Annual report
Page 1
Annual Report 2025
Page 2
Contents Introduction This is Alleima ..................................................................................................................... 1 The year in brief ............................................................................................................... 3 CEO statement ................................................................................................................. 6 Market .................................................................................................................................... 8 Alleima as an investment ......................................................................................... 10 Financial targets ............................................................................................................. 12 Sustainability targets .................................................................................................. 13 The share ............................................................................................................................ 14 Strategy and operations Customer segments ................................................................................................... 16 Business model ............................................................................................................. 18 Strategy .............................................................................................................................. 19 Divisions Tube ...................................................................................................................................... 24 Kanthal ................................................................................................................................ 26 Strip ...................................................................................................................................... 28 The formal Annual Report comprises pages 30–76 and 83–131. The Director’s Report covers pages 31–39 and 83–131, and as part of the Director’s Report, Alleima’s statutory Sustainability Report is presented on pages 95–131. The report has been prepared in accordance with the European Sus ‑ tainability Reporting Standards (ESRS) and the Taxonomy Regulation. A listing of the disclosure requirements reported by Alleima can be found on pages 123–124. The Annual Report has been prepared in the European Single Electronic Format (ESEF) and is published on alleima.com. Alleima’s products contribute to the energy transition. SCW Systems, for example, uses Sanicro® products in gasifiers that convert organic waste into fossil‑free hydrogen and green methane. Financial information Directors’ report ............................................................................................................. 31 Risks and risk management ................................................................................... 37 Financial statements and notes ......................................................................... 40 Auditor’s report .............................................................................................................. 78 Corporate governance Corporate governance report ............................................................................ 84 Board of Directors ................................................................................................. 90 Group Executive Management ...................................................................... 92 Sustainability General disclosures ................................................................................................... 96 Environment ................................................................................................................. 105 Social ................................................................................................................................... 115 Governance .................................................................................................................. 120 Appendix .......................................................................................................................... 123 Auditor’s statement ................................................................................................... 132 Other Definitions ....................................................................................................................... 136 Alternative performance measures ............................................................... 138 Five-year overview ................................................................................................... 140
Page 3
The core of Alleima’s operations is advanced materials technology. With close and long-standing customer relationships, Alleima develops high value-added products in advanced stainless steels as well as products for industrial heating and medical wire. Alleima makes its customers’ products and processes safer, more sustainable and more efficient. Alleima’s materials enable the energy transition, energy efficien - cies and improved quality of life. Advanced materials technology that makes a difference >80 ~6,800 ~100 sales in more than 80 countries 81% recycled steel in production employees1) >900 active alloys in the product portfolio years of electric melting of steel 1) Total workforce includes employees and third-party workers and is based on full-time equivalents. Customer event in Zhenjiang, November 2025 Alleima Annual Report 2025 | 1 Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other
Page 4
Premium offering in three divisions Seamless tubes and other long products primarily for the Oil and Gas, Industrial, Chemical and Petrochemical, Mining and Construc - tion, Nuclear, and Transportation customer segments, as well as the Hydrogen and Renewable Energy segment. Tu b e Strip Precision strip steel for products, primarily for the Consumer, Industrial, Transportation, and Medical customer segments, as well as coated strip steel for the Hydrogen and Renewable Energy segment. Kanthal Heating technology and heating resistance materials for the Industrial Heating, Consumer and Industrial segments, and ultra- fine wire and components in stainless steel and precious metals for the Medical segment. 2 | Alleima Annual Report 2025 Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other
Page 5
Key figures Adjusted EBIT marginRevenues, SEK million Organic revenue growth Free operating cash flow, SEK million Revenues by customer segment Revenues by geography Revenues by division Adjusted EBIT by division Adjusted EBIT, SEK million 18,630 8.3% Proposed dividend per share, SEK 2.50 Net debt/equity ratio -0.05 0% 1,100 1,555 Adjusted earnings per share, SEK 4.62 Tube Kanthal Strip Tube Kanthal Strip Europe North America Asia Other Oil and Gas Chemical and Petrochemical Industrial Industrial Heating Consumer Medical Mining and Construction Nuclear Transportation Hydrogen and Renewable Energy Note: Adjusted key figures exclude metal price effects of SEK -446 million. Revenues are recognized in the purchaser’s region, not the end-user’s. Alleima Annual Report 2025 | 3 Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other
Page 6
Growth investments Alleima had multiple organic initiatives ongoing to increase its capacity, including the opening of a new production facility for the Tube division in Zhenjiang, China, in order to meet the demand for high-quality tube products, mainly in the Chemical and Petro - chemical segment. The work to reopen a plant in Sandviken pro - gressed according to plan and will boost the company’s capacity for steam generator tubes for the Nuclear segment by approxi - mately 60%. The Kanthal division strengthened its global pres - ence by increasing its capacity for electronic heating solutions in India. The division also has ongoing expansions in Japan, the US and Scotland and is establishing a new production facility for medical wire in Malaysia. Key events Allemind: AI for increased knowledge and productivity Allemind – a data-driven AI platform that builds further on Alleima Guru to promote innovation, productivity and growth – was launched during the year. Combining established AI models with Alleima’s own data, the platform provides fast and relevant responses to complex questions. The solution is based on retrieval- augmented generation (RAG) and is implemented in a secure envi - ronment, ensuring that no information leaves the company. Allemind supports the company’s sales, finance and purchasing functions, enabling shorter lead times and increased productivity by provid - ing quick access to product data, technical specifications, report - ing and other relevant information. Measures to improve efficiency and competitiveness During the year, Alleima implemented a number of targeted mea - sures to further strengthen the company’s operational efficiency and long-term competitiveness. Most of these measures are intended to reduce Alleima’s cost levels over the long term, includ - ing through restructuring, while others are a natural part of the company’s continuing efforts to adapt its capacity based on vol - ume. The measures are expected to generate cost savings of more than SEK 200 million per year. Alleima Innovation Prize The Alleima Innovation Prize 2025 was awarded to Thomas Froböse, Chief Technology Officer, and Haydn Eagle, Sales Man - ager, both from the Specialized business unit in the Tube division. They received the prize for their exceptional contribution to the development of a critical component in the steering module of a space application. The project strengthened Alleima’s position in aerospace technology and led to continued cooperation and new development projects. 4 | Alleima Annual Report 2025 Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other
Page 7
Value-creating partnerships Together with Danieli, a global supplier of industrial equipment, the Kanthal division will supply a pilot-scale electric process gas heater to Emsteel’s direct reduced iron (DRI) plant in Abu Dhabi, United Arab Emirates, to electrify part of the company’s existing heating system. The heater is based on Prothal® DH technology and will be the first electric process gas heater for DRI that Kanthal supplies for commercial use – marking an important step in the joint development project. Delivery is planned for the first half of 2026. Leading sustainability initiatives Alleima was once again awarded a gold medal by EcoVadis. This recognition of sustainable business practices places Alleima among the top 5% of the over 150,000 companies assessed around the world. Alleima’s climate targets were approved by the Science Based Targets initiative (SBTi). The targets include a reduction in Scope 1 and 2 CO 2 emissions by more than 54% and Scope 3 CO 2 emissions by 28% by 2030, with a base year of 2019. Alleima supports the Vasa ship During the year, a collaboration was initiated with the Vasa Museum, in which Alleima contributes expertise and materials to support the efforts to preserve the Vasa ship for future generations. The new internal support structure plays a key role in preserving the ship, and Alleima’s high-alloyed SAF™ 2507 super-duplex stainless steel material is being used to construct a customized inner steel sup - port, resulting in minimal impact on the hull. The aim is to complete the steel support by 2028, in time for Vasa’s 400th memorial year. Alleima Annual Report 2025 | 5 Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other
Page 8
A challenging year with focus on long term value creation Market conditions and development during the year Market conditions varied throughout the year as global geopolitical turbulence intensified, leading to increased uncertainty and a cautious investment approach among our customers. This was particularly evident in the Industrial, Chemical and Petrochemical segments in the European market. At the same time, we noted yet another year of strong demand in the Medical and Nuclear seg - ments, while demand in Oil and Gas remained at healthy levels. Toward the latter part of the year, we noted signs of recovery in the Industrial Heating segment, albeit from low levels. Our diversi - fied segment exposure and broad geographic presence clearly benefited us. The Kanthal and Strip divisions demonstrated positive organic revenue growth, whereas Tube reported a negative devel - opment for the full year 2025. Financial performance The financial performance reflected the challenging market con - ditions, while also highlighting our resilience and ability to adapt the business to the economic climate. Revenues amounted to SEK 18,630 million (19,691) for the full year, with organic growth of 0%. Adjusted EBIT totaled SEK 1,555 million (1,944), corresponding to an adjusted EBIT margin of 8.3% (9.9). The weaker earnings were primarily driven by significant currency headwinds and adjusted for negative currency effects of SEK 341 million, the adjusted EBIT margin amounted to 9.8% -underscoring the robust - ness of Alleima’s business model. It is a strength that, despite the challenging market environment, we generated positive cash flow of SEK 1,100 million (1,266). Combined with our strong balance sheet, this has enabled us to continue executing on our strategy. Production limitations following a maintenance shutdown During the summer maintenance stop, a planned replacement of the expansion press at one of our largest production units in Sandviken was carried out. The new press has a higher degree of automation and will increase productivity as well as improve the working environment and safety for our employees. The maintenance stop was extended, and we experienced ramp up issues related to the automation system, which resulted in production limitations and reduced capacity. This negatively affected both revenues and profitability in the third and fourth quarters. Measures to strengthen efficiency and competitiveness We continuously work on operational and process improvements. To further strengthen operational efficiency and Alleima’s long term competitiveness, a number of targeted measures were initi - ated in October 2025 to adapt the business to the prevailing market conditions, including through restructuring activities. These mea - sures are expected to generate annual cost savings of approxi - mately SEK 200 million, with full effect by the end of 2026, with the majority aimed at permanently reducing the cost base. 2025 was a complex year, marked by both challenges and opportunities for Alleima. Despite turbulent market conditions, including higher tariffs and trade barriers, currency headwinds, cautious demand and geopolitical uncertainty, we maintained a solid foundation and continued to deliver on our long-term objectives. “ Our strong financial position has enabled us to be selective and strategic in our order intake” Strategic investments for increased customer value Business development and growth investments are central to our strategy for long term improvements in our product mix. In prac - tice, this means we have a clear capital allocation strategy toward selected priority segments where we see strong potential for attractive returns During the year, we completed the growth investment in a new production line in Zhenjiang, China, further strengthening our leading position in high-quality tube products primarily for the Chemical and Petrochemical industries. In parallel, work progressed on reopening a plant in Sandviken, which will increase our nuclear steam generator tubing capacity by 60% toward the end of 2026. The establishment of our medical production facility in Malaysia continued according to plan, laying the foundation for future growth in one of Alleima’s most attractive segments. Growth initiatives in Industrial Heating in Japan and Scotland also progressed according to plan, supported by megatrends such as increasing energy demand, the energy transition, and the drive for higher energy efficiency. Being close to customers with local production and service has proven to be a key success factor, partly by reducing lead times, enabling close collaborations, while also providing a natural safeguard against tariffs and trade barriers. Safety – always the highest priority The health and safety of our employees are Alleima’s top priority. Across the organization, clear and structured plans are in place to continuously improve the working environment and reduce risks for employees. During the year, we achieved a record low total recordable injury frequency rate, which is a clear result of long term and consistent safety efforts. The TRIFR for the rolling 12-month period was 5.1, com- pared with 7.1 the previous year, representing a 28% improvement. Our efforts to enhance safety continue across the organization. 6 | Alleima Annual Report 2025 Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other
Page 9
“ We demonstrate resilience in a challenging market environment” The results show that our initiatives are effective, but every incident is one too many. Beyond employee safety, a strong focus on safety also contributes to increased production stability and improved capacity utilization over time. Recognition within sustainability Our overall ambition with the sustainability agenda is to be an industry leader and to create the conditions for long term value creation. In 2025, Alleima’s climate targets were validated by the Science Based Targets initiative (SBTi), confirming that our sus - tainability ambitions are aligned with the latest climate science and international agreements. We were also once again awarded a Gold Medal by the global sustainability rating agency EcoVadis, placing Alleima among the top 5% of companies globally. Together, these achievements represent important milestones in our work to increase customer value by reducing climate impact and strengthening sustainability across the entire value chain. Focus on long term value creation 2025 was a challenging year, shaped by market uncertainty and significant currency headwinds. Despite this, we delivered a posi - tive cash flow and continued to execute our strategic initiatives to lay the foundation for profitable organic growth. Our strong finan - cial position has allowed us, despite a softer market environment, to be selective and strategic in our order intake, which positions us attractively as market sentiment improves. We now enter 2026 with strong confidence that Alleima will continue to create value for customers, employees, and shareholders. Göran Björkman, President and CEO Alleima Annual Report 2025 | 7 Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other
Page 10
Alleima operates in four main niche market segments: advanced stainless steel, special alloys, electric heating systems as well as medical wire and components. Advanced stainless steel The market for advanced stainless steel is a specialized niche in the steel industry and includes high value-added products with stringent standards for specific tolerances, high product quality and advanced process control. The market is estimated at approximately 2–4 million tons per year. Total steel market 1,900 million tons/year Stainless steel market 50 million tons/year Leading in niche markets Advanced stainless steel 2–4 million tons/year Special alloys The special alloys market includes materials with even higher levels of refinement than the advanced stainless steel market. This is a niche market of about 250–300 ktons per year, consisting of spe - cial alloys with superior properties and performance. 8 | Alleima Annual Report 2025 Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other
Page 11
Total industrial furnace market, SEK 120 billion/year Electric furnace market, SEK 30 billion/year Electric heating systems The market for industrial furnaces comprises both gas-fired and electric furnaces, and Alleima is active in the niche for electric furnace heating systems. The current market share of electric furnaces is 25% and is expected to grow, driven by the energy transition. The size of the market is currently estimated at around SEK 9 billion in annual turnover. Medical wire and components The market for ultra-fine wire and components for medical devices is a growing niche in which Alleima is a leading supplier of ultra-fine medical wire, wire-based components, orthopedic implants and surgical instruments, and nitinol solutions for various applications, such as continuous glucose monitors, pacemakers and neurostimulation systems. The size of the market is estimated at around SEK 13 billion in annual turnover. Electric heating systems, SEK 9 billion/year Alleima Annual Report 2025 | 9 Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other
Page 12
Alleima as an investment Advanced materials technology that makes a difference... Leading market positions in the premium seg - ment based on high metallurgical expertise — Strengthened resilience throughout the business cycle — Countercyclical cash flow profile — Solid financial position enables growth investments and acquisitions -0.05 2025, Net debt/equity ratio Financial stability — Critical components for customers’ specific applications that contribute to increased safety, sustainability, efficiency, and profitability — Market leader in niche end-markets where demands on advanced materials are high — Diversified customer segments and presence in several geographic regions Note: Market position refers to market share in Alleima’s addressable market, based on the company’s own aggregated assessment. Market positions (examples) Industrial heating 1 Umbilical tubing 1 Steam generator tubing 1 Aerospace titanium tubing 1 Compressor valve steel 1 Medical wire 2 A fully integrated value chain enables technology and price leadership — Reduces the dependence on external suppliers and enables quality assurance at every stage, strengthening customer confidence and product performance — Enables product and application development across the entire value chain, based on the customer’s needs Read more on page 18 R&D Melting Hot working Cold working Finishing Sales and marketing Identification of customer needs 10 | Alleima Annual Report 2025 Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other
Page 13
...with good opportunities for continued value creation Well positioned on the basis of several megatrends Profitable growth in attractive niches Improved margin profile over the long term 2029E 2030E2027E 2028E2025 Note: The figure shows Alleima’s aggregated assessment of the addressable market’s growth and should not be regarded as a commitment. 2026E — Increased energy demand, energy transition, energy efficiency and electrification — Growing and aging population, with growing need for healthcare — Development in growth markets — Increased need for more advanced materials A growing addressable market +6% per year — Industrial Heating, Medical, Chemical and Petrochemical, Nuclear, and Hydrogen and Renewable Energy are identi - fied strategic growth areas — Well-positioned product portfolio for leveraging growth in Asia — Strong position in the energy sector, including oil and gas, nuclear power and renewable energy Read more on pages 19–23 — Shift in product mix toward more profitable and less cyclical segments — Continuous productivity improvements and optimization of local presence around the world — Value-based pricing model for strengthened price leadership — Ongoing process improvements, for example through optimized inventory management for efficient production planning Read more on pages 19–23 Consumer Oil and Gas Chemical and Petrochemical Industrial Industrial Heating Medical Mining and Construction Nuclear Transportation Hydrogen and Renewable Energy 40 % 39% 21 % 32 % 43 % 25 % 41 % 40 % 42 % 43 % 17 %17 % 4 5 – 50 % 35 – 40 % 10 – 15 % Ambition 2030 2022 2023 2024 2025 0 20 40 60 80 100 % Share of revenues Industrial Other Prioritized segments Revenues and adjusted EBIT margin 0 0 25,000 20,000 15,000 10,000 5,000 10 15 5 20252015 SEK M % Revenues Adjusted EBIT margin Note: Segment reporting for Sandvik Materials Technology published in Sandvik’s financial reports, 2015–2021. Adjusted EBIT excludes metal price effects and iterms affecting comparabil - ity for the entire period. Alleima Annual Report 2025 | 11 Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other
Page 14
Financial targets Alleima has four long-term financial targets. 0% Growth Deliver profitable organic revenue growth in line with, or above, growth in targeted end-markets over a business cycle. Organic revenue growth of 0% for 2025. Organic growth over the four- year period that the target has been in effect averages 5%. Adjusted EBIT margin of 8.3% for 2025. The average for the four-year period that the target has been in effect is 9.5%. At the end of 2025, net debt in relation to equity was -0.05. The Board proposes a dividend of SEK 2.50 per share. The proposal corresponds to 71% of profit for the period (adjusted for metal price effects) for 2025. The average for the four-year period that the target has been in effect is 43%. Capital structure Net debt in relation to equity below 0.3x. Dividend policy Dividend on average 50% of profit for the period (adjusted for metal price effects) over a business cycle. Divi - dend to reflect financial position, cash flow and outlook. Earnings Adjusted EBIT margin (excluding metal price effects and items affecting com - parability) to average above 9% over a business cycle. Organic growth Adjusted EBIT margin Debt/equity ratio Dividend per share 202520242023 0 2 4 6 8 10 12 14 % 202520242023 0 2 4 6 8 10 12 % 202520242023 –0.1 –0.05 0 0.05 0.1 X 20252024 1)2023 0 1 2 3 SEK 1) Proposed dividend 8.3% -0.05 2.50 12 | Alleima Annual Report 2025 Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other
Page 15
Alleima has long-term sustainability targets in four main areas. A presentation of all sustainability targets and performance can be found in the Sustainability Report on page 95 and on Alleima’s website. Sustainability targets Climate Reduce Scope 1 and 2 CO 2 emissions by more than 54% by 2030, compared with 2019. The target has been raised from the earlier 50 %. Product offering Grow the product portfolio of applica - tions for the green transition, electrification, energy efficiency and improved quality of life at a faster pace than total growth. A responsible employer Reduce total recordable injury fre - quency rate (TRIFR) by more than 50% by 2030, compared with 2019. Circularity More than 80% recycled steel in manufactured products 0 20 40 60 80 100 120 140 160 Thousand tons 2025 2030 Target 2023 20242021 202220202019 0 14 8 4 0 100 90 80 70 60 50 40 30 20 10 No of injuries Frequency rate 2025 2030 Target 2021 2022 2023 202420202019 2024 20252020 2021 2022 20232019 76 84 82 80 78 % Total recordable injuries (TRI) Total recordable injury frequency rate (TRIFR) 0 14 8 4 2025 2030 Mål 2021 2022 2023 202420202019 0 100 90 80 70 60 50 40 30 20 10 Antal skador Skadefrekvens UPPDATERA Scope 1 – raw material based Scope 2 Scope 1 – fuels 0 20 40 60 80 100 120 140 160 2025 2030 Mål 2023 20242021 202220202019 Tusen ton UPPDATERA 1) Sustainable product portfolio includes the Hydrogen and Renewable Energy segment (hydrogen gas, CCS, biofuels, solar, wind and geothermal energy), products in the Nuclear, Industrial Heating and Medical seg - ments, and compressor valve steel in the Consumer segment. Greenhouse gases Health and safety, TRIFR Recycled steel 25% 80.8% The sustainable product portfolio amounted to 25% of the Group’s total revenues, corresponding to a develop - ment of -2%, compared with -5% for the Group’s total growth. CO2 emissions from own operations amounted to 89 ktons, corresponding to a decrease of 4% during the year and 40% since 2019. The share of recycled steel in finished products amounted to 80.8%. Sustainable product portfolio 1) of the Group’s total revenues Recycle rate 2024 20252020 2021 2022 20232019 76 84 82 80 78 % During the year, the total recordable injury frequency rate (TRIFR) was 5.1, corre - sponding to a decrease of 28% during the year and a decrease of 34% since 2019. Alleima Annual Report 2025 | 13 Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other
Page 16
The share Alleima has been listed on Nasdaq Stockholm’s Large Cap since August 31, 2022. Share price performance In 2025, Alleima’s share price increased by 9%. During the same period, the OMX Stockholm All Share Index increased by 10%. At the end of the year, the closing price for the share was SEK 81.85, corresponding to a market capitalization of SEK 20.5 billion. In 2025, the highest closing price for the share was SEK 98.25, which was recorded on February 18. The lowest closing price during the year was SEK 67.15, recorded on August 7. The total return on the Alleima share was 12%, compared with 13% for the OMX Stockholm All Share Index. Dividend and dividend policy Alleima has a long-term dividend policy to distribute on average 50% of profit for the period (adjusted for metal price effects) over a business cycle, with dividends to reflect financial position, cash flow and outlook. The Board of Directors has proposed a dividend of SEK 2.50 per share to the 2026 Annual General Meeting, corre - sponding to approximately SEK 627 million and a dividend yield of 3.1% based on the share price at year-end. The dividend proposal corresponds to 71% of profit for the period (adjusted for metal price effects). Share trading In 2025, a total of 218 million shares were traded at a total value of SEK 17 billion on all marketplaces. The average daily turnover of the share was approximately 370,000 on Nasdaq Stockholm. Shares and share capital At the end of 2025, the registered share capital was SEK 250,877,184, represented by 250,877,184 shares, each with a quota value of SEK 1. The share capital comprises one class of shares, with all shares carrying equal voting rights and equal rights to dividends. Alleima does not hold any shares in treasury. Ownership structure The total number of shareholders according to the Monitor share - holder platform was 102,008 at the end of 2025. The shares held by the ten largest shareholders corresponded to approximately 55% of the share capital and the same amount of voting rights. Swedish institutions and mutual funds owned approximately 57% of the share capital, international investors owned approximately 20% and Swedish private investors approximately 18%. Other ownership was 5%. Shareholder communication Information about the company in the form of reports, presentations and financial data is available at www.alleima.com/en/investors/. 2.50 Proposed dividend per share, SEK Share price development, January 1–December 31, 2025 0 500 1,000 1,500 2,000 VolumeSEK 0 25 50 75 100 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov D e c Share turnover, in thousands A l l e i m a O M X S t o c k h o l m A ll S h ar e I nde x 14 | Alleima Annual Report 2025 Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other
Page 17
List of covering analysts ABG Sundal Collier Adrian Gilani Danske Bank Viktor Trollsten DNB Carnegie Igor Tubic Handelsbanken Hanna Grimborg Nordea Anders Åkerblom Pareto Alexander Vilval SEB Kaleb Solomon Share information Exchange Nasdaq Stockholm Ticker ALLEI ISIN code SE0017615644 Highest price paid SEK 98.25 Lowest price paid SEK 67.15 Price at the year’s start SEK 75.10 Share price at year-end SEK 81.85 Market cap. at year-end SEK 21 billion Number of shares 250,877,184 Ownership list, December 31, 2025 Ownership by categoryOwnership by geography Share capital development The table below shows the development of the company’s share capital since its incorporation on October 7, 2019. Shareholders Total number of shares Shares and votes, % Industrivärden 52,900,000 21.09% Lundbergföretagen AB 25,200,000 10.04% First Swedish National Pension Fund 12,520,000 4.99% Swedbank Robur Funds 10,990,285 4.38% AFA Insurance 8,181,291 3.26% Vanguard 7,954,728 3.17% SEB Funds 6,141,531 2.45% Göranssonska Stiftelserna 4,944,276 1.97% Dimensional Fund Advisors 4,926,644 1.96% Norges Bank 3,882,349 1.55% Ten largest shareholders 137,641,104 54.86% Other shareholders 113,236,080 45.14% Total 250,877,184 100.00% Note: Shareholder data is collected, compiled, and processed from various sources including Modular Finance AB, Euroclear, Morningstar, and shareholders. Year Event Change in number of shares Change in share capital, SEK Total number of shares Total share capital, SEK Quota value, SEK 2019 Incorporation – – 1,000 50,000 50 2022 Share split 49,000 – 50,000 50,000 1 2022 Directed share issue 250,827,184 250,827,184 250,877,184 250,877,184 1 Sweden Swedish institutions and mutual fundsUSA International investors UK Swedish private investors Norway Other Other Alleima Annual Report 2025 | 15 Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other
Page 18
The need for advanced materials technology is growing, both within existing industries and in line with the transition to a more sustainable society. Alleima’s customers are active in several different segments, and the offering comprises products such as seamless stainless steel tubes, electric heating technology and resistance materials, ultra-fine wire and components for medical applications, precision strip steel, and coated strip steel for hydrogen applications. Customer segments Oil and Gas Tubes for extraction and produc - tion of oil and gas, advanced stainless steel umbilical tubes, control lines, corrosion-resistant alloys and oil country tubular goods (OCTG). 24% Industrial Solid and hollow bar, high-pres - sure and composite tubing, as well as semi-finished ingots and blooms, and billets for industrial production. 17% Chemical and Petrochemical Hydraulic and instrumentation tubing, heat exchanger tubing, process piping, high-temperature applications, and high-pressure equipment for chemical and petro chemical processes. 16% 10% Industrial Heating Metallic and ceramic heating elements and diffusion cassettes for heat-treatment furnaces, production of lithium-ion batter - ies, ceramics and steel, and elec - tronic appliances. 8% Consumer Precision strip steel products in advanced stainless steel for razor blades, knives, cutting tools and compressor valve steel, and heating material for electronic appliances. 16 | Alleima Annual Report 2025 Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other
Page 19
7% Medical Ultra-fine wire and wire-based components for medical devices such as glucose monitors, pace - makers, and for neurostimulation, as well as precision strip steel and small diameter tubing. 6% Transportation Stainless steel and titan tubes used in aircraft hydraulic systems and jet engines, serving the commercial, defense and space aircraft segments, and gasoline direct injection (GDI) tubes for cars and trucks. 6% Mining and Construction Drill steel for hydraulic rock drilling rigs in mines and infra - structure construction work. 5% Nuclear Steam generator tubing, cladding tubes, as well as tubing and piping for the nuclear power industry. 1% Hydrogen and Renewable Energy Tubes for hydrogen applications, concentrated solar power, geo - thermal energy, bioenergy and biofuels, offshore wind, and carbon capture and storage, as well as coated strip steel for fuel cells and electrolyzers. Note: Percentage refers to share of total revenues 2025. Alleima Annual Report 2025 | 17 Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other
Page 20
A value-creating and sustainable business model Alleima’s business model aims to deliver profitable growth and create added value for its stakeholders. Sustainability is a key and integral part of the entire value chain. Customer needs are met in a fully integrated value chain... …that create value for people and society. Customer collaborations and identification of customer needs Technological innovation and customer collaboration Alleima’s value chain is based on a focus on innovation. With industry-leading tech - nology and through continuous R&D, often in close collaboration with customers, the company develops material and process solutions that contribute to higher energy efficiency, lower CO 2 emissions, and in - creased circularity, safety and quality of life. Sourcing and circularity Responsible material sourcing is com - bined with programs for buying back raw materials from customers and extensive internal recycling flows. This includes both scrap metal and waste heat, which mini - mizes resource use and strengthens the circular economy within the company. Sustainable production The company’s steel production uses 100% fossil-free electricity and its end- products are largely made from recycled materials. Residual products from the melting process are recycled and returned to the material flow. High CO 2 efficiency is achieved during hot working by blending in biogas and using electric furnaces, while continuing to recover metal from residual flows. In cold working, products are further refined with a continued focus on resource efficiency. Efficient logistics Electric and biofuel-powered vehicles are used for internal logistics and material handling, and external transportation is continuously optimized based on sustain - ability criteria. Ethical marketing and sales Marketing and sales are conducted according to the company’s ethical guide - lines, and life cycle assessments are pro - vided for several product segments to support customers’ environmental assessments. Customer value and benefits for society Alleima’s advanced materials technology makes customer products and processes safer, more sustainable and more efficient, and has a positive impact on society. The use of Alleima’s products contributes to tangible sustainability improvements for customers through increased energy effi - ciency, lower CO 2 emissions, reduced material consumption and improved safety. ...where advanced materials technology results in high value-added products.. Examples of product properties: — Corrosion resistant — Withstand high temperatures or high pressure — Lighter and thinner, with smaller diameters — High mechanical strength — Enable technologies for the energy transition — Increased energy efficiency and lower CO2 emissions — Reduced materials usage — Contribute to safety and quality of life — Create shareholder returns — Industry-leading technology — Customer relationships and materials development — Independence, transparency and quality — Sustainability across the entire value chain Research and development Sourcing and buy-back of materials Melting of steel in electric arc furnace Sustainable production Hot working Marketing and sales Product use Cold working Logistics Buy-back/ Recycling 18 | Alleima Annual Report 2025 Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other
Page 21
Four strategic pillars Common operating model Profitable growth Own R&D — Fully integrated value chain — Decentralized organization Materials innovator and technology leader Operational and commercial excellence Industry-leading sustainability Strategy for long-term value creation Alleima’s strategy for long-term value creation is based on four pillars: profit - able growth, being a materials innovator and technology leader, operational and commercial excellence, and industry-leading sustainability. The founda - tion is a common operating model that comprises in-house research and development, a fully integrated value chain and a decentralized organization. Read more on page 20 Read more on page 21 Read more on page 22 Read more on page 23 Sanicro® 35 – a high-performance alloy for demanding industrial environments. Alleima Annual Report 2025 | 19 Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other
Page 22
Alleima has good prospects for continued profitable growth. Business development across the entire product portfolio is a key element of the strategy for a long-term improved and more profitable mix in all customer segments. Alleima also has a capital allocation strategy for growth investments and acquisitions focused on prioritized segments. Profitable growth When valuable synergies can be achieved. To increase capacity, capabilities, product portfolio or geographic presence. To increase capacity, capabilities, product portfolio or geographic presence. Innovation along with R&D, often together with customers in order to continu- ously push the boundaries of what can be achieved with materials technology. Business development in all segments Growth investments in prioritized segments M&A in prioritized segments Nuclear Alleima has supplied products to the nuclear power industry for over 60 years and is now seeing a clear upswing in the market driven by energy security and growing demand for electricity for data centers, AI and electrification. Nuclear power offers a stable, fossil-free solution, and the development of small modular reactors (SMRs) is creating new opportunities. Alleima has already secured and delivered commercial SMR orders and is responding to broad global demand. The company is now increasing its capacity for steam generator tubing by 60%, with its first deliveries scheduled for late 2026. With its extensive experience and unique metallurgi - cal expertise, Alleima is also well positioned for the next generation of nuclear power using lead, sodium, helium and molten salt as cooling media. Medical Alleima is a leading supplier of ultra-fine medical wire, wire-based components and nitinol solutions for various applications, such as continuous glucose monitors, pacemakers, neurostimulation sys - tems and surgical instruments. The development of the segment has been, and is expected to remain, positive, driven by long-term trends such as increased remote monitoring and growing invest - ments in healthcare. The acquisition of the German company Endox was completed during the year, and Alleima is responding to strong demand by establishing a presence in Asia together with existing customers. Industrial Heating Global electrification and increasing energy efficiency require - ments are driving growth within various industrial heat treatment processes. Kanthal offers solutions ranging from resistance materials and heating elements to advanced heating modules and process gas heaters for metal, glass, electronics and semicon - ductor applications. The level of innovation is high, and to meet the growing demand, Alleima is currently investing in capacity expan - sions in Europe, Japan, and the USA, as well as developing solutions for megawatt -scale electric process gas heating. Chemical and Petrochemical Alleima offers premium solutions to the Chemical and Petrochemi - cal segment globally, focusing in particular on the rapidly growing Asian market. Growth is being driven by an expanding middle class and increasing production of food, plastics and renewable energy. This has led to the establishment of new chemical and petro - chemical plants in the region, where Alleima’s tube products are used in the most demanding applications and play a crucial role in sub-segments such as ethylene, purified terephthalic acid (PTA), urea and biofuels. In these applications, corrosion resistance and tolerance to high pressure and temperatures are critical to opera - tional reliability. Capacity investments have been made in both India and China in recent years in order to meet high demand. Long-term strategy to shift product mix in all segments Alleima is working on a structural portfolio shift to improve the product mix across its portfolio. The aim is to reduce volatility and increase profitability by increasing the share of products with higher levels of refinement and higher technical content in all seg - ments. Alleima’s financial position and cash flow generation enable long-term investment decisions and flexibility in the order booking, which in turn ensures price leadership. This provides the company with a foundation to consistently execute its strategy, even in periods with challenging market conditions. Alleima’s capital allocation strategy focuses on prioritized segments characterized by higher growth, better profitability, higher capital efficiency and lower volatility. 20 | Alleima Annual Report 2025 Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other
Page 23
Trends Products and innovations Alleima’s R&D strategy is based on under - standing material trends and customer needs. As the world changes, new and higher demands are being placed on products, including: — Lighter and stronger materials for improved performance and durability — High temperature resistance to increase reliability in extreme conditions — Better compatibility with corrosive environments for longer life and increased safety — Increased fatigue resistance to extend product lifecycles — Tighter tolerances for higher precision and performance — Advanced surface coatings for better functionality and protection Alleima’s position as a materials innovator and technology leader is based on three main strategic themes: strengthening the product offering for growing segments, preserving and developing the core business, and expanding the materials portfolio to meet future needs. Materials innovator and technology leader Integrated value chain and close customer collaboration One of Alleima’s strengths is the combina - tion of its leading position in technology and an integrated value chain, from R&D capabilities, metallurgical expertise and in-house production to finished products for customers. This allows for faster itera - tion with customers, deeper technical insight and closer coordination between R&D and production. Through in-depth knowledge of customers’ application areas and a high level of technical sales, the company guides customers from idea and design to finished product. This ensures the right solutions are developed for the customer’s specific needs, both in terms of material specifications and quality and to improve the customer’s processes. Understanding of critical material needs Close cooperation with customers Understanding of the applications in which these products will be used Creation of value- added solutions through the development of new products and processes Nuclear — Further safety enhancements in nuclear power operation (Gen IV) — Data centers/AI and general electrification are increasing the need for small modular reactors Innovation based on material trends and customer needs Products in the market and in Alleima’s R&D pipeline provide exam - ples of innovation based on material trends and customer needs. Chemical and Petrochemical — Higher pressure and temperatures to increase process efficiency — Increased demand for cost-effective, high-performance materials that can handle a wider variety of corrosive condi - tions and processes Medical — Remote patient monitoring, which leads to more precision- driven out-of-hospital care, thereby enabling algorithm-based treatment — Increased demand for minimally invasive surgery thanks to faster recovery times and reimbursement benefits Industrial Heating — Industrial electrification: the transition to low-carbon technolo - gies often requires that various process gases be heated — Energy flexibility: increased focus on flexibility in terms of energy supply constraints and cost-efficiency — Prothal® range of electric process gas heaters — Hybrid heating solution powered by natural gas and electricity — Continuous glucose monitors (CGMs) — Heart failure (HF) monitors — New product development based on Nitinol material — Integration of sensors and stimulation features in new ultra-fine configurations — In many critical applications, Sanicro® 35 can match more expensive alloys in terms of quality and performance, making this alloy a cost-effective alternative for customers — Products for the next generation of nuclear technologies, including SMRs and Gen IV nuclear reactors. Alleima is develop - ing various technologies and new tube materials for use in reac - tors, including high temperature resistant FeCrAl alloys (APMT) Alleima Annual Report 2025 | 21 Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other
Page 24
Operational and commercial excellence Alleima works continuously to improve its operational and commercial efficiency. Focus areas include cost-efficiency, mix optimization and measures to strengthen its commercial capabilities. Measures to improve competitiveness Alleima continuously reviews measures to adjust its capacity and costs to the pre - vailing market conditions. This often involves adjusting staffing levels to current volumes as well as optimizing, and in some cases consolidating, parts of its operations to increase efficiency. An example of this during the year was the introduction of a number of targeted measures to further strengthen the company’s operational efficiency and long-term competitiveness. Most of these measures were intended to reduce Alleima’s cost levels over the long term, including through restructuring, while others were a natural part of the company’s continuing efforts to adapt its capacity based on volume. Optimized inventory management and digitalization An efficient supply chain is essential to meeting customer needs and maintaining high delivery accuracy. Efforts to optimize sales and capacity planning continued during the year, with a focus on balanced inventory levels based on forecasts, actual order intake and volume planning. The continued implementation of new systems resulted in improved oversight and trace - ability throughout the value chain. These systems enable more efficient production planning, product mix optimization and improved cost monitoring and analysis. Price leadership and commercial strength Alleima has achieved price leadership in several niches. To further strengthen its commercial capabilities, the company introduced more systematic follow-up of its commercial performance during the year, with a particular focus on value- based sales and technical marketing. Exercising a high level of discipline when booking orders is a key prerequisite for maintaining price leadership and ensuring profitability in a more challenging market environment. Stronger performance culture To fully realize the potential of its end- markets, Alleima is working to strengthen its internal performance culture. This includes an improved financial governance model to enable greater transparency and better decision-making, further decentral - ization of responsibilities to increase its speed and customer focus, and the intro - duction of shared business principles that strengthen engagement and clarify what is required to succeed. From left: Jane Chen, Product Specialist, Alleima, and Richard Jägrud, CEO, Morakniv. 22 | Alleima Annual Report 2025 Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other
Page 25
Industry-leading sustainability Sustainability is firmly established in Alleima’s operations, with the goal to be industry leader. Impacts arise from both the company’s own operations and the customer offering. Impact through own operations Since 1929, Alleima has used recycled steel and an electric arc furnace in pro - duction, which are more energy efficient and has a lower carbon footprint than traditional steel production with a blast furnace. Today, the products consist of about 81% recycled material, and 98% of the global electricity usage is fossil-free, resulting in a relatively low climate foot - print. Alleima is actively working to reduce its environmental impact and to increase the circularity of its raw material use. Its business model is based on a fully inte - grated value chain, from research to end-product, enabling it to control and minimize its carbon footprint throughout the production process. Impact through product offering Alleima enables sustainable development through its broad product offering and plays an important role in the transition to a more sustainable society. The strategy is based on capturing opportunities arising from the electrification of industries, the shift to sustainable energy production, increased energy efficiency and innova - tions in the medical sector. At the same time, Alleima has a positive impact on soci - ety through its entire product portfolio by offering products with a lower climate impact, longer product life cycles and bet - ter safety than many of its competitors. Working closely with its customers, Alleima responds to the technical challenges posed by new technologies and supports customers in achieving their sustainability and climate targets. At the raw materials yard, recycled steel is classified using positive material identification (PMI) equipment to ensure that the materials are properly analyzed when the goods are received. Still image from Alleima’s global brand campaign Hidden Heroes, featuring Kanthal® Super elements. Alleima Annual Report 2025 | 23 Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other
Page 26
-2%13,063 Revenues by customer segment Key figures 2025 in figures Revenues, SEK million 1,159 8.9% 4,555 Organic revenue growth Adjusted EBIT, SEK million Adjusted EBIT margin Total workforce Oil and Gas Chemical and Petrochemical Industrial Mining and Construction Nuclear Transportation Hydrogen and Renewable Energy Medical Tu b e Long-standing expertise in nuclear power Demand in the nuclear power industry is expected to grow, driven by stricter energy security requirements and a growing need for electricity for data centers, AI and gen - eral electrification. After more than six decades as an independent supplier to the sector, Alleima commands a strong position, with new construction and refur - bishments of traditional nuclear power plants as well as emerging SMR projects creating broad global demand. At the same time, the development of new reac - tor technologies with advanced coolants is creating significant long-term opportu - nities. Alleima is actively involved in materi - als research related to these technologies together with customers and will have the capability to deliver materials solutions for the future. Main competitors: Nippon Steel Corp, Tubacex, Salzgitter Mannesmann International, Jiuli and Haynes International. Go-to-market model: Approximately 75% direct sales. The focus is on collaborating with end-users and their material specifications to opti - mize and improve industrial processes. A strong local presence in key markets globally, with its own sales and technical marketing resources. North America 22% Asia 21% Other 8% Revenues by geography Europe 49% Note: Adjusted EBIT excludes metal price effects of SEK -223 million. Total workforce includes employees and third-party workers and is based on full-time equivalents. Revenues are recognized in the purchaser’s region, not the end-user’s. Material solutions for extreme environments Combined with close customer collabora - tion throughout the value chain, Alleima’s long-standing materials expertise has laid the foundation for the company’s position as a leading supplier to the oil and gas industry. Although overall market demand for oil and gas is expected to be unchanged for the foreseeable future, Alleima’s vol - umes are expected to remain favorable as existing fields gradually decrease in capacity and new resources need to be deployed. In parallel, Alleima is continu - ously developing new materials with even higher corrosion and pressure resistance as extraction shifts to deeper and more demanding environments where materials are exposed to even greater strain. The Tube division develops and manufactures seam - less tubes and other long products in advanced stainless steels and special alloys that are tailored for specific end-applications. The customers are primarily found in the segments of Oil and Gas, Chemical and Petrochemical, Industrial, Mining and Construction, Nuclear, Transportation, and Hydrogen and Renew - able Energy. The business model is based on a fully integrated value chain that encompasses the entire production chain, from steel melting to finished end-product, with in-house R&D throughout all stages. Tube has a strong global presence, with its largest production facilities located in Sandviken (Sweden), Chomutov (Czechia), Scranton, PA (US), Mehsana (India) and Zhenjiang (China). Growth through local presence Alleima is strengthening its position in the Chemical and Petrochemical segment in Asia by gradually expanding its production capacity, capabilities and collaborations with customers. The strategy is based on a “local-for-local” approach, where produc - tion is carried out close to the market to enable shorter lead times and increased production flexibility. This approach also reflects the company’s clear ambition to promote sustainability and enables inno - vation together with end-customers along the entire value chain, making it possible to customize solutions for critical applica - tions to specific needs. Demand in the region is growing, and Alleima opened a new facility in Zhenjiang, China, the com - pany’s latest investment in expanded capacity. 24 | Alleima Annual Report 2025 Introduction Financial informationDivisions Corporate governance Sustainability OtherStrategy and operations
Page 27
in the 2030’s across multiple regions,” Sung concludes “To achieve this goal, we need suppliers who can scale with us. Alleima’s expansion of its manufacturing capacity and its commitment to long-term supply position the company as a vital part of our global strategy, and we believe Alleima has both the willingness and the capability to align with this vision.” “As NuScale moves closer to the future deployment of our SMR technology, strong partners like Alleima and Doosan Enerbility are essential in building a resilient, high- quality supply chain,” said Graham Callaway, Senior Director, Supply Chain of NuScale Power. “This collaboration sup - ports our mission to provide safe, reliable, and affordable carbon-free energy, that ensures the right partnerships in place as customer demand continues to grow.” Alleima supplies critical steam generator tubing to Doosan Enerbility, which in turn manufactures key components for NuScale Power’s pioneering small modular reactors (SMRs). Together, the companies are build - ing a new generation of safe, scalable, and efficient low carbon energy systems. “Doosan and Alleima have a long-stand - ing relationship, where Alleima has success- fully supplied steam generator tubes for large-scale nuclear power plants,” says Yunsik Sung, Senior Manager at Doosan Enerbility. “Our history of collaboration and trust naturally extended into the NuScale SMR program. This trilateral partnership is strategic.” Alleima has been supplying tubes to the nuclear power industry for more than 60 years. This experience has enabled Alleima to lead in quality, while adapting to the evolving needs of the industry. “Alleima’s ability to respond to complex project requirements has been instrumen - tal,” Yunsik Sung adds. A key need for the NuScale SMR design is the requirement for helical bending of steam generator tubes to boost heat transfer efficiency. Unlike conventional U-shaped tubes used in large plants, the NuScale SMR design required tighter tol - erances in diameter and wall thickness to ensure consistent performance. Doosan Enerbility has established these stricter specifications to meet those demands. “Alleima responded with exceptional collaboration adjusting their manufactur - ing processes and quality controls to meet Doosan’s requirements. Currently, Alleima’s tubes are being bent and articulated using Doosan Enerbility tube bending machines at our Changwon facility,” Yunsik Sung explains. In 2024, Alleima announced the reopen - ing of Tube Mill 68 in Sandviken, Sweden, an investment that will increase production capacity for steam generator tubes for conventional and SMR reactors. This will strengthen Alleima’s position as a reliable, long-term supplier to the global nuclear industry. “Doosan and NuScale are preparing for the global deployment of SMRs, with plans to support a significant number of modules Forging the Future of Clean Energy with Doosan and NuScale Power “ Strong partners like Alleima and Doosan Enerbility are essential in building a resilient, high-quality supply chain” Graham Callaway Senior Director, Supply Chain of NuScale Power A collaboration between South Korea’s Doosan Enerbility, US-based NuScale Power and Sweden’s Alleima, is shaping the next chapter of the nuclear evolution. Alleima’s tubing technology is enabling a new era of nuclear power – one built on industry expertise and innovation. “We are proud to supply steam genera - tor tubes to Doosan Enerbility and NuScale Power, two leading innovators in the energy sector. SMRs hold tremendous potential for growth in the coming years, and we are well positioned to support these projects,” said Carl von Schantz, President, Tube Division. From left: Hanhee Lee, Vice President Management Division Shared Growth/Procurement, Doosan Enerbility, and Carl von Schantz, President Tube Division, Alleima. Alleima Annual Report 2025 | 25 Introduction Financial informationDivisions Corporate governance Sustainability OtherStrategy and operations
Page 28
Advanced medical technology create growing opportunities Digitalization is driving the development of new, advanced medical technologies. The need is especially increasing for chronic conditions where automated health data collection and digital treatment solutions improve safety and quality of life. Through the Kanthal division, Alleima supplies ultra- fine wire, wire-based components and nitinol solutions for various applications, such as continuous glucose monitors, pacemakers, neurostimulation systems and surgical instruments. Thanks to its combination of materials expertise, global capacity and capabilities, and customiza - tion, Alleima is a key partner to leading medical device manufacturers. The ongo - ing expansion in Malaysia will provide Alleima with a strong global platform for continued innovation and growth. Leader in electrical heating processes With over 90 years of experience of heat - ing processes requiring very high tempera - tures, Kanthal holds a leading position in enabling the electrification of energy- intensive operations. Its solutions are used in several sub-segments, such as elec - tronics, semiconductors, glass and metal. Unlike gas-fired furnaces, electric heating solutions do not require combustion and thus have the potential to significantly reduce or entirely eliminate CO 2 emissions from heat treatment processes. Electric heating therefore plays a key role in the transition towards a more sustainable industry. Up to 95% thermal efficiency can be achieved, compared with significantly lower efficiency with gas heating. This results not only in a lower climate impact but also in improved operational perfor - mance and lower energy consumption. North America 37% Asia 26% Other 7% Revenues by geography Europe 30% Key figures 2025 in figures Revenues SEK million Organic revenue growth Adjusted EBIT, SEK million Adjusted EBIT margin Total workforce Revenues by customer segment Industrial Heating Medical Consumer Industrial 1%3,996 656 16.4% 1,472 Note: Adjusted EBIT excludes metal price effects of SEK -37 million. Total workforce includes employees and third-party workers and is based on full-time equiva - lents. Revenues are recognized in the purchaser’s region, not the end-user’s. Large-scale process gas heaters Prothal® – an electric process gas heating solution that can be used with hydrogen, natural gas or hybrid solutions – marks an important step towards more climate- neutral industry. The technology is partic - ularly relevant for future DRI plants and also enables upgrades of existing installa - tions. During the year, Alleima’s partner - ship with Danieli was expanded to scale up the technology to several hundred mega - watts, with the aim of having a commercial solution in place by 2027. An important step towards industrialization was taken during the year, with the company receiv - ing its first order for a pilot heater for com - mercial use. Thanks to a combination of technical expertise, innovation and global delivery capabilities, Kanthal plays a central role in accelerating the transition to electrified, resource-efficient and climate- neutral industrial heating processes. Main competitors: Industrial Heating: Aperam, VDM Metals, Tokai KK and I Squared R Element. Medical: Fort Wayne Metals and Heraeus. Go-to-market model: Approximately 90% direct sales. The mix of agents and distributors depends on the application. There is a sharp focus on working with end-customers in the product development phase to continu - ally improve the material technology in relation to the end-customer application. Kanthal Kanthal is a global supplier of products in the areas of industrial heating technology and resistance materials as well as ultra-fine wire for use in medical devices. The division’s customers are primarily in the Industrial Heating, Consumer, Medical and Industrial customer segments. Kanthal has a global production footprint, with facil - ities in locations such as Hallstahammar (Sweden), Palm Coast, FL (US), Perth (UK), Sakura (Japan) and Walldorf (Germany). 26 | Alleima Annual Report 2025 Introduction Financial informationDivisions Corporate governance Sustainability OtherStrategy and operations
Page 29
Prothal®, Kanthal’s electric process-gas heater, sits at the core of the project. This high-temperature system can bring hydro - gen or natural gas to more than 1,000°C using electricity rather than combustion. The technology has already proven itself in a pilot together with HYBRIT in Luleå, where hydrogen was heated to 950°C at roughly 95 % efficiency. The collaboration with Danieli will take it a step further, by integrating the solution into a DRI plant, where iron ore can be reduced to iron without carbon dioxide emissions. Installation without downtime The first installation will be a demonstra - tion unit at Emsteel in Abu Dhabi, where a 1,3 MW heater is scheduled to come online in 2026. The project marks a significant milestone – technically, because it brings electric heating into one of the world’s most energy-intensive and carbon-heavy industries 1), and symbolically, because it shows how electrification can be deployed without disrupting production. “After successful test projects, we are very pleased to be able to install and eva - luate Prothal® in a real production environ - ment without risking production disrup - tions,” says Dilip Chandrasekaran, Business Development Manager at Kanthal. “For the end customer, it is an important factor not to have to plan costly stoppages in produc- tion and at the same time have the oppor - tunity to scale up electrification at the plant in the future.” Significant reduction in CO 2 emissions The advantage of the system is its simplic - ity. Prothal® is built from Kanthal’s propri - etary material, which acts both as the heating element and as a structural com - ponent. This cuts heat loss and results in a design that is robust, efficient and easy to scale. The heater can raise pure hydrogen or hydrogen–natural gas blends to high temperatures under pressure, giving operators flexibility – whether they are building new capacity or upgrading exist - ing plants. Electrification represents the most efficient way to use renewable energy to reduce emissions and it also delivers precise temperature and process control without combustion gases, soot or open flames. When powered by renewable electricity, the process step becomes entirely emis - sions-free. And even in existing natural- gas-based facilities, a full scale system can cut carbon-dioxide emissions up to 30 %, according to Danieli’s calculations. Strategic partnership for a sustainable steel industry For Kanthal, the partnership is a step toward commercializing its approach to sustain - able process-gas heating. ForDanieli, it expands a growing portfolio of renewable energy ready systems for the steel industry, giving customers practical routes to reduce carbon-dioxide emissions in existing oper - ations. As one of the world’s leading suppli - ers of equipment and complete produc - tion lines for metals and steel – spanning blast furnaces, direct reduction, melting, rolling, automation and digital control – Danieli brings the industrial integration and electric power control expertise that com - plements Kanthal’s electric- heating tech - nology. Together, the companies cover the full path from electric heat generation to plant-level implementation. This technology builds on years of research and testing, but also on a wider shift in how the industry approaches its A joint path towards fossil-free steelmaking Kanthal and the Italian engineering group Danieli formed a strategic partnership in 2024 with a shared ambition: to speed up the steel industry’s shift to electrification. The companies now are developing a new generation of electric process-gas heaters to replace fossil-fuelled systems, innovation with the potential to dramatically cut emissions from steelmaking. “ This collaboration makes it possible to unlock the potential of a new technology that will further reduce the carbon footprint of DRI plants” Marco Lapasin Vice President Danieli Engineering Centro Metallics climate responsibility. Steel production accounts for roughly seven percent of global carbon-dioxide emissions 2), making decarbonization one of the sector’s defin - ing challenges. The goal now is to demon - strate that the next generation of steel - making can run on renewable energy and electric heating, not only as a technical possibility, but as a commercially viable route forward. “This collaboration makes it possible to unlock the potential of a new technology that will further reduce the carbon foot - print of DRI plants and drive the develop - ment of more sustainable steel production,” says Marco Lapasin, Vice President, Danieli Engineering Centro Metallics. The collaboration brings together Swedish materials expertise and Italian systems engineering, resulting in a solution that strengthens competitiveness while moving the steel industry closer to net- zero. For Kanthal, it is another example of how innovation and sustainability rein - force one another, and how electrification can reshape the future of an entire sector. 1) DRI-based steel production, which starts from iron ore, is generally more energy and resource-intensive and therefore has a higher climate impact than scrap- based production, which is the method used by Alleima. 2) https://www.weforum.org/stories/2023/09/steel-in - dustry-lower-carbon-production/ Alleima Annual Report 2025 | 27 Introduction Financial informationDivisions Corporate governance Sustainability OtherStrategy and operations
Page 30
Strip Innovative materials for energy-efficient compressors Through Strip, Alleima has a long tradition of producing precision strip steel made from materials with high fatigue resistance for compressor manufacturers. The valve steel plays a crucial role in the energy efficiency of the compressors and is used in refriger - ation and freezer systems, air conditioning solutions, heat pumps and industrial com - pressors. The business is based on close customer collaboration, from design and material selection to application support, creating long-term and loyal customer relationships and enabling solutions to be adapted to specific performance require - ments. With energy efficiency expected to become increasingly important in the future, Strip continuously researches and devel - ops materials for the future, with a focus on both business interests and the climate. A profitable sustainability offering Sustainability permeates Alleima’s busi - ness model and value chain, including Strip, which has a significant exposure to the consumer market. The division is suc - cessfully conducting product life cycle assessment initiatives in order to increase transparency towards customers and end-users as well as several buy-back programs in cooperation with customers. The buy-back programs contribute to cost-efficiency as the materials are high quality and have a precise composition, saving customers money and enabling a lower climate impact by reducing the need for virgin material. A stronger position for Strip going forward Strip is implementing targeted commercial and operational initiatives in order to strengthen its profitability and delivery accuracy. The focus is on optimizing pro - duction flows, digitalization and improved inventory management as well as mix opti - mization and cost reduction measures. During the year, the division also launched a new distribution network to enable deliv - ery of high-quality products to more cus - tomers. This includes, for example, its pre - mium Damascus steel, used for high- quality chef’s knives and other products under the Damax™ brand, a product that Alleima is the only company in the world to produce on an industrial scale. Revenues by geography Europe 41% North America 10% Asia 46% Other 3% Revenues by customer segment Key figures 2025 in figures Revenues SEK million Organic revenue growth Adjusted EBIT SEK million Adjusted EBIT margin Total workforce Consumer Industrial Transportation Medical 13%1,571 61 3.9% 525 Note: Adjusted EBIT excludes metal price effects of SEK -16 million. Total workforce includes employees and third-party workers and is based on full-time equiva - lents. Revenues are recognized in the purchaser’s region, not the end-user’s. Main competitors: Proterial, Voestalpine, Jindal Steel and Zapp. Go-to-market model: Approximately 90% direct sales via an in-house sales organization. Deliveries are sent from Sandviken, supported by service centers in China, the US and Japan. The Strip division develops and manufactures a wide range of precision strip steel products and also offers a portfolio of pre-coated strip steel for components in hydrogen fuel cells. The division’s customers are in the Consumer, Industrial, Transportation, Hydrogen and Renewable Energy and Medical segments. Production is located in Sandviken, with sales and service centers in locations including Scranton, PA (US), Kobe (Japan) and Zhenjiang (China). This lays the foundation for being able to rapidly respond to cus - tomers, especially for the product groups in com - pressor valve steel in China. Hydrogen and Renewable Energy 28 | Alleima Annual Report 2025 Introduction Financial informationDivisions Corporate governance Sustainability OtherStrategy and operations
Page 31
At a time when sustainability and the circu - lar economy are becoming increasingly important for the industry’s competitive - ness, the collaboration between Morakniv and Alleima stands as a clear example of high quality combined with responsible material management. Together, the com - panies have developed new processes to ensure that leftover material or scrap steel is collected and returned to the produc - tion chain, which helps ensure that the proportion of recycled steel in Alleima’s knife steel can be maintained at between 80 and 90%. A classic recycled edition When Morakniv launched its most sustain - able knife to date, the Basic 546 SE, the steel from Alleima was a central piece of the puzzle. With 90%¹ ) recycled steel in the blade, and recycled materials in the handle and sheath, the product points the way toward the knives of the future. “Morakniv sees sustainability as an inte - grated part of our core business: delivering knives of the highest quality while minimiz - ing climate impact and making material flows as circular as possible,” says Richard Jägrud, CEO of Morakniv. ”The collabora - tion with Alleima has made it possible to develop processes where surplus or residual steel is taken care of and returned to the production chain. We want to show that high performance and environmental responsibility can go hand in hand – dura - bility in service life, in material choices and across the entire production chain is at the heart of Morakniv’s strategy.” Buy-back program, a benefit for all involved Through Alleima’s buy-back program, Morakniv sells back its residual material, which becomes feedstock for new steel. Because steel retains its properties through repeated recycling, the loop protects both high standards and climate outcomes. “We want to ensure a high recycling rate in the material we purchase, while also taking care that scrap from our production is reintroduced into a circular production chain,” adds Thomas Holmgren, COO at Morakniv. ”Thanks to this set-up, we achieve both of these objectives.” At present, Morakniv purchases three different stainless steel grades from Alleima: Alleima® 14C28N, Alleima® 10C28M, and Alleima® 12C27. All three grades are included in the buy -back program. Scrap from the production in Mora is collected in separate containers before being trans - ported back to Alleima for inspection and remelting. “Getting back residual steel with docu - mented quality simplifies our process,” says Mikael Silver, Program Manager Sus - tainability at Alleima Strip. ”It enables a higher share of recycled steel, facilitates further processing and ensures that we maintain our high requirements for alloy composition and purity.” Supply-chain resilience Virgin raw materials often have vulnerable supply chains, as they are usually concen - From scrap to strength: circular knife-making at Morakniv For over a century, Alleima has supplied premium steel to Morakniv. Together, they have combined Swedish industrial tradition and craftsmanship with the future’s demands for sustainability and circularity. “ We want to ensure a high recycling rate in the material we purchase” Thomas Holmgren COO at Morakniv trated among a limited number of produc - ers, and the material also needs to be transported over long distances. This can be compared to steel scrap, where there are more suppliers and where the vast majority is sourced within the EU. This con - tributes to lower climate impact and a more resilient production. 1) Calculated according to ISO 14021. Marit Sandgren, responsible for sustainability at Morakniv, and Magnus Lilja, Account Manager EMEA for Alleima Strip, by the container of steel scrap from Morakniv’s production, which is then transported back to Alleima’s steel production. Alleima Annual Report 2025 | 29 Introduction Financial informationDivisions Corporate governance Sustainability OtherStrategy and operations
Page 32
Financial information Directors’ report . ........................................................................................................... 31 Risks and risk management . ................................................................................. 37 Financial information and notes . ...................................................................... 40 Consolidated.financial.information .................................................................... 41 Group.notes . .................................................................................................................... 45 Parent.company .financial .information . ............................................................ 72 Parent.company.notes . .............................................................................................. 75 Auditor’s report ............................................................................................................. 78 Introduction Financial informationStrategy.and.operations Divisions Corporate .governance Sustainability Other 30 | Alleima.Annual.Report.2025
Page 33
Orderingång och intäkter SEK M Order intake Revenues 2024 19,419 19,691 Organic,.% -4 0 Structure,.% 0 0 Currency,.% -4 -4 Alloy,.% -2 -2 Total, % -9 -5 2025 17,741 18,630 The.table.is.multiplicative,.i.e..the.different.components.must.be.multiplied. to.determine.the.total.effect. Earnings Gross profit Cost.of.goods.sold.decreased.by.4%.to.15,178.million.(15,740),. mainly.driven.by.decreased.cost.for.intermediate.goods..Gross. profit.decreased.by.13%.to.SEK.3,452.million.(3,951),.correspond - ing.to.a.gross.margin.of.18.5%.(20.1)..The.decrease.was.primarily. driven.by.negative.items.affecting.comparability.of.SEK.-265 million . (0).and.negative.currency.effects. Sales, administrative and R&D costs Selling.expenses.decreased.by.7%.to.SEK.1,166 million.(1,250),. mainly.driven.by.lower.sales.volumes. Administrative.expenses.increased.by.9%.to.SEK.1,062 million. (975),.mainly.driven.by.increased.personnel.costs.and.items. affecting.comparability.. Research.and.development.costs.amounted.to.SEK.296 million. (292). Other.operating.income.and.expenses.amounted.to.SEK.10 million. (64),.mainly.driven.by.currency.effects. Operating profit (EBIT) Adjusted.EBIT.decreased.by.20%.to.SEK.1,555.million.(1,944).corre - sponding.to.a.margin.of.8.3%.(9.9),.mainly.driven.by.negative.cur - rency.effects..Depreciation.and.amortization.amounted.to. SEK -1,012.million.(-913). Reported.EBIT.amounted.to.SEK 938.million.(1,498),.correspond - ing.to.a.margin.of.5.0%.(7.6)..Metal.price.effects.had.an.impact.of. SEK -275.million.(-446).and.items.affecting.comparability.of. SEK -342.million.(0). SEK M Adjusted EBIT 2024 1,944 Organic -52 Currency -341 Structure 3 2025 1,555 Financial items Net.financial.items.were.SEK.35.million.(73)..The.change.was. . primarily.due.to.detoration.in.interest.net. Ta xes Income.tax.expense.amounted.to.SEK.301.million.(350),.corre - sponding.to.an.effective.tax.rate.of.31.0%.(22.3)..See.Note 10. Income.tax.for.more.information. Directors’ report Summary Financial overview – Group SEK M 2025 2024 Change, % Order.intake 17,741 19,419 -9 Organic growth, % -4 -6 – Revenues 18,630 19,691 -5 Organic growth, % 0 1 – Adjusted.operating.profit. (EBIT) 1,555 1,944 -20 Margin, % 8.3 9.9 – Operating.profit.(EBIT) 938 1,498 -37 Profit.for.the.period 671 1,221 -45 Adjusted.earnings.per.share,. diluted,.SEK 4.62 6.27 -26 Earnings.per.share,.diluted,. SEK 2.68 4.87 -45 Free.operating.cash.flow 1,100 1,266 -13 Net.working.capital.to.. revenues,.%1) 35.8 35.1 – Net.debt/Equity.ratio -0.05 -0.04 – . Notes.to.the.reader:.Tables.and.cal .culations.in.the.report.do.not.always. agree.exactly.with.the.totals.due.to.rounding..Comparisons.refer.to.the.cor - responding.period.last.year,.unless.otherwise.stated..Adjusted.operating. profit.(EBIT).excludes.items.affecting.comparability.(IAC).and.metal.price. effects,.see.Note.2.and.description.of.Alternative.Performance.Measures. on.pages.138–139.for.further.details..Definitions.and.glossary.can.be.found. on.www.alleima.com/investors. 1)..The.annual.number.is.based.on.a.four-quarter.. average.. Market development Market.development.for.the.year.was.mixed..Demand.in.the. . Medical.segment.remained.high.and.increased..Demand.in.Oil.and. Gas.and.Nuclear.remained.stable.at.a.high.level..Demand.in.the. short-cycle.business,.mainly.related.to.low-refined.products.in.the. Industrial.and.Chemical.and.Petrochemical.segments,.declined.. Demand.in.the.Industrial.Heating.segment.increased.from.low.levels. Order intake and revenues Order.intake.decreased.by.9%.to.SEK 17,741.million.(19,419),.with. organic.growth.of.-4%..Growth.was.noted.in.the.Medical.and. Industrial.Heating.customer.segments,.while.negative.growth.was. reported.in.the.Oil.and.Gas,.Industrial.and.Chemical.and.Petro - chemical.segments..The.regions.of.North.America.and.Asia.noted. organic.order.intake.growth.of.-3%.and.1%,.respectively..The. region.Europe.noted.organic.order.intake.growth.of.-6%.. Revenues.decreased.by.5%.to.SEK 18,630.million.(19,691),.with. organic.growth.of.0%..The.Kanthal.and.Strip.divisions.noted.posi - tive.organic.growth,.while.the.trend.was.negative.for.Tube.. Book-to-bill.was.95%..The.backlog.remained.solid.with.a.good. product.mix.. Structure.had.an.impact.of.0%,.while.currency.had.an.impact.of. -4%.on.both.order.intake.and.revenues..Alloy.surcharges.had.an. impact.of.-2%.on.both.order.intake.and.revenues. Introduction Financial informationStrategy.and.operations Divisions Corporate .governance Sustainability Other Alleima.Annual.Report.2025 | 31
Page 34
Profit Profit for the period amounted to SEK 671 million (1,221), correspond - ing to earnings per share, diluted, of SEK 2.68 (4.87). Adjusted profit for the period amounted to SEK 1,160 million (1,573) and adjusted earnings per share, diluted, amounted to SEK 4.62 (6.27). See page 138 for further details. Financial position, capital resources and l iquidity Capital employed Capital employed excluding cash increased to SEK 15,653 million (15,983). The decrease was mainly attributable to lower growth investments and fx effects. Return on capital employed excluding cash decreased to 5.8% (9.5). Working capital Net working capital amounted to SEK 6,222 million (6,821). Net working capital in relation to revenues was 35.8% (35.1). Capital expenditure Capex amounted to SEK -1,089 million (-1,190), corresponding to 108% (130) of scheduled depreciation and 5.8% (6.0) of revenues. The decrease was mainly attributable to lower growth investments and higher positive effects from the sale of tangible assets. Cash flow Cash flow from operating activities decreased to SEK 2,011 million (2,123). Free operating cash flow declined to SEK 1,100 million (1,266). The change was primarily attributable to lower operating profit and lower growth investments. Free operating cash flow SEK M 2025 2024 EBITDA 1,950 2,410 Non-cash items 301 148 Changes in working capital 86 33 Capex -1,089 -1,190 Amortization, lease liabilities -148 -135 Free operating cash flow1 1,100 1,266 1) Free operating cash flow before acquisitions and disposals of companies, net financial items and paid taxes. Funding and liquidity On December 31 2025, SEK 1,891 million (1,912) was reported as Cash and Cash equivalents, whereof SEK 1,397 million (1,229) in cash directly available for Group Treasury and SEK 494 million (683) is restricted cash such as short-term deposits and cash accounts with, for Group Treasury, limited access. The short-term deposits are considered as cash equivalent as they have a time to maturity of less than 3 months. Net debt amounted to SEK -864 million (-631), i.e. a net cash position. Net debt in relation to equity was -0.05x (-0.04). The financial net debt position was SEK -1,871 million (-1,911). Net pen - sion liability decreased year on year to SEK 589 million (820). Net debt in relation to rolling 12-month adjusted EBITDA was -0.35x (-0.22). On December 31, 2025, available credit facilities were unutilized. The short-term liquidity reserve, comprising committed credit facilities and accessible cash and cash equivalents was SEK 4,397 million (4,229). See Note 26 for further information. Share and share capital As of December 31, 2025 Alleima’s share capital amounted to SEK 250,877,184 represented by 250,877,184 shares. Alleima’s Annual General Meeting held on April 28, 2025 approved the Board’s proposal for a long-term share-based incentive program (LTI 2025). As of December 31, 2025, LTI 2023, LTI 2024 and LTI 2025 comprises 851,721 share rights. The delivery of these shares is secured through equity swap agreement with a third party. The Annual General Meeting held on April 28, 2025, resolved for the financial year 2024 on an ordinary dividend of SEK 2.30 (2.00) per share. The dividend of SEK 577 million (502) was distributed to the shareholders on May 6, 2025, of which SEK 2 million was repaid to Alleima in form of dividend related to the equity swap for LTI 2023 and LTI 2024. Significant events in 2025 — On January 14, Alleima announced the completion of its acquisi - tion of Endox Feinwerktechnik GmbH and Endox Polska SP.zo.o. (“Endox”), which had been previously announced on December 10, 2024. Endox strengthens the company’s medical business and is reported in the Kanthal division. — On January 24, the Nomination Committee proposed the re-election of Board members Göran Björkman, Claes Boustedt, Ulf Larsson, Andreas Nordbrandt, Susanne Pahlén Åklundh, Victoria Van Camp and Karl Åberg. Andreas Nordbrandt is proposed to be re-elected as Chairman of the Board. — On February 26, it was announced that Per Eklund has been appointed President for the Strip division and member of the Group Executive Management from March 1, 2025. — CFO Olof Bengtsson has retired from his position as of August 31, 2025. He has been succeeded by Johan Eriksson. — On April 14, it was announced that Johanna Kreft, EVP and General Counsel had decided to leave the company. She has been succeeded by Christian Swartling from January 19, 2026. — On June 16, it was announced that Ulrika Dunker, EVP & Head of Human Resources, had decided to leave the company. She has been succeeded by Maria Reinholdsson from March 2, 2026. — Alleima has initiated targeted measures to permanently reduce cost levels and thereby strengthen operational efficiency and long-term competitiveness. The measures are expected to generate cost savings of just over SEK 200 million annually. At the same time, one-off costs related to the measures are estimated to amount to nearly SEK 400 million, of which approx - imately half effects cash flow. Most of these costs impacted earnings in the fourth quarter 2025. Significant events after year-end 2025 — On January 29, the Nomination Committee proposed the re-election of Board members Göran Björkman, Claes Boustedt, Ulf Larsson, Andreas Nordbrandt, Susanne Pahlén Åklundh, Victoria Van Camp and Karl Åberg. Andreas Nordbrandt is proposed to be re-elected as Chairman of the Board. Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other 32 | Alleima Annual Report 2025
Page 35
Significant agreements The.manufacture.and.sale.of.rock.drill.steel.products.is.a.business. segment.(the.”RDS.business”).within.Alleima.with.multiple.custom - ers,.including.subsidiaries.in.the.Sandvik.group..The.RDS.business. is.operated.by.Alleima.Rock.Drill.Steel.AB.(the.“RDS.company”).. 10%.of.the.shares.in.the.RDS.company.are.held.by.Sandvik.AB.and. the.remaining.shares.are.held.by.Alleima.EMEA.AB..The.co-owner - ship.is.regulated.in.a.shareholders’.agreement.to.which.the.own - ers.are.party..The.terms.of.the.shareholders’.agreement.provides. Sandvik.AB.with.certain.protective.rights,.including.a.call.option. which.Sandvik.AB.may.exercise.upon,.e.g.,.a.change.of.control.in. Alleima.AB,.whereby.an.owner,.who.was.not.a.major.shareholder.at. the.time.of.signing.of.the.agreement,.gains.control.of.30%.or.more. of.all.votes.in.the.company,.and.which.call.option.provides.Sandvik. AB.with.a.right.to.purchase.Alleima.EMEA.AB’s.shares.in.the.RDS. company.at.fair.market.value..Upon.exercise.of.the.call.option.and. Sandvik.AB’s.subsequent.purchase.of.Alleima.EMEA.AB’s.shares,. the.shareholders’.agreement.will.lapse..As.a.change.of.control.that. causes.the.call.option.to.become.exercisable.may.be.a.public. take-over.offer,.the.shareholders’.agreement.is.deemed.such.a. significant.agreement.as.is.intended.by.the.Annual.Reports.Act. (1995:1554).Chapter.6.section.2.item.9. Workforce The.number.of.employees.at.year-end.was.6,380.(6,309)..Wages,. salaries,.and.other.remunerations.for.the.year.totaled.SEK.3,972. million.(3,858)..The.number.of.third-party.workers.at.year-end.was. 440.(516). Alleima guidelines for the remuneration of senior executives The.below.remuneration.guidelines.were.approved.by.the.Annual. General.Meeting.2023.and.apply.until.the.Annual.General.Meeting. 2027,.unless.any.changes.are.proposed..The.Board.of.Directors. does.not.propose.any.new.guidelines. Scope of the guidelines The.guidelines.apply.to.the.President.and.CEO.and.other.mem - bers.of.Group.Executive.Management..The.guidelines.do.not. cover.remuneration.decided.or.approved.by.the.General.Meeting.. The guidelines’ promotion of the company’s business strategy, long-term interests and sustainability A.prerequisite.for.the.successful.implementation.of.the.company’s. business.strategy.and.safeguarding.of.its.long-term.interests,. including.its.sustainability,.is.that.the.company.is.able.to.recruit. and.retain.qualified.personnel..To.this.end,.it.is.necessary.that.the. company.offers.competitive.remuneration. The.guidelines.enable.the.company.to.offer.senior.executives.a. competitive.total.remuneration..For.more.information.regarding. the.company’s.business.and.sustainability.strategy,.please.see. the.company’s.website.www.alleima.com.. Forms of remuneration The.total.remuneration.package.should.be.based.on.market. terms,.be.competitive.and.reflect.the.individual’s.performance. and.responsibilities.as.well.as.the.Group’s.earnings.trend..The. remuneration.may.consist.of.fixed.salary,.variable.remuneration,. pension.benefits.and.other.benefits. . Fixed salary The.purpose.of.the.fixed.salary.is.to.attract.and.retain.senior.exec - utives.with.the.right.competence.for.the.respective.positions..The. salary.level.should.be.determined.by.comparing.the.salary.to.simi - larly.complex.positions.within.a.defined.peer.group,.which.may. change.over.time. Variable consideration Variable share-related remuneration The.company.may.offer.long-term.share-related.or.share.price-. related.remuneration..Such.programs.(including.any.cash-based. incentive.programs.that.may.be.offered.as.an.alternative,.when. deemed.appropriate).are.adopted.by.the.General.Meeting.and.are. therefore.not.covered.by.the.guidelines.. Variable cash remuneration The.company.may.offer.short.or.long-term.variable.cash.remuner - ation..The.company.may.only.offer.long-term.variable.cash.remu - neration.as.a.three-year.program.and.during.a.year.when.the. .General.Meeting.has.not.resolved.to.adopt.a.share.or.share.price-. related.program. The.long-term.variable.cash.remuneration.shall.be.a.maximum. of.75%.of.the.fixed.annual.cash.salary,.paid.during.the.program’s. third.and.final.year,.for.the.President.and.CEO,.and.a.maximum.of. 60%.of.the.fixed.annual.cash.salary,.paid.during.the.program’s. third.and.final.year,.for.other.members.of.Group.Executive. Manage .ment..The.fulfillment.of.objectives.for.awarding.such. remuneration.shall.be.measured.over.a.period.of.one.to.three. years.and.paid.out.year.four. The.short-term.variable.cash.remuneration.shall.be.a.maximum. of.70%.of.the.fixed.annual.cash.salary.for.the.President.and.CEO. and.a.maximum.of.50%.of.the.fixed.annual.cash.salary.for.other. members.of.Group.Executive.Management. Any.variable.cash.remuneration.shall.be.conditional.upon.the. fulfillment.of.defined.and.measurable.criteria..These.criteria.shall. aim.at.promoting.the.company’s.business.strategy.and.perfor - mance.as.well.as.its.long-term.interests,.including.its.sustainability. . At.the.beginning.of.each.year,.the.criteria.are.proposed.by.the. Remuneration.Committee.and.approved.by.the.Board.of.Directors, . including.key.performance.indicators.(KPIs).and.the.target.ranges. deemed.relevant.for.the.upcoming.measurement.period.. The.criteria.may.be.financial,.and.non-financial,.and.shall.always. be.related.to.business.performance..At.least.80%.of.the.variable. cash.remuneration.shall.be.linked.to.the.financial.criteria.. The.established.KPIs.shall.be.presented.on.the.company’s.web - site.www.alleima.com..The.extent.to.which.the.criteria.for.award - ing.variable.cash.remuneration.have.been.fulfilled.shall.be.deter - mined.when.the.measurement.period.has.ended.and.will.be. published.in.the.remuneration.report.the.following.year..For.finan - cial.criteria,.the.evaluation.shall.be.based.on.the.latest.financial. information.made.public.by.the.company. Special arrangements Provided.that.remuneration.is.only.made.on.an.individual.basis,. the.company.may.offer.one-off.remuneration.in.specific.cases.for. the.purpose.of.recruiting.or.retaining.senior.executives..The.remu - neration.may.not.exceed.an.amount.corresponding.to.100%.of.the. individual’s.fixed.annual.salary.including.maximum.variable.cash. remuneration. . Introduction Financial informationStrategy.and.operations Divisions Corporate .governance Sustainability Other Alleima.Annual.Report.2025 | 33
Page 36
Right to withhold or reclaim remuneration Terms.and.conditions.for.variable.remuneration.shall.be.designed. so.that.the.Board.of.Directors.(i).has.the.right.to.limit.or.refrain.from. payment.of.variable.remuneration.if.exceptional.economic.circum - stances.prevail.and.such.a.measure.is.considered.reasonable,. and.(ii).has.the.right.to.withhold.or.reclaim.variable.remuneration. paid.to.an.executive.based.on.results.that.afterward.were.found.to. have.been.misstated.because.of.wrongdoing.or.malpractice. (so-called.malus.and.clawback).. Pension benefits Pension.shall.be.paid.in.accordance.with.relevant.national.legisla - tion,.applicable.collective.agreements.(or.similar).. For.senior.executives.based.in.Sweden,.pension.benefits.are. subject.to.the.ITP.plan.(Industry.and.Trade.Supplemental.Pension).. Accordingly,.there.are.both.premium-based.(“defined.contribu - tion”).and.benefits-based.(“defined.benefit”).pension.undertakings, . based.on.individual.prerequisites.and.applicable.regulations..Vari - able.cash.remuneration.shall.qualify.for.pension.benefits.to.the. extent.required.by.mandatory.collective.agreement.provisions.(or. similar).applicable.to.the.executive.. In.addition.to.ITP,.Alleima.may.offer.complementary.pension. benefits..Senior.executives.are.offered.disability.pension.and.a. defined.contribution.pension.scheme.with.an.Alleima.approved. insurance.provider.in.accordance.with.Alleima’s.Procurement. . Policy.(Alleima.Procurement.Procedure).. For.senior.executives.residing.outside.Sweden,.deviations.may. be.made.for.pension.benefits,.if.required.by.local.law.or.estab - lished.market.practice.. Total.pension.premiums.shall.not.amount.to.more.than.37.5%.of. the.fixed.annual.salary.. Other benefits Other.benefits.may.include,.for.example,.life.insurance,.medical. insurance.and.company.car.benefit..Such.benefits.may.not. amount.to.more.than.5%.of.the.fixed.annual.salary..For.senior. executives.in.need.of.double.accommodation:.paid.accommoda - tion,.etc..may.be.added.in.line.with.Alleima’s.regulations.and.such. benefits.may.not.amount.to.more.than.20%.of.the.fixed.annual. .salary. Termination of employment Severance.pay.may.be.paid.when.employment.is.terminated.by. Alleima..The.President.and.CEO.and.the.other.senior.executives. may.have.a.period.of.notice.of.not.more.than.12.months,.in.combi - nation.with.severance.pay.correspon .ding.to.6–12.months.fixed. salary. . When.employment.is.terminated.by.the.senior.executive,.the. notice.period.may.not.exceed.six.months.and.no.severance.pay. shall.be.paid.. In.case.a.senior.executive.is.not.entitled.to.severance.pay,.but.is. covered.by.a.non-compete.undertaking,.the.senior.executive.may. instead.be.compensated.for.such.a.non-compete.undertaking.. Any.remuneration.paid.as.compensation.for.a.non-compete. undertaking.shall.not.exceed.60%.of.the.fixed.salary.at.the.time.of. notice.of.termination.of.the.employment.and.shall.not.be.paid.for.a. longer.period.than.18.months..Fixed.salary.during.the.notice. period.together.with.any.compensation.for.the.non- .compete. undertaking.shall.not.exceed.an.amount.equivalent.to.the.senior. executive’s.fixed.salary.for.24.months.. Consideration of remuneration to the company’s employees When.preparing.the.proposal.for.the.guidelines,.the.employment. conditions.applied.within.the.company.as.a.whole.have.been.used. as.a.benchmark,.following.the.principle.that.the.remuneration. packages.of.all.Alleima.employees.should.be.based.on.the.com - plexity.of.the.position,.performance.and.market.practice..In.gen - eral,.the.same.combination.of.remuneration.components.such.as. fixed.salary,.variable.remuneration,.pension.and.other.benefits.are. offered.within.Alleima. The decision-making process for determining, reviewing and implementing the guidelines The.Board.of.Directors.has.established.a.Remuneration.Commit - tee..The.Committee’s.tasks.include.preparing.the.Board.of.Direc - tors’.decision.to.propose.guidelines.for.senior.executive.remuner - ation. The.Remuneration.Committee.shall.annually.assess.whether.a. revision.of.the.guidelines.is.needed..The.Board.of.Directors.shall. prepare.a.proposal.for.guidelines.at.least.once.every.four.years. and.submit.it.to.the.General.Meeting.for.resolution..The.guidelines. shall.be.in.force.until.new.guidelines.are.adopted.by.the.General. Meeting. . The.Remuneration.Committee.shall.also.monitor.and.evaluate. programs.for.variable.remuneration.for.the.executive.manage - ment,.the.application.of.the.guidelines.for.senior.executive.remu - neration.as.well.as.the.current.remuneration.structures.and.com - pensation.levels.in.the.company.. The.members.of.the.Remuneration.Committee.are.independent. of.the.company.and.its.executive.management..The.President.and. the.CEO.and.other.senior.executives.do.not.participate.in.the. Board.of.Directors’.processing.of.and.resolutions.regarding.remu - neration.related.matters.to.the.extent.that.they.are.affected.by. such.matters.. Decisions.on.remuneration.to.the.President.and.CEO.are.taken. by.the.Board.of.Directors,.based.on.proposals.from.the.Remuner - ation.Committee,.and.decisions.on.remuneration.to.the.other. senior.executives.are.taken.by.the.Remuneration.Committee. Adjustment to local regulations Remuneration.under.employment.is.subject.to.other.rules.than. Swedish.may.be.duly.adjusted.to.comply.with.mandatory.rules. . or.established.local.practice,.taking.into.account,.to.the.extent. possible,.the.overall.purpose.of.these.guidelines. Derogation from the guidelines The.Board.of.Directors.may.temporarily.resolve.to.derogate.from. the.guidelines,.in.whole.or.in.part,.if.in.a.specific.case.there.is. . special.cause.for.the.derogation.and.a.derogation.is.necessary.to. serve.the.company’s.long-term.interests,.including.its.sustainabil - ity,.or.to.ensure.the.company’s.financial.viability. Research and development (R&D) The.R&D.team.works.in.close.collaboration.with.the.sales.organi - zation.and.directly.with.customers.to.identify.present.and.future. customer.needs..Focus.areas.are.both.evolutionary.upgrades.and. refinement.of.existing.materials.and.processes,.such.as.develop - ing.new.super.duplex.alloys,.austenitic.materials,.and.new.efficient. compressor.valve.steels,.as.well.as.more.revolutionary.develop - ments.that.expand.the.existing.product.portfolio..Alleima’s.R&D. spend.amounted.to.SEK.296 .million.(292).during.2025,.corre - sponding.to.approximately.1.6%.(1.5).of.sales..The.number.of. employees.in.R&D.was.approximately.255.(249).by.year.end.. Key intangible resources Alleima’s.business.model.relies.on.key.intangible.resources.such. as.technological.leadership,.advanced.materials.expertise,.and. continuous.research.and.development..These.capabilities.enable. the.company.to.develop.specialized.solutions.in.close.collabora - tion.with.customers.and.form.an.essential.part.of.its.competitive. Introduction Financial informationStrategy.and.operations Divisions Corporate .governance Sustainability Other 34 | Alleima.Annual.Report.2025
Page 37
advantage..Through.its.deep.metallurgical.knowledge.and.strong. innovation.capacity,.Alleima.creates.solutions.that.enhance. energy.efficiency,.reduce.CO₂.emissions.and.support.increased. circularity..These.intangible.resources.are.therefore.central.to.the. company’s.value.creation.and.long -term.competitiveness.. Ta x Alleima.is.a.multinational.group.with.several.inter-company.trans - actions.cross.borders..The.OECD.has.issued.transfer.pricing. guidelines.for.multinational.groups..Alleima.adheres.to.these. guidelines.and.also.to.the.local.legislation.of.each.country.to. ensure.that.a.correct.pricing.model.is.applied.and.that.a.correct. amount.of.tax.is.paid.in.each.country..Alleima.monitors.the.OECD’s. tax.reform.work.and.the.EU.initiatives.on.tax.transparency.care - fully.and.observes.these.standards.as.and.when.enacted..Alleima. strives.to.have.good.relations.with.our.stakeholders,.such.as.tax. authorities,.non-governmental.organizations.and.investors.and.is. .convinced.that.an.open.discussion.and.cooperation.with.tax. authorities.around.the.globe.will.help.us.to.reduce.uncer .tainty. about.the.taxes.we.are.obliged.to.pay..However,.the.guidelines.on. transfer.pricing.can.be.interpreted.in.various.ways. In.2025,.the.Group.paid.SEK.499 .million.(451).in.income.taxes. globally..Income.tax.comprises.just.a.portion.of.all.taxes.paid.by. Alleima.worldwide..In.addition,.Alleima.pays.social.security.contri - butions,.environmental.and.energy.taxes,.property.taxes,.etc. . Furthermore,.Alleima.collects.and.pays.taxes.at.the.request.of. governments.and.authorities,.including.indirect.taxes.and.with - holding.taxes. Environment In.Sweden,.Alleima.has.operations.where.environmental.permits. are.required..All.operations.held.valid.permits.during.the.year.. Guideline.values.in.some.of.these.permits.were.exceeded.for. emissions.to.air.and.water.during.the.year..In.all.such.incidents,.a. notification.was.sent.to.the.authority..To.comply.with.the.target. values,.corrective.actions.were.prompted. Alleima.conduct.licensed.operations.in.accordance.with.envi - ronmental.legislation.at.four.locations:.Sandviken,.Söderfors,. Hallsta .hammar.and.Surahammar..The.permits.for.these.sites. relate.to.production.volumes,.allowed.intake.of.water.from.water. bodies,.emission.to.air.and.water.as.well.as.waste.disposal.to.own. landfill. Two.subsidiaries.in.Sweden.are.included.in.the.EU.Emissions. Trading.System.(EU.ETS)..Should.Alleima.not.execute.its.carbon. reduction.plan,.an.associated.cost.would.incur..In.2025,.the.num - ber.of.allowances.allocated.for.the.year.was.55,110..Actual.emis - sions.in.the.trading.system.amounted.to.around.61,188.tonnes..The. cost.to.cover.the.deficit.amounted.to.approximately.SEK 5.million. Statutory sustainability report The.statutory.sustainability.report.is.part.of.the.Directors’.report. and.covers.pages.95–131..The.report.has.been.prepared.in.accor - dance.with.the.European.Sustainability.Reporting.Standards. (ESRS).and.the.Taxonomy.Regulation..A.listing.of.the.disclosure. requirements.reported.by.Alleima.can.be.found.on.pages.123–124. Parent company The.parent.company’s.(Alleima.AB).revenues.amounted.to . SEK 36 million.(27).and.the.operating.result.was.SEK -47 .million (-50). As.of.December.31,.2025.Alleima.AB’s.share.capital.amounted.to. SEK.250,877,184.represen .ted.by.250,877,184.shares..The.largest. shareholders.of.the.parent.company.at.. year-end.were.Industri - värden.(21.09%).and.Lundbergföretagen.AB.(10.04%)..The.ten. . largest.shareholders.amounted.to.54.86%.of.total.shares.and. votes.. The.number.of.employees.in.the.parent.company.as.of. . December.31,.2025.was.9.(9). Proposed appropriation of earnings To.the.Annual.General.Meeting.on.April.29,.2026,.Alleima.Board.of. Directors.proposes.for.the.financial.year.2025.a.dividend.of.SEK. 2.50.(2.30).per.share.(SEK.627.million),.to.be.paid.in.May.2026,.and. that.the.parent.company.shall.retain.the.remaining.part.of.non-. restricted.equity..The.record.date.for.entitlement.to.receive.divi - dends.is.proposed.as.May.4,.2026.and.payment.is.expected.to.be. made.on.May.7,.2026. The Board of Directors proposes that earnings be distributed as follows: SEK Amount.to.be.paid.to.the.shareholders 627,192,960 Amount.to.be.retained.by.the.parent.company 13,267,680,441 Total non-restricted equity of the parent company 13,894,873,401 For.further.information.on.Shareholders’.Equity,.see.Group.Note 19. Statement of the Board in compliance with the Swedish Companies Act (2005:551) clause 18:4 The.Board.has.proposed.that.the.Annual.General.Meeting.2026. resolve.on.a.dividend.distribution.of.SEK.2.50.per.share.. After.the.dividend.distribution,.the.remaining.non-restricted. equity.of.SEK.13,268.million.is.proposed.to.be.retained.in.the.busi - ness.and.brought.forward..The.total.amount.of.the.proposed.divi - dend.distribution.corresponds.to.approximately.4.5%.of.the. non-restricted.equity.of.the.parent.company,.which.in.total. amounts.to.SEK.13,895.million.prior.to.the.transaction..After.the. proposed.dividend.of.SEK.627.million,.an.amount.of.SEK.13,268. million.will.remain..In.the.consolidated.balance.sheet.per.Decem - ber.31,.2025,.retained.earnings,.including.the.result.of.the.year. 2025,.amount.to.SEK.16,322.million.prior.to.the.proposed.dividend. distribution.and.will.amount.to.SEK.15,695.million.after.the.pro - posed.dividend.distribution..The.Board.notes.that.there.will.be.full. coverage.for.the.restricted.reserves.of.the.company.after.the. . dividend.distribution.. The.Board.makes.the.assessment.that.the.company’s.and.the. group’s.equity.after.the.dividend.distribution.will.be.able.to.sustain. the.requirements.which.the.nature,.size.and.risks.of.the.business. will.present.. The.Board.further.considers.the.actions.reasonable.in.light.of. the.company’s.and.the.group’s.consolidation.requirements,.liquid - ity.and.position.in.general.. The.dividend.distribution.is.not.assumed.to.present.any.risk.for. the.company’s.or.the.group’s.ability.to.fulfil.its.short.or.long.term. payment.obligations,.and.neither.of.these.measures.are.assumed. to.affect.the.ability.of.the.company.to.make.required.investments.. In.summary,.the.Board.considers.the.proposed.dividend.distri - bution.to.be.justifiable.according.to.the.Swedish.Companies.Act. (2005:551).chapter.17.section.3,.second.and.third.paragraph.. January.27,.2026 Alleima.AB.(publ) The.Board.of.Directors Introduction Financial informationStrategy.and.operations Divisions Corporate .governance Sustainability Other Alleima.Annual.Report.2025 | 35
Page 38
Divisions Alleima.has.three.divisions:.Tube,.Kanthal.and.Strip..The.largest. production.facilities.are.located.in.Sandviken,.Sweden,.and.in. Chomutov,.Czech.Republic. Tube Tube.develops.and.manufactures.seamless.tubes.and.other.long. products.in.advanced.stainless.steel.and.special.alloys,.tailored. for.specific.end.applications..The.customers.are.primarily.found.in. the.segments.of.Oil.and.Gas,.Chemical.and.Petrochemical,.Indus - trial,.Mining.and.Construction,.Nuclear,.and.Transportation.. . The.offering.also.includes.products.and.solutions.for.the.growing. . segment.of.Hydrogen.and.Renewable.Energy..Order.intake. decreased.by.11%.to.SEK.12,138.million.(13,677),.with.organic.growth. of.-7%..Revenues.decreased.by.7%.to.SEK.13,063.million.(14,027),. with.organic.growth.of.-2%..Adjusted.EBIT.margin.was.8.9%.(.10.1).. EBIT.margin.was.6.4%.(7.4).and.included.metal.price.effects.of. SEK -223 million.(-378).and.items.affecting.comparability.of . SEK -97 million.(0). SEK M 2025 2024 Change % Order.intake 12,138 13,677 -11 Organic growth, % -7 -10 – Revenues 13,063 14,027 -7 Organic growth, % -2 2 – Adjusted.EBIT 1,159 1,422 -18 Adjusted EBIT margin, % 8.9 10.1 – EBIT 839 1,044 -20 EBIT margin, % 6.4 7.4 – Number.of.employees1 4,253 4,292 -1 Number.of.third.party.workers1 301 379 -20 .1)..Number.of.employees.and.Number.of.third-party.workers.is.based.on. full-time .equivalents. Kanthal Kanthal.is.a.provider.of.products.in.the.area.of.industrial.heating. technology.and.resistance.materials,.and.also.offers.ultra-fine. wire.in.stainless.steel.for.use.in.medical.appliances..The.custom - ers.are.primarily.in.the.segments.Industrial.Heating,.Consumer,. Medical.and.Industrial..Order.intake.increased.by.2%.to.SEK.4,177. million.(4,077),.with.organic.growth.of.9%..Revenues.decreased. . by.5%.to.SEK.3,996.million.(4,200),.with.organic.growth.of.1%.. Adjusted.EBIT.margin.was.16.4%.(17.9)..EBIT.margin.was.10.2%.(16.5). and.included.metal.price.effects.of.SEK -37 million.(-59).and.items. affecting.comparability.of.SEK -210 million.(0). SEK M 2025 2024 Change % Order.intake 4,177 4,077 2 Organic growth, % 9 0 – Revenues 3,996 4,200 -5 Organic growth, % 1 -3 – Adjusted.EBIT 656 750 -13 Adjusted EBIT margin, % 16.4 17.9 – EBIT 409 691 -41 EBIT margin, % 10.2 16.5 – Number.of.employees1 1,370 1,298 6 Number.of.third.party.workers1 101 101 0 .1)..Number.of.employees.and.Number.of.third-party.workers.is.based.on. full-time .equivalents. Strip Strip.develops.and.manufactures.a.wide.range.of.precision.strip. steel.and.compressor.valve.steel.and.also.offers.a.portfolio.of. coated.strip.steel.for.components.in.hydrogen.fuel.cells..The.cus - tomers.are.in.the.segments.Consumer,.Industrial,.Transportation,. Hydrogen.and.Renewable.Energy,.as.well.as.Medical..Order.intake. decreased.by.14%.to.SEK.1,426.million.(1,665),.with.organic.growth. of.-11%..Revenues.increased.by.7%.to.SEK.1,571.million.(1,465),. . with.organic.growth.of.13%..Adjusted.EBIT.margin.was.3.9%.(4.5).. . EBIT.margin.was.0.7%.(3.8).and.included.metal.price.effects.of. SEK -16 million.(-9).and.items.affecting.comparability.of. SEK -35 million.(0). SEK M 2025 2024 Change % Order.intake 1,426 1,665 -14 Organic growth, % -11 32 – Revenues 1,571 1,465 7 Organic growth, % 13 -4 – Adjusted.EBIT 61 66 -7 Adjusted EBIT margin, % 3.9 4.5 – EBIT 11 56 -81 EBIT margin, % 0.7 3.8 – Number.of.employees1 507 486 4 Number.of.third.party.workers1 18 15 25 .1)..Number.of.employees.and.Number.of.third-party.workers.is.based.on. full-time .equivalents. Introduction Financial informationStrategy.and.operations Divisions Corporate .governance Sustainability Other 36 | Alleima.Annual.Report.2025
Page 39
Risks and risk management Alleima is exposed to a number of risks that can have a negative impact on the Group’s operations. Therefore, it is of great impor - tance that the company has a systematic and effective process to identify, manage, and reduce the effects of these risks. The purpose of Alleima’s risk work is to support the business in managing and effectively preventing risks that may affect the company’s ability to achieve its financial and strategic goals. Alleima’s Board of Directors decides on the Group’s strategic direction. The responsibility for the long-term and overall man - agement of risks follows the company’s decision and delegation order. This means that the Group’s risk management generally follows the company’s decentralized structure, where the man - agement teams of the various business operations manage their operational risks but must follow the minimum requirements defined in “The Alleima Way”. Enterprise Risk Management The Enterprise Risk Management (ERM) process within Alleima is part of the strategy- and business- planning process. All divisions and selected Group functions perform, at least once a year, as part of the strategic work, an assessment of business risks in accordance with the ERM methodology. The Group management reviews and discusses Alleima’s risk level and decides on the Group’s risk profile at least once a year. Alleima’s overall risk profile is based on the organization’s overall risk assessment and also takes into account environmental monitoring and the Group management’s own view of risks to the business. The ERM report, which summarizes important risks and preven - tive activities, was presented to the Audit Committee in October 2025 and the Board of Directors in December 2025. The participation of the Board and the Audit Committee in the ERM process is described in more detail in the section on corpo - rate governance. Continuity Planning and Crisis Management Alleima’s operational units, such as production units, have conti - nuity plans in place to ensure that the organization can continue business operations at an acceptable level in the event of a dis - ruption. In the event of a serious incident, crisis preparedness plans are in place. Insurance as a Risk Management Tool Alleima has tailored insurance programs that manage risks associ - ated with, among other things, the Group’s property, transport, and liability exposures. Insurable risks are continuously evaluated, and measures are taken to reduce these risks. To ensure cost- effective insurance solutions for the company, an a captive com - pany within the group has been started, with the intention of re- insuring selected risks for Alleima’s subsidiaries. Internal Audit and Internal Control in Alleima’s Risk Work The internal audit function regularly follows up on the implementa - tion of various risk management programs such as ERM, continuity planning, crisis management, and insurance programs. Alleima applies Group-wide internal controls to prevent risks related to financial reporting, IT systems, and security, as well as other busi - ness risks. Read more about the internal control program in the section on corporate governance and on the page for internal control over financial reporting. Financial Risks Alleima’s financial risk management is centralized, with a central finance function, Group Treasury, which manages most of the Group’s financial risks and transactions. Financial risk manage - ment is handled in accordance with the Group’s financial risk man - agement policy, which is part of “The Alleima Way.” The financial risks managed include currency risks in the form of transaction and translation exposure, commodity price risks regarding metals and energy, interest rate risk, liquidity and refi - nancing risks, and credit risks. Derivatives are widely used as hedging instruments in hedging strategies and are valued at fair value. Hedge accounting is applied to all commodity-related derivatives and certain currency derivatives to avoid volatility in results from revaluations of deriva - tives. For a more detailed description of financial risk management and hedge accounting, see note 26. Sustainability Risks The most important sustainability risks are assessed in terms of both probability and impact. To further understand the sustain - ability risks, Alleima’s materiality analysis is used to identify risks related to sustainability and climate in the value chain. For further information on sustainability-related risks and opportunities, please see the Sustainability Report on pages 95–130. Board of Directors and Audit Committee Strategy Annual report Group Management’s risk assess- ment is shared with the Board of Directors and the Audit Committee annually. Risk assessment of business units, divisions and group functions is part of the development and execution of each organization’s strategy. An high-level overview is shared externally in the annual report. Risk assessment Group Executive Management Risk assessment Business units, divisions and Group functions Consolidation of risk and review of mitigating actions Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other Alleima Annual Report 2025 | 37
Page 40
Risk Example of measures Change compared to the previous year Exposure to a potentially declining market Alleima is exposed to the oil and gas segment, where demand may gradually decrease over time, posing a risk of reduced volumes. — Long-term strategy to reduce dependence on oil and gas by growing in other customer seg - ments and seizing opportunities arising from the transition to renewable energy Geopolitical uncertainty Politically driven changes and decisions, as well as differences in legislation and regula - tions in different regions, can negatively impact operations through increased costs or otherwise complicate business operations. — Continuous monitoring of global develop - ments and continuity planning to quickly manage changes in production or distribution routes — Ongoing dialogue with organizations such as Eurofer, Jernkontoret, and ESTA Technological development If Alleima fails to lead technological develop - ment, there is a risk of missed business opportunities. — Continuous development of processes and working methods, including monitoring tech - nological developments and digitalization — Competence development within Artificial Intelligence Strategic risks Unchanged risk assessment Increased likelihood and/or impact Reduced likelihood and/or impact Risk Example of measures Change compared to the previous yea Business interruption in our production Alleima has several production units globally. Fires, breakdowns in production equipment or IT systems, weather-related events and other types of losses can lead to significant production interruptions that can affect Alleima’s ability to deliver to customers and thus Alleima’s results. — Business continuity plans developed with focus on how to minimize interruptions in production, continuous monitoring of the location of production facilities and review of risks related to natural disasters — Risk engineering visits are made regularly to larger production units to identify and develop plans to address potential causes of produc - tion interruptions — Reinvestment plans are in place for the most important production assets — Critical IT systems have disaster recovery plans in place that are tested regularly Lack of required competence to fulfill our strategic objectives Alleima has a need for competent and com - mitted employees. The company must have the ability to attract and retain talent and ensure access to leadership in order to achieve set strategic and operational objec - tives. — Continuous work with Employer Branding and maintaining Alleima’s core values — Ongoing work with competence development, including the possibility of job rotation and talent management Comment: The probability and impact of this risk have decreased seen to the ERM scope. In longer term, there is an identified risk of managing required competence shift. Supply chain risks Risk of disruptions, increased production costs, changed capital binding, or longer lead times due to dependencies on individual suppliers, regional dependencies, changed metal prices, and increased likelihood of risks related to weather. — Defined strategy for supply of raw materials and secondary raw materials — Strengthening long-term supplier relation - ships and securing alternative suppliers where possible — Reducing impacts of metal price changes through alloy surcharges or fixed-price agreements with end customers and inventory optimizations — Hedging to secure energy prices Operational risks Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other 38 | Alleima Annual Report 2025
Page 41
Risk Example of measures Change compared to the previous year Incidents within Own Operations Causing Harm to Employees or the Environment Risk of serious harm to employees or the environment due to an accident at one of the company’s production facilities — “Safety first” prioritized on the Alleima’s management agenda — Regular training to raise awareness of potential accidents within our operations — Regular follow-up of management systems related to health and safety — Specific risk assessments to minimize risks related to the environment, health, and safety Compliance related risks Risk of non-compliance with laws and regula - tions that are continuously evolving due to the geopolitical situation. This could lead to lawsuits, penalties, and potential impact on the business, including potential brand impact. — Compliance programs have been established and continuously developed based on new and changing regulations Kommentar Comment: Current geopoli - tical situation have lead to an increase of this risk Deficiencies related to information management and information security Modern digital business methods increase risks of unauthorized information disclosure and data breaches. — The company has clearly defined processes for information management, including classi - fication of information and internal regulations regarding where different types of information should be stored — Framework, including processes and organi - zation for Digital Security implemented — Ongoing training of employees to ensure knowledge about cyber-related risks Liability risks related to contracts or delivered Products Risk that delivered products do not meet defined requirements in the product specifi - cation or contract. — Continuous focus on quality and further development of Alleima’s management systems Comment: Increased require - ments from customer due to increased regulatory require - ments mean that the risk is assessed as increasing Cont. Operational risks Risk Example of measures Change compared to the previous year Financing The company is exposed to risks related to currency, commodities, interest rates, liquidity, refinancing, and credit — Continuous hedging of financial risks through derivatives — Ensuring strong financial counterparties. — Focus on cash flow and low debt — Access to confirmed long-term credit facility See Note 26 for a more detailed description of financial risks. Financial risks Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other Alleima Annual Report 2025 | 39
Page 42
Financial information and notes Consolidated financial information Consolidated income statement .............................................................................. 41 Consolidated statement of comprehensive income ................................................................................................ 41 Consolidated balance sheet ...................................................................................... 42 Consolidated statement of cash flows .................................................................. 43 Consolidated statement of changes in equity .................................................... 44 Group notes .................................................................................................................... 45 Note 1 Significant accounting principles – assessments and assumptions for accounting purposes ............................... 45 Note 2 Segment information and revenue ................................................. 51 Note 3 Personnel information and remuneration of management ...54 Note 4 Fees and remuneration to auditors ............................................... 56 Note 5 Research, development and quality assurance ....................... 56 Note 6 Other operating income .................................................................... 56 Note 7 Other operating expenses ................................................................ 56 Note 8 Operating expenses ........................................................................... 56 Note 9 Net financial items ............................................................................... 56 Note 10 Income tax .............................................................................................. 56 Note 11 Earnings per share ............................................................................... 57 Note 12 Intangible assets .................................................................................. 58 Note 13 Property, plant and equipment ....................................................... 59 Note 14 Leases ..................................................................................................... 60 Note 15 Non-current financial assets ........................................................... 61 Note 16 Inventories .............................................................................................. 61 Note 17 Trade receivables ................................................................................ 61 Note 18 Other current receivables ................................................................. 62 Note 19 Equity ........................................................................................................ 62 Note 20 Provision for pensions and other non-current benefits ........ 62 Note 21 Other interest-bearing liabilities ..................................................... 65 Note 22 Other provisions ................................................................................... 65 Note 23 Other non-interest-bearing liabilities .......................................... 66 Note 24 Accrued expenses .............................................................................. 66 Note 25 Contingent liabilities and pledged assets ................................. 66 Note 26 Financial risk management .............................................................. 66 Note 27 Related parties ...................................................................................... 70 Note 28 Business combinations ....................................................................... 71 Note 29 Government grants .............................................................................. 71 Note 30 Events after the close of the period ............................................... 71 Parent company financial information Parent company income statement ........................................................................ 72 Parent company statement of comprehensive income .................................. 72 Parent company balance sheet ................................................................................ 73 Parent company cash flow statement .................................................................... 74 Parent company changes in equity ......................................................................... 74 Parent company notes ................................................................................................. 75 Note 1 Significant accounting principles – assessments and assumptions for accounting purposes ............................... 75 Note 2 Revenue ................................................................................................... 75 Note 3 Interest revenue and similar income ............................................. 75 Note 4 Income tax .............................................................................................. 75 Note 5 Shares in group companies ............................................................. 75 Note 6 Receivables from group companies ............................................. 76 Note 7 Contingent liabilities and other commitments .......................... 76 Note 8 Employees .............................................................................................. 76 Note 9 Fees and remuneration to auditors ............................................... 76 Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other 40 | Alleima Annual Report 2025
Page 43
Consolidated financial information Consolidated income statement SEK M Note 2025 2024 Revenues 2 18,630 19,691 Cost of goods sold 2 -15,178 -15,740 Gross Profit 3,452 3,951 Selling expenses -1,166 -1,250 Administrative expenses -1,062 -975 Research and development costs 5 -296 -292 Other operating income 1,6 455 440 Other operating expenses 1,7 -445 -376 Operating profit 2, 3, 4, 5, 8, 17 938 1,498 Financial income 274 170 Financial expenses -239 -97 Net financial items 9 35 73 Profit after net financial items 973 1,571 Income tax 10 -301 -350 Profit for the year 671 1,221 Profit for the year attributable to Owners of the parent company 671 1,221 Non-controlling interests – – Earnings per share, SEK 11 Basic 2.68 4.88 Diluted 2.68 4.87 Consolidated statement of comprehensive income SEK M Note 2025 2024 Profit for the year 671 1,221 Other comprehensive income Items that will not be reclassified to profit (loss) Actuarial gains (losses) on defined benefit pension plans 20 268 32 Tax relating to items that will not be reclassified 10 -55 -8 Total items that will not be reclassified to profit (loss) 213 24 Items that may be reclassified to profit (loss) Foreign currency translation differences -740 310 Cash flow hedge 26 455 -35 Tax relating to items that may be reclassified 10 -94 7 Total items that may be reclassified to profit (loss) -378 282 Total other comprehensive income -165 306 Total comprehensive income 506 1,528 Total comprehensive income attributable to Owners of the parent company 506 1,528 Non-controlling interests – – Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other Alleima Annual Report 2025 | 41
Page 44
Consolidated balance sheet SEK M Note Dec 31, 2025 Dec 31, 2024 Goodwill 12 1,612 1,693 Other intangible assets 12 338 345 Property, plant and equipment 13 7,742 7,757 Right-of-use assets 14 391 455 Non-current financial assets 15 144 92 Deferred tax assets 10 202 228 Non-current assets 10,429 10,569 Inventories 16 6,813 7,407 Trade receivables 17 2,426 2,911 Income tax receivables 10 110 132 Other current receivables 18 863 917 Current receivables 3,399 3,960 Cash and cash equivalents 26 1,891 1,912 Current assets 12,103 13,279 Total assets 22,531 23,848 Share capital 251 251 Other paid-in capital 0 0 Reserves 1 -56 356 Retained earnings 1 16,322 16,007 Equity attributable to owners of the parent company 16,516 16,614 Non-controlling interests 0 0 Total Equity 19 16,516 16,614 Provisions for pensions 20 623 885 Loans 21 18 0 Other non-current interest-bearing liabilities 21 275 327 Non-current interest-bearing liabilities 916 1,212 Deferred tax liabilities 10 440 402 Other non-current provisions 22 348 385 Other non-current liabilities 23 39 124 Non-current non-interest-bearing liabilities 828 911 Non-current liabilities 1,744 2,123 Loans 21 2 1 Other current interest-bearing liabilities 21 142 133 Current interest-bearing liabilities 144 134 Accounts payable 1,640 2,249 Advances from customers 2 541 539 Income tax liabilities 10 114 253 Other current provisions 22 234 91 Accrued expenses 24 1,232 1,264 Other current non-interest-bearing liabilities 23 367 580 Current non-interest-bearing liabilities 4,127 4,977 Current liabilities 4,271 5,111 Total equity and liabilities 22,531 23,848 Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other 42 | Alleima Annual Report 2025
Page 45
Consolidated statement of cash flows SEK M Note 2025 2024 Operating activities Operating profit 938 1,498 Adjustments for non-cash items: Depreciation, amortization and impairment 1,012 913 Pensions -64 -32 Other non-cash items 365 180 Received interest 35 57 Paid interest -31 -30 Cash flow from financial derivatives and similar 168 -43 Income tax paid -499 -451 Cash flow from operating activities before changes in working capital 1,925 2,091 Changes in working capital Inventories 170 -23 Accounts receivable 297 111 Other receivable 169 -146 Accounts payable -575 230 Other payables 26 -140 Changes in working capital 86 33 Cash flow from operating activities 2,011 2,123 Investing activities Acquisition of intangible assets 12 -41 -48 Proceeds from sale of intangible assets 12 0 0 Acquisition of tangible assets 13 -1,112 -1,147 Proceeds from sale of tangible assets 13 64 5 Acquisition of companies and shares, net of cash 28 -147 – Other investments and financial assets 3 -3 Cash flow from investing activities -1,233 -1,193 Financing activities Repayment of loans -3 -4 Amortization of lease liabilities -148 -135 Equity swap 19 -2 -20 Dividends paid 19 -575 -501 Cash flow from financing activities 21 -729 -660 Net change in cash and cash equivalents 50 270 Cash and cash equivalents at beginning of year 1,912 1,595 Exchange rate differences in cash and cash equivalents -71 47 Cash and cash equivalents at end of the year 1,891 1,912 Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other Alleima Annual Report 2025 | 43
Page 46
Consolidated statement of changes in equity Note Share capital Other paid-in capital Translation reserve Hedge reserve Retained e a r n i n g s Equity attributable to owners of the parent company Non- controlling i n t e r e s t Tota l EquitySEK M Equity at January 1, 2024 251 0 257 -52 15,276 15,732 0 15,732 Changes Net profit – – – – 1,221 1,221 – 1,221 Other comprehensive income for the year, net of tax – – 310 -27 24 306 – 306 Total comprehensive income for the year – – 310 -27 1,245 1,528 – 1,528 Cash flow hedge, transferred to cost of hedged item – – – -165 0 -165 – -165 Tax on cash flow hedge, transferred to cost – – – 34 0 34 – 34 Net cash flow hedge, transferred to cost – – – -131 0 -131 – -131 Share-based payments 3, 19 – – – – 6 6 – 6 Equity swap 19 – – – – -20 -20 – -20 Dividends 19 – – – – -501 -501 – -501 Total transactions with owners – – – – -515 -515 – -515 Equity at December 31, 2024 251 0 567 -211 16,007 16,614 0 16,614 Changes Net profit – – – – 671 671 – 671 Other comprehensive income for the year, net of tax – – -740 361 213 -165 – -165 Total comprehensive income for the year – – -740 361 885 506 – 506 Cash flow hedge, transferred to cost of hedged item – – – -43 – -43 – -43 Tax on cash flow hedge, transferred to cost – – – 9 – 9 – 9 Net cash flow hedge, transferred to cost – – – -34 – -34 – -34 Share-based payments 3, 19 – – – – 7 7 – 7 Equity swap 19 – – – – -2 -2 – -2 Dividends 19 – – – – -575 -575 – -575 Total transactions with owners – – – – -570 -570 – -570 Equity at December 31, 2025 251 0 -173 117 16,322 16,516 0 16,516 Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other 44 | Alleima Annual Report 2025
Page 47
Note 1 | Significant accounting principles – assessments and assumptions for accounting purposes The consolidated financial statements comprise Alleima AB, corporate reg - istration number 559224-1433 (the Parent Company) and all its subsidiaries, jointly the Alleima Group with registered office in Sandviken, Sweden. The address to the head office is SE-811 81 Sandviken. The Parent Company’s functional currency is Swedish kronor (SEK), which is also the presentation currency of the Parent Company and the Alleima Group. Accordingly, the financial statements are presented in SEK. All amounts are in million SEK unless otherwise stated. Roundings may occur. The Parent Company’s Annual Report and the consolidated financial statements covering the period from January 1 to December 31, 2025, were approved for issuance by the Board of Directors and the President and CEO on March 18, 2026 and are subject to adoption at the Annual General Meet - ing on April 29, 2026. ACCOUNTING PRINCIPLES Basis for preparation The consolidated financial statements for the year 2025 covering the period from January 1 to December 31, 2025, have been prepared in accor - dance with International Financial Reporting Standards (IFRS) as endorsed by the EU. The statements are also prepared in accordance with the Swedish recommendation RFR 1 “Supplementary Accounting Rules for Groups” and applicable statements issued by the Swedish Corporate Reporting Board. These require certain additional disclosure requirements for Swedish con - solidated financial statements prepared in accordance with IFRS. Basis of measurement Assets and liabilities are stated on a historical cost basis except for certain financial assets and liabilities, which are stated at their fair value. Financial assets and liabilities measured at fair value comprise of derivative instru - ments and plan assets in the defined benefit plans. Receivables and liabili - ties and items of income and expense are offset only when required or expressly permitted in an accounting standard. The preparation of financial statements in conformity with IFRS requires management to make assessments, estimates and assumptions that affect the application of accounting policies and recognized amounts of assets and liabilities, income and expenses. Actual results may differ from these assessments. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods. Judgments made by management in the application of IFRS that have had a significant effect on the financial statements and estimates with a significant risk of material adjustment in the next year, are discussed further below. Events after the balance sheet date refer to both favorable and unfavor - able events that have occurred after the balance sheet date but before the date the financial statements were authorized for issue by the Board of Directors. Significant non-adjusting events, that is, events indicative of conditions that arose after the balance sheet date, are disclosed in the financial statements. Only adjusting events, that is, those that provide evi - dence of conditions that existed at the balance sheet date, have been considered in the final establishment of the financial statements. The most significant accounting policies for the Group, as set out below and in the notes, have been applied consistently to all periods presented in these consolidated financial statements except as specifically described. More - over, the Group’s accounting policies have been consistently applied in the Group reporting by all members of the Group. Basis of consolidation The combined accounts are prepared in accordance with the Group’s accounting principles and include the accounts of the Parent Company and all entities in which the Parent Company, directly or indirectly has control. Control exists when the Parent Company has power over the entity, is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to use its power to affect its returns. Generally, control and hence consolidation is based on ownership. Group companies are consolidated from the date the Parent Company exercises control or influence over the Company. Divested companies are included in the con - solidated accounts until the date the Parent Company ceases to control or exercise influence over them. In preparing Alleima’s combined financial statements, any intra-group transactions have been eliminated. For cases in which the subsidiary’s accounting policies do not coincide with the Group’s accounting policies, adjustments were made to comply with the Group’s accounting policies. The consolidated financial statements are prepared in accordance with the acquisition method. In business combinations, acquired assets and assumed liabilities are identified and classified, and measured at fair value on the date of acquisition (also known as a purchase price allocation). Transaction costs in conjunction with acquisitions are recognized directly in profit or loss for the year as other operating expenses. Contingent con - siderations are recognized as financial liabilities and at fair value on the acquisition date. Contingent considerations are remeasured at each reporting period with any change recognized in profit or loss for the year. Foreign currency Foreign currency transactions Transactions in foreign currencies are translated into functional currency at the foreign exchange rate prevailing at the date of the transaction. The functional currency is the currency of the primary economic environment in which the Group entities operate. Monetary assets and liabilities denomi - nated in foreign currencies at the balance sheet date are translated to the functional currency at the foreign exchange rate prevailing at that date. Foreign exchange differences arising on translation are recognized in profit or loss for the year. Non-monetary assets and liabilities measured in terms of historical cost in a foreign currency are translated using the exchange rate prevailing at the date of the transaction. Non-monetary assets and lia - bilities that are measured at fair value are re-translated to the functional currency at the exchange rate prevailing at the date that the fair value was determined. Financial statements of foreign operations The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on consolidation, are translated from the foreign operation’s functional currency to the Group’s presentation currency, SEK, at foreign exchange rates prevailing at the balance sheet date. Revenues and expenses of foreign operations are translated to SEK at average rates that approximate the foreign exchange rates prevailing at each of the trans - action dates. Translation differences arising from the translation of the net investment in foreign operations are recognized in other comprehensive income and are accumulated in a separate component of equity, a transla - tion reserve. When the foreign operation is divested, the accumulated translation differences attributable to the divested foreign operation are reclassified from equity to profit or loss for the year as a reclassification adjustment at the date on which the profit or loss of the divestment is rec - ognized. For cases in which divestments made include a residual controlling influence, the proportionate share of accumulated translation differences from other comprehensive income is transferred to non-controlling interests. Changes in accounting policies IASB has published amendments of standards that are effective as of January 1, 2025 or later. The standards have not had any material impact on the financial reports. IASB has published IFRS 18 Presentation and Disclosure in Financial Statements with an implementation date of January 1, 2027. The standard has been approved by the EU. IFRS 18 will replace IAS 1 Presentation of Financial Statements. IFRS 18 primarily concerns three key areas for presentation and disclosures in the financial statements, with a focus on the income statement and reporting of financial performance. According to Alleima’s analysis, IFRS 18 is not expected to have a material impact on Alleima’s financial reports when it is applied for the first time. Adjustment of reporting of sold services Other operating income and other operating expenses have been adjusted in order to recognize certain of Alleima’s contractual services gross. These services mainly relate to facility management, electricity and warehouse services, which are not part of Alleima’s core business. Previously, these Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other Alleima Annual Report 2025 | 45
Page 48
services were accounted for through netting of income and expenses. Comparative periods have been restated, resulting in an increase in both other operating income and other operating expenses of SEK 300 million for the full year 2024. The adjustment has no impact on operating profit (EBIT). SEK M Reported Restatement Restated 2024 Other operating income 140 300 440 Other operating expenses -76 -300 -376 Cash flow statement The consolidated cash flow statement is prepared in accordance with the indirect method. A short-term investment is classified as a cash and cash equivalent if: — The risk of changes in value is insignificant — It is readily convertible into cash — It has a maturity of no more than three months from the date of acquisition Reporting of operating segments Alleima’s management monitors its operations from an operating segment perspective. In accordance with IFRS 8 Operating segments, Alleima’s management has identified the three divisions Tube, Kanthal and Strip as the reportable segments. Alleima’s business is organized in a manner that allows the Group’s Chief Operating Decision Maker (CODM), meaning the CEO, to monitor results, return and cash flow generated by the various products in the Group. Each operating segment has a Division Head that is responsible for day-to-day activities and who regularly reports to the CEO regarding the results of the operating segment’s work and the need for resources. Since the CEO moni - tors the business’ result and decides on the distribution of resources based on the products the Group manufactures and sells, these constitute the Group’s operating segments. The Group’s operations are organized in Divisions based on products. The market organization also reflects this structure. The same accounting principles are applied for the segments and the Group. Segment results, assets and liabilities include only those items that are directly attributable to the segment and the relevant portions of items that can be allocated on a reasonable basis to the segments. Unallocated items comprise interest, gains on disposal of financial investments, interest expense, losses on disposal of financial investments, income tax expense and certain administrative expenses. Unallocated assets and liabilities include income and deferred tax receivables and payables, financial investments and financial liabilities. Revenue from goods Sales from Alleima are mainly made through three types of contracts; (i) framework agreements where sales are made on orders placed, (ii) agree - ments for specific sales, or (iii) orders and order confirmations with or with - out reference to standard terms and conditions. The contract period varies depending on the type of product. Agreements for products with a long production time and framework agreements have longer durations which can be several years, agreements for certain specific products carried in stock have a short term. Revenue is recognized when the control of goods is transferred to the customer at an amount reflecting the expected and entitled consideration for the goods provided. The supply of goods comprises, advanced stain - less steels and other long products in advanced stainless steels and special alloys as well as products in the area of industrial heating, resistance mate - rials and ultra-fine wire for use in medical appliances, as well as a wide range of precision strip steel products and pre-coated strip steel. Allocation of transaction price The transaction price is allocated to each identified performance obliga - tion on a relative stand-alone selling price basis. This means that each per - formance obligation will be allocated its share of revenue based on its stand-alone selling price put in relation to the sum of all performance obli - gation’s stand-alone selling price. Adjusted market assessment approach and expected cost plus a margin approach are normally used to determine the stand-alone selling price if no observable selling price is available for one or more of the performance obligations. Variable consideration is gen - erally allocated proportionally to all performance obligations unless there is evidence that the entire variable consideration is related to a specific performance obligation in the contract. Variable consideration Customer contracts can include variable considerations such as cash dis - counts and rebates. When such components are identified, an assessment is made to determine if the identified portion of revenue and any related cost of goods sold should be deferred to a later period. This is established by applying the expected value method or the most likely amount method with the threshold of being highly probable that a reversal of revenue will not occur. Significant financing component When advances are received, Alleima adjusts the promised amount of con - sideration for the effects of the time value of money. Alleima uses the prac - tical expedient to not calculate and account for significant financing com - ponent if the period between the transfer of a good to a customer and payment is 12 months or less. Cost to obtain a contract Incremental costs to obtain a customer contract shall be recognized as a contract asset if the cost is incremental and Alleima expects to recover the costs. The contract asset is periodized over the contract lifetime. Contract asset for costs to obtain a contract is not recognized if the contract has a duration equal to or shorter than 12 months. Examples of incremental costs are agent fees, commission to sales employees, signing fees etc. Goods sold In many Alleima contracts, revenue is recognized at point of sale because the control is transferred at one point in time. However, some contracts are executed over a period of time, hence are to be recognized over time Revenue from goods sold (e.g. high value-added products in advance stainless steels and special alloys and products for industrial heating) is recognized at a point in time when the control has been transferred to the customer. To assess when the control has been transferred, indicators such as, but not limited to, significant risks and rewards of ownership, transferred physical possession, the customer has accepted the asset, present right to payment and legal title of goods are considered. For sale of goods the transfer of control usually occurs when the significant risks and rewards are transferred in accordance with the Incoterms. When goods sold are highly customized and there is an enforceable right to payment for performances completed to date, the goods are recognized over time. Progress of satisfaction of each performance obligation is used to measure the revenue by the proportion of cost incurred to date compared to estimated total cost of each performance obligation. If a customer contract includes a buy-back clause, exercised at the cus - tomer discretion and a significant transfer of control has not taken place, the transaction is then accounted for as an operational lease in accordance with IFRS 16 Leases. If the customer is not considered to have a significant economic incentive to exercise the option, the contract is then accounted for by applying the principles of variable consideration. Payment is generally due between 30–90 days from the transfer of con - trol. In some contracts, short-term advances are required before the prod - uct is delivered. Some contracts contain late delivery penalties and volume rebates, which give rise to variable consideration subject to constraint. Operating expenses Operating expenses are classified according to function, as described below. Depreciation and amortization and personnel costs are stated by function. Cost of goods sold Cost of goods sold is defined as the costs of production and procurement of the goods sold and other order specific costs. The cost of goods sold also includes inventory write-down and valuation items, the part of the cost for personnel, premises, purchased services and depreciation and amorti - zation of non-current assets, including right-of-use assets, attributable to the production of sold goods. Note 1 | Significant accounting principles – assessments and assumptions for accounting purposes Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other 46 | Alleima Annual Report 2025
Page 49
Selling expenses Selling expenses include costs for the internal sales organization, purchased services, personnel costs, cost for right-of-use assets, bad debt losses, IT costs of sales systems and logistics systems as well as depreciation and amortization of non-current assets attributable to sales activities. Advertis - ing and other marketing activities are also included and are expensed as incurred. Administrative expenses Administrative expenses consist of the part of the personnel costs, pur - chased services as well as depreciation and amortization of non-current assets, including right-of-use assets, attributable to the other joint functions. Costs associated with the Board of Directors, executive management and corporate functions are included in administrative expenses. Other operating income and other operating expenses Other operating income and other operating expenses include secondary activities, exchange rate differences in operating activities and gain/loss on the sale of tangible and intangible assets. Financial income and expenses Financial income consists of interest income on cash and cash equivalents. Financial expenses consist of interest expense on borrowings, lease liabili - ties and pension liabilities. Unrealized gains and losses on hedging instru - ments are recognized in profit or loss for the year. Income tax Deferred tax assets relating to deductible temporary differences and tax losses carried forward are recognized only to the extent that it is probable they can be utilized against future taxable profits. Effects of changes in tax rates are recognized in the period when the change is substantively enacted. Intangible assets Goodwill Goodwill acquired in a business combination repre sents the excess of the cost of the business combination over the net fair value of the identifiable assets, liabilities and contingent liabilities recognized. Goodwill is measured at cost less any accumulated impairment losses and is reported as an indefinite useful life intangible asset. Goodwill is allo - cated to cash generating units that are expected to benefit from the syner - gies of the business combination and is tested for impairment yearly, or when there is an indication of impairment. Impairment losses on goodwill are not reversed. Research and development Expenditure on research activities related to the obtaining of new scientific or technical knowledge is expensed as incurred. Expenditure on develop - ment activities, whereby the research results or other knowledge is applied to accomplish new or improved products or processes, is recognized as an intangible asset in the balance sheet, provided the product or process is technically and commercially feasible and the Company has sufficient resources to complete development, and is subsequently able to use or sell the intangible asset. The carrying amount includes the directly attributable expenditure, such as the cost of materials and services, costs of employee benefits, fees to register intellectual property rights and amortization of patents and licenses. Other expenses for development are expensed as incurred. In the balance sheet, capitalized development expenditure is stated at cost less accumulated amortization and any impairment losses. Emission rights Emission rights are recognized at cost less any accumulated impairment. The cost for the rights received free of charge is zero. A provision is made if a deficit of emission rights has been identified between the rights owned and the rights to be delivered due to actual emissions. The provision is valued at the market value of the rights required to cover the excess con - sumption of emissions made. Gains or losses on the disposal of emission rights are recognized in the income statement. Other intangible assets Other intangible assets acquired by the Company are recognized at cost less accumulated amortization and any impairment losses. Capitalized expenditure for the development and purchase of software for the Group’s IT operations are included here. Intangible assets also include patents, trademarks, licenses, customer relationships and other rights. They are split between acquired and internally generated intangible assets. Amortization of intangible assets Amortization is charged to profit or loss for the year on a straight-line basis over the estimated useful lives of intangible assets unless such lives are indefinite. Intangible assets with an indefinite useful life, consisting of goodwill, are systematically tested for impairment annually or as soon as there is an indication that the asset may be impaired. Intangible assets with a finite useful life are amortized as of the date the asset is available for use. The estimated useful lives are as follows: — Patents and trademarks 10–20 years — Customer relationships 7–12 years — Capitalized development costs 3–10 years — Software for IT operations 3 years Impairment and reversals of impairment Assets with an indefinite useful life are not amortized but tested annually for impairment. Assets that are amortized or depreciated are tested for impair - ment whenever events or changed circumstances indicate that the carry - ing amount may not be recoverable. An impairment loss is recognized in the amount by which the carrying amount of an asset exceeds its recoverable amount, which is the greater of the fair value less cost of disposal and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a rate that reflects current market assessments of the time value of money and the risks specific to the asset. For an asset that does not generate largely independent cash flows, the recoverable amount is determined for the cash generating units to which the asset belongs. Goodwill is tested at the level of operating segments. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation and amortization, if no impairment loss had been recognized. Impairment of goodwill is not reversed. Property, plant and equipment Owned assets Property, plant and equipment are recognized at cost less accumulated depreciation and any impairment losses. Depreciation of property, plant and equipment Property, plant and equipment are depreciated over their estimated useful lives. Land is not depreciated. Depreciation is recognized on a straight-line basis (unless otherwise described) based on the cost of the assets, adjusted by residual value when applicable, and estimated useful lives. The following depreciation periods are applied. Land and buildings: — Land indefinite useful life — Buildings 10–50 years — Site improvements 10–50 years Plant and machinery: — Plant and machinery 5–25 years Equipment, tools, fixtures and fittings: — Estimated useful lives — Computer equipment 3–5 years If an item of property, plant and equipment comprises components with different useful lives, each such significant component is depreciated sep - arately. Depreciation methods and estimated residual values and useful lives are reviewed at each year-end. Note 1 | Significant accounting principles – assessments and assumptions for accounting purposes Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other Alleima Annual Report 2025 | 47
Page 50
Impairment and reversals of impairment Impairment and reversals of impairment is applicable also for property, plant and equipment. For details see Intangible assets. Borrowing costs Borrowing costs attributable to the construction of qualifying assets are capitalized as a portion of the qualifying asset’s cost. A qualifying asset is an asset that takes a substantial time period to get ready for its intended use or sale and to a substantial amount. The Group considers a period in excess of one year to be a substantial time period. Leases In the consolidated financial statements, leases when Alleima being a lessee are recognized as right-of-use assets and when being a lessor either as a finance lease or an operational lease. Impairment and reversals of impairment Impairment and reversals of impairment is applicable also for right-of-use assets. For details see Intangible assets. Alleima as a lessee For all contracts an evaluation is done to identify if a lease exists by testing if Alleima has the right to obtain substantially all the economic benefits from use of the identified assets and has the right to direct the use of the identi - fied asset and that the supplier has no substantial rights of substitution. Alleima has decided to separate non-lease components from the lease components in contracts concern ing buildings. The non-lease component cost should then be recognized as an expense and not be included in the calculation of a right-of-use asset and lease liability for asset class build - ings. For all other asset classes non-lease components are included in the calculation of a right-of-use asset and lease liability. The lease contracts are assessed at the commence ment date whether the lessee is reasonably certain to exercise an option to extend the lease; or to exercise an option to purchase the underlying asset; or not to exercise an option to terminate the lease. In cases of open-ended contracts local law can provide protection to the lessee from being given notice. This requires the Alleima lessee to determine the contract period instead of considering the termination clause. The lessee then determines the length of the contract period based on factors such as the importance of building to the business, any planned or made leasehold investments and the market situation for premises. The lease liability and right-of-use asset is calculated by using the implicit rate in the contract. If the implicit rate cannot be identified the incremental borrowing rate is instead applied, which is the interest rate the Company had been given if the investment had been financed through a loan from a financial institute. The measurement of the right-of-use asset includes amount of initial measurement of lease liability, lease payments at or before the commencement date, any initial direct cost and restoration costs. Alleima depreciates the right-of-use asset from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. After commencement date the carrying amount of the lease liability and the right-of-use asset is remeasured to reflect any modification or reas - sessment of a lease contract. Alleima has chosen to apply the two expedients concerning leases shorter than one year (defined as leases with a lease term of 12 months or less at commencement date) and low value assets (with a value as new below USD 5,000) which are expensed on a current basis. Alleima as a lessor As a lessor, Alleima has classified its leases as operating leases. An operating lease is a lease that does not transfer substantially all the risks and rewards as a result from ownership of an underlying asset. A sub - lease should also be classified as finance or operational lease by reference to the right-of-use asset arising from the head lease, rather than by reference to the underlying asset, for example, an item of property, plant or equipment. When the agreement is recognized as an operating lease the asset is classified as tangible assets and valued at cost less accumulated depreci - ation. The cost of an asset comprises the acquisition value and any initial direct costs related to the contract. The lease payments and the deprecia - tions are included in profit or loss on a straight-line basis over the term of the lease. Inventories Inventories consist of goods held for sale in the ordinary course of business, in the process of production for such sales or in the form of materials or supplies to be consumed in the production process. Inventories are stated at the lowest of cost and net realizable value, with due consideration of obsolescence. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses. Cost is based on the first-in/first-out (FIFO) principle and includes expen - diture incurred in acquiring the inventories and bringing them to their exist - ing location and condition. In the case of manufactured inventories and work in progress, cost includes an appropriate share of overheads based on normal operating capacity. Financial instruments Financial instruments recognized in the balance sheet include assets, such as account receivables, financial investments, cash and cash equivalents and derivatives, and liabilities such as loan liabilities, account payables, and derivatives. Cash and cash equivalents consist of cash and bank balances as well as current investments with maturities up to and including 3 months. Recognition and derecognition A financial asset or a financial liability is recognized on the balance sheet when the entity becomes a party to the contractual provisions of the instru - ment. Account receivables are recognized upon issuance of the invoice. A liability is recognized when the counterparty has performed under the agreement and the Company is contractually obliged to settle the obligation, even if no invoice has been received. At initial recognition, the Group measures financial assets and liabilities at its fair value plus or minus, in the case of a financial asset or liability not at fair value through profit or loss (FVPL), transaction costs including all fees, premiums and discounts that are directly attributable to the acquisition or issue of the financial asset and liability. Transaction costs of financial assets and liabilities carried at FVPL are expensed in the income statement. A financial asset is derecognized when the rights to receive cash flows under the agreement have expired or have been transferred and the Group has substantially transferred all the risks and rewards. A financial liability is derecognized when the obligation specified in the contract is discharged or otherwise expires. A financial asset and a financial liability are offset and presented in a net amount in the balance sheet only if there is a legally enforceable right to offset the recognized amounts and there is an intention either to settle on a net basis or to realize the asset and settle the liability simultaneously. Classification and measurement Financial assets, excluding derivatives, including equity- and debt instruments The Group classifies its financial assets as those to be measured at fair value, and those to be measured at amortized cost. For debt instruments, which includes accounts receivables, the classifi - cation depends on the Group’s business model for managing the financial assets and the contractual terms of the cash flows: Amortized Cost: Assets that are held for collection of contractual cash flows, where those cash flows represent solely payments of principal and interest, are measured at amortized cost. Interest income from these finan - cial assets is included in financial income using the effective interest rate method. Any gain or loss arising on derecognition is recognized directly in the income statement. Fair Value through profit and loss: Assets that do not meet the criteria for amortized cost are measured as fair value through profit and loss. Financial liabilities Financial liabilities excluding derivatives are classified and subsequently measured at amortized cost. Any difference between the loan amount, net of transaction costs, and the repayable amount is allocated to profit or loss for the year over the term of the loan using the effective interest method. For information on contractual terms, scheduled repayments and the exposure to interest risk and currency risk, refer to Note 26 Financial risk management. Note 1 | Significant accounting principles – assessments and assumptions for accounting purposes Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other 48 | Alleima Annual Report 2025
Page 51
Financial instruments measured at fair value in the balance sheet Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Under the IFRS 13 Fair Value Measurement disclo - sure requirements, the method applied to the valuation of assets and liabili - ties measured at fair value in the balance sheet is presented below. The valuation is divided into three levels: Level 1: Fair value is determined according to prices listed on an active market for the same instrument Level 2: Fair value is determined based on either directly (as a price) or indirectly (derived from prices) on observable market data Level 3: Fair value is determined based on input data that is not observ - able in the market All of Alleima’s financial instruments measured at fair value are measured according to Level 2. Measurements of fair value The fair value of foreign exchange contracts, raw materials- and electricity- and gas derivatives are determined based on observable market prices. For means of payment, receivables and payables with variable interest and current receivables and payables (for example, trade receivables and accounts payable), the fair value has been considered to correspond to the carrying amount. Hedge accounting Hedge accounting is applied in accordance with IFRS 9 and to meet the criteria there must be a clear relationship between the hedging instrument and the hedged item. The relationship is expected to be highly effective, and it must be possible to reliably measure such effectiveness. Moreover, the hedge must be formally designated and documented. Gains and losses on remeasurement of derivatives used for hedging purposes are recognized as described below under cash flow hedges. Cash flow hedges Hedge accounting is applied when hedging a partic ular risk associated with highly probable future cash flows and forecast transactions. Alleima applies hedge accounting for derivatives that are used to hedge the Group’s exposure to electricity-, gas- and metal price risk. In addition, hedge accounting is applied for some derivatives that are used to hedge the exchange rate exposure in orders and investments. Changes in the fair value of the derivatives designated for hedge accounting are recognized in Other comprehensive income and accumulated in the Hedge reserve within equity. Changes in fair value are subsequently reclassified to profit or loss in the same period as the Group reports the expense of the hedged consumption of electricity, gas and metal or included in the carrying amount of the purchased metals or acquired property, plant and equip - ment as appropriate. Any ineffectiveness is recognized immediately in profit or loss. Derivatives, for which hedge accounting is not applied, are measured at their fair value directly through profit or loss. Current receivables Trade receivables Trade receivables are recognized at amortized cost. Alleima evaluates its trade receivables, contract assets and financial leases on a collective basis for each category, respectively. Each reporting entity classifies their receivables in suitable risk categories according to Group policy based on expected credit losses. Expected credit loss provisions are based on the full lifetime expected credit loss model with a provision matrix where fixed provision rates are applied depen ding on the number of days outstanding. The entities con - sider reasonable and supportable information about past events, current conditions and reasonable and supportable forecasts of future economic conditions when measuring the expected credit losses. Credit risks are classified based on credit information provided by credit agencies, identified payment behavior of the customer and other relevant information available, such as lost contracts, changes in company manage - ment and other customer specific information. Additionally, a macroeco - nomic evaluation is conducted on the outlook of industries and countries relevant for Alleima’s customers if needed. Changes to the allowance for expected credit losses for accounts receivables are recognized in selling expenses. Alleima’s principles for the writing off receivables are based on several pre - requisites, such as proof of write-off, insolvency or failed legal and other collection processes. An assessment is made whether one or several of these prerequisites are fulfilled before the write-off takes place. The Group selectively utilizes different forms of credit securities, such as letters of credit, retention of title or credit insurance. Alleima sells certain trade receivables for larger volume and credit worthy customers without recourse. The receivable is derecognized when sub - stantially all risks and rewards of ownership of the financial asset has been transferred. Contract assets A contract asset is recognized when the right to consideration for a perfor - mance obligation is conditional on completion of promises other than the passage of time. Equity Equity is defined as total shareholders’ equity including non-controlling interests. The translation reserve comprises all foreign exchange differences aris - ing on the translation of the financial statements of foreign operations stated in a currency different from the Group’s presentation currency. Dividends are recognized as a liability in the period in which they are resolved at a shareholders’ meeting. Retained earnings including profit or loss for the year comprises the earned profit of the parent company and its subsidiaries. Equity swap raised to secure the delivery of shares under the incentive program is reported in equity with adjustment for related expenses and any dividends on the shares. Non-controlling interests are recognized as a separate item in the Group’s equity. Acquisitions of non-controlling interests are recognized as a transaction within shareholders’ equity, meaning between the parent company’s owners and non-controlling interests. Accordingly, goodwill does not arise in conjunction with such transactions. Gains or losses on disposals to non-controlling interests are also recognized in equity. Pensions Defined-contribution plans A defined-contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. The size of the pension that the employee will ultimately receive in such cases depends on the size of the contributions that the entity pays to the plan or an insurance company and the return that the contributions yield. Obligations for contri - butions to defined-contribution pension plans are recognized as an employee benefit expense in profit or loss for the year as the employee renders services to the entity. Defined-benefit plans The Group’s net obligation in respect to defined-benefit pension plans is calculated separately for each plan by estimating the amount of future benefit that employees have vested in return for their service in the current and prior periods. This benefit is discounted to its present value. The dis - count rate is the yield on high-quality corporate bonds, mortgage bonds – or if there is no deep market for such bonds, government bonds – that have maturity dates approximating the terms of the Group’s obligations. The cal - culation is performed annually by a qualified actuary. In addition, the fair value of any plan assets is assessed. This method of accounting is applied to the most significant defined-benefit plans in the Group. A few plans, which neither individually nor in the aggregate are significant in relation to the Group’s total pension obligations, are still recognized in accordance with local regulations. In measuring the present value of pension obligations and the fair value of plan assets, actuarial gains and losses may accrue either because the actual outcome differs from earlier assumptions (so-called experience adjust - ments) or the assumptions are changed. These actuarial gains and losses are recognized in the balance sheet and in other comprehensive income. When the benefits under a plan are improved, the portion of the increased benefits that relate to past service by employees is recognized in profit or loss for the year. The amount of obligations recognized in the balance sheet for pensions and similar obligations reflects the present value of the obliga - tions at the balance sheet date, less the fair value of any plan assets. Note 1 | Significant accounting principles – assessments and assumptions for accounting purposes Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other Alleima Annual Report 2025 | 49
Page 52
Other provisions A provision is recognized in the balance sheet when the Group has a legal or constructive obligation as a result of a past event, and it is probable that an outflow of resources will be required to settle the obligation, and a reliable estimate of the amount can be made. If the effect is material, the provision is determined by discounting the expected future cash flows at a pre-tax rate that reflects the current market assessments of the time value of money and, where appropriate, the risks specific to the liability. The provi - sions are mainly related to termination benefits, warranty commitments, restructuring, long-term incentives, environmental obligations and legal disputes and claims, such as value-added tax issues, and customer and supplier claims relating to ongoing or finished projects. Termination benefits When employment is terminated, a provision is recognized only when the entity is demonstrably committed either to terminate the employment of an employee or a group of employees before the normal retirement age or provide termination benefits as a result of an offer made to encourage vol - untary redundancy. In the latter case, a liability and an expense are recog - nized if it is probable that the offer will be accepted and the number of employees that will accept the offer can be reliably estimated. Warranty commitments A provision for warranties is recognized when the underlying products are sold. The provision is based on historical warranty data and a weighing of all possible outcomes against their associated probabilities. Restructuring A provision for restructuring is recognized when the Group has approved a detailed and formal restructuring plan and the restructuring has either commenced or has been announced publicly. Future operating costs are not provided for. Employee benefits A provision for personnel-related benefits is recognized in accordance with agreements entered for long-term incentive programs, local bonus programs, part-time pensions, and other personnel obligations. Environmental obligations Environmental provision is recognized when there is a legal obligation or a decided defined action, such as remediation or testing programs. Every year a provision is recognized for waste material and slag deposits. Moni - toring programs in continuous operations are regarded as cost as they occur. Site restoration Provision for costs for restoring contaminated land is made in accordance with when there is a legal requirement or other binding commitment to restore established contaminated land and when the cost can be measured with reasonable precision. Site restoration is included in environmental obligations. Legal disputes Legal disputes include provisions for claims which, at the balance sheet date, had not been closed. Other obligations Other obligations include provisions for onerous contracts. Provisions classified as current are expected to result in an outflow of resources within twelve months from the balance sheet date. Share-based payments The costs for equity-settled payments are based on the fair value of the share rights calculated by an independent party at the date of grant. These payments are reported as employee costs during the vesting period with a corresponding increase in equity. The vesting conditions in the program are linked to non-market performance conditions (earnings per share and reduction of carbon dioxide) and service conditions (employment period) which are taken into account in employee cost during the vesting period by the change in the number of shares that are expected to finally vest. Alleima records a liability for social security expenses, at each reporting period, for all outstanding share-based payments. Social security expenses attribut - able to equity-based instruments to employees as compensation for pro - vided services are expensed in the periods during which the services are performed. The provision for social security expenses is based on the fair value of the share rights at each reporting period. Other liabilities Other liabilities excluding derivatives are classified and subsequently measured at amortized cost. Contract liabilities are recognized when a payment is received before the performance obligation has been satisfied. Alleima is party of supply chain financing arrangements, also known as reversed factoring. Those liabilities are part of the working capital used in Alleima’s normal operating cycle, and represents a liability to pay for received goods or services, which were invoiced or formally agreed with the supplier. Thus, these liabilities are presented as part of Accounts pay - able in the balance sheet. Contingent liabilities A contingent liability is recognized when there is a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events. A contingent liability is also recognized when there is a present obliga - tion that cannot be recognized as a liability because it is not probable that an outflow of resources will be required, alternatively because the amount of the obligation cannot be measured with sufficient reliability. CRITICAL ESTIMATES AND KEY JUDGMENTS In order to prepare the financial statements, management and the Board make various judgments and estimates, including impact from climate change, that can affect the amounts recognized in the financial statements for assets, liabilities, revenues and expenses as well as information in gen - eral, including contingent liabilities. The judgments and estimates discussed below are those deemed to be most important for an understanding of the financial statements, considering the level of significant estimations and uncertainty. The conditions under which Alleima operates are gradually changing meaning that the judgments also change. Business combinations The Group uses estimates and judgments regarding allocation of goodwill and other surplus values in a business combination, see Note 12 Intangible assets and Note 28 Business combinations. Income tax Estimates are made to determine both current and deferred tax liabilities/ assets, not least the value of deferred tax assets. The actual results may differ from these estimates, for instance due to changes in the business climate, changed tax legislation, or the outcome of the final review by tax authorities and tax courts of tax returns, see Note 10 Income tax. Valuation of inventory The Group use estimates to determine inventory reserves. When calculat - ing inventory reserves, Alleima considers forecasted production and sales volumes, as well as the demand for certain products and historical con - sumption, see Note 16 Inventories. Impairment of non-current assets Intangible and tangible assets represent a significant part of Alleima’s total assets. Determination of the useful lives of asset classes involves taking into account historical trends and making assumptions related to future socioeconomic and technological development and expected changes in market behavior Impairment tests of goodwill Goodwill is tested for impairment annually and whenever events or changes in circumstances indicate that the carrying amount of goodwill has been impaired, for example due to a changed business climate or a decision taken either to sell or close down certain operations. In order to determine if the value of goodwill has been impaired, the cash generating unit or group of cash generating units to which goodwill has been allocated Note 1 | Significant accounting principles – assessments and assumptions for accounting purposes Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other 50 | Alleima Annual Report 2025
Page 53
must be valued using present value techniques. When applying this valua - tion technique, Alleima relies on a number of factors, including historical results, business plans, forecasts and market data. As can be deduced from this description, changes in the conditions for these judgments and estimates can significantly affect the assessed value of goodwill, see Note 12 Intangible assets. Impairment tests of other non-current assets Alleima’s intangible and tangible assets, excluding goodwill, are stated at cost less accumulated amortization and depreciation and any impairment losses. Other than goodwill, Alleima has not identified any intangible or tan - gible assets with indefinite useful lives. The assets are amortized over their estimated useful lives to their estimated residual values. Both the estimated useful life and the residual value are reviewed at least at each financial year-end, see Note 12 Intangible assets and Note 13 Property, plant and equipment. The carrying amount of the Group’s non-current assets is tested for impairment whenever events or changes in circumstances indicate that the carrying amount will not be recovered. The carrying amount of intangible and tangible assets not yet available for use is tested annually. If such anal - ysis indicates an excessive carrying amount, the recoverable amount of the asset is estimated. The recoverable amount is the higher of the asset’s fair value less costs of disposal, and its value in use. Value in use is measured as the discounted future cash flows of the asset, alternatively the cash gener - ating unit to which the asset belongs. A call for an impairment test also arises when a non-current asset is clas - sified as being held for sale, at which time it must be remeasured at the lower of its carrying amount and fair value less costs of disposal. Post-employment benefits Actuarial assumptions are used to measure pension obligations and they significantly affect the recognized net liability and the annual pension cost. One critical assumption – the discount rate – is essential for the measure - ment of both the interest expense of the year and the present value of the defined-benefit obligations’ current year. The discount rate is used both for calculating the present value of the obligation and as an estimate for the return on plan assets. The discount rate is reviewed quarterly, which affects the net liability, and annually, which also affects the expense for the coming year. All other assumptions, both financial and demographic, are reviewed at least annually, see Note 20 Provision for pensions and other non-current post-employment benefits. The financial risk management and sensitivity analysis associated with the defined benefit plans are presented in Note 26 Financial risk manage - ment. Environmental obligations The nature and long history of the operations of the Alleima Group typically entail a risk of claims in relation to contaminations, since the environmental requirements on operations were generally less stringent in the past. Claims to investigate or to carry out remedial measures may arise following inqui - ries from authorities, in connection with property transfers, property devel - opment or review of permits. Environmental provision is updated at least annually and whenever events or changes in conditions indicate a need of review, e.g. requirements from authorities or decision to sell or close down certain operations. The ongoing provision for waste material and slag is based on estimated cost and time before final coverage of the landfill. Environmental obligation is presented in Note 22 Other Provisions. Note 1 | Significant accounting principles – assessments and assumptions for accounting purposes Note 2 | Segment information and revenue Alleima’s management monitors its operations from an operating segment perspective. In accordance with IFRS 8, Operating segments, Alleima’s management has identified the three divisions Tube, Kanthal and Strip as the reportable segments. Alleima monitors and evaluates the segments on adjusted operating profit (Adjusted EBIT), see Alternative Performance Measures presented in page 138. Further information see Reporting of operating segments in Note 1. Division Tube develops and manufactures seamless tubes and other long products in advanced stainless steels and special alloys. Division Kanthal is a provider of products in the area of industrial heating technology and resistance materials, and also offers ultra-fine wire in stainless steel for use in medical appliances. Division Strip develops and manufactures a wide range of precision strip steel products and also offers pre-coated strip steel for components in the hydrogen fuel cell stack. 2.1 Revenues by division and region SEK M 2025 2024 Organic % Tube Europe 6,442 7,417 -10 North America 2,907 3,008 1 Asia 2,742 2,422 23 Other 971 1,180 -15 Total 13,063 14,027 -2 Kanthal Europe 1,190 1,223 -4 North America 1,485 1,493 9 Asia 1,050 1,225 -6 Other 272 258 13 Total 3,996 4,200 1 Strip Europe 645 627 4 North America 148 114 42 Asia 728 703 12 Other 50 21 145 Total 1,571 1,465 13 GROUP Europe 8,277 9,266 -8 North America 4,540 4,616 5 Asia 4,520 4,350 13 Other 1,293 1,460 -7 Total 18,630 19,691 0 Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other Alleima Annual Report 2025 | 51
Page 54
2.2 Information on business segments/divisions 2025, SEK M Tube Kanthal Strip Common functions Un-allocated Eliminations Group Tota l Revenue External revenue 13,063 3,996 1,571 0 18,630 Internal revenue 434 45 0 0 -478 0 Total 13,497 4,041 1,571 0 -478 18,630 Cost of goods sold -11,409 -2,913 -1,334 0 478 -15,178 Adjusted EBIT 1,159 656 61 -321 1,555 Items affecting comparability -97 -210 -35 0 -342 Metal price effects -223 -37 -16 0 -275 EBIT 839 409 11 -321 938 Net financial items 35 Earnings before tax 973 Other segment information Inventory 5,233 975 604 0 0 6,813 Accounts Receivable 1,658 511 229 28 0 2,426 Accounts Payable -1,298 -201 -52 -89 0 -1,640 Other Receivables 382 121 60 111 0 675 Other Liabilities -1,451 -298 -147 -157 0 -2,052 Net working capital 4,524 1,109 695 -107 0 6,222 Tangible assets 6,334 939 341 128 7,742 Intangible assets 225 1,642 56 26 1,950 Cash and cash equivalents 0 0 0 0 1,891 1,891 Other Assets 7,534 1,709 899 164 610 10,915 Other Liabilities -3,087 -667 -234 -283 -684 -4,954 Capital employed 11,006 3,623 1,063 35 1,817 17,543 Capital expenditure 843 214 60 35 0 1,153 Total depreciation & amortization -707 -146 -50 -27 0 -930 Impairment losses -3 -79 0 0 0 -82 Other non-cash expenses 150 129 27 -19 78 365 2024, SEK M Tube Kanthal Strip Common functions Un-allocated Eliminations Group Tota l Revenue External revenue 14,027 4,200 1,465 0 19,691 Internal revenue 427 36 0 0 -462 0 Total 14,453 4,235 1,465 0 -462 19,691 Cost of goods sold -12,178 -2,819 -1,204 0 462 -15,740 Adjusted EBIT 1,422 750 66 -294 1,944 Items affecting comparability 0 0 0 0 0 Metal price effects -378 -59 -9 0 -446 EBIT 1,044 691 56 -294 1,498 Net financial items 73 Earnings before tax 1,571 Other segment information Inventory 5,605 1,166 636 0 0 7,407 Accounts Receivable 2,192 538 181 0 0 2,911 Accounts Payable -1,761 -322 -53 -114 0 -2,249 Other Receivables 594 125 43 97 0 859 Other Liabilities -1,507 -353 -148 -99 0 -2,107 Net working capital 5,123 1,155 659 -116 0 6,821 Tangible assets 6,345 954 334 123 0 7,757 Intangible assets 241 1,722 61 12 0 2,037 Cash and cash equivalents 0 0 0 0 1,912 1,912 Other Assets 8,701 1,925 865 142 444 12,077 Other Liabilities -3,551 -793 -211 -274 -1,059 -5,888 Capital employed 11,735 3,809 1,049 4 1,298 17,895 Capital expenditure 841 270 37 46 0 1,195 Total depreciation & amortization -720 -120 -48 -27 0 -914 Impairment losses 0 1 0 0 0 1 Other non-cash expenses 146 14 9 0 10 180 All transactions between the divisions are on market terms. For information regarding business combinations, see Note 28. Note 2 | Segment information and revenue Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other 52 | Alleima Annual Report 2025
Page 55
Non-current assets by country, SEK M 2025 2024 Sweden 6,260 6,154 USA 1,205 1,399 Germany 747 634 Czech Republic 581 597 China 311 252 India 198 257 Japan 191 180 UK 182 185 Italy 145 179 Netherlands 81 84 Other countries 183 328 Total 10,083 10,249 Non-current assets consists of intangible assets, property, plant and equipment and right-of-use assets. Non-current assets are specified by country based where the assets are located. Contract liabilities, SEK M 2025 2024 Balance at January 1 539 560 Revenue recognized included in contract liability open balance -236 -409 Revenue recognized from performance obligations satisfied in previous years -5 0 Reversed this year -11 -13 Additions this year 294 375 Business combinations 0 0 Translation differences for the year -40 26 Balance at December 31 541 539 2.4 Revenue per customer segment Revenue 2025 Tube Kanthal Strip Alleima Revenue per customer segment SEK M Share of revenue (%) SEK M Share of revenue (%) SEK M Share of revenue (%) SEK M Share of revenue (%) Oil and Gas 4,371 33 0 0 0 0 4,371 23 Industrial 2,564 20 352 9 331 21 3,246 17 Chemical and Petrochemical 3,035 23 0 0 0 0 3,035 16 Industrial Heating 0 0 1,892 47 0 0 1,892 10 Consumer 0 0 639 16 827 53 1,467 8 Medical 41 0 1,110 28 85 5 1,237 7 Mining and Construction 1,081 8 0 0 0 0 1,081 6 Transportation 850 7 3 0 214 14 1,067 6 Nuclear 1,010 8 0 0 0 0 1,010 5 Hydrogen and Renewable Energy 111 1 0 0 114 7 225 1 Total 13,063 100 3,996 100 1,571 100 18,630 100 Revenue 2024 Tube Kanthal Strip Alleima Revenue per customer segment SEK M Share of revenue (%) SEK M Share of revenue (%) SEK M Share of revenue (%) SEK M Share of revenue (%) Oil and Gas 4,529 32 0 0 0 0 4,529 23 Industrial 2,781 20 252 6 303 21 3,336 17 Chemical and Petrochemical 3,411 24 0 0 0 0 3,411 17 Industrial Heating 37 0 2,107 50 0 0 2,145 11 Consumer 0 0 787 19 793 54 1,579 8 Medical 34 0 1,047 25 77 5 1,158 6 Mining and Construction 1,149 8 0 0 0 0 1,149 6 Transportation 775 6 6 0 202 14 984 5 Nuclear 1,092 8 0 0 0 0 1,092 6 Hydrogen and Renewable Energy 218 2 0 0 90 6 309 2 Total 14,027 100 4,200 100 1,465 100 19,691 100 2.3 Revenue and Non-current assets by country and contract liabilities Revenue by country, SEK M 2025 2024 USA 3,982 4,205 China 2,301 2,055 Sweden 2,085 2,298 UK 1,480 1,802 Germany 1,091 1,185 India 845 814 Italy 798 1,167 Brazil 498 485 Japan 472 542 France 467 456 Canada 466 319 Norway 423 367 Korea 393 458 Saudi Arabia 257 320 Taiwan 247 193 Netherlands 244 236 Spain 210 231 Finland 192 139 Australia 191 169 Switzerland 185 195 Other countries 1,802 2,055 Total 18,630 19,691 Revenues are attributed to countries on the basis of the customer’s location. Note 2 | Segment information and revenue Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other Alleima Annual Report 2025 | 53
Page 56
3.1 Average number of employees 2025 2024 Number Women % Number Women % Sweden 3,262 22 3,175 21 Czech Republic 725 19 721 19 Germany 459 26 468 25 United Kingdom of Great Britain 127 18 138 15 Netherlands 76 16 74 15 Italy 43 37 41 34 Rest of Europe 119 48 100 38 Total Europe 4,812 22 4,718 21 USA 770 27 764 24 Rest of North America 4 29 3 33 North America 774 27 767 24 India 336 8 321 7 China 272 31 253 32 Japan 63 25 66 23 Rest of Asia 51 42 47 40 Asia 722 20 686 20 Other 32 40 38 39 Total 6,339 23 6,209 22 3.2 Wages, salaries, other remuneration and social costs SEK M 2025 2024 Wages, salaries and other remuneration 3,972 3,858 Social costs 1,244 1,172 Total 5,216 5,030 Of which, pension costs recognized in social costs Defined contribution plan 315 259 Defined benefit plan 64 32 Total 379 292 3.3 Wages, salaries, other remuneration by market area SEK M 2025 2024 Sweden 2,049 1,930 Rest of Europe 988 884 Total Europe 3,038 2,814 North America 700 790 Asia 221 238 Other 13 15 Total 3,972 3,858 Of which, to Boards of Directors and presidents in all consolidated group companies Salaries and other remuneration 112 108 Of which, variable salary 19 15 3.4 Gender distribution in senior management Proportion of women, % 2025 2024 Senior management 30 29 Other senior executives 36 32 3.5 Remuneration to executive management Remuneration to the board of directors Fees to the Chairman and other external Board members are paid in accor - dance with the resolution at the Annual General Meeting. No Board fees are paid to the President and the employee representatives. In accordance with the resolution of the 2025 Annual General Meeting the total fee to the external Board members elected at the Meeting amounts to in total SEK 4,829,000 on an annual basis. 2025 2024 SEK Board fee Audit Committee fee Remuneration C o m m i t t e e Tota l Board and Committee fee Board fee Audit Committee fee Remuneration C o m m i t t e e Tota l Board and Committee fee Andreas Nordbrandt(Chairman of the Board) 1,530,000 112,000 1,642,000 1,470,000 108,000 1,578,000 Claes Boustedt 530,000 114,000 644,000 510,000 108,000 618,000 Susanne Pahlén Åklundh 530,000 230,000 760,000 510,000 217,000 727,000 Karl Åberg 530,000 114,000 644,000 510,000 108,000 618,000 Ulf Larsson 530,000 79,000 609,000 510,000 76,000 586,000 Victoria Van Camp 530,000 530,000 510,000 1) 510,000 Total 4,180,000 458,000 191,000 4,829,000 4,020,000 433,000 184,000 4,637,000 1) Member in the Board since 2 May 2024. President and other senior executives Guidelines for remuneration For information on the guidelines for remuneration of senior executives, please refer to page 33. President and CEO Alleima’s President and CEO, Göran Björkman, was paid an annual fixed sal - ary of SEK 7,842,444 during 2025. In addition, car allowance and an annual variable cash based salary of a maximum 70% of the fixed salary is payable. The variable salary for 2025 amounted to SEK 1,976,296. Göran Björkman is entitled to retire at age 65. Göran Björkman has a Swedish pension plan (ITP 2) and supplementary defined contribution plan apply under which the company each year contributes 30% of fixed salary proportions in excess of 20 price base amounts. Pension premium amounted of 34.4% of his annual fixed salary. In the event of termination of employment by the Company, Göran Björkman has a notice period of 12 months’ severance pay. Other senior executives Other members of the Group Executive Management are covered by a Swedish pension plan (ITP 1 or ITP 2) and for one member a German pension plan. The minimum retirement age is 62. For members of the Group Execu - tive Management a supplementary defined contribution plan applies under which the company each year contributes 25–30% (depending on age and employment start in GEM) of fixed salary proportions in excess of 20 price base amounts. One member is covered by a German pension plan under which 2.2% of fixed salary is contributed. Severance pay may be paid when employment is terminated by Alleima. The severance pay corresponds to 12 months fixed salary in addition to the notice period, which is 6 months. Any other income from employment can be deducted from the severance pay. Short-term incentive program (STI) Alleima annual incentive program for senior executives, and other managers in the Group, are linked to predetermined and measurable financial criteria, measured during 2025. Senior executives except Division mangers are mea - sured 100% on Group performance. Division managers are measured 80% on own business performance and 20% on Group performance. During 2025 the criteria’s have been related to Alleima’s adjusted EBIT, cash con - version and growth. Note 3 | Personnel information and remuneration of management Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other 54 | Alleima Annual Report 2025
Page 57
Note 3 | Personnel information and remuneration of management Remuneration and other benefits pertaining to 2025 expensed during 2025, in SEK Position Fixed salary Annual variable salary 1) Other benefits Long-term variable salary 2) Pension costs President and CEO 7,999,2933) 1,976,296 151,409 7,204,824 2,753,962 Other senior executives4) 24,568,991 3,184,461 2,741,846 9,758,432 9,246,245 Total 32,568,284 5,160,757 2,893,255 16,963,256 12,000,207 1) Amount pertaining to 2025 and expected to be paid in 2026. 2) Refers to LTI 2022 payment and expensed LTI 2023–2025. 3) Göran Björkmans fixed salary during 2025 amounts to 7,842,444. The remaining amount relates to vacation pay, etc. Board fees are not payable to President and CEO. 4) Pertains to the following persons in 2025: Olof Bengtsson (Jan–Aug), Johan Eriksson (Sep–Dec), Ulrika Dunker, Johanna Kreft (Jan-Oct), Mikael Blazquez, Tom Eriksson, Elja Nordlöf, Per Eklund, Robert Stål, Carl von Schantz. Remuneration and other benefits pertaining to 2024 expensed during 2024, in SEK Position Fixed salary Annual variable salary 1 Other benefits Long-term variable salary Pension costs President and CEO 7,475,9723) 0 151,745 2,751,761 2,135,455 Other senior executives4) 24,327,204 393,113 2,126,328 5,440,879 9,030,968 Total 31,803,176 393,113 2,278,073 8,192,640 11,166,423 1) Amount pertaining to 2024 and expected to be paid in 2025. 2) Refers to LTI 2021 payment and expensed LTI 2023–2024. 3) Göran Björkmans fixed salary during 2024 amounts to 7,329,384. The remaining amount relates to vacation pay, etc. Board fees are not payable to President and CEO. 4) Pertains to the following persons in 2024: Olof Bengtsson, Ulrika Dunker, Johanna Kreft, Mikael Blazquez, Tom Eriksson, Elja Nordlöf, Claes Åkerblom, Robert Stål, Carl von Schantz. Long-term incentive program (LTI) Share-based incentive program 2023–2025 The Annual General Meetings approved the Board’s proposal to adopt a performance share program for each year for a maximum 30 senior execu - tives and key individuals in the Alleima Group, divided into three categories. For all participants, a personal investment is required in each separate pro - gram and the programs encompass a grant of a maximum total of 852,000 shares. All program participants have invested in Alleima shares (“invest - ment shares”), up to an amount corresponding to 8% of the employee’s fixed annual salary before tax. Provided certain performance targets are met, Alleima shares may be allot - ted (“performance shares”). The maximum number of performance shares that may be allotted for each acquired investment share depends on the category to which the participant belongs. The number of Performance Shares that will finally be allotted to the participant for each acquired Investment Share is dependent on the development of the Alleima Group’s (i) adjusted earnings per share, excluding (a) metal price effects and (b) items affecting comparability (IAC) (“adjusted EPS”) and (ii) reduction of car - bon dioxide (CO 2). The two targets (adjusted EPS and CO 2 emission) are weighted among themselves at 90 and 10%, respectively, of the total target fulfilment. In January 2025, the Board of Directors established the levels regarding adjusted EPS for the performance years and CO 2 emission for LTI 2025 that must be attained. After three years, 2023–2025, 2024–2026, 2025–2027, will the outcome of the LTI 2023, LTI 2024 and LTI 2025 be established. The level required for maximum allotment and the extent to which the established levels are attained will be disclosed in the 2025, 2026 and 2027 Annual Report. The allotments of performance shares in ongoing programs requires continuous employment and that all investment shares are held during a period of three years from the acquisition of the investment shares. In order to fulfil Alleima’s obligations under the share savings program, the company has entered into an equity swap agreement with a financial institu - tion. Under the terms of the agreement, the financial institution has commit - ted to deliver to participants in the program Alleima shares at the time of delivery in accordance with the terms and conditions of the program. Performance outcome LTI 2023: Performance shares will be allotted since the performance targets set by the Board of Directors were met. For maximum level of fulfilment requires 15% adjusted EPS growth and CO 2 emissions requires a reduction to 0.44 metric tons of CO 2 emissions per rollable metric ton steel from 2023 to 2025. Target fulfillment for adjusted EPS was 33.3% and CO 2 emission 67.0%. Assumptions for determining the value, 2023–2025 LTI Program Assumptions LTI 2025 (on date of issue) LTI 2024 (on date of issue) LTI 2023 (on date of issue) Share price, SEK 79.75 71.80 47.82 Present value of forecasted future dividends, SEK 1) 6.96 7.22 8.62 Risk-free interest rate, % 2.04 3.75 3.50 1) Based on analysts’ 3 year combined expectations. LTI 2025 LTI 2024 LTI 2023 Maximum number of Performance Shares Tota l Of which CEO Of which oth sen exec Tota l Of which CEO Of which oth sen exec Tota l Of which CEO Of which oth sen exec Outstanding at beginning of year 0 0 0 306,857 54,615 113,814 380,901 77,663 122,790 Allotted during the period 284,395 55,275 106,728 0 0 0 0 0 0 Forfeited during the year -6,786 0 -6,786 -50,440 0 -45,252 -63,206 0 -59,034 Outstanding at year-end 277,609 55,275 99,942 256,417 54,615 68,562 317,695 77,663 63,756 Theoretical value when allotted acc. to Black-Scholes, SEK 72.14 64.84 39.82 Cash-based incentive program (2022) In 2022 the Board decided upon Remuneration Committee proposal to implement a cash based LTI program, LTI 2022. The payment is conditional on continued employment in Alleima for a three-year period until the end of 2024 and the Group achieving a defined profitability target in 2022. It is lim - ited to a maximum of 75% of the fixed annual salary for the President and CEO and 60% of the fixed annual salary for other members of the Group Executive Manage¬ment. Payment was done in May 2025 since the perfor - mance targets, Adjusted EBITA, set by the Board of Directors were met. Costs for the programs The following IFRS 2 provisions were made during the year: LTI 2025: SEK 4 million, of which SEK 1 million social costs, LTI 2024: SEK 4 million (4), of which SEK 1 million (1) social costs, LTI 2023: SEK 2 million (6), of which SEK 1 million (2) social costs. Preparation and decision-making process The Board’s Remuneration Committee prepares issues relating to the Group Executive Management’s remuneration. The Committee met two times during the year. Issues dealt with included the magnitude of any pay increases and the long-term variable incentive program. The Board dis - cussed the Committee’s proposals and made a decision, using the Commit - tee’s proposal as a basis. Based on the Committee’s proposals, the Board decided on the remuneration of the President for 2025. The President decided on remuneration to other senior executives after consultation with the Committee. The Committee performed its task supported by expertise on remuneration levels and structures. For information on the composition of the Committee, refer to the Corporate Governance Report. Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other Alleima Annual Report 2025 | 55
Page 58
Note 4 | Fees and remuneration to auditors SEK M 2025 2024 PwC Audit fees -21 -19 Other services -1 -2 Total -22 -21 Other audit firms Tax consultancy services -6 -4 Other services -5 -3 Total -11 -7 Note 5 | Research, development and quality assurance SEK M 2025 2024 Research and development, charged as cost -296 -292 Total -296 -292 Note 6 | Other operating income SEK M 2025 2024 Currency exchange gain 138 106 Capital gain on disposal of intangible and tangible fixed assets 7 0 Contractual services (Note 1 page 45-46) 248 300 Other operating income 62 33 Total 455 440 Other operating income includes insurance compensations for damages etc. Note 7 | Other operating expenses SEK M 2025 2024 Currency exchange loss -198 -61 Capital loss on disposal of intangible and tangible fixed assets -7 -3 Contractual services (Note 1 page 45-46) -229 -300 Other operating expenses -11 -13 Total -445 -376 Other operating expenses consist of transaction cost related to acquisition SEK -9 million (-3) and other operating non-financial cost SEK -2 million (-9). Note 8 | Operating expenses SEK M 2025 2024 Cost of goods and material -7,339 -8,437 Employee benefit expense -5,216 -5,030 Depreciation and amortization -930 -914 Inventory obsolescence provision -148 -132 Impairment losses and reversal impairment losses, non-current assets -82 1 Impairment losses, doubtful receivables -1 -5 Other expenses -4,431 -4,117 Total -18,147 -18,633 Other expenses is mainly related to purchases of services, energy and IT. Note 9 | Net financial items SEK M 2025 2024 Interest income 35 56 Other investments including derivatives Net gain on remeasurements of financial assets/lia - bilities 238 108 Other financial income 0 7 Financial income 274 170 Interest expense -47 -50 Other investments including derivatives Net loss on remeasurements of financial assets/lia - bilities -170 -33 Other financial expenses -21 -14 Financial expenses -239 -97 Net financial items 35 73 Gain and loss from remeasurement of financial assets and liabilities are mainly temporary revaluation effects on foreign exchange derivatives due to discrepancies between contract rates and market exchange rates on the balance date. Note 10 | Income tax Recognized in profit and loss Income tax expense for the year, SEK M 2025 2024 Current tax -287 -499 Adjustment of taxes attributable to prior years -9 -24 Total current tax expense -296 -522 Deferred taxes relating to temporary differences and tax losses carried forward -5 173 Total tax expense -301 -350 Reconciliation of the Group’s tax expense Alleima’s recognized tax expense for the year amounted to SEK 301 million (350) or 31.0% (22.3) of profit after financial items. 2025 2024 SEK M % SEK M % Profit after financial items 973 1,571 Weighted average tax based on each country’s tax rate -248 -25.4% -372 -23.7 Tax effect of Non-deductible expenses -20 -2.0% -25 -1.6 Tax-exempt income 14 1.4% 25 1.6 Adjustments relating to prior years’ current tax expenses -9 -1.0% -24 -1.5 Revaluation of temporary differences 8 0.8% 52 3.3 Effects of tax losses carried forward, net -31 -3.2% -3 -0.2 Other -16 -1.6% -3 -0.2 Total recognized tax expense -301 -31.0% -350 -22.3 The weighted average tax rate for Alleima calculated in accordance with the statutory tax rates in each country is 25.4% (23.7). Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other 56 | Alleima Annual Report 2025
Page 59
Tax items attributable to Other comprehensive income 2025 2024 SEK M Before tax Ta x After tax Before tax Ta x After tax Actuarial gains/losses attributable to defined benefit pension plans 268 -55 213 32 -8 24 Foreign currency translation differences -740 – -740 310 – 310 Hedge reserve adjustment 455 -94 361 -35 7 -27 Other comprehensive income -16 -149 -165 307 -1 306 Recognized in the balance sheet Deferred tax assets and liabilities The deferred tax assets and liabilities recognized in the balance sheet are attributable to the following assets and liabilities: 2025 2024 SEK M Deferred tax assets Deferred tax liabilities Net Deferred tax assets Deferred tax liabilities Net Intangible assets 2 -39 -37 2 -42 -39 Property, plant and equipment 33 -688 -655 44 -662 -618 Financial non-current assets 25 -112 -87 5 -115 -110 Inventories 84 -2 82 73 -3 70 Receivables 3 -48 -45 4 -10 -6 Pensions 79 -13 66 126 -8 118 Interest-bearing liabilities 87 0 87 97 0 97 Non-interest-bearing liabilities 155 1 155 193 0 193 Tax losses carried forward 196 – 196 122 – 122 Total 664 -902 -238 666 -839 -173 Offsetting within companies -462 462 0 -437 437 0 Total deferred tax assets and liabilities 202 -440 -238 228 -402 -173 Unrecognized deferred tax assets The Group has additional tax losses carried forward of SEK 150 million (51) related to Switzerland, Brazil and Malaysia. No deferred tax asset was recognized for these losses. The expiry dates of these tax losses carried forward are distributed as follows: Year SEK M No expiry date 150 Total 150 Related deferred tax assets were not recognized since utilization of the tax losses against future taxable profits is not deemed probable in the foresee - able future. The tax value of the unrecognized tax losses carried forward amounted to SEK 41 million (17). Change of deferred tax in temporary differences an unused tax losses SEK M 2025 2024 Balance at the beginning of the year, net -173 -317 Recognized in profit and loss -5 173 Recognized in other comprehensive income -61 -23 Translation differences 8 -6 Acquisitions -7 – Balance at end of year, net -238 -173 In addition to the deferred tax assets and liabilities, Alleima reports the following tax liabilities and receivables: SEK M 2025 2024 Income tax receivables 110 132 Income tax liabilities -114 -253 Net tax receivables/liabilities -4 -121 Pillar 2 Alleima is covered by the OECD model rules for Pillar 2. The Group’s parent company, Alleima AB, is based in Sweden which has implemented the rules as of January 1, 2024. The rules are not expected to have a material impact on the Group for 2025. Note 11 | Earnings per share Earnings per share, SEK 2025 2024 Basic 2.68 4.88 Diluted 2.68 4.87 The calculation of the numerators and denominators used in the above calculations of earnings per share are presented below. 2025 2024 Profit for the year attributable to the owners of the parent company 671 1,221 Total number of shares 250,877,184 250,877,184 Number of shares in equity swap (LTI) -720,006 -702,053 Number of outstanding shares 250,157,178 250,175,131 Number of outstanding shares, weighted average 250,164,359 250,291,704 Number of shares after dilution 250,836,665 250,862,889 Number of shares after dilution, weighted average 250,855,258 250,866,966 Dilution is related to the outstanding share-based LTI programs for 2023, 2024 and 2025. Refer to Note 3.5 for further information about the LTI programs. Note 10 | Income tax Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other Alleima Annual Report 2025 | 57
Page 60
Note 12 | Intangible assets Internally generated intangible assets Acquired intangible assets Tota lSEK M Capital - ized R&D expendi - tures IT soft - ware Patents and licenses Other Sub-total Capital - ized R&D expendi - tures IT soft - ware Patents, licenses, trade - marks Goodwill Other Sub-total Cost At January 1, 2025 69 334 – 59 462 19 83 4 1,693 144 1,942 2,404 Additions – 14 – 0 14 – 27 – – 0 27 41 Business combinations – – – – – – 0 3 92 21 115 115 Disposals – -12 – – -12 – 0 – – – 0 -13 Reclassifications – -4 – -1 -5 – 0 – – – 0 -5 Translation differences for the year – – – -6 -6 – 0 0 -142 -10 -153 -159 At December 31, 2025 69 332 – 52 453 19 110 6 1,641 154 1,931 2,383 Accumulated amortizations and impairment losses At January 1, 2025 27 179 – 27 233 19 70 8 – 37 134 367 Disposals 0 -12 – 0 -12 – 0 0 – 0 0 -13 Impairment losses, net – – – – – – – – 30 7 37 37 Reclassifications – – – 1 1 – 0 -9 – 9 0 0 Amortizations for the year 7 22 – 0 29 – 3 6 – 13 22 51 Translation differences for the year – – – -4 -4 – 0 0 0 -4 -5 -9 At December 31, 2025 33 189 – 24 246 19 72 5 29 62 188 434 Net carrying amount at December 31, 2025 36 143 – 28 207 – 38 1 1,612 92 1,742 1,949 Cost At January 1, 2024 119 292 – 70 481 19 77 4 1,621 138 1,859 2,340 Additions 0 35 – 12 47 0 0 0 – 0 0 48 Business combinations – – – – – – – – – – – – Disposals -94 – – -27 -121 – 0 – – – 0 -121 Reclassifications 45 7 – – 51 – 6 – 0 – 6 57 Translation differences for the year – – – 3 3 – 0 0 71 5 77 80 At December 31, 2024 69 334 – 59 462 19 83 4 1,693 144 1,942 2,404 Accumulated amortizations and impairment losses At January 1, 2024 119 169 – 24 312 19 68 4 0 23 115 427 Disposals -94 0 – 0 -94 0 0 0 – 0 0 -94 Impairment losses, net – – – – – – – – – – – – Reclassifications – – – 0 0 – 0 – – – 0 0 Amortizations for the year 2 10 – 0 12 – 2 3 – 12 18 30 Translation differences for the year – – – 2 2 – 0 0 – 2 2 5 At December 31, 2024 27 179 – 27 233 19 70 8 0 37 134 367 Net carrying amount at December 31, 2024 43 155 – 32 229 – 13 -4 1,693 107 1,808 2,037 Intangible assets Depreciation for the year is included in the following lines in the income statement 2025 2024 Cost of gods and services sold -4 -3 Selling expenses -17 -15 Administrative expenses -24 -10 Research and development expenses -7 -2 Total -51 -30 Impairment losses per line in the income state - ment 2025 2024 Cost of gods and services sold -30 0 Selling expenses -7 0 Total -37 0 Goodwill at December 31, 2025 amounted to SEK 1,612 million (1,693), essen - tially related to the acquisition of Kanthal in 1997. The impairment test of goodwill is presented below. For Alleima the cash-generating units (CGU) are the divisions Tube, Kanthal and Strip. The goodwill is allocated to the CGU based on where the business combinations have originally been made. Year 2025 2024 Tube 65 67 Kanthal 1,547 1,625 Strip 0 0 Total 1,612 1,693 The recoverable amount of the CGU has been assessed based on esti - mates of value in use. Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other 58 | Alleima Annual Report 2025
Page 61
Calculations of value in use are based on the estimated future cash flows using forecasts covering a five-year period, which are in turn based on the five-year plans prepared annually by Alleima. The plan is founded on the Divisions’ strategies and an analysis of the current and anticipated business climate, and the impact this is expected to have on the market in which the division operates. A range of economic indicators, which differ for each market, and external and internal studies of these, are used in the analysis of the business situation. The key assumptions mentioned below reflect past experience, current and future situation and are consistent with external information. The key assumptions when deter - mining cash flow forecasts include anticipated demand, growth rate, oper - ating margin and working capital requirements. Alleima’s goal is to be an industry leader in sustainability. The long-term targets include reducing carbon dioxide emissions from Scope 1 and 2 by more than 54% by 2030 compared to 2019, SBTi net zero by 2050, and more than 80% circularity in steel production, and exploring, testing and imple - menting alternative solutions to reduce slag that ends up in landfills. The divisions build their strategies in the same way, i.e. there are plans and ambitions linked to sustainability in each strategy. It is thus also an integral part of the financial forecast for the strategy period. The factor used to calculate growth in the terminal period after five years was 2% for Alleima, the same level as used previous years. Need of working capital beyond the five-year period is deemed to increase approximately as the expected growth in the terminal period. The discount rate consists of a weighted average cost of capital for borrowed capital and shareholders’ equity. The pre-tax discount rates used for Alleima are: Year 2025 2024 Tube 11.5% 11.4% Kanthal 10.9% 11.1% Strip 10.9% 11.0% The specific risks of the CGU have been adjusted in future cash flow fore - casts. The impairment testing of goodwill performed at year end 2025 did not indicate any impairment requirements. Sensitivity in the calculations indicates that the goodwill value would be maintained even if the discount rate was increased by 1 percentage points, the long-term growth rate was lowered by 1 percentage points, and the operating margin dropped 1 per - centage points. Note 13 | Property, plant and equipment SEK M Land and buildings Plant and machinery Equipment, tools, fixtures and fittings Constructions in progress Other Tota l Cost At January 1, 2025 5,802 15,340 1,544 1,301 69 24,056 Additions 71 90 10 933 7 1,112 Business combinations 44 4 3 0 – 51 Disposals -127 -247 -52 -53 – -479 Reclassifications 151 750 89 -976 -29 -16 Translation differences for the year -200 -537 -59 -70 -7 -873 At December 31, 2025 5,741 15,401 1,534 1,135 40 23,851 Accumulated depreciations and impairment losses At January 1, 2025 3,495 11,731 1,074 – – 16,300 Disposals -81 -226 -47 – – -354 Impairment losses, net 3 25 2 – – 30 Reclassifications -2 -11 -3 – – -16 Depreciations for the year 165 491 68 – – 724 Translation differences for the year -123 -419 -32 – – -574 At December 31, 2025 3,457 11,591 1,062 – – 16,110 Net carrying amount at December 31, 2025 2,285 3,810 472 1,135 40 7,742 Cost At January 1, 2024 5,686 14,686 1,497 819 28 22,717 Additions 6 57 13 1,020 50 1,147 Business combinations – – – – – 0 Disposals -13 -102 -50 -7 – -172 Reclassifications 26 432 52 -552 -12 -54 Translation differences for the year 98 267 31 21 3 419 At December 31, 2024 5,802 15,340 1,544 1,301 69 24,056 Accumulated depreciations and impairment losses At January 1, 2024 3,282 11,119 1,033 – – 15,435 Disposals -13 -99 -46 – – -157 Impairment losses, net 0 -1 0 – – -1 Reclassifications 1 -1 0 – – 0 Depreciations for the year 162 505 70 – – 736 Translation differences for the year 63 208 16 – – 286 At December 31, 2024 3,495 11,731 1,074 – – 16,300 Net carrying amount at December 31, 2024 2,307 3,609 470 1,301 69 7,757 Note 12 | Intangible assets Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other Alleima Annual Report 2025 | 59
Page 62
Tangible assets Depreciation for the year is included in the following lines in the income statement 2025 2024 Cost of goods and services sold -687 -700 Selling expenses -7 -9 Administrative expenses -13 -12 Research and development expenses -17 -16 Total -724 -736 Note 13 | Property, plant and equipment Impairment losses/reversal of impairment losses per line in the income statement 2025 2024 Cost of goods and services sold -30 1 Selling expenses – 0 Administrative expenses – 0 Total -30 1 Note 14 | L e a s e s Alleima as a lessee The arrangements in which Alleima is a lessee consist of a number of assets such as facilities for production, warehouse, office premises, certain office equipment and vehicles. Most of the facilities have a rental period of 5–10 years and for most office equipment and vehicles the period is 3–5 years. SEK M Land and buildings Plant and machinery Fixture and fittings Tota l Accumulated acquisition cost At January 1, 2025 448 244 164 855 Additions 92 1 34 127 Business combinations 3 0 1 3 Remeasurements -5 1 1 -3 Divestments and disposals -33 -2 -23 -58 Reclassifications 4 0 0 5 Translation differences for the year -32 0 -8 -40 At December 31, 2025 477 244 169 890 Depreciation and impairment losses At January 1, 2024 202 119 80 401 Reclassifications 6 0 -4 2 Divestments and disposals -30 -2 -22 -54 Impairment losses 15 0 0 15 Depreciations for the year 77 37 41 155 Translation differences for the year -15 0 -4 -19 At December 31, 2025 255 153 91 500 Net carrying amount at December 31, 2025 222 90 78 391 Accumulated acquisition cost At January 1, 2024 427 248 152 826 Additions 35 0 30 65 Business combinations 0 0 0 0 Remeasurements 20 -4 5 21 Divestments and disposals -43 0 -32 -75 Reclassifications -3 -1 7 3 Translation differences for the year 11 0 3 15 At December 31, 2024 448 244 164 855 Depreciation and impairment losses At January 1, 2024 167 84 74 325 Reclassifications -3 -2 0 -5 Divestments and disposals -43 0 -32 -74 Impairment losses 0 0 0 0 Depreciations for the year 73 37 37 148 Translation differences for the year 5 0 2 7 At December 31, 2024 202 119 80 401 Net carrying amount at December 31, 2024 246 125 83 455 See note 21 for split of Lease liabilities on current and non-current leases. Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other 60 | Alleima Annual Report 2025
Page 63
Depreciation per line item in the income statement SEK M 2025 2024 Cost of goods sold -103 -98 Selling expenses -25 -26 Administrative expenses -24 -22 Research and Development expenses -2 -2 Total -155 -148 Impairment losses SEK M 2025 2024 Cost of goods sold -12 0 Administrative expenses -3 0 Total -15 0 Amounts recognized in the income statement SEK M 2025 2024 Depreciations -155 -148 Impairment losses -15 0 Interest expenses related to lease liabilities -17 -17 Expenses for low value assets -6 -8 Total amount recognized in the income statement -193 -172 The total cash outflow for leases during the year -148 -135 Note 14 | Leases Note 15 | Non-current financial assets SEK M 2025 2024 Derivatives designated as hedging instruments 99 9 Funded pension plans (note 20) 34 65 Non-current holdings of securities 0 2 Other non-interest-bearing receivables 10 13 Other interest-bearing receivables 1 2 Total 144 92 Note 16 | Inventories SEK M 2025 2024 Raw materials and consumables 2,431 2,460 Work in progress 2,843 3,045 Finished goods 1,539 1,902 Total 6,813 7,407 Inventories which were booked as expense amounted to SEK 15,178 million (15,740) during the year, whereof SEK 148 million (132) was related to write- down of inventories reported in cost of goods sold. Note 17 | Trade receivable 2025 SEK M Current 1–30 days past due 31–60 days past due 61–90 days past due 91–180 days past due 181–360 days past due More than 360 days past due Tota l Expected loss rate, % 0,7 1,4 3,7 12,6 28 69,9 88,9 2,0 Gross carrying amount – trade receivables 2,111 276 34 16 6 20 13 2,476 Loss allowance -15 -4 -1 -2 -2 -14 -12 -50 Reported value 2,095 272 33 14 4 6 1 2,426 2024 SEK M Current 1–30 days past due 31–60 days past due 61–90 days past due 91–180 days past due 181–360 days past due More than 360 days past due Tota l Expected loss rate, % 0,4 1,5 2,6 13,3 22,9 50,5 99,5 1,3 Gross carrying amount – trade receivables 2,540 317 42 13 19 5 13 2,949 Loss allowance -10 -5 -1 -2 -4 -3 -12 -37 Reported value 2,530 312 41 11 15 3 0 2,911 Leasing liabilities SEK M 2025 2024 Within one year 140 164 Between one and five years 240 263 Later than five years 46 52 Total undiscounted leasing liabilities 426 479 Contracts not yet commenced At December 31 2025 Alleima Group has not entered any contracts with commenced date in 2026 or later. Alleima as a lessor The Group holds no financial leases. Alleima’s operational leases mainly consists of lease contracts related to two facilities owned by Alleima. Lease income amounted to SEK 52 million (52). Future minimum lease payments under non- cancel able operational lease contracts was SEK 190 million (205) at December 31, 2025. Operating leases SEK M 2025 2024 Within one year 47 51 Between one and five years 95 89 Later than five years 47 65 Total undiscounted lease payments 190 205 Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other Alleima Annual Report 2025 | 61
Page 64
Note 18 | Other current receivables SEK M 2025 2024 Contract assets 0 35 Derivatives designated as hedging instruments 178 45 VAT receivables 164 209 Prepaid expenses 286 256 Other non-interest-bearing receivables 211 347 Advances to suppliers 24 25 Total 863 917 Note 19 Equity As of December 31, 2025 Alleima’s share capital amounted to SEK 250,877,184 represented by 250,877,184 shares. To the Annual General Meeting on April 29, 2026, Alleima’s Board of Directors proposes for the financial year 2024 an ordinary dividend of SEK 2.50 per share (SEK 627,192,960), to be paid in May 2026. The remaining amount for the parent company, SEK 13,267,680,441, should be carried for - ward. The Board makes the assessment that the parent company’s and the group’s equity after the dividend distribution will be able to sustain the requirements which the nature, size and risks of the business will present. The Board further considers the actions reasonable in light of the parent company’s and the Group’s consolidation requirements, liquidity and posi - tion in general. The dividend distribution is assumed to not present any risk for the parent company’s or the Group’s ability to fulfil its short- or long- term payment obligations, or assumed to affect the ability to make required investments. The Annual General Meeting held on April 28, 2025, resolved for the financial year 2024 on an ordinary dividend of SEK 2.30 per share. The divi - dend of SEK 577 million was distributed to the shareholders on May 6, 2025, of which SEK 2 million was repaid to Alleima in form of dividend related to the equity swap for LTI 2023 and LTI 2024. Alleima’s General Meeting held on April 28, 2025 approved the Board’s proposal for a long-term share-based incentive program (LTI 2025). After a period of three years, a certain number of Alleima shares free of charge will be allotted, provided that certain performance targets are met. As of December 31, 2025, LTI 2025 comprises 277,609 share rights and LTI 2023 and LTI 2024 comprises 317,695 and 256,417 share rights respectively (LTI 2023: 380,901, LTI 2024 306,857)). The delivery of these shares is secured through an equity swap agreement with a third party. Further information regarding the incentive programs are provided in Note 3. Reserves Consolidated equity includes certain reserves which are described below. Translation reserves The translation reserve comprises all exchange differences arising from the translation of the financial statements of foreign operations into Alleima’s presentation currency. Hedge reserves Alleima apply hedge accounting for derivatives that are used to hedge the Group’s exposure to electricity-, gas- and metal price risk and for some derivatives that are used to hedge the exchange rate exposure in orders and investments. Changes in the fair value of the derivatives designated for hedge accounting are recognised in Other comprehensive income and accumulated in the Hedge reserve within equity. Refer to Note 1 for the accounting principles and Note 26 for more information on derivatives. Non-controlling interest Non-controlling interest amounted to SEK 0 million (0) and refers to Alleima Rock Drill Steel AB (RDS) in which Sandvik AB owns 10% of the company. The Class B shares held by Sandvik are not subject to future dividends. Refer to Note 27 for further information. Note 20 | Provision for pensions and other non-current benefits Alleima provides direct pension solutions or participates in defined benefit, defined contribution and other plans for post-employment benefits to all employees. These plans are structured in accordance with local regula - tions and practices. The Group’s most significant defined-benefit pension plans are described below. Sweden The Swedish pension plan is funded through a foundation and is based on salary at the time of retirement. It is partly closed for new participants, meaning that only new employees born prior to 1979 have the option of join - ing the plan. Employees born after 1979 are encompassed by a defined contribution plan. There are no funding requirements for the defined bene - fit plan. Pension payments to retirees are made directly from Alleima, the Company has the opportunity to request reimbursement for pension pay - ments made which have been secured by the pension fund. The total value of Alleima’s assets held by the foundation was SEK 1,262 million (1,215), which was SEK 221 million lower (256 lower) than the capital value of the corre - sponding pension obligations for the entire foundation. The commitment for family pension, also a defined-benefit plan, is insured with Alecta. Sufficient information to use defined-benefit account - ing for this plan is not available, and therefore recognized as a defined- contribution plan. At the end of 2025, Alecta reported a plan surplus of 167% (162). The Alleima Group’s share of Alecta’s saving premiums is 0.03%, the total share of active members in Alecta is 0.20%. For 2026, the expected contri - bution to Alecta is SEK 20 million (19). The Group’s mutual responsibility as a credit insured company of PRI Pensionsgaranti in Sweden is classified as a contingent liability and amounts to SEK 30 million (29). This mutual responsibility can only be imposed in the instance that PRI Pensionsgaranti has consumed all of its assets, and it amounts to a maximum of 2% of the Group’s pension liability in Sweden. Germany In Germany, Alleima has defined benefit pension plans. A few years ago, Alleima formed a foundation, a Contractual Trust Agreement, which covers the current employees of Alleima’s German companies. The pension com - mitments for retirees and paid-up policyholders remain unfunded. The pension is based on salary at the time of retirement and other parameters. There are no funding requirements and employees in the plan are required to contribute a certain percentage of their salary to the plan. Pension pay - ments to retirees are mainly made from the Company. Other Other countries have no material defined benefit pension plans. Risks and cash flows Three main categories of risks are associated with the Company’s defined-benefit pension plans. The first category is linked to future pension payments. Greater life expectancy, increased inflation assumptions and higher salaries can increase future pension payments and thus also the lia - bility for the pension obligation. The second category refers to the assets in the foundations that are funded. Low returns may, in the future, lead to the assets being insufficient for covering future pension payments. The third and final category pertains to the measurement methods and accounting of defined-benefit pension plans, primarily regarding the discount rate utilized in the measurement of the present value of the pension obligations. This rate can fluctuate, leading to major changes in the recognized pension lia - bility. The discount rate also affects the interest rate component of the pen - sion liability and that is recognized in net financial items. To determine the discount rate, AA credit rated corporate bonds are used that correspond to the duration of the pension obligation. If there is no deep market for corporate bonds, government bonds are used as the basis for determining the discount rate. Mortgage bonds are used in Sweden to determine the discount rate. Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other 62 | Alleima Annual Report 2025
Page 65
A sensitivity analysis of the most important assumptions affecting the recognized pension liability is provided below. Note that this sensitivity analysis is not intended to be the expression of an opinion by the Company regarding the probability of such events occurring. Governance The defined benefit and defined contribution plans are governed through a Pension Supervisory Board (PSB). PSB meets twice a year and has the following areas of responsibility: — Implement policies and directives — Ensure efficient administration of the major pension plans and efficient management of reserved plan assets — Approve establishment of new plans, material changes or closure of existing plan — Approve guidelines for management of assets Note 20 | Provision for pensions and other non-current benefits Information by country December 31, 2025, SEK M Sweden Germany Other Tota l Amounts included in the balance sheet Present value of funded and unfunded obligations 1,758 162 152 2,073 – of which for actives 725 60 130 915 – of which for vested deferreds 517 32 1 551 – of which for retirees 516 69 20 605 Plan assets 1,262 120 135 1,517 Total surplus/(deficit) -496 -42 -17 -555 Other pension provisions -34 Total Net liability -589 Provision for pensions -623 Overfunded pension plans recognized as asset, non-current receivable 34 Funding level, % 72 74 89 73 Net liability for medical plans 22 22 Average duration of the obligation, years 20 5 12 18 Amounts included in the income statement/Other comprehensive income Total (Current) service cost -52 -4 -9 -64 Net interest -25 -1 -1 -28 Remeasurements 271 0 -3 268 Total expense for defined benefits (pretax) 194 -5 -12 176 Amounts included in the cash flow statement Contributions by the employer 0 -6 -6 -11 Benefits paid, net -50 -4 -1 -56 Major assumptions for the valuation of the liability Life expectancy, years1 23 23 Inflation, % 1.75 2.00 Discount rate, % (weighted average) 3.95 3.90 Future salary increase, % (weighted average) 3.00 3.50 1) Expressed as the expected remaining life expectancy of a 65 year old in number of years. Investment strategy The aims of the investment decisions made in the foundations managing plan assets are as follows: — Ensure that the plan assets are sufficient to cover the foundation’s future pension commitments — Achieve optimal returns while taking into account a reasonable level of risk Each foundation is to have a written investment policy approved by PSB. Reviews are performed annually. The foundation makes its own decisions on its investment strategy and takes into consideration the composition of the pension commitments, requirements of cash and cash equivalents and available investment opportunities. The investment strategy is to be long- term and in line with the guidelines established by PSB. Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other Alleima Annual Report 2025 | 63
Page 66
Note 20 | Provision for pensions and other non-current benefits Information by country December 31, 2024, SEK M Sweden Germany Other Tota l Amounts included in the balance sheet Present value of funded and unfunded obligations 1,955 176 185 2,315 – of which for actives 820 70 153 1,042 – of which for vested deferreds 595 28 2 624 – of which for retirees 540 79 31 650 Plan assets 1,215 126 190 1,530 Total surplus/(deficit) -740 -50 6 -784 Other pension provisions -35 Total Net liability -820 Provision for pensions -885 Overfunded pension plans recognized as asset, non-current receivable 65 Funding level, % 62 72 103 66 Net liability for medical plans 26 26 Average duration of the obligation, years 21 6 12 19 Amounts included in the income statement/Other comprehensive income Total (Current) service cost -29 -4 1 -32 Net interest -23 -2 0 -24 Remeasurements 40 2 -9 32 Total expense for defined benefits (pretax) -12 -3 -7 -24 Amounts included in the cash flow statement Contributions by the employer 0 2 -6 -4 Benefits paid, net -49 -4 -1 -54 Major assumptions for the valuation of the liability Life expectancy, years1 23 22 Inflation, % 2.00 2.00 Discount rate, % (weighted average) 3.55 3.20 Future salary increase, % (weighted average) 3.25 3.50 1) Expressed as the expected remaining life expectancy of a 65 year old in number of years. Reconciliation of change in present value of defined benefit obligation for funded and unfunded plans SEK M 2025 2024 Opening balance, January 1 2,315 2,331 Service cost 63 41 Past service cost 1 -8 Settlements 0 -1 Interest cost 79 77 Contributions by plan participants 3 4 Benefits paid -78 -82 Settlements payment from plan assets -2 -195 Insurance premiums for risk benefits -1 -1 Remeasurements loss/(gain) arising from: – Financial assumptions -244 78 – Demographic assumptions 0 0 – Experience adjustments -33 49 Exchange differences -31 23 Closing balance, December 31 2,073 2,315 Reconciliation of change in the fair value of plan assets SEK M 2025 2024 Opening balance, January 1 1,530 1,518 Interest income 51 52 Contribution by the employer 11 4 Benefits paid directly by employer 56 54 Insurance premiums for risk benefits -1 -1 Contributions by plan participants 3 4 Benefits paid -78 -82 Settlements payment from plan assets -2 -195 Payment from foundation -16 0 Effect on asset ceiling 0 29 Return on plan assets excl amount included in interest -8 130 Exchange differences -31 19 Closing balance, December 31 1,517 1,530 SEK M 2025 2024 Actual return on plan assets 43 182 Consolidation ratio for funded plans, % 73 66 Consolidation ratio for all plans, including unfunded, % 73 66 Estimated contributions for the next year 67 68 Sensitivity analysis, change in provision (net, SEK M) Sweden Germany Life expectancy, +1 year 70 4 Discount rate -50 bps 179 4 Inflation rate +50 bps 182 3 Class of assets in % 2025 2024 Interest-bearing securities 25 27 Shares 24 23 Properties 23 22 Other 24 22 Cash and cash equivalents 4 6 of which assets without quoted prices 52 49 Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other 64 | Alleima Annual Report 2025
Page 67
Note 21 | Other interest-bearing liabilities SEK M 2025 2024 Non-current liabilities Lease liabilities 275 327 Total 275 327 Current liabilities Lease liabilities 142 133 Total 142 133 Changes in liabilities arising from financing activities Cash flow Non-cash flow changes SEK M Jan 1, 2025 New loans Amortization Business combination Reclassi - fication New leases Currency/FX Other Dec 31, 2025 Interest-bearing non-current liabilities 0 – 0 23 -4 – -1 0 18 Interest-bearing current liabilities 1 – -3 0 4 – 0 0 2 Lease liabilities 460 – -148 4 0 128 -23 -3 418 Share swap – – -2 – – – – – – Dividends paid – – -575 – – – – – – Total 461 – -729 27 0 128 -24 -3 438 -729 Cash flow Non-cash flow changes SEK M Jan 1, 2024 New loans Amortization Business combination Reclassi - fication New leases Currency/FX Other Dec 31, 2024 Interest-bearing non-current liabilities 1 – 0 – -1 – 0 0 0 Interest-bearing current liabilities 3 – -4 – 1 – 0 0 1 Lease liabilities 505 – -135 – 0 65 8 18 460 Share swap – – -20 – – – – – – Dividends paid – – -501 – – – – – – Total 510 – -660 – 0 65 8 18 461 -660 Note 22 | Other provisions SEK M Warranties Restructuring Employee benefits Environmental obligations Legal disputes Other obligations Tota l Balance at January 1, 2025 17 15 184 183 18 60 476 Provisions made during the year 17 177 36 15 11 13 270 Provisions used during the year -7 -12 -55 0 -1 -21 -97 Unutilized provisions reversed during the year -1 -10 -36 -5 0 0 -53 Reclassifications 0 0 0 0 0 -3 -3 Business combinations 1 0 0 0 0 0 1 Translation differences -1 -2 -3 0 -3 -3 -13 Balance at December 31, 2025 26 167 126 193 25 45 582 of which current 8 167 2 5 11 40 234 of which non-current 18 0 123 188 14 5 348 The provisions for environmental obligations mainly refer to waste material and slag, investigations and remedial measures in Sweden. Regarding environ - mental obligations, see also Note 1 Critical estimates and key judgments. SEK M Warranties Restructuring Employee benefits Environmental obligations Legal disputes Other obligations Tota l Balance at January 1, 2024 16 37 147 211 7 48 467 Provisions made during the year 4 0 63 2 13 21 103 Provisions used during the year -3 -21 -29 -30 -2 -7 -93 Unutilized provisions reversed during the year 0 0 -3 0 0 0 -3 Reclassifications 0 0 4 0 0 -4 0 Business combinations 0 0 0 0 0 0 0 Translation differences 0 0 2 0 0 2 3 Balance at December 31, 2024 17 15 184 183 18 60 476 of which current 2 5 27 0 0 57 91 of which non-current 15 10 157 183 17 2 385 Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other Alleima Annual Report 2025 | 65
Page 68
Note 23 | Other non-interest- bearing liabilities SEK M 2025 2024 Other non-current liabilities Derivatives designated as hedging instruments 39 124 Total 39 124 Other current liabilities Derivatives designated as hedging instruments 87 276 VAT liabilities 86 82 Other 193 222 Total 367 580 Other current liabilities refers mainly to personnel related liabilities. Note 24 | Accrued expenses SEK M 2025 2024 Personnel related 914 971 Customer discounts 10 11 Other accrued expenses 307 283 Total 1,232 1,264 Personnel related expenses includes social contribution, salaries and bonuses. Other accrued expenses includes accrued property tax, accrued IT costs, accrued commission to agents and accrued expenses for elec - tricity and gas etc. Note 25 | Contingent liabilities and pledged assets SEK M 2025 2024 Bank guarantees 146 148 Other contingent liabilities 116 141 Total 262 288 Contingent liabilities Other contingent liabilities refer mainly to bank guarantees provided by Sandvik to cover underlying business by Alleima. Sandvik has the right to recourse against Alleima for the guarantees. Other contingent liabilities also include pension related guarantees. Pledged assets At the end of 2025, no assets have been pledged as collateral (0). Note 26 | Financial risk management Financial assets and liabilities by valuation category Designated for hedge accounting Fair value through profit or loss Amortized cost Total carrying amount SEK M 2025 2024 2025 2024 2025 2024 2025 2024 Financial assets Trade receivables – – – – 2,426 2,911 2,426 2,911 Other receivables – – – – 410 596 410 596 Derivatives 269 51 9 3 – – 277 54 Cash and cash equivalents – – – – 1,891 1,912 1,891 1,912 Total financial assets 269 51 9 3 4,727 5,419 5,004 5,474 Financial liabilities Borrowings – – – 20 1 20 1 Derivatives 104 391 22 10 – – 126 400 Accounts payable – – – – 1,640 2,249 1,640 2,249 Other liabilities – – – – 693 760 693 760 Total financial liabilities 104 391 22 10 2,353 3,011 2,480 3,411 The carrying amounts are considered to represent a good approximation of the fair values due to the short durations. All derivatives belong to Level 2 in the fair value hierarchy, i.e. observable inputs have been used in deriving the fair values. Financial exposure and risk management Alleima is exposed to financial risks through its global operations. The Financial Risk Management Policy is established and decided by the Board of Directors of which outlines the framework on the identified financial risks of Alleima and how it shall be managed, measured, and reported. Group Treasury is the Group function tasked with managing the majority of its financial risks. The primary objective of Group Treasury is to mitigate the impact of financial risks on the Group’s net profit. Through internal banking operations, Group Treasury carries out its mission by supporting group companies with interest-bearing instruments and trans- actions for currency and commodity hedging. These internal transactions consolidate the Group’s financial risks within Group Treasury, enabling a com- prehensive assessment of the total risk exposure and the implementation of appropriate risk mitigation measures in cooperation with external counter - parties. The function is also responsible for the infrastructure that applies to the Group’s bank accounts and payment solutions. Group Treasury utilizes group account structures and netting payment solutions to mea - sure and efficiently allocate liquidity across the Group, ensuring that resources are directed to where they are most needed. These solutions also reduce the number of internal transactions and associated costs. In the event of a funding need for the group, it is primarily Group Treasury that seeks financing solutions, analogously, excess liquidity is also managed by Group Treasury for an optimal return. Group Treasury assists group com - panies in financial matters, trade finance and credit management solutions, as well as on behalf of the pension trust funds with risk measurement and management of the pension liability and related assets. Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other 66 | Alleima Annual Report 2025
Page 69
Currency risk – Translation exposure Translation exposure occurs when assets and liabilities in subsidiaries are denominated in currencies other than Alleima’s presentation currency. Since the Swedish krona (SEK) is Alleima’s presentation currency, a trans - lation risk related to the valuation of the net assets in foreign subsidiaries and the profit/loss in foreign currency achieved during the period occurs. The net assets, which usually consist of the foreign subsidiaries’ sharehold - ers equity, are translated to SEK at the rates applied at the balance sheet date. At December 31, 2025 the Group’s net assets in subsidiaries in local currencies amounted to SEK 5,293 million (6,815). Exposure – Net assets by foreign currency 2024 2025 0 400 200 600 800 1,600 1,400 1,200 1,000 2,000 1,800 USD OtherEUR GBP INR JPYCHF CZKCNY SEK M Alleima has chosen not to hedge future profits in foreign subsidiaries. Net assets are also not hedged, but the differences that arise due to changes in exchange rates are recognized directly in other comprehensive income. The diagram above shows the distribution of net assets among various currencies. If exchange rates were to change by 10% in an unfavorable direction the net effect on other comprehensive income would be approximately SEK -529 million (-681). This net effect primarily comprises translation exposure in equity. Sensitivity analysis by currency against SEK CHF CNY CZK EUR GBP INR JPY USD Övr Tota l 8 -51 -134 -127 -22 -65 -19 -99 -19 -529 Commodity price risk Alleima’s financial risks related to commodities are primarily concentrated to energy such as electricity and gas and alloy metals such as nickel, molybdenum and copper. A change in the electricity price of SEK 0.1 per kWh is estimated to affect Alleima’s operating profit by plus or minus SEK 80 million (80) on an annual basis, based on the prevailing conditions and without hedging instruments at year-end 2025. For Alleima’s largest production unit in Sweden, the elec - tricity and gas prices are continuously hedged through derivatives. When Alleima obtains a customer order containing a fixed price for nickel, molybdenum or copper, the prices of these materials are hedged by signing financial contracts. This means that Alleima’s operating profit is not impacted by movements in the price of these raw materials, relating to the aforemen - tioned orders at a fixed price. The Group applies a hedging strategy in order to minimize the metal price risk in connection with transactions conducted at a variable metal price. The measurement of inventory is not affected by hedging. Changes in metal prices affect the profit and loss statement as a conse - quence of the lead time between the purchase of raw material and delivery of the finished product. The effect can be estimated through the rules regarding valuation of inventory. The net effect is presented in Note 2 and description of Alternative Performance Measures on pages 138-139. Changes in metal prices may also lead to changes in net working capital. Capital structure and dividend policy The Group has financial targets on both capital structure and dividends. The capital structure is monitored by measuring the net debt/equity ratio and shall have a ratio below 0.3. Net debt is defined as interest-bearing current and non-current liabilities, including net pension liabilities and leases, less cash and cash equivalents. The ratio at year end 2025 amounted to -0.05x (-0.02). A breakdown of the components is presented in Alternative Performance Measures on page 139. Dividend shall be on average 50% of net profit (adjusted for metal price effects) over a business cycle. Currency risk – Transaction exposure Transaction exposure occurs when the value of the foreign cash flows from sales and purchases fluctuate due to changes in foreign exchange rates and impacts the Group’s profit and loss. Alleima’s annual transaction with - out hedging instruments, meaning the Group’s net flow of currencies from operations, after full offsetting of the counter-value in the exporting com - panies’ local currencies, and measured at the average exchange rate, amounted to SEK 5,115 million (5,059) in 2025. The most important curren - cies for one year of exposure are shown in the following diagram. Exposure – Net flow in foreign currency 2024 2025 SEK M NOK USD OtherEUR GBP JPY KRWCAD CHF CZK CNY -1,500 -500 -1,000 0 2,000 1,500 1,000 500 3,500 2,500 3,000 Alleima generally offers customers the possibility to pay in their own cur - rencies through the global sales organization. As a result, the Group is con - tinuously exposed to currency risks associated with account receivables denominated in foreign currency and future invoicing to foreign customers. Since a large percentage of production is concentrated in a few countries, while sales occur in many countries, Alleima is exposed to a large net inflow of foreign currencies. To reduce exposure to foreign currencies, currencies received are used to pay for purchases in the same currency via a netting structure. A certain portion of the anticipated net flow of sales and purchases is hedged through financial instruments and bank account balances in accor - dance with guidelines set in the Group’s policy for financial risk management. In addition, major project orders are currency hedged to protect the gross margin. At year-end, the total hedged amount was SEK 5,535 million (5,339). The average duration for the hedged volume of foreign currency was 8 months (13). Unrealized gain from outstanding currency contracts for hedg - ing of future net flows amounted to SEK 205 million (-216). This amount con - sists of SEK 116 million (-141) related to contracts maturing in 2026 and SEK 89 million (-75) related to contracts maturing in 2027 or later. To avoid transaction risk in the balance sheets of subsidiaries, they are financed in their functional currency through Group Treasury. The currency risk that arises in Group Treasury as a result of this is managed using various derivatives to minimize the transaction risk. The effect on total operating profit over a 12-month period would be approximately SEK -512 million (-506) if the Swedish krona strengthened by 10% against all currencies with exposure, assuming that the composition is the same as it was at year-end. Sensitivity analysis by currency against SEK CAD CHF CZK CNY EUR GBP JPY KRW NOK USD Other Tota l -31 20 72 -49 -96 -17 -27 -12 -13 -336 -23 -512 Note 26 | Financial risk management Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other Alleima Annual Report 2025 | 67
Page 70
Estimated consumption and hedged volumes Estimated yearly consumption Volume hedged Hedging horizon Average hedged price Electricity 800 GWh 1,024 GWh 36 months 492 SEK/MWh Gas 190 GWh 44 GWh 12 months 30 EUR/MWh Nickel 11,400 Mt 1,254 Mt 29 months 16,308 USD/Mt Molybden 1,800 Mt 135 Mt 10 months 23 USD/lb Copper 390 Mt 0 Mt 0 months - USD/Mt Hedge accounting Derivatives used in the Group’s hedging strategies are measured at fair value. To reduce the impact on earnings from valuation fluctuations, all commodity derivatives and the majority of currency derivatives are desig - nated as cash flow hedges, with hedge accounting applied in accordance with applicable accounting standards. The relationship between the hedg - ing instrument and the hedged item is formally documented at the incep - tion of the hedge. Hedge effectiveness is assessed both at the start of the hedging relationship and on a quarterly basis throughout its duration. The effective part of changes in the fair value of the derivatives that are desig - nated as, and qualify for, cash flow hedging is recognized in Other compre - hensive income Changes in fair value are subsequently reclassified to profit or loss in the same period as the Group reports the expense of the hedged consumption of electricity, gas and metal or included in the carry - ing amount of the purchased metals. Any ineffectiveness is recognized immediately in profit or loss. Hedge accounting effect on financial position and performance for the Group 2025 2024 SEK M Nominal amount of the hedge Cash flow hedge reserve Line item in the statement of financial position where the hedging instrument is included Nominal amount of the hedge Cash flow hedge reserve Line item in the statement of financial position where the hedging instrument is included Cash flow hedges Non-current/other current financial assest and non-interest- bearing liabilities/ current non- interest- bearing liabilitie Non-current/other current financial assest and non-interest- bearing liabilities/ current non- interest- bearing liabilities Foreign exchange risk FX Forward contracts 5,038 197 4,951 -148 Commodity price risk Electricity forward contracts 1 024 GWh -50 911 GWh -83 Gas forward contracts 44 GWH -1 114 GWH 6 Metal forward contracts 1,323 tonnes 1 3,309 tonnes -40 whereof Nickel forward contracts 1,188 tonnes 3,031 tonnes Molybden forward contracts 135 tonnes 271 tonnes Copper forward contracts 0 tonnes 7 tonnes 2025 2024 SEK M Change in fair value of the hedging instrument recognized in OCI Hedge ineffective - ness recognized in profit before tax Line item in income statement for ineffectiveness Change in fair value of the hedging instrument recognized in OCI Hedge ineffective - ness recognized in profit before tax Line item in income statement for ineffectiveness Cash flow hedges Foreign exchange risk FX Forward contracts 139 0 – -337 0 – Commodity price risk Electricity forward contracts 19 0 – 17 0 – Gas forward contracts -2 0 – 129 0 – Metal forward contracts 84 0 – 281 0 – 2025 2024 SEK M Amount reclassified from the cash flow hedge into profit and loss Amount transferred from the cash flow hedgeinto cost of hedged item Line item the in income statement that includes the reclassified amounts Amount reclassified from the cash flow hedge into profit and loss Amount transferred from the cash flow hedgeinto cost of hedged item Line item the in income statement that includes the reclassified amounts Cash flow hedges Foreign exchange risk FX Forward contracts 206 Revenues and other operating income/ expenses -49 Revenues and other operating income/ expenses Commodity price risk Electricity forward contracts 14 Cost of goods sold -40 Cost of goods sold Gas forward contracts -5 Cost of goods sold -36 Cost of goods sold Metal forward contracts 0 -43 – 0 -165 – Note 26 | Financial risk management Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other 68 | Alleima Annual Report 2025
Page 71
Interest rate risk Interest rate risk is defined as the impact that changes in market interest rates will have on the Group’s finance net items if a 1 percentage point change in interest rates occurs. Depending of whether the interest bearing instrument is an asset or liability, interest risk is measured in two ways: — If Alleima has invested in an interest-bearing asset, the risk is measured as the value change of the asset from an interest rate changes — If Alleima has interest bearing borrowings, the risk is measured as the increased interest cost for the coming twelve months is an impact of changed interest rates At December 31, 2025, Alleima had no interest-bearing loans with floating interest to be reset during 2026. Hence, if market rates were to rise by 1 per - centage point across all terms interest costs would be impacted by SEK -0 million (-0). The Group CFO has a mandate to vary the average fixed-interest term of the Group’s debt portfolio, provided that it does not exceed 36 months. At year-end, Alleima had equivalent SEK 20 million (1) in fixed interest-terms external borrowings with an average remaining time to maturity of 35 months (5). In the event that Alleima has surplus liquidity, it is placed in bank deposits or in short-term money market instruments, which means that the inter - est-rate risk (the risk of a change in value) is low. Liquidity and refinancing risk Liquidity and refinancing risk are defined as the risk that financing possibili - ties will be limited when loans are to be refinanced, and that payment com - mitments cannot be met as a result of insufficient liquidity. Mainly, all liabili - ties except certain derivatives, pension- and lease liabilities mature within 12 months. According to the financial risk management policy, the Group’s capital employed (cash excluded) shall, in addition to equity, pensions liabilities, deferred tax and long-term provisions, be financed long-term (>1 year). At December 31, 2025, the Group’s capital employed, excluding cash and cash equivalents, was SEK 15,365 million (15,983) and long-term financing, including share capital, pension liabilities, long-term tax liabilities, long- term provisions and the guaranteed long-term credit facility, amounted to SEK 20,046 million (20,826). The short-term liquidity reserve, comprising committed credit facilities and accessible cash and cash equivalents, was SEK 4,397 million (4,229). This reserve should at a minimum correspond to loans that mature for payment over the next six months and one-month operating expenses, calculated to SEK 1,230 million (1,481). Alleima has a revolving credit facility of SEK 3,000 million that after extension during 2024 matures in 2029. That was the last opportunity to prolong the revolving credit facility. Alleima’s financing strategy is to achieve a well-balanced maturity profile for liabilities to thereby reduce the refinancing risk. At December 31, 2025, SEK 1,891 million (1,912) was reported as Cash and Cash equivalent whereof SEK 1,397 million (1,229) are cash directly available for Group Treasury and SEK 494 million (683) are restricted cash such as short-term deposits and cash accounts with, for Group Treasury, limited access. The short-term deposits are considered as cash equivalent as they have a time to maturity less than 3 months. Credit risk The Group’s commercial and financial transactions give rise to credit risk in relation to Alleima’s counterparties. Credit risk or counterparty risk is defined as the risk for losses if the counterparty does not fulfill its commit - ments. The credit risk to which Alleima is exposed to can be divided into the fol - lowing categories: — Financial credit risk — Credit risk in trade receivables Exposure SEK M 2025 2024 Trade receivables 2,426 2,911 Cash and cash equivalents 1,891 1,912 Unrealized net gains on derivatives 277 54 Other receivables 9 14 Total 4,604 4,892 Alleima has established agreements with the Group’s principal banking part - ners, including International Swaps and Derivatives Association (ISDA) agree - ments, which provide the right to offset assets and liabilities arising from financial derivative transactions. This means that the Group’s counter party exposure to the financial sector is limited to the unrealized net gains that arise in derivative agreements, and investments and bank balances. At December 31, 2025 the value of these amounted to SEK 2,168 million (1,967). Alleima only accepts financial counterparties with a solid credit rating and financial position. Alleima is exposed to credit risk in connection with outstanding accounts receivable arising from sale of goods to customers. The credit risk is spread over a large number of customers with various credit worthiness. The total value of accounts receivable as per December 31, 2025 was SEK 2,426 million (2,911) while SEK 50 million (37) was reserved for doubtful accounts. The total credit losses, defined as the sum of receivables written off and change in bad debt reserve, was SEK 1 million (5) corresponding to 0.004% (0.02) of sales. Pension commitments The majority of the pension liability for Alleima is with its Swedish entities. Other countries with defined benefit pension plans are Germany and Switzerland. Risks associated with Alleima’s pension obligations are amongst others, interest rate fluctuations, capital market volatility, and changes in life expectancy. The Group-funded pension liability has an average duration of 18.1 years (18.9). The allocation to interest-bearing assets is 25% (27) of the pension portfolio. Due to the asset allocation and differences in duration between interest-bearing assets and the pension liability, Alleima is exposed to inter - est rate fluctuations. This exposure arises both from the discounting of the liabilities and from changes in the market value of the interest-bearing assets. If the average discount rate falls by -50 basis points the pension lia - bility would increase by SEK 191 million (223). 24% (23) of the pension portfolio is invested in equities. A 20% movement in the equity portfolio would result in a change in market value of SEK 72 million (71). If the life expectancy assumptions increase by one year, the pension liability would rise by 3.6% (3.8) which corresponds to SEK 75 million (89). More information on pensions and pension risks is found in Note 20. Development of pension liability and assets 20252024 0 0 2,500 2,000 1,500 1,000 500 100 70 60 80 90 40 50 30 20 10 SEK M % Liabilities Assets Funding level Note 26 | Financial risk management Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other Alleima Annual Report 2025 | 69
Page 72
In 2025, the pension assets totaled SEK 1,517 million (1,530) and the corre - sponding pension liability amounted to SEK 2,106 million (2,350), which is equal to a funding level of 72% (65). The value of Alleima’s pension assets changed by -1% during the year (+1). The value of the pension liability changed by -10% during the year (-1). The pension plans are governed through a Pension Supervisory Board (PSB). PSB is responsible for imple menting policies and directives, approving new plans or material changes and closure of existing plans. Supply chain finance Supply chain finance (SCF) is a financing structure linking three parties together: the buyer, the supplier and the bank or financial institution. SCF enables the buyer to receive longer payment terms while the supplier can receive early payment. Incentives for using SCF are typically cash flow enhancement and reduction of working capital. Alleima entities can play the role of either the buyer or the seller, i.e. the counterpart can be either a customer or a supplier. When Alleima use SCF as a customer, the company receives extended payment terms. Alleima has an SCF program that suppliers can join, which gives Alleima an extended credit period of up to 120 days in exchange for the supplier to receive a discounted amount of the original invoiced amount within 10 to 15 days. Ordinary credit time is usually 30–60 days. At the end of 2025, the extended payment period was 60 (69) days on average and total debt in the program was SEK 379 million (339), whereof SEK 345 million (189) has been paid to the supplier by the program. The debt is shown in row Accounts payables in the balance sheet and was not impacted by any non- cash movements during the year. Alleima using SCF being a supplier, gives extended payment terms to its clients. The payment terms are discussed on case-by-case basis. At the end of 2025 the total value of the Account Receivable program was SEK 9 million (9). Note 27 | Related parties Transactions with shareholders On August 31, 2022 the Alleima shares were delivered to the shareholders of Sandvik and Alleima is no longer part of the Sandvik Group. During 2022, the subsidiary Alleima Rock Drill Steel AB (RDS) made a directed share issue to Sandvik AB regarding 10,000 B-shares in the Com - pany, which resulted in the majority owner Alleima now owning 90% of the shares in RDS, i.e. all A-shares, and Sandvik 10%. The Class B shares held by Sandvik are not subject to future dividends. According to agreement between the parties, Alleima has, subject to certain conditions, the right, but not the obligation to acquire, Sandvik’s Class B shares at its quota value (SEK 2,778). Furthermore, Alleima has issued a call option to Sandvik, which can only be exercised if a few predetermined events occur and in the event that the call option is exercised, the purchase price shall be set at Fair Market Value. Alleima has in all previous periods presented prior to the rights issue consolidated RDS to 100%, i.e. without accounting for a non-controlling interest. In the new issue of Class B shares, Alleima reports in its consolidated financial statements a minority shareholding of SEK 2,778 corresponding to the issue proceeds that RDS received from Sandvik AB. No “profit share” belonging to the minority shareholder Sandvik AB will be reported in the future as Sandvik is not entitled to any dividend. This means that the minority share in equity will be SEK 2,778 in all future periods unless Alleima acquires Sandvik AB’s B shares in accordance with the agreement or Alleima divests RDS at fair value according to the agree - ment’s call option. Compensation to key management personnel Compensation to the Board and Group Management is disclosed in Note 3. Note 26 | Financial risk management Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other 70 | Alleima Annual Report 2025
Page 73
Note 29 | Government grants Alleima has received various forms of government grants in countries where the Group operates, totalling SEK 6 million (5).The grants have been recognized as a reduction of the cost to which the grant is attributable. The majority of the grants have no unfulfilled conditions of contingencies attached to the grants. Note 30 | Events after the close of the period — On January 29, the Nomination Committee proposed the re-election of Board members Göran Björkman, Claes Boustedt, Ulf Larsson, Andreas Nordbrandt, Susanne Pahlén Åklundh, Victoria Van Camp and Karl Åberg. Andreas Nordbrandt is proposed to be re-elected as Chairman of the Board. Note 28 | Business combinations The acquisitions of business combinations executed during current year are set out on the table below. Annual revenue and number of employees reflect the situation at the date of the respective transaction. During 2024 there were no acquisitions of business combinations executed. Division/Cash Generating Unit Company Country Acquisition date Annual revenue No. of employees Kanthal Endox Feinwerktechnik GmbH & Endox Polska SP.zo.o. (“Endox”) Germany/ Poland January 10, 2025 SEK 65 M in 2023 90 On 10 January 2025, Alleima acquired Endox Feinwerktechnik GmbH and Endox Polska SP.zo.o. (“Endox”). Endox strengthens the company’s medical technology business. The acquisition was carried out through the acquisition of 100% of the shares, as well as the voting rights. Alleima gained control of the business on the transaction date. No equity instruments have been issued in connection with the acquisition. The acquisition has been reported according to the acquisition method and SEK 9 million in acquisi - tion costs were reported and are included in Other operating expenses. The impact on Alleima’s earnings per share is expected to be somewhat positive. Goodwill from the acquisition consist of expected synergies and is not deductible for tax purposes. Assets, liabilities and contingent liabilities included in the acquired operations are stated below. Fair value recognized in the Group SEK M Endox Intangible assets 24 Property, plant and equipment 51 Right of use assets 3 Inventories 14 Receivables 6 Cash and cash equivalents 34 other liabilities and provisions -36 Deferred tax liabilities -7 Net identifiable assets and liabilities 90 Goodwill 92 Purchase consideration 181 Less: cash and cash equivalents in acquired companies -34 Net cash outflow 147 Contributions from companies acquired during the year SEK M 2025 Contributions as of acquisition date Revenues 65 Profit for the year 4 Contributions if the acquisition date would have been 1 January Revenues 65 Profit for the year 4 Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other Alleima Annual Report 2025 | 71
Page 74
Parent company financial information Parent company income statement SEK M Note 2025 2024 Revenues 2 36 27 Gross Profit 36 27 Administrative expenses -85 -75 Other operating income 2 0 Other operating expense 0 -2 Operating loss -47 -50 Dividend from Group companies 740 1,076 Interest revenue and similar income 3 33 36 Interest expense and similar costs 0 -1 Profit after net financial items 726 1,060 Income tax 4 3 3 Profit for the year 729 1,063 Parent company statement of comprehensive income SEK M Note 2025 2024 Profit for the year 729 1,063 Other comprehensive income Total other comprehensive income 0 0 Total comprehensive income 729 1,063 Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other 72 | Alleima Annual Report 2025
Page 75
Parent company balance sheet SEK M Note Dec 31, 2025 Dec 31, 2024 Shares in group companies 5 11,907 11,907 Deferred tax assets 8 5 Non-current assets 11,915 11,912 Receivables from group companies 6 2,241 2,121 Other current receivables 13 10 Prepaid expenses and accrued income 4 6 Current receivables 2,258 2,136 Cash and cash equivalents 0 0 Current assets 2,258 2,136 Total assets 14,173 14,048 Share capital 251 251 Restricted equity 251 251 Retained earnings 13,166 12,673 Net profit 729 1,063 Unrestricted equity 13,895 13,737 Total equity 14,146 13,987 Provision for pensions 3 2 Non-current interest-bearing liabilities 3 2 Other non-current provisions 3 14 Non-current non-interest-bearing liabilities 3 14 Non-current liabilities 6 17 Accounts payable 1 1 Current tax liabilities 0 1 Other current liabilities 2 2 Other liabilities to group companies 5 29 Accrued expenses and deferred income 13 11 Current non-interest-bearing liabilities 21 44 Current liabilities 21 44 Total equity and liabilities 14,173 14,048 Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other Alleima Annual Report 2025 | 73
Page 76
Parent company cash flow statement SEK M Note 2025 2024 Operating activities Operating loss -47 -50 Adjustments for non-cash items: Other non-cash items -11 3 Received interest 32 35 Income tax paid -1 0 Cash flow from operating activities before changes in working capital -26 -13 Changes in working capital Accounts receivable -1 0 Other receivables 5 -1 Accounts payable 0 0 Other payables 2 -4 Changes in working capital 6 -5 Cash flow from operating activities -20 -18 Investing activities Lending to group companies 6 -143 -536 Dividend and appropriations received from group companies 740 1,076 Cash flow from investing activities 597 540 Financing activities Equity swap -2 -20 Dividend -575 -501 Cash flow from financing activities -577 -521 Net change in cash and cash equivalents 0 0 Cash and cash equivalents at beginning of the year 0 0 Cash and cash equivalents at end of the year 0 0 Parent company changes in equity SEK M Restricted equity Unrestricted equity Tota l equityNote Share capital Retained e a r n i n g s Equity at January 1, 2024 251 13,188 13,439 Changes Net profit – 1,063 1,063 Other comprehensive income for the year, net of tax – 0 0 Total comprehensive income for the year – 1,063 1,063 Share-based payments – 6 6 Equity swap – -20 -20 Dividends – -501 -501 Total transactions with owners – -515 -515 Equity at December 31, 2024 251 13,737 13,987 Changes Net profit – 729 729 Other comprehensive income for the year, net of tax – 0 0 Total comprehensive income for the year – 729 729 Share-based payments – 7 7 Equity swap – -2 -2 Dividends – -575 -575 Total transactions with owners – -570 -570 Equity at December 31, 2025 251 13,895 14,146 Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other 74 | Alleima Annual Report 2025
Page 77
Note 1 | Significant accounting principles - assessments and assumptions for accounting purposes The parent company’s financial statements have been prepared according to the Swedish Annual Accounts Act and RFR 2 Reporting for legal entities and other statements issued by the Swedish Financial Reporting Board. The parent company follows the same accounting policies as the Group (see Group Note 1) with the following exceptions. Subsidiaries Shares in subsidiaries are recognized at cost, including expenses directly related to the acquisition, less any impairment. Group contributions are reported as appropriations in the income statement. Classification and measurement of financial instruments IFRS 9 Financial Instruments is adopted, except regarding financial guaran - tees where the exception allowed in RFR 2 is chosen. Financial guarantees are included in contingent liabilities. Internal loans are managed by the Group’s Treasury function and all internal credit facilities are reviewed on regular basis. Internal loans are managed to collect contractual cash flows and is therefore designated as amortized cost. Impairment losses are cal - culated based on expected credit losses. Other information The annual report has been approved by the Board of Directors on March 18, 2026. The balance sheet and income statement are subject to adoption by the Annual General Meeting on April 29, 2026. Note 2 | Revenue Revenues relates to sales to other companies within the Group. Note 3 | Interest revenue and similar income Interest revenue and similar income consist mainly of interest income from receivables from group companies. Note 4 | Income tax SEK M 2025 2024 Current tax expense 0 0 Deferred tax expense/income 3 3 Total tax on profit for the year 3 3 The difference between recorded tax and the tax based on prevailing tax rate consists of the below listed components. SEK M 2025 2024 Profit before tax 726 1,060 Tax effect according to tax rate in Sweden -149 -20.6% -218 -20.6% Tax effect of: Non-taxable dividend from group company 152 21.0% 222 20.9% Other 0 0.0% 0 0.0% Total recognized tax income 3 0.4% 3 0.3% Note 5 | Shares in group companies Company, reg. No., reg’d office Number of shares Holding (capital/ votes) Dec 31, 2025 SEK M Dec 31, 2024 SEK M Alleima EMEA AB, 556734-2026, Sweden 501,000 100.0% 11,907 11,907 Alleima India Private Limited, U29308PN2019PTC182454 , India 1 0.1% 0 0 Total shares in group companies 11,907 11,907 SEK M Dec 31, 2025 Dec 31, 2024 Acquisition value at January 1 11,907 11,907 Total shares in group companies 11,907 11,907 Indirectly owned subsidiaries (not directly owned by Alleima AB) Company, reg. No., reg’d office Holding (capital/ votes) Alleima StripTech AB, 559250-4905, Sweden 100% Alleima Rock Drill Steel AB, 559235-0986, Sweden 90% Alleima Söderfors AB, 559415-0285, Sweden 100% Alleima PT AB, 556207-5191, Sweden 100% Alleima Treasury AB, 559216-9139, Sweden 100% Alleima Captive Försäkrings AB, 559456-3321, Sweden 100% Alleima Tube AB, 556234-6832, Sweden 100% Kanthal AB, 556442-5576, Sweden 100% Alleima Denmark ApS, 42 82 89 63, Denmark 100% Alleima Finland Oy, 3228605-8, Finland 100% Kanthal Norway AS, 927733161, Norway 100% Alleima Limited, 13164633, United Kingdom 100% Alleima France SAS, 501352033, France 100% Alleima Benelux B.V., 24350347, Netherlands 100% Alleima Italia S.r.l., MI-2588812, Italy 100% Alleima Calimera S.r.l, LE-182270, Italy 100% Alleima Portugal, Unipessoal Lda., 516848720, Portugal 100% Alleima Switzerland AG, CHE-178.868.723, Switzerland 100% Alleima Sonceboz SA, CHE-107.535.722, Switzerland 100% Alleima Zug AG, CHE-110.271.251, Switzerland 100% Alleima Spain S.I., B67599217, Spain 100% Alleima CZ Spol. S.r.o., CZ60278773, Czech Republic 100% Alleima Karlsruhe GmbH, HRB 109839, Germany 100% Kanthal GmbH, HR B 102852, Germany 100% Alleima GmbH, HRB 12806, Germany 100% Alleima Engineering GmbH, HRB 5049, Germany 100% Alleima Dettingen GmbH, HRB 361289, Germany 100% Alleima Poland Sp. Z o.o, 0000343886, Poland 100% Alleima Special Metals, LLC, 91-0817881, USA 100% PennPower Inc, 25-1706867, USA 100% Alleima USA LLC, 82-5283200, USA 100% Alleima Precision Tube LLC, 84-3834789, USA 100% Pennsylvania Extruded Tube Co., 23-2685343, USA 100% Kanthal Corporation, 06-1057960, USA 100% Kanthal Thermal Process Inc., 94-2739405, USA 100% Alleima do Brasil Industria e Comercio Ltda, 11.149.881/0001-23, Brazil 100% A L L E I M A Advance Materials de Costa Rica SRL, 4062001304267, Costa Rica 100% Alleima Materials Technology, S.A. de C.V., SMT191120RH2, Mexico 100% Alleima Middle East DMCC, DMCC192604, United Arab Emirates 100% Alleima India Private Limited, U29308PN2019PTC182454 , India 100% Alleima Japan K.K., 9140001004795, Japan 100% Alleima Materials Technology (Jiangsu) Co., 913211916657999610, Ltd, China 100% Alleima (Shanghai) Materials Technology Co., Ltd, 91310115607381700W, China 100% Alleima Korea Co.,Ltd, 180111-1265031, Republic of Korea 100% Alleima Malaysia SDN. BHD., 6819T, Malaysia 100% Alleima South East Asia Pte. Ltd., 201942268N, Singapore 100% Taiwan Alleima Limited, 90523423, Taiwan 100% Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other Alleima Annual Report 2025 | 75
Page 78
Note 6 | Receivables from group companies SEK M Dec 31, 2025 Dec 31, 2024 Cash pool 2,237 2,118 Trade receivables group companies 4 3 Total 2,241 2,121 Note 7 | Contingent liabilities and other commitments At December 31, 2025, the parent company’s provided guarantees for the benefit of group companies amounted to SEK 967 million (2,904). Note 8 | Employees The average number of employees in the parent company is 9 (9), of whom 3 are women (3). Salaries and remunerations for the Board and the President and CEO is presented below. SEK M 2025 2024 Salaries and remunerations 19 15 Social costs 3 7 Total 22 23 Of which, pension costs recognized in social costs 3 2 Note 9 | Fees and remuneration to auditors Audit fees to appointed auditor was SEK 6 million (5). Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other 76 | Alleima Annual Report 2025
Page 79
Board of Directors’ and President and CEO’s certification The Board of Directors and the President and CEO here by certify that the Annual Report has been prepared in accordance with generally accepted accounting principles in Sweden and that the consolidated financial statements have been prepared in accor - dance with the international financial reporting standards referred to in the regulation (EU) no. 1606/2002 of the European Parliament and Council dated July 19, 2002, pertaining to the application of international financial reporting standards. The Annual Report and the consolidated financial statements give a true and fair view of the Parent Company’s and the Group’s financial position and results. The Report of the Directors pertaining to the Parent Company and the Group gives a fair overview of the development of the Parent Company’s and the Group’s operations, financial position, and results, and describes the significant risks and uncertainties facing the Parent Company and the companies included in the Group. The Board of Directors and the President and CEO further certify that the Annual Report and the consolidated financial statements have been prepared in accordance with the European Sustainabil - ity Reporting Standards (ESRS) and the specifications adopted pursuant to Article 8.4 of the EU Taxonomy Regulation. Sandviken, March 18, 2026 Andreas Nordbrandt Chairman Karl Åberg Board member Claes Boustedt Board member Susanne Pahlén Åklundh Board member Ulf Larsson Board member Victoria Van Camp Board member Göran Björkman Board member President and CEO Tomas Kärnström Board member (Employee representative) Mikael Larsson Board member (Employee representative) Our auditors’ report was rendered on March 19, 2026 Öhrlings PricewaterhouseCoopers AB Magnus Svensson Henryson Authorised Public Accountant Auditor-in-Charge Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other Alleima Annual Report 2025 | 77
Page 80
Auditor’s report To the general meeting of shareholders of Alleima AB (publ), corp. id 559224-1433 Report on the annual accounts and consolidated accounts Opinions We have audited the annual accounts and consolidated accounts of Alleima AB (publ) for the year 2025 except for the corporate statement on pages 83-93 and the sustainability report on pages 95-131. The annual accounts and consolidated accounts of the company are included on pages 30-76 of this document. In our opinion, the annual accounts have been prepared in accordance with the Annual Accounts Act, and present fairly, in all material respects, the financial position of the Parent Company as of 31 December 2025 and its financial performance and cash flow for the year then ended in accordance with the Annual Accounts Act. The consolidated accounts have been prepared in accor - dance with the Annual Accounts Act and present fairly, in all material respects, the financial position of the Group as of 31 December 2025 and its financial performance and cash flow for the year then ended in accordance with International Financial Reporting Stan - dards (IFRS), as adopted by the EU, and the Annual Accounts Act. Our opinions do not cover the corporate governance statement and the statutory sustainability report on pages 83-93 and 95-131, respectively. The statutory administration report is consistent with the other parts of the annual accounts and consolidated accounts. We therefore recommend that the general meeting of share - holders adopts the income statement and balance sheet for the Parent Company and the Group. Our opinions in this report on the annual accounts and consoli - dated accounts are consistent with the content of the additional report that has been submitted to the parent company’s audit committee in accordance with the Audit Regulation (537/2014) Article 11. Basis for opinions We have conducted our audit in accordance with the International Standards on Auditing (ISA) and generally accepted auditing stan - dards in Sweden. Our responsibilities under these standards are further described in the Auditor’s Responsibilities section. We are independent of the Parent Company and the Group in accordance with professional ethics for accountants in Sweden and have otherwise fulfilled our ethical responsibilities in accordance with these requirements. This includes, based on the best of our knowledge and belief, that no prohibited services referred to in the Audit Regulation (537/2014) Article 5.1 have been provided to the audited company or, where applicable, its Parent Company or its controlled companies within the EU. We believe that the audit evidence we have obtained is sufficient and adequate as a basis for our opinions. Our audit approach Audit scope We designed our audit by determining materiality and assessing the risks of material misstatement in the consolidated financial statements. In particular, we considered where the Board of Direc - tors and the Managing Director made subjective judgements; for example, in respect of significant accounting estimates that involved making assumptions and considering future events that are inherently uncertain. As in all of our audits, we also addressed the risk of management override of internal controls, including among other matters consideration of whether there was evidence of bias that represented a risk of material misstatement due to fraud. We tailored the scope of our audit in order to perform sufficient work to enable us to provide an opinion on the consolidated finan - cial statements as a whole, taking into account the structure of the group, the accounting processes and controls, and the industry in which the group operates. Materiality The scope of our audit has been influenced by our application of materiality. An audit is designed to obtain reasonable assurance about whether the financial statements are free from material misstatement. Misstatements may arise due to fraud or error. They are considered material if they, individually or in aggregate, could reasonably be expected to influence the economic decisions of users taken on the basis of the consolidated financial statements. Based on our professional judgement, we determined certain quantitative thresholds for materiality, for the consolidated finan - cial statements as a whole as set out in the table below. These, together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements, both individually and in aggregate on the financial statements as a whole. Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other 78 | Alleima Annual Report 2025
Page 81
Key audit matters Key audit matters of the audit are those matters that, in our professional judgement, were of most signifi - cant in our audit of the annual accounts and consolidated accounts for the current period. These matters were addressed in the context of our audit of, and in forming our opinion thereon, the annual accounts and consolidated accounts as a whole, but we do not provide separate opinions on these matters. Description of key audit matter Revenue recognition in the appropriate period Revenue amounts to SEK 18,630 million in 2025 and is a material item in the consolidated accounts. The Group has various revenue streams that largely consist of precision strip products, seamless tubes and other long products in advanced stainless steel and alloys as well as heating materials and ultra fine wire products that are sold to customers. Sales are generally recognised as revenue at a point in time when control has been transferred to the customers. Some signifi - cant orders are being delivered over a longer period of time and have characteristics that require additional attention to identify the transfer of control and other performance commitments so that revenue is recognised in the appropriate period. The revenue streams are mostly transaction-rich and require robust processes with controls and monitoring in place to ensure accurate reporting. In light of the inherent characteristics and the significant amount reported, the cut off in revenue recognition is considered a key audit matter in our audit. A description of the area is presented in Note 2. Accounting and valuation principles are presented in Note 1. How our audit addressed the key audit matter Our audit procedures have included, but were not limited to, the procedures listed below. We have: — Evaluated if the Group’s accounting principles for revenue recognition comply with IFRS — Mapped and evaluated processes for the recognition of significant revenue streams — Tested a sample of IT and business process controls in revenue processes — Tested a sample of transactions against supporting agree - ments and payments, as well as obtained accounts receivable confirmation from external customers — Tested a sample of transactions before and after year end to assess whether revenue has been recognised in the appropriate period — Performed tests to verify if intra group sales have been eliminated in the consolidated accounts — Evaluated the information on revenue recognition presented in the annual accounts and consolidated accounts and assessed whether it provides sufficient information according to the financial reporting frameworks How our audit addressed the key audit matter Our audit procedures have included, but were not limited to, the procedures listed below. We have: — Evaluated if the Group’s accounting principles for the measurement of inventories comply with IFRS — Mapped and evaluated significant systems and processes for reporting of inventory and tested a sample of key controls in processes for establishing cost and existence — Tested book value of raw materials to actual prices on a sample basis — Assessed the reasonableness of the product costing for work in progress and finished goods — Participated in stock takes and performed own testing on a sample basis at a number of locations — Evaluated the Group’s analysis of slow movers and assess - ments of obsolescence — Traced disclosure information to accounting records and other supporting documentation — Read the information presented in the annual accounts and consolidated accounts and assessed whether it provides sufficient information according to IFRS Description of key audit matter Measurement of inventories The Group’s inventories amount to SEK 6,813 million as of 31 December 2025 and is a significant item in the consolidated accounts. Alleima keeps its significant stocks of raw materials, work-in- progress and finished goods at its production and sales units. An accurate measurement of volumes and cost of assets included in inventories at the balance sheet date is important for a fair pre - sentation of gross profit. Robust processes are required to establish the acquisition cost of a product when procurement, production and logistical pro - cesses are complex. Establishing product costing requires many instances of management judgement which has an impact on the reported values. This includes, but is not limited to, assessing nor - mal production volumes, foreign exchange rates, prices of raw materials and allocation of direct and indirect costs. Management evaluates the condition and how sellable finished products are to measure inventories at the lower of cost and market price. Finally, there is a complexity in measuring volumes, particularly for some raw materials and work in progress, and to eliminate effects from intra group transactions. The significant nature of the item and the inherent complexity in establishing acquisition cost, makes the measurement of invento - ries a key audit matter in our audit. A description of the area is presented in Note 16. Accounting and valuation principles are presented in Note 1. Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other Alleima Annual Report 2025 | 79
Page 82
Other information than the annual accounts and consolidated accounts This document also contains information other than the annual accounts and consolidated accounts, which is found on pages 1-29, 83-93 and 135-140. The remuneration report that we obtained prior to the date of this auditor’s report also constitutes other information. The Board of Directors and the Managing Director are responsible for other information. Our opinion on the annual accounts and consolidated accounts does not cover this other information and we do not express any form of assurance conclusion regarding this other information. In connection with our audit of the annual accounts and consoli - dated accounts, our responsibility is to read the information iden - tified above and consider whether the information is materially inconsistent with the annual accounts and consolidated accounts. In this procedure, we also take into account our knowledge obtained in the audit and assess whether the information other - wise appears to be materially misstated. If we, based on the work performed concerning this information, conclude that there is a material misstatement of this other infor - mation, we are required to report this. We have nothing to report in this regard. The Board of Directors’ and Managing Director’s responsibilities The Board of Directors and the Managing Director are responsible for the preparation of the annual accounts and consolidated accounts and that they give a fair presentation in accordance with the Annual Accounts Act and, concerning the consolidated accounts, in accordance with IFRS as adopted by the EU. The Board of Directors and the Managing Director are also responsible for such internal control as they determine is necessary to enable the preparation of annual accounts and consolidated accounts that are free from material misstatement, whether due to fraud or error. In preparing the annual accounts and consolidated accounts, the Board of Directors and the Managing Director are responsible for assessing the company’s and the Group’s ability to continue as a going concern. They disclose, as applicable, matters related to going concern and using the going concern basis of accounting. The going concern assumption applies unless the Board and the Managing Director intend to liquidate the company or cease to operate or have no realistic alternative to doing so. The auditor’s responsibility Our objectives are to obtain reasonable assurance about whether the annual accounts and consolidated accounts as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reason - able assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs and generally accepted auditing standards in Sweden will always detect a mate - rial misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or aggre - gated, they could reasonably be expected to influence the eco - nomic decisions of users taken on the basis of these annual accounts and consolidated accounts. A further description of our responsibility for the audit of the annual accounts and consolidated accounts is available on the website of the Swedish Inspectorate of Auditors: www.revisorsinspektionen.se/revisornsansvar. This description is part of the auditor’s report. Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other 80 | Alleima Annual Report 2025
Page 83
Report on other legal and regulatory requirements The auditors’ examination of the administration and the proposed appropriations of the profit or loss. Opinions In addition to our audit of the annual accounts and consolidated accounts, we have also audited the administration of the Board of Directors and the Managing Director of Alleima AB (publ) for the year 2025 as well as the proposed appropriations of the compa - ny’s profit or loss. We recommend to the general meeting of shareholders that the profit be appropriated in accordance with the proposal in the statutory administration report and that the members of the Board of Directors and the Managing Director be discharged from liability for the financial year. Basis of opinion We have conducted our audit in accordance with generally accepted auditing standards in Sweden. Our responsibilities under those standards are further described in the Auditor’s Responsibilities section. We are independent of the Parent Com - pany and the Group in accordance with professional ethics for accountants in Sweden and have otherwise fulfilled our ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and adequate as a basis for our opinion. The Board of Directors’ and Managing Director’s responsibilities Responsibility for the proposed appropriation of the company’s profit or loss rests with the Board of Directors. In conjunction with the proposal of a dividend, this includes an assessment of whether the dividend is justifiable considering the requirements which the company’s and the Group’s type of operations, size and risks place on the size of the Parent Company’s and the Group’ equity, consolidation requirements, liquidity and position in gen - eral. The Board of Directors is responsible for the organisation and administration of the company’s affairs. This includes continuous assessment of the company’s and the Group’s financial situation and ensuring that the company’s organisation is designed so that the accounting, management of assets and the company’s finan - cial affairs otherwise are controlled in a reassuring manner. The Managing Director is responsible for day-to-day management in accordance with the guidelines and instructions issued by the Board and is required to take such actions as may be necessary to ensure compliance with the company’s statutory accounting obligations and satisfactory management of funds. The auditor’s responsibility Our objective for the management audit, and thus for our opinion on release from liability, is to obtain audit evidence which enables us to assess with reasonable assurance whether any member of the Board or the Managing Director has in any material respect: — taken any action or been guilty of any neglect that could give rise to a liability to indemnify the company or, — otherwise acted in contravention of the Companies Act, the Annual Accounts Act or the Articles of Association Our objective in respect of our audit of the proposed appropria - tion of the company’s profit or loss, and thus for our opinion on the same, is to obtain reasonable assurance that the proposed appro - priation is consistent with the Companies Act. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with generally accepted auditing standards in Sweden will always detect actions or omissions that can give rise to liability to the company, or that the proposed appropriations of the company’s profit or loss are not in accordance with the Companies Act. A further description of our responsibility for the audit of the administration is available on the website of the Swedish Inspec - torate of Auditors: www.revisorsinspektionen.se/revisornsansvar. This description forms part of the statutory annual report. Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other Alleima Annual Report 2025 | 81
Page 84
The auditor’s opinion on the ESEF report Opinion In addition to our audit of the annual accounts and consolidated accounts, we have also examined whether the Board of Directors and the Managing Director have prepared the annual accounts and the consolidated accounts in a format that facilitates uniform electronic reporting (the ESEF report) according to Chapter 16, Section 4 a of the Securities Market Act (2007:528) for Alleima AB (publ) for the year 2025. Our examination and our opinion refer only to the statutory requirement. In our opinion, the ESEF report has been prepared in a format that in all significant respects facilitates uniform electronic reporting. Basis for Opinion We have conducted our examination in accordance with FAR’s recommendation, RevR 18 Examination of the Esef report . Our responsibilities under this recommendation are further described in the Auditor’s Responsibilities section. We are independent of Alleima AB (publ) in accordance with professional ethics for accountants in Sweden and have otherwise fulfilled our ethical responsibilities in accordance with these requirements. We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Responsibilities of the Board of Directors and the Managing Director The Board of Directors and the Managing Director are responsible for ensuring that the Esef report has been prepared in accordance with Chapter 16, Section 4 a of the Securities Market Act (2007:528) and for ensuring that there is such internal control as the Board of Directors and the Managing Director regard as necessary to prepare the Esef report in a manner that is free from material mis - statement, whether due to fraud or error. The auditor’s responsibility Our responsibility is to obtain reasonable assurance whether the Esef report is in all material respects prepared in a format that meets the requirements of Chapter 16, Section 4a of the Swedish Securities Market Act (2007:528), based on the procedures per - formed. RevR 18 requires us to plan and execute procedures to achieve reasonable assurance that the Esef report is prepared in a format that meets these requirements. Reasonable assurance is a high level of assurance, but it is not a guarantee that an engagement carried out according to RevR 18 and generally accepted auditing standards in Sweden will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the Esef report. The audit firm applies ISQC 1 Quality Control for Firms that Perform Audits and Reviews of Financial Statements, and other Assurance and Related Services Engagements and accordingly maintains a comprehensive system of quality control, including documented policies and procedures regarding compliance with professional ethical requirements, professional standards and legal and regulatory requirements. The examination involves obtaining evidence, through various procedures, that the Esef report has been prepared in a format that enables uniform electronic reporting of the annual accounts and consolidated accounts. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement in the report, whether due to fraud or error. In carrying out this risk assessment, and in order to design proce - dures that are appropriate in the circumstances, the auditor con - siders those elements of internal control that are relevant to the preparation of the Esef report by the Board of Directors and the Managing Director, but not for the purpose of expressing an opin - ion on the effectiveness of those internal controls. The examination also includes an evaluation of the appropriateness and reason - ableness of assumptions made by the Board of Directors and the Managing Director. The procedures mainly include a validation that the Esef report has been prepared in a valid XHTML format and a reconciliation of the Esef report with the audited annual accounts and consoli - dated accounts. Furthermore, the procedures also include an assessment of whether the consolidated statement of financial performance, financial position, changes in equity, cash flow and disclosures in the Esef report has been marked with iXBRL in accordance with what follows from the Esef regulation. The auditor’s examination of the corporate governance statement The Board of Directors is responsible for that the corporate gover - nance statement on pages 83-93 has been prepared in accor - dance with the Annual Accounts Act. Our examination of the cor - porate governance statement is conducted in accordance with FAR’s auditing standard RevR 16 The auditor’s examination of the corporate governance statement. This means that our examina - tion of the corporate governance statement is different and sub - stantially less in scope than an audit conducted in accordance with International Standards on Auditing and generally accepted auditing standards in Sweden. We believe that the examination has provided us with sufficient basis for our opinions. A corporate governance statement has been prepared. Disclo - sures in accordance with chapter 6 section 6 the second para - graph points 2-6 of the Annual Accounts Act and chapter 7 section 31 the second paragraph the same law are consistent with the other parts of the annual accounts and consolidated accounts and are in accordance with the Annual Accounts Act/ the Annual Accounts Act for Credit Institutions and Securities Companies/ the Annual Accounts Act for Insurance Companies. Öhrlings PricewaterhouseCoopers AB, Torsgatan 21, SE-113 97 Stockholm, was appointed auditor of Alleima AB (publ) by the general meeting of the shareholders on 28 April 2025 and has been the company’s auditor since 28 October 2020. Stockholm, March 19, 2026 Öhrlings PricewaterhouseCoopers AB Magnus Svensson Henryson Authorised Public Accountant Auditor-in-Charge This is a translation of the Swedish language original. In the event of any differences between this translation and the Swedish language original, the latter shall prevail. Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other 82 | Alleima Annual Report 2025
Page 85
Corporate governance Corporate governance report ........................................................................... 84 Board.of.Directors . ....................................................................................................... 90 Group.Executive.Management . ........................................................................... 92 Introduction Financial .informationStrategy.and.operations Divisions Corporate governance Sustainability Other Alleima.Annual.Report.2025 | 83
Page 86
Corporate governance report The.corporate.governance.report.describes.how.Alleima.applies.internal.and. external.regulations.in.the.governance.of.the.Group,.and.how.these.regulations.are. applied.in.the.Group’s.management.structures.and.decision-making.processes. Alleima’s.corporate.governance.and.decentralized.business.man - agement.model.are.intended.to.make.Alleima.competitive.in.the. market.over.the.long.term.and.to.promote.confidence.in.Alleima. among.all.of.the.company’s.stakeholders..Alleima’s.operations. must.be.efficiently.organized,.with.clear.areas.of.responsibility.. The.company’s.financial.reporting.and.sustainability.reporting. must.be.correct,.transparent.and.supported.by.a.robust.frame - work.for.risk.management.and.monitoring.. As.a.Swedish.company.listed.on.the.Nasdaq.Stockholm.stock. exchange,.Alleima.is.subject.to.several.external.regulations.that. are.relevant.to.how.the.company.is.governed,.such.as.the.Swedish. Companies.Act,.the.Swedish.Corporate.Governance.Code.(the. “Code”).and.the.Nasdaq.Nordic.Main.Market.Rulebook.for.Issuers. 1. Shareholders As.of.December.31,.2025,.Alleima’s.share.capital. amounted .to. SEK 250,877,184.represented.by.250,877,184.shares..Alleima.has. only.one.share.class,.and.each.share.corresponds.to.one.vote.. Beyond.this,.there.are.no.limitations.as.to.how.many.votes.each. shareholder.can.cast.at.a.General.Meeting.. At.year-end,.Alleima.had.102,008.share.holders..Two.of.these. shareholders.–.AB.Industri .värden.and.L.E.Lundbergföretagen.AB. –.had.direct.or.indirect.holdings.in.the.company.that.represented. at.least.one.tenth.of.the.number.of.votes.for.all.shares.in.the. .company. The.2025.Annual.General.Meeting.(AGM).authorized.the.Board. of.Directors.of.Alleima.to.decide,.for.the.period.up.until.the.2026. AGM,.on.the.repurchase.of.own.shares.up.to.a.maximum.of.10%.of. all.shares.in.the.company..Alleima.has.not.exercised.the.authoriza - tion.to.repurchase.shares.and.does.not.hold.any.treasury.shares. Additional.information.on.the.share.and.Alleima’s .shareholders. is.provided.in.the.section.“The.share”.on.pages.14–15. 2. General Meeting The.General.Meeting.is.Alleima’s.highest.decision-making .body,. where.shareholders .exercise.their.voting.rights..The.company’s. Board.of.Directors.and.auditor.are.elected.at.the.AGM..The.AGM. also.adopts.the.company’s.income.statement.and.balance.sheet,. and.resolves.on.issues.including.distribution.of.the.company’s. profits,.discharge.from.liability.for.the.Board.and. CEO,.and.fees.to. Board.members..If.the.Articles.of.Association,.the.instructions.in. force.for.the.Nomination.Committee,.or.the.company’s.guidelines. for.remuneration.to.senior.executives.are.to.be.amended, .resolu - tions.to.that.effect.are.also.made.by.the.General.Meeting.. Each.shareholder.that.is.entered.in.the.share.register,.and.regis - ters.their.participation. in.accordance. with.the.notice.to.attend,. has. the.right.to.participate.and.exercise.the.voting.rights.for.their. shares.at.a.General .Meeting. .Shareholders.are.also.entitled.to.be. represented.by.a.proxy..Under.the.Articles.of.Association,.the. Board.may.also.decide.to.allow.shareholders .to.exercise.their.. of.Shares..Additionally,.Alleima’s.corporate.governance.is.regulated . by.a.number.of.internal.regulations,.such.as.the.Articles.of.Associ - ation,.the.procedural.guidelines.for.the.Board.of.Directors,.the. instructions.to.the.President.and.CEO.and.the.company’s.policies. In.2025,.Alleima.applied.the.Code.without.any.deviations. This.corporate.governance.report.for.2025.has.been.prepared. in.accordance.with.the.Swedish.Annual.Accounts.Act.(SFS. 1995:1554).and.the.Code,.and.has.been.reviewed.by.the.company’s . auditors..This.report.describes.the.company’s.management. structure.and.organization..It.sets.out.the.Board’s.duties.and. responsibilities.and.presents.the.Board’s.activities.during.the.year.. It.also.describes.Alleima’s.internal.control.with.regard.to.the.com - pany’s.financial.reporting.and.sustainability.reporting. The.Swedish.Corporate.Governance.Code.is.available.at. www.bolagsstyrning.se Further.information.on.Alleima’s.corporate.governance .is. available.at.www.alleima.com,.including: .— Alleima.AB’s.Articles.of.Association .— Alleima’s.instructions.for.the.Nomination.Committee .— Corporate .governance .reports .from.previous .years .— Information.on.the.2026.AGM,.including.the.notice.to. attend.(once.issued) .— Information.on.the.activities.of.the.Nomination.Committee. ahead.of.the.AGM .— Information.and.minutes.from.previous.AGMs Nomination.Committee Nomination.Committee External.auditor Remuneration.CommitteeNomination.Committee Shareholders General.Meeting Board.of.directors President.and.CEO.and. . Group.Executive.Management Divisions.and.Group.functions 1 3 9 65 10 2 4 7 8 Introduction Financial .informationStrategy.and.operations Divisions Corporate governance Sustainability Other 84 | Alleima.Annual.Report.2025
Page 87
3. Nomination Committee The.main.task.of.the.Nomination.Committee.is.to.prepare.and.sub - mit.proposals.to.the.AGM.regarding.election.of.the.Board,.election. of.the.Chairman.of.the.Board,.appointment.of.the.auditor,.and.fees. to.Board.members.who.are.not.company.employees.and.to.the. auditor..The.2024.AGM.adopted.revised.instructions.for.the.Nomi - nation.Committee,.which.includes.a.procedure.for.appointing.the. Nomination.Committee.and.will.be.valid.until.the.AGM.resolves.on. a.change..In.accordance.with.the.instructions,.the.Nomination. Committee.shall.consist.of.members.appointed.by.each.of.the. four.largest.shareholders.in.terms.of.the.number.of.votes.on.the. final.business.day.in.August.and.the.Chairman.of.the.Board.. The.composition.of.the.Nomination.Committee.is.announced. each.year.in.a.press.release.and.on.Alleima’s.website..Information. to.shareholders.on.how.to.submit.proposals.to.the.Nomination. Committee.is.also.provided.on.the.website. In.its.work,.the.Nomination.Committee.specifically.considers.the. demands .that.the.company’s.strategic.development, .international . operations,.and.governance.and.control.place.on.Alleima’s.Board. of.Directors.with.regards.to.competencies .and.composition..The. Nomination.Committee.applies.rule.4.1.of.the.Code.as.its.diversity. policy..The.goal.of.the.diversity.policy .is.that.the.Board.shall.have. an.appropriate.composition.in.view.of.the.company’s.operations,. phase.of.development.and.other.relevant.circum .stances,.display. diversity.and.breadth.in.terms.of.qualifications,.experience.and. background.of.the.Board.members.elected.by.the.General.Meeting, . and.promote.efforts.to.achieve.gender.balance.. Nomination Committee for 2026 AGM For.the.2026.AGM,.the.Nomination.Committee.consists.of.Chairman . Fredrik.Lundberg.(AB.Industrivärden);.Bo.Selling.(L.E.Lundberg - före.tagen.AB);.Jan.Dworsky.(Swedbank.Robur.Funds);.Anders. Algotsson.(AFA.Försäkring);.and.Alleima’s.Chairman.of.the.Board. Andreas .Nordbrandt..The.composition.of.the.Nomination. Commit- tee.was.announced.in.a.press.release.and.on.the.company’s.web - site.on.September.9,.2025. The.Committee.held.two.minuted.meetings.ahead.of.the.AGM.. At.the.statutory.meeting.of.the.Committee,.the.Chairman.of.the. Board.informed.the.Committee.of.the.Board’s.activities. during .the. year.and.about.the.results.of.the.Board’s.annual.evaluation..The. Committee.also.held.separate.individual.meetings.with.certain. Board.members.elected.by.the.AGM,.including.the.President.and. CEO. The.Committee’s.proposal.for.election.of.the.Board.was.pre - sented.through.a.press.release.on.January.29,.2026.and.on.the. company’s.website.where.the.Committee.proposed.the.re- .election. of.all.members.of.the.Board..The.other.proposals .of.the.Nomination . voting.rights.through.postal.voting..Each.shareholder.has,.inde - pendent.of.the.scope.of.their.shareholding,.a.legal.right.–.under. certain.prescribed.conditions.–.to.have.a.matter.addressed.at.a. General.Meeting. Alleima’s.AGM.must.be.held.within.six.months.of.the.end.of.the. financial.year.on.December.31..Normally,.the.AGM.is.held.in.late. April.or.early.May..At.the.latest,.the.date.and.location.of.the.AGM.is. announced.in.conjunction.with.publication.of.the.interim.report. . for.the.third.quarter..The.notice.to.attend.is.issued.through.an. announcement.in.Post-.och.Inrikes.Tidningar.and.on.the.compa - ny’s.website,.at.the.earliest.six.weeks.and.at.the.latest.four.weeks. ahead.of.the.date.of.the.AGM. 2025 Annual General Meeting Alleima’s.2025.AGM.was.held.on.April.28,.2025,.at.Ferrum.Arena.in. Sandviken,.Sweden..Shareholders.representing.161,100,251.shares. and.votes,.or.approximately.64%.of.the.total.number. of.shares.and. votes,.were.in.attendance.at.the.meeting. The.notice.to.attend.the.meeting.was.issued.on.March.24,2025.. Shareholders.who.wished.to.attend.the.AGM.could.either.partici - pate.in.person.on.the.premises,.via.proxy.or.through.postal.voting. The.company’s.Chairman.of.the.Board,.and.its.President.and. CEO,.each.gave.presentations.that.were.published.on.Alleima’s. website.after.the.meeting.. The.AGM.passed.the.following.resolutions: .— Adoption.of.the.income.statements.and.balance.sheets.for.the. Parent.Company.and.the.Group.for.2024. .— Discharge.from.liability.for.the.President.and.CEO,.and.for.the. Board.of.Directors,.for.the.2024.financial.year. .— Adoption.of.the.Board’s.proposal.for.a.dividend.of. . SEK 2.30.per.share. .— Election.of.the.Board.of.Directors. .— Appointment.of.auditor. .— Resolution.on.fees.to.Board.members.and.the.auditor. .— Approval.of.the.Board.of.Directors’.remuneration.report.for.2024. .— Adoption.of.a.long-term.incentive.program.(LTI.2025).in.the.form. of.a.performance.share.program.for.30.senior.executives.and. key.employees.in.the.Group.. .— Authorization.for.the.Board.of.Directors.to.make.decisions.on. acquisitions.of.the.company’s.own.shares.up.to.a.maximum.of. 10%.of.the.total.number.of.shares.in.the.company. Complete.minutes.from.the.2025.AGM.and.other.information.are. available.on.www.alleima.com. 2026 Annual General Meeting The.AGM.for.Alleima.AB.will.be.held.on. Wednesday,.April.29,.2026.in.Sandviken,. Sweden..The.notice.to.attend.the.AGM.will. be.published.in.Post-.och.Inrikes.Tidningar. and.on.the.company’s.website..Issuance. of.the.notice.will.be.announced.in.Svenska. Dagbladet.and.in a.daily.newspaper.pub - lished.in.Sandviken.or.Gävle..Documenta - tion.for.decision-making.will.be.published. on.Alleima’s.website.ahead.of.the.AGM.. Copies.of.these.documents.will.also.be. sent.to.any.shareholders.who.request. them.and.provide.their.mailing.address. Introduction Financial .informationStrategy.and.operations Divisions Corporate governance Sustainability Other Alleima.Annual.Report.2025 | 85
Page 88
Committee.are.presented.in.the.notice.to.attend.the.2026.AGM.. The.members.of.the.Nomination.Committee.did.not.receive.any. remuneration.from.the.company.for.their.work.on.the.Committee. 4. Board of Directors Alleima’s.Board.of.Directors.has.overall.responsibility.for.the.com - pany’s.organization.and.management,.and.is.tasked.with.achieving . profitable.and.sustainable.development.in.the.company.in.accor - dance.with.the.interests.of.the.company.and.its.shareholders..The. Board.regularly.evaluates.the.company’s.strategy.and.long-term. goals,.and.routinely.monitors.the.company’s .financial.position,. financial.reporting,.sustainability.reporting.and.risk.management.. The.Board.is.tasked.with.making.decisions.on.issues.concerning. major.acquisitions.and.investments,.or.significant.changes.in. . Alleima’s.organization.and.operations..Moreover,.the.Board. appoints.the.President.and.CEO,.who.is.responsible.for.the daily. operations.pursuant.to.the.Board’s.guidelines.and.instructions. Every.year,.the.Board.adopts.written.procedural.guidelines.for. its.activities..These.procedural.guidelines.describe.the.Board’s. duties,.the.Board.committees.to.be.formed.and.the.allocation.of. responsibilities.among.the.Board,.the.committees.and.the.Presi - dent.and.CEO..The.Board.also.adopts.a.yearly.plan.that.establishes . which.ordinary.agenda.items.are.to.be.addressed.at.the.various. Board.meetings.during.the.year. Composition of the Board (ESRS2, GOV-1) As.set.out.in.Alleima’s.Articles.of.Association,.the.Board.is.to.consist . of.a.minimum.of.three.and.a.maximum.of.ten.members,.elected.by. the.AGM..The.members.of.the.Board.are.elected.yearly.by.the. AGM.for.the.period.up.until.the.next.AGM..Additionally,.the.trade. union.organizations.that.are.represented.in.the.company’s.opera - tions.have.the.right.to.jointly.elect.two.employee.representatives. and.two.deputies.to.the.Board.. Alleima’s.Board.of.Directors.currently.consists.of.seven.members . elected .by.the.AGM,.two.employee.representatives.and.two.depu - ties.for.the.employee.representatives..The.members. of.the.Board. have.experience.from.different.industrial.segments.and.the.finan - cial.markets..Moreover,.all.of.the.Board.members.elected.by.the. AGM.have.experience.of.the.requirements.imposed .on.a.listed. company,.including.through.their.board.assignments.with.other. companies..In.electing.the.Board.members,.Rule.4.1.of.the.Code. was.applied.as.diversity.policy.for.the.purpose.of.attaining.diversity . as.regards.gender,.age.and.experience.as.well.as.educational.and. occupational.background..Two.of.the.seven.members.(approx.. 29%).elected.by.the.AGM.are.women..The.Board.members.are. presented.in.more.detail.on.pages.90–91.. Alleima’s.Board.fulfills.the.requirements.of.the.Code.as.regards. independence..Under.the.Code,.a.majority.of.the.Board’s.mem - bers.must.be.independent.in.relation.to.the.company.and.its .man- agement..On.Alleima’s.Board,.all.members.elected.by.the.AGM.–. apart.rom.the.company’s.President. and.CEO,.Göran.Björkman. –.are. independent.in.relation.to.the.company.and.its.management.. . Furthermore,.under.the.Code.at.least.two.of.these.members.must. be.independent.in.relation.to.the.company’s.major.shareholders,. which.is.achieved.as.all.members.elected.by.the.Board.apart.from. Karl.Åberg.and.Claes.Boustedt.meet.this.requirement..The.latter . two.members.represent.the.company’s.two.major.shareholders,. AB.Industrivärden.and.L.E.Lundbergföretagen .AB,.whose.business. models.are.built.on.long-term.active.and.responsible.ownership.in. selected.holding.companies. Board activities in 2025 The.Board.held.17.meetings.in.2025..Eight.of.these.were.physical. meetings.held.at.Alleima’s.premises.in.Sandviken.or.Stockholm,. one.was.a.physical.meeting.held.during.the.Board’s.annual.trip.to. one.of.Alleima’s.other.production.facilities,.five.meetings.were. . virtual .and.three.meetings.were.held.per.capsulam..Board.member . attendance.is.presented.on.pages.90–91..In.advance.of.each. meeting,.an.agenda.and.related.pre-read.materials.were.circulated . to.the.Board.members.. The.President.and.CEO.routinely.reported.to.the.Board.regarding . the.company’s.development,.financial.results.and.market.condi - tions..The.Board.approved.the.company’s.strategy.for.2025–2029,. and.then.regularly.followed.up.on.the.company’s.implementation. of.the.strategy..The.Division.Presidents.and.several.business.unit. presidents. also.presented.the.current.strategies.of.their.respective . operations.to.the.Board..Furthermore,.the.Board.routinely.oversaw . the.company’s.financial.reporting.and.dissemination.of.information . to.the.market.to.ensure.that.they.were.of.good.quality.and.accu - rately.reflected.the.company’s.financial.position..Reports.from.the. Audit.and.Remuneration.Committees.were.routinely.addressed,. and.the.Board.met.with.the.company’s.auditor.to.discuss.the.audi - tors.observations.on.the.audit.activities.for.the.year..The.Board. also.reviewed.the.company’s.work.in.the.areas.of.internal.control,. risk.management,.sustainability.and.compliance,.and.conducted. an.annual.review.of.the.Group’s.Code.of.Conduct.and.other.poli - Board.meetings.in.2025 Q1 Ordinary . meeting. Meeting.on. full-year.report. . for.2024 Meeting. . on.2024. Annual . Report.and. notice.of. . 2025.AGM Ordinary meeting Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov DecQ2 Q3 Q4 Ordinary meeting Ordinary meeting Ordinary meeting Extra.. meeting Extra.. meeting Extra. meetings Statutory.meeting Meeting.on. . half-year.report. . for.2025 Meeting.on.. interim .report .. for.the.third.. quarter.2025 Ordinary.meeting. during.Board.trip Meeting. on.interim. report .. for.the.first.. quarter . 2025 Introduction Financial .informationStrategy.and.operations Divisions Corporate governance Sustainability Other 86 | Alleima.Annual.Report.2025
Page 89
cies..During.the.year,.the.Board.continued.to.devote.particular. attention.to.the.supervision.of.the.company’s.work.to,.as.from.the. financial.year.of.2025,.prepare.sustainability.reporting.in.accor - dance.with.the.EU.Corporate.Sustainability.Reporting.Directive. (CSRD),.which.has.been.enacted.in.Swedish.law..In.the.fall.of.2025,. the.Board.visited.Alleima’s.operations.at.its.Tube.division.in. . Mehsana, .India. Remuneration to the Board The.AGM.resolved.that.the.total.fees.to.all.Board.members.who. are.elected.by.the.AGM.and.who.are.not.company.employees. would.amount.to.SEK.4,829,000.for.2025..For.more.detailed.infor - mation.on.remuneration.of.the.Board,.refer.to.pages.90–91.and. Note 3.5.on.page.54. Evaluation of Board activities The.activities.of.the.Board.are.evaluated.annually.to.ensure.the. quality.of.the.work,.and.to.identify.any.need.to.add.further.compe - tence.or.experience.to.the.Board.or.to.change.the.Board’s.work - ing.methods..In.2025,.the.evaluation.was.carried.out.by.way.of. each.Board.member.responding.anonymously.to.an.online.ques - tionnaire..The.Chairman.of.the.Board.then.held.individual.discus - sions.with.each.Board.member,.where.the.results.were.discussed.. The.compiled.findings.of.the.evaluations.were.presented.to.the. Board.as.well.as.to.the.Nomination.Committee.. 5. Audit Committee The.foremost.tasks.of.the.Audit.Committee.include.supporting.the. Board.in.its.efforts.to.monitor.and.ensure.the.quality.and.robust - ness.of.the.company’s.accounting,.financial.reporting,.sustainabil - ity.reporting.and.dissemination.of.information.to.the.market..The. Committee.monitors.the.efficiency.of.the.Group’s.internal.controls, . internal.audits,.risk.management.and.regulatory.compliance..The. Committee.also.oversees.the.work.of.the.auditor,.takes.positions. on.any.discoveries.during.the.audit,.reviews.the.independence.of. the.auditor.and.assists.the.Nomination.Committee.in.its.work.on. proposing.an.auditor.for.appointment.by.the.AGM..The.work.of.the. Audit.Committee.is.governed.by.the.regulations.of.the.Swedish. Companies.Act,.the.Code.and.written.instructions.that.are.revised. and.approved.annually.by.the.Board.. The.members.of.the.Audit.Committee.are.selected.by.the.Board. at.its.statutory.Board.meeting.after.the.AGM,.for.a.period.of.one. year.at.a.time..In.2025,.the.members.of.the.Audit.Committee.were. Susanne.Pahlén.Åklundh,.Karl.Åberg.and.Claes.Boustedt..All.mem - bers.are.independent.in.relation.to.the.company.and.its.manage - ment,.and.Susanne.Pahlén.Åklundh.is.also.independent.in.relation. to.the.company’s.major.shareholders..Furtermore,.the.Committee. holds.the.auditing.experience.required.under.the.Companies.Act.. The.Committee.held.six.meetings.during.the.year.at.which.all. members,.the.company’s.external.auditor.and.representatives.of. company.management.were.in.attendance..The.Chairman.of.the. Committee.reported.to.the.Board.after.each.meeting,.and.the. meeting.minutes.were.made.available.to.the.Board.. 6. Remuneration Committee The.Remuneration.Committee.prepares.issues.related.to.remuner - ation.of.senior.executives.in.the.company..A.central.task.is.submit - ting.proposals.to.the.Board.regarding.remuneration.of.the.President. and.CEO..The.Committee.also.oversees.the.establishment.of. remuneration.of.senior.executives.who.report.directly.to.the.Presi - dent.and.CEO..Moreover,.the.Committee.prepares.proposals.for. long-term.incentive.programs.for.senior.executives.and.key. employees.for.resolution.by.the.General.Meeting,.with.the.purpose . of.setting .criteria .for.variable.remuneration.that.benefits.the.inter - ests.of.the.shareholders..Similarly,.the.Committee.prepares.guide - lines.for.the.remuneration.of.senior.executives.that.are.then. resolved.on.by.the.AGM..The.Committee.also.prepares.the.remu - neration.report.that.the.Board.compiles.for.every.financial.year. and.presents.for.approval.by.the.AGM..Furthermore,.the.Commit - tee.oversees.succession.planning.for.the.President.and.CEO,. Group.Executive.Management,.and.other.key.roles.in.the.group.. The.work.of.the.Remuneration.Committee.is.governed.by.the.reg - ulations.of.the.Code.and.written.instructions.that.are.revised.and. approved.annually.by.the.Board.. The.members.of.the.Remuneration.Committee.are.selected.by. the.Board.at.its.statutory.Board.meeting.after.the.AGM,.for.a.period . of.one.year.at.a.time..In.2025,.the.Remuneration.Committee.con - sisted.of.Chairman.Andreas.Nordbrandt.and.member.Ulf.Larsson,. both.of.whom.are.independent.in.relation.to.the.company.and.its. management. The.Committee.held.two.meetings.during.the.year.at.which.all. members.and.representatives.of.company.management.were. . in.attendance..The.Chairman.of.the.Committee.repor .ted.to.the. Board.after.each.meeting,.and.the.meeting.minutes.were.pre - sented.to.the.Board.. For.guidelines,.remuneration.and.other.bene .fits.payable.to. Group.Executive.Management,.refer.to.page.33,.Note.3.5.on.page. 54.and.the.remuneration.report.for.2025.on.www.alleima.com. 7. President and CEO and Group Executive Management The.President.and.CEO.governs.the.company’s.daily.operations.in. accordance.with.the.instructions.and.directions.of.the.Board..The. President.and.CEO.is.responsible.for.ensuring.that.the.company. works.toward.and.achieves.its.goals.and.strategic.plans..More - over,.the.President.and.CEO.is.responsible.for.preparing.and.pro - viding.pre-read.materials.to.the.Board.ahead.of.Board.meetings. and.keeping.the.Board.up.to.date.regarding.the.company’s.finan - cial.position,.development,.risks.and.opportunities..The.role,.areas. of.responsibility.and.authority.of.the.President.and.CEO.are. described.in.the.instructions.to.the.CEO,.which.are.adopted.every. year.by.the.Board.. The.President.and.CEO.is.supported.by.Group.Executive.Man - agement,.to.which.responsibilities.and.authority.are.delegated.. Group.Executive.Management.also.has.an.advisory.function..In. addition.to.the.President.and.CEO,.Group.Executive.Management. includes.the.three.Division.Presidents.and.six.managers.responsi - ble.for.the.company’s.Group.functions:.finance,.strategy.and.IT,. legal,.communication,.HR.and.strategic.research..Group.Executive. Management.holds.minuted.meetings.once.a.month..The.members . of.the.Group.Executive.Management.are.presented.further.on. pages.92–93.. Introduction Financial .informationStrategy.and.operations Divisions Corporate governance Sustainability Other Alleima.Annual.Report.2025 | 87
Page 90
8. Divisions and Group functions Alleima’s.business.operations.follow.the.principle.of.clear.decen - tralization.of.responsibilities.and.authority..Primary.operational. responsibility.in.the.company.lies.with.the.divisions.and.their .busi- ness.units,.which.have.been.delegated. responsibility .for.pursuing . and.developing.their.respective.operations.in.accordance.with. established.targets.and.strategies..The.divisions. and.their.respec - tive.business.units.are.responsible.for.their.operational.earnings,. capital.and.cash.flows..The.business.and.earnings.situations.are. regularly.monitored.by.the.President.and.CEO.and.Group.Execu - tive.Management. Alleima.has.three.divisions,.each.with.its.own.distinct.product. range,.production.and.sales.organization:.Tube,.Kanthal.and.Strip.. The.divisions.are.described.in.more.detail.on.pages.24–29. The.Group.functions.have.Group-wide.responsibility.for.issues. within.their.respective.areas.of.responsibility,.and.coordinate.with. corresponding.functions.in.the.divisions..The.Group .functions.are. responsible.for.establishing .policies.and.processes.in.their.areas. of.responsibility.that.will.apply.to.the.company.as.a.whole.. Alleima.has.seven.Group.functions:.corporate. governance.and . sustainability, .finance, .strategy.and.IT,.legal,.communication,.HR. and.strategic.research. The.policies.and.processes.that.are.decided.on.by.the.Group. functions.and.by.the.heads.of.the.division.functions,.together.with. the.overall.principles.of.decentralization.that.Alleima.applies,.are. jointly.called.“The.Alleima.Way”.and.can.be.divided.into.three. blocks:.management,.core.and.supporting.processes. 9. External auditor The.external.auditor.is.a.control.body.that.is.appointed.every.year. by.the.AGM..The.task.of.the.external.auditor.is.to.review.the.com - pany’s.annual.report.and.consolidated.financial.statements.as. well.as.management.of.the.company.by.the.President.and.CEO.. The.outcome.of.the.external.auditor’s.work.–.the.auditor’s.report.–. is.distributed.to.shareholders.in.the.annual.report.and.at.the.AGM.. Prior.to.the.AGM,.the.external.auditor.submits.its.opinion.regarding . among.other.things,.the.adoption.of.the.income.statements.and. balance.sheets,.appropriation.of.profit.or.loss,.discharge.from. . liability.for.the.Board.and.President.and.CEO,.and.the.preparation. of.the.ESEF.report.. Alleima.AB’s.Articles.of.Association.state.that.the.company.is.to. have.a.minimum.of.one.and.a.maximum.of.three.auditors,.with.a. maximum.of.three.deputy.auditors,.and.that.a.registered.audit. company.may.be.appointed.auditor..At.the.2025.AGM,.the.audit. firm.Öhrlings.PricewaterhouseCoopers.AB.was.elected.auditor.of. Alleima.AB.for.the.period.until .the.2026.AGM..Magnus.Svensson. Henryson.is.auditor-in-charge.. In.accordance.with.its.procedural.guidelines,.the.Board.met. with.the.external.auditor.in.2025..Moreover,.the.external.auditor. attended.every.meeting.of.the.Audit.Committee..The.external. auditor’s.activities.included.presenting.the.scope.and.orientation. of.the.planned.audit.and.submitting.audit.and.review.reports. Audit.fees.are.paid.on.an.ongoing.basis.according.to.approved. current .invoices. .For.detailed.information.on.fees.paid.to.the.exter - nal.auditor,.see.Note.4.on.page.56.. 10. Internal audit The.internal.audit.function.is.subordinate.to.the.Audit.Committee.. The.task.of.the.function.is.to.provide.independent.and.objective. assurance.of.the.company’s.internal.control,.risk.management. and.governance.by.conducting.internal.audits..Internal.control. activities.are.governed.by.written.instructions.that.are.revised.and. approved.annually.by.the.Audit.Committee.and.the.Board. The.basis.for.the.internal.control.activities.is.a.risk-based.annual. plan.that.is.prepared.using.a.risk.analysis.based.on.documentation . from.the.Board,.the.President.and.CEO,.Group.Executive.Manage - ment.and.the.divisions. .The.annual.plan.is.approved.by.the.Audit. Committee.. Nine.internal.audits.were.conducted.in.2025..The .head.of.the. internal.audit.function.attended. all.Audit.Committee .meetings . during.the.year,.except.for.the.meeting.that.dealt.exclusively.with. the.annual.report..The.outcomes.of.the.internal.audits.were. reported.to.the.Audit.Committee..Opportunities.for.improving.the. efficiency.of.the.company’s.governance.and.processes.for.internal . control.or.risk.management.that.were.identified.in.internal.audits. were.also.reported.to.the.executives.responsible. Alleima.process.map Management processes Core processes Support processes Product .. development Marketing Sales Procurement Manufacturing Distribution Regulatory.and legal.compliance Quality, .sustainability .and environment,.health.and.safety Strategy,.business.planning, risk.management .and.follow-up Finance HR/personnel IT Communication Introduction Financial .informationStrategy.and.operations Divisions Corporate governance Sustainability Other 88 | Alleima.Annual.Report.2025
Page 91
I. Control environment Alleima’s.control.environment.is.built.on.a.clear.allocation .of.duties. and.responsibilities .between.the.company’s.various.bodies.and . functions.as.well.as.a.corporate.culture.in.which.integrity,.ethics . and.transparency.are.fundamental.values. The.Board.is.ultimately.responsible.for.ensuring. that.the.com- pany.has.an.efficient.system.for.internal.control.and.exercises. oversight.through.regular.follow-ups.of.internal.control.activities. as.well.as.through.the.Audit.Committee.and.the.President.and. CEO..The.allocation .of.duties.is.clarified.in.the.procedural.guide - lines.to.the.Board,.the.instructions.to.the.Audit.Committee.and.the. instructions.to.the.President.and.CEO.. The.Audit.Committee.routinely.follows.up.on.the.company’s. internal.control.activities.and.prepares.the.Board’s.work.related. . to.quality.assurance.of.the.company’s.financial.reporting.and.sus - tainability.reporting..Additionally,.both.the.Board.and.the.Audit. Committee.meet.the.company’s.external.auditor.at.least.once.a. year.without.company.management.in.attendance..The.President. and.CEO.leads.the.practical.internal.control.activities.through. Group.Executive.Management.and.the.internal.control.function.. The.company’s.management.also.has.the.important.task.of. . working.clearly.to.ensure.that.all.employees.understand.what.is. required.to.maintain.good.internal.control.and.how.they.are. expected.to.promote.it. The.internal.regulations.for.internal.control.activities .are.docu- mented.in.policies,.processes.and.manuals.that.are.included.in. . The.Alleima.Way.and.are.reviewed.and.adopted.annually. II. Risk assessment All.divisions.and.selected.Group.functions.perform.an.assessment. of.business.risks.in.accordance.with.the.enterprise.risk.manage - ment.(ERM).methodology.at.least.once.a.year,.as.part.of.their.strat - egy.work..Risks.that.are.noted.by.the.divisions.and.Group.functions, . as.well.as.observations.from.internal.and.external.audits,.are.then. taken.into.account.in.the.design.of.Alleima’s.Risk.and.Control.Matrix . (RACM).internal.control.framework.to.ensure.that.adequate.con - trols.are.established.to.address.identified.risks..Identified.and.rele - vant.risks.are.then.reported.to.the.Audit.Committee.and.the.Board. III. Control activities Based.on.identified.and.relevant.risks,.the.internal.control.frame - work.is.designed,.addressing.different.control.perspectives.for. financial.reporting.(ICFR.–.including.Group.functions.and.local. entities),.general.IT.controls.(ITGC.–.covering.main.financial.IT.sys - tems),.sustainability.reporting,.and.governance.and.risk.functions.. For.each.control.perspective,.an.individual.is.appointed.to.monitor. whether.the.internal.control.is.carried.out.in.accordance.with.valid. procedures..In.addition,.the.individual.operations.within.each. respective.control.perspective.appoint.an.indivdual.to.supervise. and.follow.up.their.respective.local.units. IV–V. Communication, information and monitoring Internal.control.is.monitored.regularly.through.self-assessments.to . ensure.that.risks.are.managed.appropriately.and.in.accordance . with.the.requirements.of.the.internal.control.framework..The . results.from.the.self-assessments.of.completed.internal.controls, . identified.deficiencies,.analysis.and.action.plans.are.included.in . the.CFO’s.report.to.the.Audit.Committee..The.Chairman.of.the.Audit . Committee.regularly.reports.on.the.Committee’s.work.to.the.Board . regarding.internal.control..The.Board.also.carries.out.an.annual . review.of.the.company’s.processes.for.internal.control.together . with.the.results.of.completed.controls.and.self-assessments. The five integral components of internal control activities: I. Control. . environment II. Risk.. assessment III. Control. . activities IV. Information.and. .communication V. Monitoring For.more.information,.visit.the.COSO.website:.www.coso.org Internal control and risk management pertaining to financial reporting and sustainability reporting (ESRS 2, GOV-5) Alleima’s.internal.control.activities.are.intended.to.ensure.that.the. company’s.financial.position.and .consolidation .of.sustainability. reporting.are.correct.and.reliable,.and.that.the.company.is.in.com - pliance.with.applicable.laws.and.regulations. The.starting.point.for.internal.control.activities .is.the.framework.for. internal.controls.issued.by.the.Committee.of.Sponsoring.Organi - zations.(COSO).of.the.Treadway.Commission..This.framework. identifies.five.integral.components.of.internal.control.activities:. control.environment,.risk.assessment,.control.activities,.informa - tion.and.communication,.and.monitoring. Introduction Financial .informationStrategy.and.operations Divisions Corporate governance Sustainability Other Alleima.Annual.Report.2025 | 89
Page 92
Board of Directors Name Andreas Nordbrandt Karl Åberg Claes Boustedt Susanne Pahlén Åklundh Ulf Larsson Victoria Van Camp Göran Björkman Position Chairman.of.the.Board Chairman.of.the. .Remuneration.Committee Board.member Member.of.the.Audit. . .Committee Board.member Member.of.the.Audit. . .Committee Board.member Chairman.of.the.Audit. .Committee Board.member Member.of.Remunera- tion.Committee Board.member Board.member President.and.CEO Born 1971 1979 1962 1960 1962 1966 1965 Election to the Board 2021 2021 2021 2022 2023 2024 2019 Education Master.of.Science.in. Mechanical.Engineering. from.the.Institute.of. Technology.at.Linköping. University,.Sweden. Master.of.Science.in. Economics.and.Business. Administration.from. Stockholm.School.of. Economics,.Sweden. Master.of.Science.in. Business.and.Economics. from.Stockholm.School. of.Economics,.Sweden. Master.of.Science.in. Chemical.Engineering. from.Lund.Institute.of. Technology,..Sweden. Bachelor.of.Science.in. Forestry.from.the.. Swedish.University.of. Agricultural.Sciences.in. Umeå,.Sweden. Master.of.Science.in. Mechanical.Engineering. and.Ph.D..in.Machine.Ele- ments.from.Luleå.University. of.Technology,.Sweden.. Master.of.Science.in. Mechanical.Engineering. from.KTH.Royal.Institute. of.Technology.in.. Stockholm,.Sweden. Other material board assign- ments as.per.. December.31,. 2025 Chairman.of.the.board.. of.SaltX.Technology. Holding.AB.and.SMP. Holding.AB..Member.of. the.board.of.Sandvik.AB. Member.of.the.board.. of.Essity.AB.and.. Telefon.aktiebolaget.L.M. Ericsson. Member.of.the.board.. of.Sandvik.AB,.. Hufvudstaden.AB,.. Husqvarna.AB.and.. Förvaltnings.AB.Lunden.. Chairman.of.the.board.. of.Alfdex.AB..Member.. of.the.board.of.. ASSA.ABLOY.AB.and. Sweco.AB. Member.of.the.board.. of.CEPI,.Swedish.Forest.. Industries.and.Svenska. Cellulosa.Aktiebolaget. SCA. Chairman.of.the.board.of. LumenRadio.AB..Member. of.the.board.of.Billerud. AB,.ASSA.ABLOY.AB,.SR. Energy.AB,.Wireless.Solu- tion.AB.and.the.Chalmers. University.of.Technology. Foundation..Deputy. member.of.the.board.of. Viking.Analytics.AB. Chairman.of.the.. board.of.SKGS... Member.of.the.board.of.. Industriarbetsgivarna.i. Sverige.service.AB.and. the.Confederation.of. Swedish.Enterprise. Professional experience Former.Division.. President.at.Epiroc. Underground.Rock. Excavation.and.Atlas. Copco.Rocktec. Deputy.CEO.and.head.. of.the.investment.organi- zation.and.the.finance. function.at.AB.Industri- värden..Former.partner. and.co-founder.of.Zeres. Capital.Partners.AB,.. partner.at.CapMan.Public. Market.Fund,.and.various. positions.within.Handels- banken.Capital..Markets. Deputy.CEO.of.L.E.. Lundbergföretagen.AB. and.CEO.of.L.E.Lundberg. Kapitalförvaltning.AB.. Former.Head.of. Research.at.Öhman. Fondkommission. Various.previous.posi- tions.within.Alfa.Laval.AB,. including.President.of. the.Energy.Division.and. the.Equipment.Division. and.member.of.Alfa. Laval.Group.Manage- ment. President.and.CEO.of. Svenska.Cellulosa.Aktie- bolaget.SCA..Former.CEO. of.SCA.Forest.Products. AB..Member.of.the.Royal. Swedish.Academy.of. Engineering.Sciences.. and.the.Royal.Swedish. Academy.of.Agriculture. and.Forestry..Norwegian. Consul.General. Adjunct.professor.of. Machine.Elements.at.Luleå. University.of.Technology.. Member.of.the.Royal. Swedish.Academy.of.Engi- neering.Sciences..Founder. and.owner.of.consulting. firm,.Axa.Consulting..For- mer.CTO.and.President. Technology,.with.several. senior.positions.at.SKF.. Various.previous.manage- ment.positions.within.the. Sandvik.Group,.including. President.of.the.business. area.Sandvik.Materials. Technology.and.member. of.Sandvik’s.Group.Execu- tive.Management.Team.as. well.as.VP.and.Head.of. Global..Production.at.AB. Sandvik.Coromant. Attendance Board.meetings. 17/17 17/17 17/17 17/17 16/17 17/17 17/17 Audit.Committee. .meetings – 6/6 6/6 6/6 – – – Remuneration. Committee. meetings 2/2 – – – 2/2 – – Annual.General. Meeting Yes Yes Yes Yes Yes Yes Yes Independence In.relation.to.the. company.and.its. management Yes Yes Yes Yes Yes Yes No In.relation.to. major.share- holders Yes No No Yes Yes Yes Yes Remuneration (kSEK) 1,642 644 644 760 609 530 – Holdings1) 9,180 12,000 30,000 10,000 5,000 2,320 65,893 1).Own.and.related.parties’.holdings.in.Alleima.AB.(publ).as.of.December.31,.2025. Gender distribution members elected by AGM Women, 29 % Men, 71 % Introduction Financial .informationStrategy.and.operations Divisions Corporate governance Sustainability Other 90 | Alleima.Annual.Report.2025
Page 93
Name Andreas Nordbrandt Karl Åberg Claes Boustedt Susanne Pahlén Åklundh Ulf Larsson Victoria Van Camp Göran Björkman Position Chairman.of.the.Board Chairman.of.the. .Remuneration.Committee Board.member Member.of.the.Audit. . .Committee Board.member Member.of.the.Audit. . .Committee Board.member Chairman.of.the.Audit. .Committee Board.member Member.of.Remunera- tion.Committee Board.member Board.member President.and.CEO Born 1971 1979 1962 1960 1962 1966 1965 Election to the Board 2021 2021 2021 2022 2023 2024 2019 Education Master.of.Science.in. Mechanical.Engineering. from.the.Institute.of. Technology.at.Linköping. University,.Sweden. Master.of.Science.in. Economics.and.Business. Administration.from. Stockholm.School.of. Economics,.Sweden. Master.of.Science.in. Business.and.Economics. from.Stockholm.School. of.Economics,.Sweden. Master.of.Science.in. Chemical.Engineering. from.Lund.Institute.of. Technology,..Sweden. Bachelor.of.Science.in. Forestry.from.the.. Swedish.University.of. Agricultural.Sciences.in. Umeå,.Sweden. Master.of.Science.in. Mechanical.Engineering. and.Ph.D..in.Machine.Ele- ments.from.Luleå.University. of.Technology,.Sweden.. Master.of.Science.in. Mechanical.Engineering. from.KTH.Royal.Institute. of.Technology.in.. Stockholm,.Sweden. Other material board assign- ments as.per.. December.31,. 2025 Chairman.of.the.board.. of.SaltX.Technology. Holding.AB.and.SMP. Holding.AB..Member.of. the.board.of.Sandvik.AB. Member.of.the.board.. of.Essity.AB.and.. Telefon.aktiebolaget.L.M. Ericsson. Member.of.the.board.. of.Sandvik.AB,.. Hufvudstaden.AB,.. Husqvarna.AB.and.. Förvaltnings.AB.Lunden.. Chairman.of.the.board.. of.Alfdex.AB..Member.. of.the.board.of.. ASSA.ABLOY.AB.and. Sweco.AB. Member.of.the.board.. of.CEPI,.Swedish.Forest.. Industries.and.Svenska. Cellulosa.Aktiebolaget. SCA. Chairman.of.the.board.of. LumenRadio.AB..Member. of.the.board.of.Billerud. AB,.ASSA.ABLOY.AB,.SR. Energy.AB,.Wireless.Solu- tion.AB.and.the.Chalmers. University.of.Technology. Foundation..Deputy. member.of.the.board.of. Viking.Analytics.AB. Chairman.of.the.. board.of.SKGS... Member.of.the.board.of.. Industriarbetsgivarna.i. Sverige.service.AB.and. the.Confederation.of. Swedish.Enterprise. Professional experience Former.Division.. President.at.Epiroc. Underground.Rock. Excavation.and.Atlas. Copco.Rocktec. Deputy.CEO.and.head.. of.the.investment.organi- zation.and.the.finance. function.at.AB.Industri- värden..Former.partner. and.co-founder.of.Zeres. Capital.Partners.AB,.. partner.at.CapMan.Public. Market.Fund,.and.various. positions.within.Handels- banken.Capital..Markets. Deputy.CEO.of.L.E.. Lundbergföretagen.AB. and.CEO.of.L.E.Lundberg. Kapitalförvaltning.AB.. Former.Head.of. Research.at.Öhman. Fondkommission. Various.previous.posi- tions.within.Alfa.Laval.AB,. including.President.of. the.Energy.Division.and. the.Equipment.Division. and.member.of.Alfa. Laval.Group.Manage- ment. President.and.CEO.of. Svenska.Cellulosa.Aktie- bolaget.SCA..Former.CEO. of.SCA.Forest.Products. AB..Member.of.the.Royal. Swedish.Academy.of. Engineering.Sciences.. and.the.Royal.Swedish. Academy.of.Agriculture. and.Forestry..Norwegian. Consul.General. Adjunct.professor.of. Machine.Elements.at.Luleå. University.of.Technology.. Member.of.the.Royal. Swedish.Academy.of.Engi- neering.Sciences..Founder. and.owner.of.consulting. firm,.Axa.Consulting..For- mer.CTO.and.President. Technology,.with.several. senior.positions.at.SKF.. Various.previous.manage- ment.positions.within.the. Sandvik.Group,.including. President.of.the.business. area.Sandvik.Materials. Technology.and.member. of.Sandvik’s.Group.Execu- tive.Management.Team.as. well.as.VP.and.Head.of. Global..Production.at.AB. Sandvik.Coromant. Attendance Board.meetings. 17/17 17/17 17/17 17/17 16/17 17/17 17/17 Audit.Committee. .meetings – 6/6 6/6 6/6 – – – Remuneration. Committee. meetings 2/2 – – – 2/2 – – Annual.General. Meeting Yes Yes Yes Yes Yes Yes Yes Independence In.relation.to.the. company.and.its. management Yes Yes Yes Yes Yes Yes No In.relation.to. major.share- holders Yes No No Yes Yes Yes Yes Remuneration (kSEK) 1,642 644 644 760 609 530 – Holdings1) 9,180 12,000 30,000 10,000 5,000 2,320 65,893 1).Own.and.related.parties’.holdings.in.Alleima.AB.(publ).as.of.December.31,.2025. Name Tomas Kärnström Mikael Larsson Position Board.member. (appointed.by.IF.Metall) Board.member (appointed.by.Unionen) Born 1966 1963 Election to the Board 2021 2021 Attendance, Board meetings 17/17 15/17 Holdings1) 577 27 Name Niclas Widell Maria Sundqvist Position Deputy.Board.member (appointed.by.IF.Metall) Deputy.Board.member (appointed.by.. Akademikerföreningen) Born 1974 1964 Election to the Board 2021 2021 Attendance, Board meetings 14/172) 10/172) Holdings1) 24 126 1).Own.and.related.parties’.holdings.in.Alleima.AB.(publ).as.of.December.31,.2024. 2)..The.number.of.board.meetings.includes.three.per.capsulam.resolutions.in.which.deputy. board.members.did.not.participate. Introduction Financial .informationStrategy.and.operations Divisions Corporate governance Sustainability Other Alleima.Annual.Report.2025 | 91
Page 94
Group Executive Management Name Göran Björkman Carl von Schantz Robert Stål Per Eklund Johan Eriksson Christian Swartling Mikael Blazquez Maria Reinholdsson Tom Eriksson Elja Nordlöf Position President.and.CEO President.Tube.Division President.Kanthal.. Division President.Strip.Division CFO EVP.and.General.Counsel EVP.and.Head.of.. Strategy,.M&A.and.IT. EVP.and.Head.of.Human. Resources EVP.&.Head.of.Strategic. Research EVP.&.Head.of. .Communications Born 1965 1973 1983 1971 1973 1974 1972 1968 1973 1985 In the position since 2017 2023 2023 2025 2025 20263) 2018 20264) 2018 2018 Education Master.of.Science.in. Mechanical.Engineering. from.KTH.Royal.Institute. of.Technology.in.. Stockholm,.Sweden. Master’s.degree.in.. Business.Administration. from.Kellogg.School.of. Management.at.North- western.University.and.. Bachelor.of.Arts.degree. in.Economics.from.. Northwestern.University,. USA.. Master.of.Science.in. Material.Science.from. KTH.Royal.Institute.of. Technology,.Sweden.. Bachelor.of.Science.in. Business.and.Economics. from.Stockholm.. University,..Sweden. Master’s.degree.in. Mechanical.Engineering. and.Materials.Science. from.Luleå.University.of. Technology,.Sweden. Bachelor.of.arts.degree. in.Economics.and.. Business.Administration. from.Dalarna.University,. Sweden. Master.of.Laws.(Corporate. Law).from.New.York.. University,.School.of.Law.. Master.of.Laws.from.the. Faculty.of.Law.at.Lund.. University. Master.of.Science.in. Automatic.Data.Process- ing.from.University.of. Gävle,.Sweden. Master.of.Business. Administration.(MBA). from.Edinburgh.Business. School,.Bachelor.of.. Science.(BSc).in.Human. Resource.Development. and.Labor.Relations. from.Umeå.University.. Doctor.of.Philosophy.in. Materials.Chemistry.from. Uppsala.University,.. Sweden..Bachelor’s. degree.in.Inorganic. Chemistry.from.Uppsala. University,.Sweden. Master.of.Science.in. Media.and.Communica- tion.from.University.of. Gävle,.Sweden. Material board assignments1).. as.per.. December.31,. 2025 Chairman.of.the.. board.of.SKGS... Member.of.the.board.of.. Industriarbetsgivarna.i. Sverige.service.AB.and. the.Confederation.of. Swedish.Enterprise. – – – – – – – Member.of.the.board.of. SWERIM.AB. – Professional experience Various.previous.man- agement.positions.within. the.Sandvik.Group,. including.President.of. the.business.area.. Sandvik.Materials.. Technology.and.member. of.Sandvik’s.Group. Executive.Management. Team.as.well.as.Vice. President.and.Head.of. Global.Production.at.AB. Sandvik.Coromant. Formerly.President.of.the. General.Industry.division. at.Atlas.Copco,.Senior. Vice.President.and.Head. of.the.Energy.Sector.at. Lantmännen,.and.Man- aging.Director.within.the. Sapa.Group.(now.Hydro. Extrusions). Former.CEO.of.Dafo. Vehicle.Fire.protection;. various.positions.within. Sandvik.Materials.. Technology,.including. President.of.Business. Unit.EMEA.within.the. Tube.Division,.Global. Sales.and.Marketing.. Manager.as.well.as.. Product.Manager.for. Nuclear.Power.Products. within.the.Tube.Division,. and.Product.Manager. within.the.Metallurgy. department.at.ABB.AB. Formerly.General.Man- ager.Marketing.and.Sales. at.the.Strip.Division,.as. well.as.various.senior. positions.within.the. Sandvik.Group,.including. Head.of.Strategy.Execu- tion.and.Corporate.. Business.Development.at. Sandvik.Coromant.and. other.roles.primarily.in. sales.and.marketing.as. well.as.business.devel- opment. Former.Head.of.Group. Business.Control.at. Alleima,.different.roles.at. Sandvik.Group.including. Head.of.Group.Business. Control,.and.different. managerial.roles.within. Business.Control.at. AstraZeneca. Former.Senior.Vice.. President.Group.Legal.at. Stora.Enso,.Nordic.General. Counsel.at.GE.Capital,.and. lawyer.at.Mannheimer. Swartling.law.firm. Various.previous.posi- tions.within.Sandvik. Materials.Technology,. including.Business.Unit. Manager.Nuclear.Power. and.Global.Sales.and. Marketing.Manager. Nuclear.Power.&.Aero- space.within.the.Tube. division,.and.various. positions.within.Telefon- aktiebolaget.L.M.Ericsson,. including.Manager.. Market.Supply.Americas. and.Manager.Customer. Logistics. Former.CHRO.at.. Stockholm.Exergi,.HR. and.Communications. Director.at.LKAB,.CHRO. and.Head.of.Corporate. Staffs.at.Telenor.. Sweden,.and.SVP.Talent. Management.at.Telenor. Group,.and.various.. positions.within.Vattenfall. including.CHRO,.VP.. Talent.Management,.and. IT.Manager.. Various.previous.posi- tions.within.Sandvik. Materials.Technology,. including.Head.of.. Materials.Design.and. Strategic.Research.. Manager;.Discovery. Research.Manager.and. Material.Specialist.at.. St..Jude.Medical.AB;.and. Researcher.at.Lawrence. Berkeley.National.. Laboratory. Various.previous.posi- tions.within.the.Sandvik. Group,.including.Corpo- rate.Communications. Manager.and.Communi- cations.Specialist;.and. Communications.Officer. at.the.German-Swedish. Chamber.of.Commerce. Holdings2) 65,893 21,584 15,085 611 5,011 – 9,961 – 8,636 2,096 Other members of Group Executive Management in 2025 Olof.Bengtsson.was.CFO.until.August.31,.2025. Johanna.Kreft.was.EVP.and.General.Counsel.until.October.8,.2025. Ulrika.Dunker.was.EVP.and.Head.of.Human.Resources.until.December.31,.2025.. 1).Pertains.to.board.assignments.outside.the.Alleima.Group.. 2).Own.and.related.parties’.holdings.in.Alleima.AB.(publ).as.of.December.31,.2025.. Gender distribution, Group Executive Management Women, 20 % Men, 80 % Introduction Financial .informationStrategy.and.operations Divisions Corporate governance Sustainability Other 92 | Alleima.Annual.Report.2025
Page 95
Name Göran Björkman Carl von Schantz Robert Stål Per Eklund Johan Eriksson Christian Swartling Mikael Blazquez Maria Reinholdsson Tom Eriksson Elja Nordlöf Position President.and.CEO President.Tube.Division President.Kanthal.. Division President.Strip.Division CFO EVP.and.General.Counsel EVP.and.Head.of.. Strategy,.M&A.and.IT. EVP.and.Head.of.Human. Resources EVP.&.Head.of.Strategic. Research EVP.&.Head.of. .Communications Born 1965 1973 1983 1971 1973 1974 1972 1968 1973 1985 In the position since 2017 2023 2023 2025 2025 20263) 2018 20264) 2018 2018 Education Master.of.Science.in. Mechanical.Engineering. from.KTH.Royal.Institute. of.Technology.in.. Stockholm,.Sweden. Master’s.degree.in.. Business.Administration. from.Kellogg.School.of. Management.at.North- western.University.and.. Bachelor.of.Arts.degree. in.Economics.from.. Northwestern.University,. USA.. Master.of.Science.in. Material.Science.from. KTH.Royal.Institute.of. Technology,.Sweden.. Bachelor.of.Science.in. Business.and.Economics. from.Stockholm.. University,..Sweden. Master’s.degree.in. Mechanical.Engineering. and.Materials.Science. from.Luleå.University.of. Technology,.Sweden. Bachelor.of.arts.degree. in.Economics.and.. Business.Administration. from.Dalarna.University,. Sweden. Master.of.Laws.(Corporate. Law).from.New.York.. University,.School.of.Law.. Master.of.Laws.from.the. Faculty.of.Law.at.Lund.. University. Master.of.Science.in. Automatic.Data.Process- ing.from.University.of. Gävle,.Sweden. Master.of.Business. Administration.(MBA). from.Edinburgh.Business. School,.Bachelor.of.. Science.(BSc).in.Human. Resource.Development. and.Labor.Relations. from.Umeå.University.. Doctor.of.Philosophy.in. Materials.Chemistry.from. Uppsala.University,.. Sweden..Bachelor’s. degree.in.Inorganic. Chemistry.from.Uppsala. University,.Sweden. Master.of.Science.in. Media.and.Communica- tion.from.University.of. Gävle,.Sweden. Material board assignments1).. as.per.. December.31,. 2025 Chairman.of.the.. board.of.SKGS... Member.of.the.board.of.. Industriarbetsgivarna.i. Sverige.service.AB.and. the.Confederation.of. Swedish.Enterprise. – – – – – – – Member.of.the.board.of. SWERIM.AB. – Professional experience Various.previous.man- agement.positions.within. the.Sandvik.Group,. including.President.of. the.business.area.. Sandvik.Materials.. Technology.and.member. of.Sandvik’s.Group. Executive.Management. Team.as.well.as.Vice. President.and.Head.of. Global.Production.at.AB. Sandvik.Coromant. Formerly.President.of.the. General.Industry.division. at.Atlas.Copco,.Senior. Vice.President.and.Head. of.the.Energy.Sector.at. Lantmännen,.and.Man- aging.Director.within.the. Sapa.Group.(now.Hydro. Extrusions). Former.CEO.of.Dafo. Vehicle.Fire.protection;. various.positions.within. Sandvik.Materials.. Technology,.including. President.of.Business. Unit.EMEA.within.the. Tube.Division,.Global. Sales.and.Marketing.. Manager.as.well.as.. Product.Manager.for. Nuclear.Power.Products. within.the.Tube.Division,. and.Product.Manager. within.the.Metallurgy. department.at.ABB.AB. Formerly.General.Man- ager.Marketing.and.Sales. at.the.Strip.Division,.as. well.as.various.senior. positions.within.the. Sandvik.Group,.including. Head.of.Strategy.Execu- tion.and.Corporate.. Business.Development.at. Sandvik.Coromant.and. other.roles.primarily.in. sales.and.marketing.as. well.as.business.devel- opment. Former.Head.of.Group. Business.Control.at. Alleima,.different.roles.at. Sandvik.Group.including. Head.of.Group.Business. Control,.and.different. managerial.roles.within. Business.Control.at. AstraZeneca. Former.Senior.Vice.. President.Group.Legal.at. Stora.Enso,.Nordic.General. Counsel.at.GE.Capital,.and. lawyer.at.Mannheimer. Swartling.law.firm. Various.previous.posi- tions.within.Sandvik. Materials.Technology,. including.Business.Unit. Manager.Nuclear.Power. and.Global.Sales.and. Marketing.Manager. Nuclear.Power.&.Aero- space.within.the.Tube. division,.and.various. positions.within.Telefon- aktiebolaget.L.M.Ericsson,. including.Manager.. Market.Supply.Americas. and.Manager.Customer. Logistics. Former.CHRO.at.. Stockholm.Exergi,.HR. and.Communications. Director.at.LKAB,.CHRO. and.Head.of.Corporate. Staffs.at.Telenor.. Sweden,.and.SVP.Talent. Management.at.Telenor. Group,.and.various.. positions.within.Vattenfall. including.CHRO,.VP.. Talent.Management,.and. IT.Manager.. Various.previous.posi- tions.within.Sandvik. Materials.Technology,. including.Head.of.. Materials.Design.and. Strategic.Research.. Manager;.Discovery. Research.Manager.and. Material.Specialist.at.. St..Jude.Medical.AB;.and. Researcher.at.Lawrence. Berkeley.National.. Laboratory. Various.previous.posi- tions.within.the.Sandvik. Group,.including.Corpo- rate.Communications. Manager.and.Communi- cations.Specialist;.and. Communications.Officer. at.the.German-Swedish. Chamber.of.Commerce. Holdings2) 65,893 21,584 15,085 611 5,011 – 9,961 – 8,636 2,096 Other members of Group Executive Management in 2025 Olof.Bengtsson.was.CFO.until.August.31,.2025. Johanna.Kreft.was.EVP.and.General.Counsel.until.October.8,.2025. Ulrika.Dunker.was.EVP.and.Head.of.Human.Resources.until.December.31,.2025.. 1).Pertains.to.board.assignments.outside.the.Alleima.Group.. 2).Own.and.related.parties’.holdings.in.Alleima.AB.(publ).as.of.December.31,.2025.. 3).Christian.Swartling.was.appointed.EVP.and.General.Counsel.with.effect.from.January.19,.2026. 4).Maria.Reinholdsson.was.appointed.EVP.and.Head.of.Human.Resources.with.effect.from.March.2,.2026. Introduction Financial .informationStrategy.and.operations Divisions Corporate governance Sustainability Other Alleima.Annual.Report.2025 | 93
Page 96
Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other 94 | Alleima Annual Report 2025
Page 97
Sustainability report General disclosures ................................................................................................. 96 Value chain .................................................................................................................... 100 Environment ................................................................................................................ 105 The EU Taxonomy ...................................................................................................... 105 Climate change ........................................................................................................... 106 Pollution ............................................................................................................................ 110 Water .................................................................................................................................... 111 Resource use and circularity ................................................................................ 112 Entity specific disclosure ....................................................................................... 114 Social .................................................................................................................................. 115 Own workforce ............................................................................................................. 115 Workers in the value chain ..................................................................................... 118 Governance ................................................................................................................. 120 About governance .................................................................................................... 120 Appendix ......................................................................................................................... 123 1. List of disclosure requirements ..................................................................... 123 2. Policies ......................................................................................................................... 125 3. Reporting principles ............................................................................................ 125 4. List of disclosures derived from other EU legislation ...................... 127 5. Tables for reporting in accordance with the EU Taxonomy ........ 129 6. Table on substances of concern .................................................................. 131 Auditor’s statement ................................................................................................. 132 Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other Alleima Annual Report 2025 | 95
Page 98
General disclosures (ESRS 2) Basis for preparation and reporting principles General basis for preparation of sustainability statements (BP-1) This is Alleima’s consolidated sustainability report for the 2025 financial year. It has been prepared in accordance with the requirements of the European Sustainability Reporting Standards (ESRS) and the Swedish Annual Accounts Act, and contains the disclosures deemed to be material in Alleima’s double materiality assessment. The sustainability report covers Alleima AB and all its subsidiaries, jointly the Alleima Group, with its registered office in Sandviken, Sweden. The contents and scope of the consolidated report, and the principles for determining what is included, are the same as for the financial statements. See Note 1 on page 45. The sustainability statement covers the areas of Alleima’s upstream and downstream value chain where the materiality assessment has indicated that material impacts, risks or opportunities exist or could arise. Read more about the materiality assessment on page 103 and about policies, activities, targets and metrics under each material disclosure. The report has been reviewed by an independent auditor. Disclosures in relation to specific circumstances (BP-2) Time horizons Alleima applies the time horizons set out in ESRS: — short-term: less than 1 year — medium-term: 1–5 years — long-term: more than 5 years Estimates and uncertainties Alleima reports Scope 1, 2 and 3 emissions in accordance with the GHG Protocol. Emissions data within Scope 3 include information from the com - pany’s value chain and are considered to be subject to a higher degree of measurement uncertainty. The GHG accounting for Scope 3 was based on a combination of activity data primarily from internal data sources and, to some extent, on emissions data from both internal and external data sources. The data set is considered complete for the most significant emission category (category 1), with a focus on obtaining a high proportion of primary data and supplier-specific emissions data, especially for raw material pur - chases. For other, less significant categories, expenditure data was used extensively. The calculation of GHG emissions based on expenditure data has higher uncertainty than using activity data such as consumption in weight, volume, or number of items. The calculations were carried out using data models within an IT system for GHG data reporting. Conversion factors were sourced from suppliers where available; otherwise, industry averages were applied. For spend- based data, conversion factors from Exiobase were used. Some categories were deemed not applicable, some were based on surveys, assumptions, and extrapolation. No primary data was available, and no data model based on assumptions was set up for downstream transportation. To some extent, this information is included in category 1. How these emissions will be reported will be determined at a later stage. In cases where reported data are not fully available at the end of the reporting period, estimated values are included to reflect the full year. Esti - mates are prepared by the reporting entities themselves based on histori - cal reporting patterns. For further information on estimates and sources of uncertainty, see the Accounting policies section, starting on page 125. Incorporation by reference ESRS Disclosure requirements Information Part of the directors’ report Location GOV-1 The role of the administrative, management and supervisory bodies Information on the composition, experience and diversity of the Board Corporate governance report – Composition of the Board 86 GOV-5 Risk management and internal control over sustainability reporting Description of risk management and internal control processes including identified risks Corporate governance report – Internal control and risk management pertaining to financial reporting and sustainability reporting 89 SBM-1 Strategy, business model and value chain Further information regarding employees Note 3 Personnel information 54 Amendments and corrections of errors in previous reporting This is Alleima’s first report prepared in accordance with the Corporate Sustainability Reporting Directive (CSRD) and the ESRS. The presentation and information in the sustainability report therefore differ from previous reports. Emissions data for 2024 relating to scope 3 has been updated based on more precise information that has become available. The update represents a material reduction and creates the basis for a meaningful comparison between the current year’s and the previous year’s emissions data. No other material adjustments have been made compared with Alleima’s pre - vious sustainability reporting. Omission of sensitive information Information relating to upcoming innovations of a commercially sensitive nature that could have a potentially material impact on the Group’s future earnings has been omitted for confidentiality reasons. Phase-in of disclosures Alleima has identified biodiversity as an area where it has material impacts and risks, mainly through its impacts related to climate change, pollution and water use in its own operations and from activities in the value chain. The steel value chain and Alleima’s production processes generate GHG emissions, use water and are associated with a number of non-GHG pollut - ants that can contribute to biodiversity loss. Alleima’s production operations are also dependent on ecosystem services, such as water and raw materi - als. Similarly, Alleima has an impact on ecosystem services both in its own operations and upstream in the value chain as a result of water withdrawal and the extraction of raw materials. In this year’s report, Alleima has chosen to apply the phase-in rules pre - sented by the EU in summer 2025. The company’s environmental and sus - tainability policies include actions to reduce negative impacts on biodiver - sity, including requirements for traceability, certifications and cooperation with stakeholders that promote ecosystem restoration, as well as descrip - tions of how these actions are to be followed up. For additional information about metrics and targets, see page 98. For additional information about Alleima's policies, se pages 98 and 125. This is the first time Alleima has prepared a report in accordance with the ESRS; therefore, comparative information is not available for all indicators. This applies to the reporting of indicators under E2 -5 and G1-3. In addition, Alleima has chosen to apply the phase-in provisions for the following disclosures: ESRS standard Disclosure requirements Phase-in General disclosures ESRS 2 SBM-3 Anticipated financial effects Environmental disclosures ESRS E1 E1-9 Anticipated financial effects ESRS E2 E2-6 Anticipated financial effects ESRS E3 E3-5 Anticipated financial effects ESRS E4 E4-1 Transition plan E4-2 Policies E4-3 Actions E4-4 Targets E4-5 Metrics E4-6 Anticipated financial effects ESRS E5 E5-6 Anticipated financial effects Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other 96 | Alleima Annual Report 2025
Page 99
Governance The role of the administrative, management and supervisory bodies (GOV-1) and information provided to and sustainability matters addressed by the undertaking’s administrative, management and supervisory bodies (GOV-2) Alleima’s Board of Directors has the highest responsibility for the Group’s sustainability work. This responsibility includes the governance and over - sight of the processes needed to ensure efficiency and due diligence in various areas such as reporting, compliance with regulations and policies, as well as the international principles that Alleima follows. Composition of the Board As set out in Alleima’s Articles of Association, the Board is to consist of a minimum of three and a maximum of ten members, elected by the AGM. The members of the Board are elected yearly by the AGM for the period up until the next AGM. Additionally, the trade union organizations that are represented in the company’s operations have the right to jointly elect two employee representatives and two deputies to the Board. Alleima’s Board of Directors currently consists of seven members elected by the AGM, two employee representatives and two deputies for the employee representatives. The members of the Board have experience from different industrial segments and the financial markets. Moreover, all of the Board members elected by the AGM have experience of the require - ments imposed on a listed company, including through their board assign - ments with other companies. With the exception of the President and CEO, all members elected by the AGM are independent in relation to the company and its management. Sustainability governance Alleima’s Board of Directors has the overall responsibility for sustainability reporting, monitored by the Audit Committee. Group Executive Manage - ment has the overall responsibility for the company’s strategy as well as its sustainability work and agenda, while the divisions are responsible for implementation and follow-up. To coordinate the Group’s sustainability work, Alleima has established a Sustainability Council with representatives from various Group functions and divisions. Its composition, with broad overall expertise, helps integrate sustainability into the company’s various operations. All divisions are repre - sented by their sustainability managers, who bring their familiarity with each business unit to the table. The division representatives also have broad sustainability expertise and knowledge in areas such as water, bio - diversity and sustainable value chains. The Sustainability Council also includes experts in the fields of energy, reporting and analysis, sourcing, HR and communication. The council coordinates the preparation of sustainability governing doc - uments, such as the Sustainability Policy and related procedures, as well as preparing materials that require approval from Group Executive Manage - ment. The head of the governance and sustainability function chairs the Sustainability Council and reports to the President and CEO. The Sustain - ability Council reports to Group Executive Management quarterly. In these reviews, management is informed about issues related to sustainability as well as the company’s progress towards its sustainability targets and plans In electing the Board members, Rule 4.1 of the Code was applied as the company’s diversity policy to ensure selection based on qualifications, experience and relevant expertize. Two of the seven members (approxi - mately 29%) elected by the AGM are women. The Board members are presented in more detail on pages 90-91. Corporate governance and management system Alleima is governed based on its internal corporate governance framework, The Alleima Way, which implements the laws and external rules to be followed and also sets out the internal rules and principles for governance that apply specifically within Alleima. The Alleima Way is based on three blocks: management, core and supporting processes. The processes are governed by policies, procedures and other governing documents describing the common ways of working implemented throughout the entire organization. Sustainability governance is integrated into The Alleima Way and there is a clear structure in place for how sustainability is to be managed within the company. For a more detailed description of The Alleima Way, refer to page 87 in the Corporate governance report. Alleima has also implemented global multi-site certifications according to ISO 45001 and ISO 14001 that covers each major location and workers that perform work for Alleima at these locations. Whether a location is deemed major is based on the risk profile of that facility. If a location is not covered by a certified management system, it will instead be covered by a separate procedure under the Sustainability Policy, which aims to ensure that environmental, health and safety considerations are sufficiently addressed. At the end of 2025, all of the company’s major locations were covered by a management system that was verified by a third party. Division Group Executive Management Board of Directors Division Division Group functions Sustainability Manager Sustainability Council Audit Committee Sustainability Manager Sustainability Manager Sustainability Manager General disclosures (ESRS 2), cont. for further progress towards reaching long-term targets. Sustainability work is reported to the Board in the same way twice per year. During the year, Alleima reviewed its Sustainability Policy and revised its sustainability targets, including introducing science-based targets approved by the Science Based Targets initiative. An ongoing review of the Group’s progress has been provided to management and the Audit Com - mittee on a quarterly basis and to Alleima’s Board. The Group continued to focus on security work during the year, and several security-related programs and campaigns were implemented. The Nomination Committee is responsible for ensuring that Board mem - bers have the requisite expertise. Information from the sustainability function allows the Board to continuously develop their sustainability expertise. The Board participates in the double materiality assessment and helps identify Alleima’s impacts, risks and opportunities. Its sustainability review led, for example, to long-term sustainability risks being included in the risk management process. Sustainability is also a part of Alleima’s strategy, meaning that sustainability issues have been identified as crucial for the company’s continued success. In order to execute the company’s strategy, long- and short-term operational targets are set based on Alleima’s materi - ality assessment. The long-term targets are approved by the Board and management. Monitoring and follow-up of progress towards sustainability targets are integrated into the company’s overall performance review pro - cess. The targets are followed up on a monthly basis and reported to Group Executive Management on a quarterly basis. Short-term targets are followed Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other Alleima Annual Report 2025 | 97
Page 100
Sustainability-related incentive programs Integration of sustainability-related performance in incentive schemes (GOV-3) The Annual General Meeting has adopted guidelines for variable cash remuneration for senior executives, making it conditional upon the fulfillment of defined and measurable criteria. These criteria shall aim at promoting the company’s business strategy and performance as well as its long-term interests, including sustainability. At the beginning of each year, the criteria are proposed by the Remuneration Committee and approved by the Board of Directors, including KPIs and the target ranges deemed relevant for the upcoming measurement period. The criteria may be financial, and non-financial, and shall always be related to business performance. At least 80% of the variable cash remu - neration shall be linked to the financial criteria. With respect to short-term variable remuneration in 2025, it was decided that the CEO and the heads of Group functions are to be assessed on the basis of Group-level KPIs and the heads of divisions are to be assessed on the basis of a combination of Group-level and division-level KPIs. Variable remuneration for the year was based on factors such as the company’s reduction of CO 2 emissions. To achieve maximum fulfillment of the GHG emissions reduction target, Scope 1 and 2 emissions must be reduced to 87,950 tons of CO 2 by 2027, compared with 2025. Due diligence Statement on due diligence (GOV-4) Alleima’s process for identifying, preventing and mitigating negative impacts from the company’s operations are guided by internationally rec - ognized principles, such as the ten principles in the UN Global Compact, the UN Universal Declaration of Human Rights, the ILO Declaration on Fundamental Principles and Rights at Work, the Rio Declaration on Environ - ment and Development, and the UN Convention Against Corruption. Alleima also follows the principles in the OECD Guidelines for Multinational Enterprises, the UN Guiding Principles on Business and Human Rights, the Responsible Minerals Initiative and the UN SDGs. The company is also a signatory to the UN Global Compact (UNGC) and reports on the ten princi - ples in accordance with the UN Global Compact. Further information on Alleima’s due diligence process is presented in the sections below. Core elements of due diligence References to the the sustainability report Pages a) Embedding due diligence in governance, strategy and business model ESRS 2 GOV-2 ESRS 2 GOV-3 ESRS 2 SBM-3 97 98 102 b) Engaging with affected stake - holders in all key steps of the due diligence ESRS 2 GOV-2 ESRS 2 SBM-2 ESRS 2 IRO-1 ESRS S1 97 99 103 115 c) Identifying and assessing adverse impacts ESRS 2 IRO-1 ESRS 2 SBM-3 103 102 d) Taking actions to address those adverse impacts ESRS E1 ESRS S1 106–108 115 e) Tracking the effectiveness of these efforts and communicating ESRS E1 ESRS S1 108–109 116–117 Risk management and internal controls over sustainability reporting (GOV-5) The Board is ultimately responsible for establishing effective systems for risk management and internal control. Sustainability risks are managed in Alleima’s overall risk management process. The Sustainability Council helps develop the risk management process for climate-related risks and opportunities, while the HR function helps with social and workplace risk management and the compliance function helps with risks related to busi - ness ethics. The top risk within internal controls constitute the fact that the program is limited given that it's new. A new risk assessment was conducted during the year which will be used to plan expansion of the program.The program for internal control also includes compliance follow-up, for example with Alleima’s Code of Conduct. General disclosures (ESRS 2), cont. up continuously and the results are used for deciding on improvement plans and actions. Key performance indicators (KPIs) and other relevant information are consolidated at the Group level on a monthly, quarterly or annual basis depending on the type of target or reporting requirement. Policies Alleima has a long history of operating in accordance with applicable laws and internationally recognized principles and is committed to following sustainable business practices. This involves its own internal work as well as its interactions with business partners. Group-wide policies governing the operations are established based on The Alleima Way and the company’s risk management process. These are supported by procedures and process descriptions. Some of the company’s most important policy documents are: — Code of Conduct — Supplier Code of Conduct — Sustainability Policy — People Policy — Procurement Policy — Ethics and Compliance Policy Alleima’s Code of Conduct provides principles for how the company is to do business and establishes responsible, ethical behavior as a require - ment. There is also a separate Supplier Code of Conduct. The Codes of Conduct are based on internationally recognized principles for environ - mental, social and governance aspects, such as the ten principles in the UN Global Compact, the UN Universal Declaration of Human Rights, the ILO (International Labour Organization) Declaration on Fundamental Principles and Rights at Work, the Rio Declaration on Environment and Development, and the UN Convention Against Corruption. Alleima also follows the principles in the OECD Guidelines for Multinational Enterprises, the UN Guiding Principles on Business and Human Rights, the Responsible Minerals Initiative and the UN Sustainable Development Goals (SDGs). The company is also a signatory to the UN Global Compact (UNGC) and reports on the ten principles in accordance with the UN Global Compact. Alleima does not accept any form of harassment, bullying or discrimina - tion. The company has zero tolerance for forced labor, slave labor, and child labor and supports children’s rights and the right to education. All Alleima employees have the right to join a trade union if they so wish. The Board is ultimately responsible for the Code of Conduct, the Sus t ain- ability Policy, and the Ethics and Compliance Policy. Group Executive Management has the ultimate responsibility for the Supplier Code of Conduct, the People Policy and the Procurement Policy. The Code of Conduct and Supplier Code of Conduct can be found on Alleima’s website: www.alleima.com/sustainability/codeofconduct. Alleima’s commitments to respect human rights are also available on the website: www.alleima.com/ sustainability/humanrights. For further information on Alleima’s policies, see Appendix 1, page 125. Metrics and targets Alleima has not set group-wide sustainability targets for the areas of pollu - tion and hazardous substances, water, biodiversity, waste circularity, or areas encompassed by responsible business conduct. These are mea - sured and monitored through the internal framework The Alleima Way. Along with the long-term sustain a bility targets adopted by the Board, The Alleima Way is a comprehensive framework designed to manage and moni - tor all topics defined as material in Alleima’s double materiality assessment. The Alleima Way implements the laws and external rules to be followed and sets out the internal rules and principles for governance that apply specifically within Alleima. The framework is based on three blocks: man - agement, core and supporting processes. The processes are governed by policies, procedures and other governing documents describing the com - mon ways of working implemented throughout the entire organization. The Alleima Way includes several mandatory KPIs that are measured and monitored. Policies and procedures are reviewed on an annual basis, including a follow-up of their appropriateness and effectiveness. The follow-up con - sists of several checkpoints that measure whether the policy in question has been implemented in the organization. Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other 98 | Alleima Annual Report 2025
Page 101
The Board reviews the company’s work in the areas of internal control, risk management, sustainability and compliance on an annual basis, with the latter including a review of the Group’s Code of Conduct and other internal policies. In a situation that does not appear to conform with Alleima’s principles as set out in the Code of Conduct, policies, or currently prevailing law, we expect employees and business partners to bring their concerns to the company’s attention. This can be done through the company’s whistleblower service, Speak Up. Read more on page 102. Read more about internal control and risk management on page 89 (corporate governance report). Strategy, business model and value chain Strategy, business model and value chain (SBM-1) Alleima has identified sustainability as an important success factor and driver of profitable growth. Sustainability is a natural part of all aspects of the company’s operations and is an integral part of the company’s com - mercial strategy. The impact on the environment, people, human rights, and operations are managed equally with other business decisions. For further information on Alleima’s strategy, see page 86. Business model and value chain Alleima’s greatest contribution to sustainability is through its product offer - ing. The company’s products contribute to making customers’ products, applications and processes safer, more efficient and more sustainable. They also enable the transition to renewable sources of energy, the electri - fication of industries and innovations in the medical sector. Alleima’s business model aims to deliver profitable growth and create added value for the company’s stakeholders. With a fully integrated value chain, Alleima has the opportunity to influence and minimize the climate footprint in all phases of production. The company’s upstream value chain consists of suppliers of direct and indirect materials. Downstream, there are customers and end-products. The upstream value chain primarily involves the production of raw mate - rials and energy used in the production process. The company’s circular business model and steel production based on scrap as an input material enables a sustainable manufacturing process, which is largely supplied using recycled metal raw material. In addition to recycled metal raw mate - rial, primary metal raw material and alloy elements are added to varying degrees, depending on the material being produced. Alleima has developed a process with robust procedures to ensure sustainable sourcing of primary materials. Direct material sourcing addresses aspects related to common sustainability risks, such as risks related to mining and refinement of metallic raw materials. The products Alleima manufactures are based on unique material com - positions with properties that meet customers’ high demands in terms of safety, mechanical properties, corrosion resistance, temperature and more. The company delivers tube products in advanced stainless steel and special alloys, products for industrial heating and resistance materials, and ultra-fine medical wire and wire-based components. Alleima also develops a wide range of precision strip steel and valve steel and offers a range of coated strip steel aimed at hydrogen applications. Alleima’s customers mainly operate in the Energy, Chemical and Petrochemical, Industrial, Mining, Construction, Transportation and Medical segments, spanning more than 80 countries. Interests and views of stakeholders (SBM-2) Stakeholder groups Channels for dialogue Purpose of dialogue Own workforce Employee appraisals, webinars, consultation committees To encourage commitment among employees and to understand their sustainability interests Customers Continuous dialogue, trade fairs, customer surveys To understand customer needs, interests and challenges Owners Interim reports, annual report, investor calls, AGM To develop communication methods that attract new share - holders and provide the financial information they need Suppliers Continuous dialogue, supplier evaluations To gain insight into suppliers’ sustainability work and offerings Local communities and workers in the value chain Continuous dialogue, consultation committees To meet the needs of local communities and employees in the value chain and to manage Alleima’s impact on them. General disclosures (ESRS 2), cont. In terms of revenues, the five largest geographic markets are the US, China, Sweden, the UK and Germany. Together, these markets accounted for just over 50% of the company’s total revenues. The company’s employees in these countries represented more than 77% of the total workforce. For further information, see the segment information in Note 2 of the company’s financial information. Alleima’s sustainability focus areas Alleima’s long-term sustainability agenda is based on four focus areas: a responsible employer, climate, circularity, and product offering. A responsible employer Alleima’s success is largely due to the company’s ability to attract, develop and retain the right employees. Workplace health and safety is the top priority and all operations have clear plans for how the work environment and employee safety can be improved. Equal opportunity and development are also prioritized areas that help employees thrive and develop. Climate Electrification and an increased share of biofuels are two components of Alleima’s plan to reduce the climate impact of its own operations. Alleima mainly uses energy in its heating processes in the form of fuel-powered burners in furnaces, for example, and electricity for electric arc furnaces. Since 2013, all of Alleima’s operations in Europe and approximately 98% of its operations worldwide use fossil-free electricity. In some heating pro - cesses, biofuels are also blended in. During the year, blended biofuels accounted for 16% of the energy used in direct combustion. Circularity Alleima primarily melts steel scrap instead of virgin material in its steel production, and the company’s end-products consist of more than 80% recycled steel. Together with the use of fossil-free electricity at the produc - tion facilities, this means that Alleima has a relatively low carbon footprint. Product offering Alleima’s goal is to be an industry leader in sustainability in terms of its operations as well as its product offering. The main contribution to sustain - ability comes from the company’s products and solutions, which allow customers to transition to fossil-free energy, improve their energy efficiency and reduce their climate impact. Interests and views of stakeholders (SBM-2) Alleima’s main stakeholders are its employees, customers, owners and suppliers. The company also has common interests with the communities and organizations where it operates, both locally near its operations and at the national and global levels. There are also more distant stakeholders, such as the employees of its business partners. Communication with stakeholders uses the same channels as other company communication, which includes interim reports, annual reports, investor calls, employee webinars and committees for consultation. The information is taken into account and serves as input for future analyses, such as materiality assessments. The Audit Committe and the CEO are informed of the stakeholders’ views in connection with the annual material - ity assessment. Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other Alleima Annual Report 2025 | 99
Page 102
1) The icons show where Alleima’s material topics mainly occur in the value chain. The illustration is not exhaustive and should be seen as an overview. Material sustainability aspects in the value chain Climate and energy Pollution Water Resource use and waste Growth in products that support increased sustainability Health and safety Diversity Business ethics Upstream Activities in the value chainSustainability aspects 1) Geographic connection Own operations Alleima’s operations consist of producing high value- added products in advanced stainless steel and spe - cialty alloys as well as products for industrial heating. This is primarily done by melting steel in electric arc furnaces as well as hot and cold working products in various stages of completion. 100% fossil-free electricity and more than 80% recy - cled steel are used in the process. A high proportion of metals and other residual products are also recycled in production. Alleima works continuously to increase energy efficiency, reduce waste and ensure health and safety in the workplace. Concentrated primarily in Sweden, Germany, Czechia and the UK in Europe. There are also major production facilities in the US, India and China. Melting of steel in electric arc furnace Hot working Cold workingResearch and development Alleima’s research and devel - opment aims to solve com - plex challenges with advanced material together with customers. Work to develop future material in he form of patented alloy compositions results in inno - vations that support energy efficiency and the energy transition, as well as reduced CO2 emissions and increased circularity, safety and quality of life. Globally.Sandviken. Sourcing and buy-back of raw materials The majority of Alleima’s sourcing consists of acquiring secondary material, including through established buy- back programs with custom - ers. Purchasing fossil-free energy, as well as optimized and fossil-free transporta - tion, contribute to sustain - able sourcing. To reduce the amount of purchased mate - rial and energy, Alleima also focuses on a recycling sys - tem for internal scrap and waste heat recovery. General disclosures (ESRS 2), cont. Biodiversity Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other 100 | Alleima Annual Report 2025
Page 103
Downstream Own operations Sweden and globally. Recycle Metallic materials are circular and have good recycling potential. Buy-back pro - grams and recycling systems allow Alleima to reduce the climate impact of manufac - turing new materials. Product use End-products enable better energy efficiency, reduced CO2 emissions, the energy transition, reduced materials usage, and increased safety and quality of life. Depends on customer or service unit. Marketing and sales Marketing and sales follows the highest ethical standards. In addition to finished prod - ucts, the company offers data from life cycle assess - ments for several products. Globally. Logistics Electric and biofuel-powered vehicles are used for internal logistics and material trans - portation. High demands are placed on external transpor - tation when it comes to fossil-free fuel and to load and route optimization. Transportation is primarily by water, rail and road, and only to a certain extent by air. Globally. The majority of large flows originate in Sweden. General disclosures (ESRS 2), cont. Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other Alleima Annual Report 2025 | 101
Page 104
ESRS standard Topic Negative / positive impact, risk/opportunity Time horizon Where in the value chain Location E1 Climate 106 Climate change mitigation Negative impact, risk Energy Negative impact, risk E2 Pollution 110 Air Negative impact, risk Soil Negative impact, risk Substances of concern and substances of very high concern Negative impact, risk E3 Water 111 Water withdrawals Negative impact, risk Water discharges Negative impact E4 Biodiversity 96 Impacts and dependencies on ecosystems Negative impact, risk Impacts through climate change and pollution Negative impact, risk E5 Resource use and circular economy 112 Resource inflows Negative impact, risk Resource outflows Negative impact, risk n/a Company-specific disclosure 114 Growth in products that support increased sustainability Positive impact, opportunity S1 Own workforce 115 Health and safety Negative impact, risk Diversity Negative impact, risk S2 Workers in the value chain 118 Health and safety Negative impact, risk G1 Business ethics 120 Corporate culture Positive impact, opportunity Corruption and bribery Negative impact, risk Management of relationships with suppliers Negative impact General disclosures (ESRS 2), cont. Upstream DownstreamOwn operations Short Medium Long The table below lists Alleima’s material sustainability topics. The table also shows the type of impact, risk or opportunity they entail, where in the value chain they arise, and within what time horizon. This is Alleima’s first sustain - ability report in accordance with the ESRS, which is why no changes com - pared to the previous year regarding the outcome of the materiality assess - ment are reported. In addition to the sustainability topics covered by the ESRS, Alleima has identified a company -specific disclosure: Growth of products that support increased sustainability. Sustainability topics are incorporated into Alleima’s overall strategic work to ensure that the company’s business model and strategy are resilient to the identified impacts, risks, and opportunities. This work includes analyz - ing Alleima’s ability to manage impacts and risks and to take advantage of opportunities. For further information on Alleima’s strategy, see page 86. Impacts, risks, and opportunities are further described in each topical section of the report. Material impacts, risks and opportunities and their interaction with strategy and business model (SBM-3) Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other 102 | Alleima Annual Report 2025
Page 105
Impact, risk and opportunity management Description of the processes to identify and assess material impacts, risks and opportunities (IRO-1) The materiality assessment aims to assess Alleima’s impact on the outside world and the impact of the outside world on Alleima as well as the risks and opportunities that arise. In 2023, the company carried out its first double materiality assessment, where impacts as well as risks and opportunities were identified. Since then, the materiality assessment has been reviewed annually. The assessment is based on Alleima’s own operations and value chain. The materiality assessment was carried out in the following steps: Step 1 – Mapping stakeholders and the value chain A comprehensive mapping of Alleima’s value chain was carried out in com - bination with an analysis of the operating environment and interviews with stakeholders. The goal was to better understand the company’s context and pave the way for the next step in the materiality assessment. Step 2 – Identifying impacts, risks and opportunities A mapping of possible impacts, risks and opportunities along the value chain was carried out. This resulted in several potential material topics. Internal and external stakeholders were then identified for each topic. Step 3 – Assessment To establish material topics, workshops were held with internal stakehold - ers along with interviews with Group Executive Management and the Board. Materiality thresholds were based on these initiatives, and each topic was weighted based on scale, scope, irremediable character and likelihood. The weighting resulted in a summary of material topics. Step 4 – Validation and documentation The selection was then validated by the finance function and the corporate governance function, along with Group Executive Management and the Board, which resulted in a final collection of topics that are material for Alleima and that will therefore be included in the company’s sustainability reporting. The material topics identified define the scope of Alleima’s reporting. The material topics are also to be reflected in the company’s sustainability targets and strategies and be integrated into its risk and business processes. The materiality assessment covers Alleima’s entire value chain. The pro - cess and method used for the double materiality assessment and the pre - determined threshold for materiality are approved annually by the Board and the Audit Committee. Process Impact materiality The assessment covered Alleima’s impacts on people and the environment, both those caused directly by the company’s own operations and those caused indirectly by activities upstream or downstream in the value chain. These impacts can be either positive or negative, or both. They can also be either actual or potential. Scale defines how grave the negative impact is – for example, conse - quences for people and/or the environment – as well as how beneficial the positive impact is. Scope defines how widespread the impacts are – for example, the num - ber of people or the geographical perimeter impacted. Irremediable character is defined as the possibility of restoring the environment or people impacted to their prior state. Severity is then categorized based on a five-point scale: not applicable, minimal, important, significant or critical. Likelihood categorizes impacts as actual, likely or unlikely. For negative impacts, materiality is defined based on severity (scale, scope and irremediable character) and the likelihood of occurrence. For positive impacts, materiality is defined based on benefits and the likelihood of occurrence. Impact materiality is assessed using due diligence principles to draw conclusions on the severity of the impacts. Financial materiality The assessment of financial materiality covers the financial impacts for Alleima due to external factors. Impacts may arise in the form of risks (nega - tive financial impacts) or opportunities (positive financial impacts). Financial materiality is assessed based on the likelihood and magnitude of the finan - cial impact. Step 5 – Dialogue with stakeholders Several different stakeholder groups were involved in Alleima’s first materi - ality assessment as an independent company back in 2022. Interviews were carried out with a number of external stakeholders (suppliers and customers) as well as with internal stakeholders from different central functions within the Group, from the divisions and from the Board and management. In the 2023 materiality assessment, the results were expanded to include consultations with internal and external specialist experts and other exter - nal sources and reports as well as a geographic mapping of impacts, risks and opportunities. The reviews in 2024 and 2025 included those responsible for the various topic groups as well as the Board and management. Read more about stakeholder dialogues on page 99. Results Topics are deemed material if they exceed Alleima’s defined threshold for likelihood and/or impact, risk and opportunity. The results of the double materiality assessment are reported annually to the Board and the Audit Committee. The results are also used as input for Alleima’s risk management process. The topics deemed material are: — Climate and energy — Pollution — Water — Biodiversity — Circularity — Health and safety — Diversity — Business ethics — Growth in products that support increased sustainability Climate and energy include reporting of Scope 1, 2, and 3 GHG emissions. Circularity covers Alleima’s material inflows and outflows of resources and their circularity, reported as metallic raw materials and waste management. Health and safety encompass both the company’s own workforce and employees in the value chain. Diversity includes the company’s own work - force. Business ethics include compliance and sustainable procurement. Alleima has also defined a company-specific material topic: Growth of products that contribute to increased sustainability. For a complete list of the disclosure requirements covered by the sustain ability report, see Appendix 1 on page 123. General disclosures (ESRS 2), cont. Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other Alleima Annual Report 2025 | 103
Page 106
Climate-related scenario analysis To identify and analyze the company’s main climate-related risks and opportunities, Alleima has conducted a climate scenario analysis. The analysis covered transition risks and opportunities in Alleima’s own operations and value chain as well as physical risks in Alleima’s own operations. For the latter, all of Alleima’s facilities were included. Transition risks were analyzed using the Net Zero (NZ) and Nation - ally Determined Contributions (NDC) Scenario from the Network for Greening the Financial System (NGFS), while RCP8.5 (continued high emissions) and RCP2.6 (significantly reduced emissions) were used for physical risks. The time horizons used were 2020, 2030 and 2050. Physical risk refers to the potential negative impacts and damages caused by climate-related events and changes in the physical environ - ment. These risks are associated with the direct consequences of climate risks such as extreme weather conditions, rising sea levels, heat waves and other natural disasters. Transition risk refers to the financial, legal and operational risks associated with the transition to a low-carbon and sustainable econ - omy. This type of risk arises due to changes in policies, regulations, technologies, market dynamics and consumer preferences aimed at mitigating climate change and reducing GHG emissions. The climate risk analysis focused on the components of risk and expo - sure. Risk is defined as potential sources of climate-related damages, such as rising sea levels resulting in damages or property loss. Expo - sure refers to the presence of people, livelihoods, environmental ser - vices and resources, infrastructure, or economic, social or cultural assets in places and settings that could be adversely affected. The analysis identified expected changes in eight risks for two emission scenarios (RCP2.6 and RCP8.5) and three time horizons (2030, 2050 and 2100) at 55 of Alleima’s facilities. The potential risks assessed were extreme heat, extreme cold, drought/water stress, heavy precipitation, river flooding, coastal flooding, coastal erosion and variable winds. The 55 facilities assessed comprise administrative offices, produc - tion units, sales units, distribution units, and warehouses. The facilities are located in five regions: North America (10), South America (2), Europe (29), the Middle East and South Asia (5), and East Asia (9). The main risks and opportunities were grouped into three opportu - nity clusters and five risk clusters, together providing a description of Alleima’s potential climate-related risks and opportunities. The results of the analysis have been used in Alleima’s climate transition plan to ensure that the right activities are implemented to mitigate the company’s climate impact. Identified risk/opportunity Category Extreme heat Physical risk Heavy precipitation Physical risk Drought Physical risk Water stress Physical risk Floods Physical risk Reputational damage and loss of trust due to failure to meet sustainability expectations Transition risk Costs associated with compliance with sustainability regulations, including inconsistent regulations between regions and legal disputes Transition risk A lack of investment and/or insufficient speed in developing the technologies needed to reduce emissions Transition risk Sustainable growth through alignment with the European Green Deal, green financing and opportunities to attract talent Transition opportunity Commercialization of products that support the climate transition Transition opportunity General disclosures (ESRS 2), cont. Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other 104 | Alleima Annual Report 2025
Page 107
Environment Alleima’s operations currently have a relatively low carbon footprint with in our industry, primarily due to the high percentage of recycled steel used production and a large proportion of fossil-free electricity. The areas deemed most material are climate and energy, pollution, water, biodiversity, and circularity. The EU Taxonomy The EU Taxonomy is a classification system that aims to identify whether economic activities contribute to achieving the EU’s environmental objec - tives. For the 2025 reporting, the company has chosen to apply the new delegated act (Delegated Regulation 2026/73), which was published in the EU Official Journal in January 2026. Reporting principles The following section describes how the KPIs were calculated. Turnover Turnover was derived from the consolidated income statement on page 41 and reconciled with reported revenues of the group. Total turnover aligns with revenues in the income statement. The identification of eligible turnover was determined based on a screening of significant revenue streams that comply with the screening criteria. Manufacture of iron and steel was identified. Alleima’s steel manufacturing and the reported turnover originating from its supply chain are included based on the fact that they comply with the criteria for the manufacture of iron and steel, including its sub-groups, which for the company include, for example, manufacturing of tube prod - ucts, precision strip steel, ultra-fine wire for medical devices and material for heating technology. No other activities that generate significant reve - nue streams comply with any of the classifications listed in the Taxonomy. The year-on-year development for revenue-generating activities is pre - sented in Note 2 on page 51. CapEx CapEx was derived from Group Notes 12–14 detailing intangible assets, property, plant and equipment, and leases, on pages 58–61. CapEx in the company’s steel manufacturing facility and the units to which it supplies are considered Taxonomy-aligned given that they are considered necessary to maintain Taxonomy-aligned activities. Total CapEx for the year included reported new acquisitions and business combinations pertaining to intan - gible assets, excluding goodwill, property, plant and equipment, and leases. CapEx reported as Taxonomy-aligned includes plant and machinery, assets under construction, and equipment, tools, fixtures and fittings amounting to SEK 23 million (30), SEK 632 million (594) and SEK 16 million (21), respectively. The difference in Taxonomy-aligned CapEx compared with the previous year is due to production-related CapEx. OpEx OpEx is determined based on items in the consolidated income statement. Deductions for non-eligible OpEx have been made. Eligible activities include the steel manufacturing facility and the units in the company to which it supplies. OpEx reported as Taxonomy-aligned includes SEK 22 million (25) related to research and development. Other expenses related to service and maintenance of Taxonomy-aligned activities include costs for repairs and maintenance, and short-term leases. These are included in an amount of SEK 1,448 million (1,487). The increase was mainly attributable to repairs and maintenance. Assessment of compliance with Regulation (EU) 2020/852 The following section summarizes the company’s assessment of its compli - ance with the regulation, detailing the key aspects of the process to identify and categorize the company’s core operations as generally set out in the EU regulation on the establishment of a framework to facilitate sustainable investment. The review was conducted to identify Taxonomy-eligible activities. The review found that the company’s manufacture of iron and steel meets the criteria as an eligible economic activity. The steel material is manufactured by two subsidiaries. These are classified as manufacturing electric arc fur - nace (EAF) high-alloy steel, which is a Taxonomy-eligible technology. The company further processes the steel material into finished products, which the delegated act describes as sub-groups of the category “manufacture of iron and steel.” The sub-groups are based on the European Statistical Classification of Economic Activities (NACE). The technical screening criteria for climate change mitigation and the emissions reporting to EU Emissions Trading System (EU-ETS) are aligned. Testing of alignment with the criteria for the EU environmental objective for climate change mitigation was therefore based on reported and verified GHG emissions in the product benchmark. The subsidiaries that produce steel reported a GHG intensity of 98 kg and 149 kg of CO 2 per ton of steel produced, respectively. When tested against the technical screening criteria, both were found to meet the listed thresholds for steel manufactured using an electric arc furnace. To a limited extent, the manufacturing operations are supplied with purchased steel, for which the company has not been able to verify that the technical screening criteria have been met. This share was reported as not Taxonomy- aligned. Alleima is only covered by the environmental objective of making a sub - stantial contribution to climate change mitigation through the economic activity of manufacture of iron and steel. This means that the risk of double counting has been eliminated. Do no significant harm Climate Change Adaptation A climate change risk analysis and assessment has been carried out. An updated climate change analysis and assessment was carried out during the year. The analysis confirmed that water-related risks, such as flooding during heavy rainfall, constitute the main climate-related risk for steel production. Sustainable use and protection of water and marine resources An environmental impact assessment has been carried out in accordance with the Water Framework Directive (2000/60/EC) in connection with the permit application. The identified risks were included as a condition in the permit. All conditions have been met. Pollution prevention and control Within the framework of chemical management and the established chemi - cal register, the review showed that no significant amounts of substances listed in Appendix C are used, manufactured or released to the market. The current permit originates from an application that was based on the best available techniques. Protection and restoration of biodiversity and ecosystems An environmental impact assessment has been carried out in accordance with 2000/60/EC in connection with the permit application. The identified risks were included as a condition in the permit. All conditions have been met. Minimum safeguards Alleima has ensured that it has the governing documents, including policies, procedures and instructions, needed to conduct its business in accordance with established guidelines and principles for companies and human rights. This included examining whether the company has explicitly stated its commitment to comply with these guidelines and principles and whether requirements and expectations are included in the company’s Codes of Conduct for its own operations and the value chain. Controls have been carried out to ensure that the company’s policy documents and actual procedures comply with the commitments made and that the company’s policies are thus followed. The review concluded that the company’s commitments, governing documents and actual proce - dures entail that these minimum safeguards have been met. The Taxonomy tables are presented in Appendix 5, on page 129. Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other Alleima Annual Report 2025 | 105
Page 108
Topic Negative / positive impact, risk/opportunity Where in the value chain Climate change mitigation Alleima generates Scope 1 and 2 GHG emissions in its production and through the use of fuel and energy, which represents an actual negative climate impact. However, the largest share of its emissions are Scope 3 emissions and are mainly linked to the purchase of raw materials as well as capital goods, transportation, business travel and energy-related activities. A shortage of recycled steel could result in a greater need for virgin material, which would further increase Scope 3 emissions. The company faces several financial climate-related risks, including the fact that the price of emission rights has a direct impact on production costs. The transition to net zero requires both short-term and long-term investments. Rising electric - ity prices and stricter regulations concerning non-renewable energy could also have a financial impact, while cheaper renewable electricity could create opportunities. In the long term, a tax on Scope 2 emissions could be introduced, which would have a financial impact. In addition, the climate transition in the value chain could lead to increased costs, supply disruptions and price fluctuations. Growing demand for recycled or low-carbon steel could also drive up input prices. Negative impact, risk Energy Alleima’s operations, particularly its production processes, are inherently energy-intensive, resulting in a negative impact linked to energy consumption. The company is facing significant financial risk due to rising energy prices and inefficient energy consumption. At the same time, there is a certain financial potential to be leveraged by improving energy efficiency. Energy shortages and high energy costs are existing risks that are managed within the framework of the company’s risk management process. To reduce its climate impact and secure access to sustainable energy, Alleima’s steel production is strategically located in an area where fossil-free electricity is available to power the electric arc furnace. Negative impact, risk Climate change (ESRS E1) Challenges Implementing major changes in the production process entails risks. Alleima’s production flow impacts all aspects of its operations, which means that downtime and interruptions have major consequences. For example, when changing energy sources, inputs or workflows, major efforts are required to ensure that both the process and the end-product achieve the desired quality. Alleima’s focus is on managing the transition while continuing to develop the company’s business and ensure the delivery of high-quality products to customers. By adopting a controlled approach in the conversion activities, the company can secure its production process, while continuing to manu - facture high-quality products. Competition for scrap is growing, limiting the supply and making it more difficult for Alleima to secure the required volumes. If this trend continues, it could result in both higher costs and increased emissions. At present, there are only a few sources of primary iron raw material with low climate impact, which means that Alleima must continue to purchase various grades of secondary raw material (ferrous scrap) to produce steel. Strategy Transition plan for climate change mitigation (E1-1) Alleima has set net-zero targets to 2050 that were verified by the Science Based Targets initiative (SBTi) in 2025. The targets for Scopes 1 and 2 are in line with the 1.5°C target set by the Paris Agreement, and the target for Scope 3 is linked to the goal of limiting global warming to well below 2°C. A transition plan has been established to achieve these targets. Sustainability and reducing climate impact are closely linked to Alleima’s business strategy and operations. The transition plan has been presented to the Board and approved for implementation. The investments required will be handled within the framework of the company’s regular investment process. Limiting Alleima’s climate impact requires efforts and actions to reduce GHG emissions or support the removal of GHG from the atmosphere. This involves mitigating or slowing down climate change by reducing the drivers of anthropogenic GHG emissions (emissions caused by human activity). Reducing the amount of GHG emissions to the atmosphere will limit the increase in the global temperature and the potential impacts of climate change. Examples of activities: — Transitioning to renewable energy sources in the company’s own operations — Phasing out fossil fuels in the transportation sector — Purchasing low-carbon products and services Energy efficiency also plays an important role in climate change mitigation since it reduces the overall demand for energy, leading to lower GHG emis - sions. Examples of activities to increase energy efficiency: — Increasing the efficiency of production and distribution processes — Constructing or adapting buildings to reduce energy loss — Reducing water use and consumption Although Alleima has energy-intensive production processes and emits greenhouse gases (GHG) in its production and through the use of fuel and purchased goods, several of the company’s products also contribute to lower emissions among customers. Upstream DownstreamOwn operations Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other 106 | Alleima Annual Report 2025
Page 109
Impact, risk and opportunity management Policies related to climate change mitigation and adaptation (E1-2) Alleima’s Sustainability Policy covers all units in the Group and describes the company’s management and oversight of sustainability in order to ensure regulatory compliance. Alleima’s material impacts, risks and opportunities are related to climate change mitigation and energy. All activities are to be incorporated into implemented programs aimed at improving energy efficiency and reducing GHG emissions. Improvement initiatives should not be solely limited to the company’s manufacturing operations. For facilities in high-risk areas with severe weather conditions or areas where other unplanned events linked to climate change could occur, the business continuity planning process should include adaptation actions or operational modifications. Adaptation as a result of slower changes should also be taken into account in the strategic planning process. As far as possible, the energy used should come from fossil-free sources. Efforts to have renewable energy sources installed at or near Alleima’s facilities should be supported. Modes for transporting materials (internally, between Alleima facilities and to customers) with a low environmental and carbon footprint are to be promoted. Where economically viable alternatives are not available, efforts should be made to encourage transportation service providers to lower their environmental and carbon footprint. The process for assessing the climate impact of suppliers is laid out in the Supplier Code of Conduct and the Procurement Policy. For further information on Alleima’s policies, see page 98. Actions and resources in relation to climate change (E1-3) Management of physical and transition risks and opportunities Alleima can become more resilient to climate risks and opportunities by implementing mitigation and adaptation actions. Previous actions and strategies can be incorporated into a climate transition plan that further develops Alleima’s resilience strategy. Extreme heat Reviewing working hours and schedules can help to ensure the health and safety of workers. Ensuring refrigeration equipment is installed and workers have reliable access to water and cool places to rest can also contribute to the health and safety. Heavy precipitation and flooding Along with servicing drains, gutters and manholes, continuous building inspections and maintenance reduce the risks of negative impacts of heavy precipitation and flooding. Drought Alleima is working to improve the water efficiency of its operations in order reduce its water consumption. This also includes reusing water, for exam - ple by installing solutions to collect water from production and stormwater. Actions to mitigate climate change Mitigation refers to the efforts and actions taken to reduce GHG emissions or support the removal of GHG from the atmosphere. This involves imple - menting policies and practices aimed at mitigating or slowing down climate change by reducing the drivers of anthropogenic GHG emissions (emissions caused by human activity). Alleima has established a climate transition plan to manage risks and mitigate the company’s climate impact, read more on page 106. Several actions have been planned to manage the climate-related risks identified. 0 160,000 140,000 120,000 100,000 80,000 60,000 40,000 20,000 SEK M 2019 Base Year 2020 2021 2022 2023 2024 2025 Other Kanthal Electricity 100% fossil free electricity Tube: Electrification of car furnace Strip: Biofuels Tube: Facilitate biogas in furnace Tube: Electrification of pit furnace Tube: Replace LPG with hydrogen Kanthal: LPG phase out Kanthal: Fuel oil phase out Tube: Electrification of walking beam furnace Projected emissions 2030 2030 Target Phase out fuel oils in Sandviken 100% fossil free electricity 2030 potential beyond plan Beyond plan 61,340 -59% Target 2030 68,423 -54% 2025 89,380 -40% Transition plan Scopes 1 and 2 Climate change (ESRS E1), cont. Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other Alleima Annual Report 2025 | 107
Page 110
Actions Scopes 1 and 2 The transition plan defines concrete activities intended to help achieve the company’s targets. Many of these activities involve switching from fossil fuels to biofuels, electricity or hydrogen in heating processes. As of the start of 2025, the company’s emissions had already been reduced by 37% compared with the base year. The actions taken to achieve this reduction were relatively simple to implement, but gave considerable leverage and thus had a major impact. The main changes involved starting to blend in biofuels and making conscious choices when purchasing electricity. The company’s operations, and therefore its emissions, vary from divi - sion to division. The majority of Tube’s emissions fall within Scope 1, arising from the production of primary products. In Kanthal, electrification plans are in place, especially in Hallstahammar, where the focus is on phasing out liquefied petroleum gas (LPG) and fuel oil. In 2025, Kanthal completed its initiative regarding electricity procurement and achieved 100% fossil -free electricity. Within Tube, a walking -beam furnace used for heating drill steel—currently powered by LPG—has been prepared to handle fuels such as natural gas, hydrogen, and/or biogas. Investments in infrastructure for supplying these media remain to be carried out. The project is currently paused and is planned to resume in 2027. Additional conversions from LPG to biopropane will be carried out in coming years, and there are plans in place to convert several furnaces from fossil fuel operation to hydrogen or electricity in 2027. There are also plans to convert a large furnace at the Sandviken plant used for heating materials for hot forming. The conversion is expected to contribute to a reduction of 12,000 tons of CO 2 and will thus have a major impact on the company’s total Scope 1 and 2 emissions. By 2030, Scope 1 and 2 emissions are expected to be reduced by 54% compared with the base year. There is also scope for additional activities – such as the electrification of two plants in the US that have not yet fully transitioned to fossil-free elec - tricity and the phase-out of fuel oil used to supplement electricity at the Sandviken plant – but these activities are not included in the primary climate transition plan. In Scopes 1 and 2, the company generates approximately 25,000 tons of process-related emissions per year, which could potentially give rise to a lock-in effect. These emissions are linked to the steel production process and stem from the blending of coal, which causes CO 2 emissions. Alleima works with its suppliers to identify alternative materials, but faces a chal - lenge since there are currently no other materials that give the end-product the same properties. Actions Scope 3 The largest Scope 3 climate impact occurs upstream in the value chain, where raw materials represent the main source of emissions. Since these emissions still require a higher level of assumptions, it is difficult to be as precise for them as for Scopes 1 and 2. To limit Alleima’s Scope 3 climate impact, the focus is on working with suppliers to gain access to alternative materials with a lower climate impact, while at the same time maintaining the quality of the end-products. This includes gaining access to scrap with the right chemical composition and striving to buy back the company’s own products and scrap from cus - tomers where possible. Climate change (ESRS E1), cont. Targets and metrics Targets related to climate change mitigation and adaptation (E1-4) Alleima has set net-zero targets to 2050 that have been verified by the SBTi, a third party that reviews and confirms targets. Alleima continuously works to identify activities that could be carried out to further reduce emissions in its own operations. These include gradually shifting technologies in processes for heat treatment and increasing the share of fossil-free electricity and biofuel when possible. The upstream value chain is also continuously mapped out to identify steps that would result in reduced emissions, which is a prerequisite for Alleima to reach net- zero emissions over time. Targets Outcome 2025 Status of target Reduce Scope 1 and 2 CO 2 emissions by 54% by 2030. 4% decline year-on-year. 40% reduction achieved since 2019. Reduce Scope 3 CO2 emissions by more than 28% by 2030. 12% decline year-on-year. 18% reduction achieved since 2019. Energy consumption and mix (E1-5) MWh 2025 2024 Total fossil 314,988 320,806 Of which petroleum products 131,237 136,937 Of which natural gas 155,063 149,330 Of which purchased electricity and heat 25,157 31,370 Of which self-generated electricity 3,531 3,169 Total nuclear 520,884 536,207 Total renewable 180,224 192,146 Of which biofuels 55,164 72,742 Of which purchased electricity 124,724 119,333 Of which self-generated renewable electricity 336 71 Total energy consumption 1,016,096 1,049,159 Energy intensity, MWh / SEK M revenue 55 53 Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other 108 | Alleima Annual Report 2025
Page 111
Climate change (ESRS E1), cont. Comments on outcome 2025 Alleima emits GHG in its production and through the use of fuel. The company has secured volumes of biogas that are blended with the fuel used in furnaces and heating processes and has thereby been able to reduce the amount of fossil fuels. In addition, hydrogen gas cutting tests have been performed with positive results. CO2 emissions from the company’s own operations in 2025 amounted to approximately 89 ktons, a decrease from the previous year. Compared with the base year 2019, the total decrease was 40%. Emissions arise from the company’s direct energy consumption, primarily within production. CO 2 emissions from indirect energy sources amounted to approximately 8 ktons in 2025, which corre - sponds to approximately 9% of total own emissions. 69% of the total energy consumption came from fossil-free energy sources in 2025, of which 51% from nuclear sources. Alleima’s operations are energy intensive. An energy management system has been established to ensure efficient energy consumption. In 2025, Alleima used 632 GWh of fossil-free electricity, correspond - ing to 98% of the total electricity purchased. Reporting principles See Reporting principles on page 125. Gross Scopes 1, 2, 3 and Total GHG emissions (E1-6) Thousand ton CO₂eq 2025 2024 Change, % Base year 2019 Change against base year, % Target 2030, % Target 2050, % Scope 1 Total 82 83 -2 Share from emissions trading schemes, % 74 73 1 Scope 2 Total (market-based) 8 10 -25 Total (location-based) 63 61 3 Scope 3 Total 486 553 -12 595 -18 -28 -90 (net-zero) Purchased goods and services 384 450 -15 Capital goods 11 19 -39 Fuel- and energy-related activities 28 28 -2 Upstream transportation and distribution 40 32 25 Waste generated in operations 4 5 -15 Business travel 4 3 25 Employee commuting 8 8 2 Upstream leased assets – – Downstream transportation and distribution Not disclosed Not disclosed Processing of sold products 6 7 -15 Use of sold products – – End-of-life treatment of sold products 1 1 -27 Downstream leased assets 0 0 -6 Franchises – – Investing activities – – Total emissions Total emissions (market-based) 575 646 -11 Total emissions (location-based) 631 697 -9 Own operations Scope 1 and 2 (market-based) 89 93 -4 149 -40 -54 -90 (net-zero) kton CO₂eq 2025 2024 Biogenic emissions 18 21 tCO₂eq/SEK M revenue 2025 2024 GHG intensity (market-based) 31 33 GHG intensity (location-based) 34 35 Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other Alleima Annual Report 2025 | 109
Page 112
Pollution (ESRS E2) Impact, risk and opportunity management Policies related to pollution (E2-1) Alleima’s Sustainability Policy covers all units in the Group and describes the company’s management and oversight of sustainability in order to ensure regulatory compliance. Where applicable, the prevention of pollution from the company’s oper - ations and the mitigation of negative impacts related to air and soil pollution are included as part of the environmental management activities of all facil - ities with manufacturing activities. The environmental management system is to include relevant requirements and conditions for operation in accor - dance with the facility’s permit. Use of potentially harmful substances is to be minimized and efforts are to be made to find replacements. The use of substances of very high con - cern is to be phased out as far as possible. Chemical risks are to be identi - fied and proactively managed to eliminate or reduce the risk of harm to human health and the environment. The process for assessing the impact of suppliers on the company’s pollution prevention and control is laid out in the Supplier Code of Conduct and the Procurement Policy. Actions and resources related to pollution (E2-2) Alleima carries out systematic remediation work related to pollution and in accordance with its granted environmental permits where required. Engi - neering operations have traditionally generated large emissions of pollut - ants to air, soil and water. As technological developments and continuous improvements are made, more measures and resources related to moni - toring and control are needed to ensure that the operations are conducted in accordance with applicable permits. The design of these control pro - grams is based on the specific operations in question, following consulta - tions regarding the principles and regulations in place in each location. For example, the largest operations in Sandviken, Sweden, have a rigorous self-inspection program in place that includes control procedures where responsibility, sampling programs and procedures for actions, training, etc. form part of a management system. Comments on outcome 2025 The conditions for emissions to air were met in 2025, with a few exceptions of elevated dust and metal levels in filters, elevated level of hydrogen fluoride from pickling plant and elevated nitrogen oxide emissions from a furnace. Other non-continuous measurements did not reveal any elevated levels. Continuous NOx measurements did not reveal any elevated levels. Continuous mercury measurements did not reveal any elevated levels. Nickel and cobalt are included in several classes of substances of concern and are included in reported quantities used and emitted as part of products. Nickel and cobalt are not classified as substances of very high concern. Endocrine disruptors or substances of very high concern to the environment are not handled at any of Alleima’s facili - ties. While emissions of substances of concern to the environment occur, emissions of substances of very high concern are very low. Topic Negative / positive impact, risk/opportunity Where in the value chain Pollution of air Alleima’s production facilities in Sandviken, Söderfors and Hallstahammar require permits and are subject to environmental legislation, including emissions rules. Several of the facilities release substances listed in Annex II of the EU Emission and Transfer Register Regulation, exceeding the reporting thresholds. Within the Group, none of the facilities in the Strip division are subject to the regulation, while the Kanthal division has one facility that is subject to the regulation (Hallstahammar). In the Tube division, an investigation is ongoing to determine how many facilities are affected. Stricter environmental requirements and changes in permit processes could have a financial impact for Alleima, especially if the requirements result in increased costs or restrict its operations. Negative impact, risk Pollution of soil Alleima has an actual negative impact on soil, particularly in connection with its production facilities in Sandviken and Hall - stahammar, where substances have been detected in the soil. This gives rise to a financial risk linked to costs and liabilities for past and potential new pollution. The company also faces a financial risk related to stricter environmental requirements and licensing rules. Negative impact, risk Substances of concern and substances of very high concern Alleima’s production uses certain substances that are restricted by law and some that are on the candidate list of substances of very high concern under the EU Regulation on Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH). However, our handling of these substances is exempt since they are used in industrial processes. Stricter environmental requirements and permit processes may entail a financial risk due to increased costs for finding replacement components. However, none of Alleima’s products contain substances that are on the candidate list or require special permits, which reduces the regulatory risk associated with the contents of the products. Negative impact, risk Targets and metrics Targets related to pollution (E2-3) See page 98. Pollution (E2-4) Ton 2025 2024 NOx 156 156 Hazardous air pollutants ( Cd, Cr, Ni ) 1 0 Zinc 2 0 SOx, non-methane volatile organic compounds (NMVOC) and particulate matter are monitored and are below the reporting thresholds. Substances of concern and substances of very high concern (E2-5) Ton 2025 Substances of concern 10,223 Substances of very high concern 16 For details, see table on page 131. Reporting principles See Reporting principles on page 125. Alleima has an impact on air, water and soil pollution both through its own production and through activities upstream in the value chain. In addition, some of the substances used in its operations are classified as substances of concern or very high concern. Direct pollution is mainly linked to the company’s own production, while indirect pollution occurs upstream, for example during the extraction of raw materials. The use of fossil fuels and emissions from production pro - cesses contribute to these environmental impacts. Upstream DownstreamOwn operations Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other 110 | Alleima Annual Report 2025
Page 113
Targets and metrics Targets related to water and marine resources (E3-3) See page 98. Water consumption (E3-4) Water and effluents 2025 2024 Freshwater intake by source, 1,000 m 3 Tota l Of which water stressed areas Tota l Of which water stressed areas Surface water 1,825 0 1,918 0 Groundwater 604 48 475 44 Purchased water 1,306 7 1,094 7 Collected rainwater 0 0 0 0 Total 3,735 55 3,487 51 Water discharge 419 21 640 17 The water intensity, in cubic meters per million euro revenue amounted to 2,218. Water (ESRS E3) Impact, risk and opportunity management Policies related to water and marine resources (E3-1) Alleima’s Sustainability Policy covers all units in the Group and describes the company’s management and oversight of sustainability in order to ensure regulatory compliance. Where applicable, water sourcing, use, discharge and treatment are included as part of the environmental management activities of all facilities with manufacturing activities. The environmental management system is to include relevant requirements and conditions for operation in accordance with the facility’s permit. Commitments to reduce water consumption are to be established for the company’s own operations as well as upstream and downstream in the value chain where there are water supply threats or for facilities located in areas of high water stress. The process for assessing the impact of suppliers on the company’s water resources is laid out in the Supplier Code of Conduct and the Pro - curement Policy. Actions and resources related to water and marine resources (E3-2) A previous reviews of water stress according to company geography was updated during the year. The outcome confirmed the previous understand - ing of the locations where we operate. Based on the results, resources have been allocated to additional studies to map out and understand the situation at our operations in the Gujarat and Tamil Nadu regions in India. The goal of the work is to establish accurate facts and provide local man - agement with good knowledge. This would allow correct and appropriate measures to be decided on and implemented locally, if necessary. Comments on outcome 2025 During the year, water use increased by 7%, mainly due to higher intake at the operations in Sandviken. Water use in water -stressed areas accounted for just over 1% of total water withdrawal and amounted to 55 thousand cubic meters (51). Topic Negative / positive impact, risk/opportunity Where in the value chain Water withdrawals Alleima depends on water during production, especially for cooling. Water use, discharge and treatment are monitored according to environmental management protocols and regulated by local permits. The majority of the water is recircu - lated in closed systems, with varying flows depending on the level of pollution. One of the facilities, in Mehsana, India, is located in an area of high water stress. The groundwater in the area was classified as overexploited in 2023, putting it at risk of a future water shortage. Impacts also occur upstream in the value chain, since raw material extraction requires large amounts of water. While Alleima reduces its water footprint by basing approximately 80% of its production on recycled steel, it remains dependent on virgin alloy materials. Limited water supply poses an economic risk since water scarcity can lead to higher production costs or operational disruptions. Negative impact, risk Water discharge Alleima has extensive discharge of cooling water in own operations. The cooling water can be discharged into a surface water recipient, in accordance with local regulations. The discharge of water is monitored through the Environmental Management System. In the upstream value chain, especially in the mining of raw materials there is significant discharge of water from production. Estimated ground-water discharge to projected copper-nickel mines ranges from less than 95 to 7,500 liters per minute, depending on the location and type of mining activity. There is a financial risk connected to water discharge related to stricter regulations and/or permits. Negative impact Reporting principles See Reporting principles on page 125. Alleima depends on water in its production processes, especially for cool - ing. This water is also discharged. Significant water consumption also occurs upstream in the value chain. Upstream DownstreamOwn operations Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other Alleima Annual Report 2025 | 111
Page 114
Actions and resources related to resource use and circular economy (E5-2) To increase circularity, Alleima – in collaboration with customers – has set up buy-back programs where we buy back materials from end-of-life prod - ucts and waste from customer manufacturing. Slag from steel manufacturing is the largest waste category. Alleima works continuously to reduce the amount of slag that goes to landfill and to instead identify possible alternatives. Slag, for example, has been used as a replacement for sand in the steel mill and as a construction material for depot surfaces, both with good results. At Alleima’s industrial location in Sandviken, Sweden, there are now multiple surfaces paved with asphalt in which slag produced in-house has replaced natural materials. The surfaces have proven to hold up well despite the stress from heavy vehicles and mechanical wear and tear. Another area where waste is reused is magnesite-based tundish lining, which is sent externally for processing. The material is then used together with lime as a substitute for dolomite. Alleima’s ambition also includes taking responsibility for waste generated from purchased goods as well as downstream impacts from packaging materials and the company’s products. This could involve activities within sourcing to identify recyclability in products and include this knowledge in purchasing decisions. It also involves engaging with waste management suppliers to understand what recovery operations are accessible in different regions where Alleima is present. Resource use and circular economy (ESRS E5) Impact, risk and opportunity management Policies related to resource use and circular economy (E5-1) Alleima’s Sustainability Policy covers all units in the Group and describes the company’s management and oversight of sustainability in order to ensure regulatory compliance. Alleima’s material impacts, risks and opportunities are related to waste and resource inflows. All facilities have a responsibility to use materials and other resources as respectfully and efficiently as possible in order to reduce the need for virgin materials and energy consumption. At Alleima, 100% of recycled materials must be correctly sorted and labeled to maintain the high value and quality. All generated scrap shall remain within Alleima for recycling. The sale of secondary raw materials is not permitted unless approved by the direct purchasing organization. Efforts to minimize waste from product manufacturing, operational pro - cesses and office environments are to be encouraged. All waste is to be recycled or reused. If neither recycling nor reuse is possible, the disposal of waste to landfill is to be kept to a minimum. The facilities are to actively look for internal or external solutions for recycling or reuse of waste arising from their own operations. Efforts are to be made to ensure that all packaging materials, both for internal use and for delivery to customers, are based on renewable and recyclable materials. The use of plastics should be avoided. If plastics are used, they should be made from recycled materials and be designed to be reused or recycled after use. When purchasing consumables (indirect materials) for operating and office environments, sustainability criteria such as renewability, reusability and environmental impact should be taken into consideration. The process for assessing the impact of suppliers on the company’s resource use and circularity is laid out in the Supplier Code of Conduct and the Procurement Policy. Topic Negative / positive impact, risk/opportunity Where in the value chain Resource inflows Alleima has an environmental impact through its use of materials and is dependent on both virgin and recycled metal raw materials. Its production is based on advanced materials technology, and its main inputs are various metals and alloys. There are currently no regulatory restrictions on these raw materials. Since its production is largely based on secondary materials, Alleima has a positive impact by contributing to circular material use. At the same time, there are financial risks linked to the supply and price of scrap metal and to future demands for a more circular business model. Expanding the use of recycled materials also represents a financial opportunity since metals can be reused several times without deteriorating in quality, thus creating good conditions for circular resource efficiency. Negative impact, risk Resource outflows Alleima’s production generates relatively large volumes of waste, some of which is highly toxic. Depending on customers’ operations, significant amounts of waste are also generated upstream – and potentially downstream – in the value chain. There is a financial risk linked to stricter rules regarding waste management and a risk of fines for improper disposal. Negative impact, risk Alleima is highly dependent on material inputs, such as primary and secon - dary raw materials (scrap). The company also produces significant volumes of waste in its production operations as well as upstream and downstream in the value chain. However, Alleima produces sustainable and circular products, which means that its resource outflows are less significant. Upstream DownstreamOwn operations Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other 112 | Alleima Annual Report 2025
Page 115
Targets and metrics Targets related to resource use and circular economy (E5-3) Alleima strives to continuously increase the amount of recycled steel in the products it manufactures. Targets Outcome 2025 Status of target More than 80% recycled steel in finished products 80.8% Meets target Resource inflows (E5-4) Thousand ton 2025 2024 Primary metallic material 44 47 Secondary metallic material 185 195 Share recycled, % 80,8 80,8 Resource use and circular economy (ESRS E5), cont. Comments on outcome 2025 The circularity of input materials amounted to approximately 81%, which meant that the level from the previous year was maintained despite lower volumes and continued focus on high -alloy materials and specialty steels. Waste circularity declined for total waste but continued to improve when slag volumes are excluded, reaching 78% (74). For total waste, the breakdown between circular and non-circular waste was 36% / 64%. Reporting principles See Reporting principles on page 125. Resource outflows (E5-5) 2025 2024 Thousand ton Hazard - ous Non- hazardous Hazard - ous Non- hazardous Total waste diverted from disposal. By recovery operations: 10,477 31,564 10,990 31,985 of which reuse 72 2,885 73 3,390 of which recycling 9,052 27,048 10,072 27,080 of which incineration with energy recovery 1,353 1,631 845 1,516 Total waste directed to disposal. By treatment type: 6,364 69,282 7,553 54,998 of which incineration 776 74 781 18 of which landfill 5,317 68,869 6,427 54,469 of which other management methods 271 339 346 512 Total hazardous / non-hazardous 16,841 100,847 18,543 86,984 Totalt waste, 1,000 ton / circularity, % 117,688 36 105,527 41 Excluding slag, 1,000 ton / circularity, % 49,008 78 49,423 74 Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other Alleima Annual Report 2025 | 113
Page 116
Hydrogen and renewable energy — Hydrogen refueling stations — Concentrated solar power — Biogas — Offshore wind — Carbon capture and storage — Geothermal energy Electrification — Electrification of industrial heating within: — Steel industry — Chemical and petrochemical industry — Lithium-ion industry Energy transition — Hydrogen fuel cell technology — Energy-efficient compressor valve steel — Small modular nuclear reactors Innovations for improved quality of life — Cochlear implant — Neurostimulation — Diagnostics and sensing — Remote monitoring Product offering and R&D enable new technologies Impact, risk and opportunity management Alleima enables sustainable development through its broad product offer - ing and plays an important role in the transition to a more sustainable soci - ety. The company’s products contribute to developing advanced technolo - gies required to address future sustainability challenges. Alleima’s goal is to be a leader in sustainability and for the product port - folio for green transition applications to grow faster than for other products. Policies Alleima’s Sustainability Policy covers all units in the Group and describes the company’s management and oversight of sustainability in order to ensure regulatory compliance. The policy provides guidelines for how Alleima is to boost the growth of products that support increased sustain - ability. Targets and metrics Products from Alleima play an essential role in developing new technolo - gies. By continuously investing in developing the product offering, Alleima strives to be a market leader within sustainability and circularity. Alleima’s overall target is to grow the product portfolio of applications for the green transition, electrification, energy efficiency and improved quality of life at a faster pace than total growth. Targets Outcome 2025 Status of target Grow the product portfolio of applications for the green transition, electrification, energy efficiency and improved quality of life at a faster pace than total growth. The sustainable product portfolio1) amounted to 25% of the Group’s total reve - nues, corresponding to growth of -2%, compared with -5% for the Group’s total growth. Revenues within the prod - uct portfolio declined to a lesser extent than total revenues, which resulted in the share increasing to 25% (24%). 1) Sustainable product portfolio includes the Hydrogen and Renewable Energy seg - ment (hydrogen gas, CCS, biofuels, solar, wind and geothermal energy), products in the Nuclear, Industrial Heating and Medical segments, and compressor valve steel in the Consumer segment. Activities Together with customers, Alleima develops products in durable materials to enable the transition from fossil-fueled to electric furnaces. This helps to reduce both customers’ carbon footprint and costs related to CO 2 emis - sions. The company provides applications for production, distribution and use in hydrogen, biogas production, solar and bioenergy, offshore wind, and carbon capture and storage. To guarantee Alleima’s customers that the products have a low carbon footprint, the company implemented LCAs for rock drill steel, strip steel and solid bar products. All calculations were reviewed by the independent party IVL Swedish Environmental Research Institute to ensure that the figures are accurate. Reliable LCA data means that customers can more easily calcu - late the CO 2 emissions for their own products. Comments on outcome 2025 The share amounted to 25% of total sales (24). The increase was mainly driven by the fact that these applications weakened to a lesser extent than the business as a whole. Entity-specific disclosure Growth in products that support increased sustainability Topic Negative / positive impact, risk/opportunity Where in the value chain Growth in products that support increased sustainability Alleima has a positive impact downstream in the value chain through products that contribute to lower emissions among customers, for example through electric industrial heating and solutions that enable energy efficiency gains for customers. There is a financial opportunity related to market demand for the products offered by Alleima, which can facilitate customers’ transition to net-zero emissions. Positive impact, opportunity Reporting principles See Reporting principles on page 126. Upstream DownstreamOwn operations Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other 114 | Alleima Annual Report 2025
Page 117
implemented by each division. Several key initiatives were formulated in connection with Alleima’s overall strategy work, and they are continuously followed up. The Head of Human Resources has quarterly follow-ups with the CEO, with representatives from the HR management team participating when necessary. The divisions report quarterly to Group Executive Management. Key activities are formulated and followed up on a quarterly basis, based on the company’s strategic focus. Read more about Alleima’s policies on page 98. Processes for engaging with own workforce and workers’ representatives about impacts (S1-2) Alleima’s employee survey is conducted twice a year and aims to continu - ously measure employee satisfaction, engagement, and sense of belonging. The results provide valuable insights into how the company is performing from an employee perspective and enable targeted improvement measures in identified and prioritized areas. Inclusion is a separate follow-up area in the survey, and concrete actions are taken where necessary to strengthen inclusion and diversity within specific employee groups based on the survey results. Processes to remediate negative impacts and channels for own workforce to raise concerns (S1-3) and Taking action on material impacts on own workforce, and approaches to managing material risks and pursuing material opportunities related to own workforce, and effectiveness of those actions (S1-4) Health and safety Alleima has a systematic process to ensure the health and safety of those people working at the Group’s workplaces. Assessing and reducing risks is a part of the company’s everyday work. It is the responsibility of each Alleima unit’s management to ensure that this is carried out. A task-based risk assessment method shall be used to system - atically examine a job and identify hazards, evaluate the risks and specify controls. There is a procedure for this work, which also includes require - ments that need to be met beyond any local, statutory or legal requirements. Risk assessments shall be performed by a group of individuals with the necessary expertise, which must include, as a minimum, a trained facilitator, the local manager in charge, and the operator. The risk assessment shall be reviewed and approved by this group plus a health and safety representa - tive, a relevant subject matter expert (if required) and the manager of the process that is being assessed for risk. Impact, risk and opportunity management Policies related to own workforce (S1-1) Alleima has a workforce of approximately 6,800, including employees and third-party workers, in more than 25 countries. It is crucial for the compa - ny’s long-term success that current and future employees thrive and develop. Alleima strives to offer a diverse and inclusive workplace with market-based remuneration and working conditions. Considerable empha - sis is placed on creating a safe workplace through preventive efforts to minimize the number of incidents. Alleima’s material impacts, risks and opportunities are related to working conditions, including health and safety, and diversity. Alleima’s Sustainability Policy covers all units in the Group and describes the company’s management and oversight of sustainability in order to ensure regulatory compliance. Health and safety risks are to be identified and managed proactively to reduce or minimize the risk of harm to the company’s employees. Monitoring, auditing and incident reporting processes are to be followed, and appro - priate corrective and preventive actions are to be taken for all incidents, near misses and risks that arise. Incidents are to be appropriately investi - gated, and lessons learned from the investigations and other good health and safety procedures are to be promoted and shared across the organi - zation. Strategies and practices related to diversity and inclusion are estab - lished and implemented to support a workplace characterized by diversity and to benefit from the effects of a diverse and inclusive culture. Work is governed by the overall People Policy, which is supported by procedures and processes for various areas. The Board has delegated ownership of the People Policy to the CEO. The policy is broken down and Channels for engaging with own workforce and workers’ representatives — Performance and development reviews, and regular employee reviews. All employees are offered reviews at least once a year. — Regular function and department meetings, quarterly Alleima Update webinars with leaders in the company with the opportu - nity to ask questions. — Cooperation with local trade union representatives, formation of the European Workers Council (EWC), trade union represen - tation on the Alleima Board. — Regular employee survey with subsequent dialogue. Topic Negative / positive impact, risk/opportunity Where in the value chain Health and safety Alleima’s production operations are associated with a risk of accidents and serious incidents. To ensure health and safety, the company has established a systematic work environment process. All major facilities are certified according to ISO 45001, which also covers third-party workers. Other units follow specific policies adapted to their local risk profile. There are financial risks linked to health and safety, such as the cost of sick leave, sanctions or negative publicity in the event of incidents. Negative impact, risk Diversity Alleima’s Code of Conduct takes a clear stand against any form of discrimination based on gender identity, ethnicity, national origin, religion, age, disability, marital status, social class or other individual characteristics. To support this, regular training is provided to ensure professional workplace standards. Employee surveys gather feedback on workplace culture, and management responds to concerns to foster an environment where all employees can succeed. Discrimination in recruitment processes and in the workplace constitutes a financial risk, as it may cause the organiza - tion to lose valuable talent and experience increased employee turnover. At the same time, there is significant economic potential linked to successful efforts in diversity and inclusion – for example by attracting and retaining competent employees. Active work in these areas can also strengthen the organization’s attractiveness from both a customer and investor perspective. Negative impact, risk Alleima operates in an industry associated with a risk of damages and has systematic processes for ensuring the health and safety of the people working at the company’s facilities. Diversity is an important issue for Alleima and there are action plans in place to increase diversity at the company. Social Own workforce (ESRS S1) Upstream DownstreamOwn operations Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other Alleima Annual Report 2025 | 115
Page 118
Targets and metrics Targets related to managing material negative impacts, advancing positive impacts, and managing material risks and opportunities (S1-5) The overall target in health and safety is to be ambitious and attainable and, over a long-term time horizon, help Alleima to make clear progress towards its vision of zero accidents. Proposed targets are prepared by the Sustain - ability Council and consensus is built across the organization through the divisions. Proposals are decided on by Group Executive Management, and final approval is obtained from the Board as a part of the Group’s sustain - ability targets. The divisions engage their units to prepare local plans with annual mile - stones that help the Group to achieve the long-term target. Implementation of the plans is followed up at the division level, and safety KPIs such as acci - dent frequency are monitored by management teams at every level on a monthly basis. Alleima has a dedicated environment, health and safety team that func - tions as a working group, addressing Group-wide improvement matters through measures such as campaigns and developing joint training. Targets Outcome 2025 Status of target Reduce TRIFR by more than 50% by 2030, compared with 2019 TRIFR of 5.1 TRIFR decreased 34% compared with 2019 All employees can work to their full potential while feel - ing valued and welcome, no matter who they are 77 of 100 Engagement index amounted to 77 of 100 which was higher than the benchmark Review is conducted continuously to understand the effectiveness of mea - sures and to update local risk assessments. Knowledge exchange between units also takes place through network meetings, where successful prac - tices are shared and examples are presented for discussion. A system has been introduced for the dissemination and sharing of information about incidents and potentially serious incidents to create greater awareness of risks and incidents that could occur in more than one location within the company. Alleima has set up health and safety committees at several locations to promote participation and consultation on all levels. Typically, committee representatives include local management, employees and EHS profes - sionals. Health and safety training is an important area. The aim is to ensure that everyone who works for Alleima has the relevant skills, knowledge, compe - tencies, and behaviors to undertake their work safely. The responsible manager ensures that all employees and anyone working on Alleima’s behalf understands their responsibilities and that they have been offered and participated in training as needed. Diversity Diversity, equality and inclusion are critical to innovation, business perfor - mance and the future success of the company. Alleima works actively to create an inclusive and gender-equal workplace, with zero tolerance for discrimination. All employees should feel valued and be able to achieve their full potential. The company takes measures to promote an inclusive culture and ensure the physical and psychological well-being of its employees. One focus area involves working proactively to ensure future expertise and diversity by defining new skills and hybrid skills that could be in demand in the future. To assess necessary future skill needs, the talent management work is linked to the overall business strategy and to the global trends and events affecting the company. Another focus area is talent recruitment. Alleima has developed a tool to support managers in evaluation of candidates and the HR function formu - lates and manages job listings to attract qualified candidates and ensure equal opportunity. Alleima has three leadership programs for developing new leaders as well as experienced managers. Alleima Commit and Elevate is for new man - agers, Alleima Empower and Advance is for those who have been manag - ers for some time and Alleima Accelerate and GoBeyond is for senior exec - utives. Equal opportunity perspectives are a natural part of the structure for every leadership program. Additionally, through the Accelerate and GoBe - yond program, Alleima coordinates with the Stockholm School of Econom - ics Executive Education. In 2025, 23 managers completed the Accelerate and GoBeyond program. Alleima has an ambassador program in Sweden that aims to raise aware - ness of, and encourage, inclusive behavior. There are also several different initiatives ongoing within the divisions and in different countries to promote diversity and inclusion. One example is in India, where the company offers diversity and inclusion courses in collaboration with Business Sweden. Violations are to be reported through Alleima’s whistleblower tool, Speak Up. Read more about this tool on page 121. Own workforce (ESRS S1), cont. Comments on outcome 2025 Health and safety In addition to KPIs that measure outcomes, leading indicators are also used. These are intended to measure the progress of local environ - ment, health, and safety plans. The aim is to ensure that each site identifies, formulates and implements improvement measures based on the local risk profile or a shared priority focus area. Hazards and near misses are also measured, as is the percentage of these that have been managed and closed out. During the year, TRIFR developed favorably, reducing to 5.1 (7.1). In 2025, 60 injuries were reported among employees and non-employ - ees at Alleima’s locations (85). The most common accidents were hand and finger injuries. Diversity One way to strengthen the organization is to provide training in the company’s core values, equal opportunity, and psychological well-being in order to promote new ways of thinking and strengthen the organization’s culture. Reporting principles See Reporting principles on page 126. Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other 116 | Alleima Annual Report 2025
Page 119
Occupational health and safety 2025 2024 Incidents Employees Non- employees Tota l workforce Employees Non- employees Tota l workforce Number of fatal injuries 0 0 0 0 0 0 Number of LTIs 32 1 33 38 0 38 LTIFR 3.0 0.9 2.8 3.5 0.0 3.2 Number of TRIs 57 3 60 85 0 85 TRIFR 5.3 2.6 5.1 7.9 0.0 7.1 Days lost due to work-related incidents 513 18 531 683 0 683 2025 2024 Employee head count by contract type and gender Female Male Other Not reported Tota l Female Male Other Not reported Tota l Total 1,550 5,142 0 5 6,696 1,438 5,098 0 8 6,543 Whereof permanent 1,492 5,003 0 5 6,499 1,380 4,959 0 8 6,347 Whereof temporary 58 139 0 0 197 58 139 0 0 197 Whereof non-guaran- teed hours 0 0 0 0 0 0 0 0 0 0 Total 1,550 5,142 0 5 6,696 1,438 5,098 0 8 6,543 Whereof full-time 1,483 4,959 0 5 6,447 1,374 4,931 0 8 6,313 Whereof part-time 67 183 0 0 249 64 167 0 0 230 2025 2024 Top management by gender, % Female Male Female Male Group Executive Management 25 75 30 70 Senior management 45 55 42 58 Employee head count by gender 2025 2024 Male 5,142 5,098 Female 1,550 1,438 Other 0 0 Not reported 5 8 Total employees 6,696 6,543 Employee mobility 2025 2024 Terminated positions 711 779 Total employees 6,696 6,543 Employee turnover, %1) 10.6 12.0 1) Employee turnover: number of terminated positions in relation to the average number of employees. Age distribution, number 2025 2024 Under 30 781 710 30–50 3,300 3,274 Over 50 2,616 2,560 Total 6,696 6,543 Employee head count by country 2025 2024 Sweden 3,494 3,408 USA 789 783 Czech Republic 748 747 Other countries 1,666 1,606 Total employees 6,696 6,543 Reporting on employees, broken down by gender (S1-6) Total number of employees who have left the undertaking during the reporting period and the rate of employee turnover in the reporting period (S1-6) Age distribution (S1-9) Reporting on employee head count in countries where the undertaking has at least 50 employees representing at least 10% of its total number of employees (S1-6) Own workforce (ESRS S1), cont. Health and safety (S1-14) Reporting on employees by contract type, broken down by gender (S1-6) Reporting on top management by gender (S1-9) 2025 2024 Employee head count by contract type and region Europe North America Asia Other Tota l Europe North America Asia Other Tota l Total 5,137 819 740 0 6,696 5,026 819 699 0 6,543 Whereof permanent employees 5,011 819 669 0 6,499 4,900 819 628 0 6,347 Whereof temporary 126 0 71 0 197 126 0 71 0 197 Whereof non-guaran- teed hours 0 0 0 0 0 0 0 0 0 0 Total 5,137 819 740 0 6,696 5,026 819 699 0 6,543 Whereof full-time 4,889 818 740 0 6,447 4,797 818 699 0 6,313 Whereof part-time 248 1 0 0 249 229 1 0 0 230 Reporting on employees by contract type, broken down by region (S1-6) Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other Alleima Annual Report 2025 | 117
Page 120
Processes to remediate negative impacts and channels for value chain workers to raise concerns (S2-3) Alleima’s commitment to human rights covers the entire supply chain, Alleima’s own operations and its dialogue with suppliers. Alleima’s approach to responsible supplier management is based on the six stages of the OECD Due Diligence Guidance for Responsible Business Conduct. Alleima’s Supplier Code of Conduct provides clear guidelines on principles and rules that suppliers are to apply and follow. Human rights due diligence (HRDD) is an integral part of the governance of Alleima’s processes. Alleima’s Code of Conduct provides guidance on principles to be followed, such as having a safe and healthy workplace with fair wages and no harassment, characterized by diversity, equality and non-discrimination, with no child or forced labor, and where everyone is free to form and join organizations of their choice. HRDD is also included in assessments of potential acquisitions, major investments and significant business restructuring. In the Supplier Code of Conduct, Alleima requires suppliers to comply with applicable health and safety legislation and rules. Suppliers are also obligated to provide a safe and healthy work environment and to take every possible action to prevent incidents and injuries. Compliance is verified through multiple checkpoints, including but not limited to audits of the physical environment and equipment, procedures and control measures. Employees and partners are expected to alert Alleima to any violation of the company’s Codes of Conduct and policies as well as applicable laws and regulations in countries where the company operates. Receiving reports on violations allows Alleima to improve its work environment, reduce its risks and continuously work to be an ethical and sustainable company. Read more about Speak Up and reporting violations on page 121. Workers in the value chain (ESRS S2) Impact, risk and opportunity management Policies related to value chain workers (S2-1) Alleima strives to ensure that human rights and good working conditions are respected throughout the value chain. The Supplier Code of Conduct sets out requirements for compliance with applicable legislation, including in areas such as health, safety and the working environment. Suppliers are expected to provide a safe and healthy work environment and to take pre - ventive measures to minimize risks of incidents and injuries. Compliance is verified through checkpoints such as risk screening, evaluations and physi - cal audits. Read more about supplier evaluations on page 121. Alleima’s Sustainability Policy covers all units in the Group and describes the company’s management and oversight of sustainability in order to ensure regulatory compliance. Sustainable procurement and sourcing practices are to be implemented in order to systematically evaluate and monitor suppliers, and encourage their continuous development, to ensure they meet Alleima’s sustainability requirements and expectations. Efforts are to be made to get all suppliers to sign Alleima’s Supplier Code of Conduct and to ensure their compliance. Conflict minerals originating from conflict or high-risk areas must comply with the requirements of EU directives, OECD due diligence processes or national legislation enacting such resolutions. Alleima undertakes to refrain from any action that contributes to financing conflicts. Additional impacts, risks and opportunities related to workers in the value chain are governed by the Supplier Code of Conduct and the Pro - curement Policy. Read more about Alleima’s policies on page 98. Alleima’s commitments to respect human rights are also available on the website: www.alleima.com/sustainability/humanrights. Processes for engaging with value chain workers about impacts (S2-2) For information on processes for engaging with value chain workers, see the section “Sustainable sourcing” on page 121. Topic Negative / positive impact, risk/opportunity Where in the value chain Health and safety Some workers in Alleima’s supply chain work in high-risk countries, such as China, India, Gabon and Madagascar, where there is a risk of inadequate or dangerous working conditions. Alleima also sources primary materials such as nickel and manganese, which are associated with elevated risks of poor working conditions and inadequate health and safety measures. There is a financial risk associated with the fact that stricter regulations could lead to higher costs for due diligence and monitoring of suppliers. There is also a reputational risk related to Alleima being associated with suppliers with poor working conditions. Negative impact, risk Alleima is highly dependent on its suppliers. Some of the workers in Alleima’s value chain work in high-risk countries with potentially inadequate or danger ous working conditions, precarious employment, a lack of adequate training and career development, a lack of equality and inclusion, inade - quate facilities, and child or forced labor, which Alleima does not accept. To ensure that such inadequacies are not accepted, the company has a Sup - plier Code of Conduct that all suppliers must comply with. Compliance is verified through multiple checkpoints. Upstream DownstreamOwn operations Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other 118 | Alleima Annual Report 2025
Page 121
Taking action on material impacts on value chain workers, and approaches to managing material risks and pursuing material opportunities related to value chain workers, and effectiveness of those action (S2-4) Work related to supplier sustainability evaluations continued during the year according to the defined procedures from a sustainability perspective. This is a common process for the entire company and shall be carried out globally by purchasing organizations. Purchasers are to have the necessary training to effectively follow the company’s procedure for sustainable sourcing. The outcome of the supplier evaluations carried out during the year and training figures are presented under G1-2 on page 122. The company continued with its active approach of using corrective action plans for managing improvement activities and deviations. When necessary, Alleima engaged with actors in the value chain to develop such activities. Other actions include training for suppliers provided by Alleima. Alleima applied an escalation process implemented by the company when deviations were identified that were too significant or when the busi - ness partner did not accept the company’s supportive involvement. In such cases, Alleima raised the matter internally to decide on the correct approach. The company’s default approach is to try to resolve deviations together with the business partner, but in certain cases this process can result in the partnership being terminated. No contracts were terminated during the year as a result of violations of the Supplier Code of Conduct. Workers in the value chain (ESRS S2), cont. Comments on outcome 2025 During the year, work on risks in the supply chain continued, resulting in increased compliance with the requirements of our Supplier Code of Conduct. This year’s risk screening shows that supplier risks have decreased compared with the previous year. No contracts were terminated as a result of violations of the com - pany’s Supplier Code of Conduct that caused material adverse impacts on workers in the value chain. Reporting principles See Reporting principles on page 126. Targets and metrics Targets related to managing material negative impacts, advancing positive impacts, and managing material risks and opportunities (S2-5) See page 98. Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other Alleima Annual Report 2025 | 119
Page 122
The process for assessing the impact of suppliers on the company’s own operations is laid out in the Supplier Code of Conduct and the Procurement Policy. Alleima’s Ethics and Compliance Policy has been designed to address legal, regulatory and internal requirements and describes how the company is to incorporate these to achieve compliance. The policy is governed by procedures for specific issues, for example gifts and hospitality and data security. The Board is responsible for the Ethics and Compliance Policy. Policy revisions are prepared by the Audit Committee and decided by the Board. The company’s compliance function regularly reports to the Audit Commit - tee about the implementation of the policy, including the effectiveness of the entire compliance program. Matters dealt with by the Audit Committee are recorded in minutes and reported to the Board. To ensure sustainable sourcing, Alleima has a Procurement Policy that is supported by a procedure for evaluating supplier sustainability work. The Procurement Council establishes structures and processes to manage the requirements imposed by the compliance function, the Board and the CEO. Governing documents are managed through the Procurement Council, but there is also scope for local processes. The Procurement Policy is owned by Group Executive Management. For information on other policies, see page 98. The compliance function establishes the requirements outlined in the Group’s compliance program. These include the identification of risks, pol - icy development, training, controls, audits, reporting, and monitoring. Each division is responsible for implementing the program within its organization. The Group’s compliance function reports to Alleima’s General Counsel. Employees in the compliance function monitor developments with respect to new legislation and regulations as well as external factors such as geopolitical developments that impact the operations and their gover - nance. Collaboration takes place with external parties as well as internal functions such as the company’s risk management process. The Ethics and Compliance Policy and related procedures regulate how employees are to act, and the policy is further supported by Compliance House, a tool used to monitor effectiveness and performance. By monitor - ing and analyzing employees’ ethical conduct, the tool supports the organi - zation in identifying and addressing any shortcomings. When shortcomings are identified, measures are taken to ensure that all defined requirements are managed and that there are no issues left unaddressed. Governance Business conduct (G1) At Alleima, ethical business conduct means a business that is conducted with honesty and integrity, where all employees, contractors and partners comply with legal requirements as well as the highest ethical standards. This is ensured through policies, integrated into core processes and main - tained through continuous engagement and training. The company pro - motes a culture where ethics and compliance are core elements of the operations at every level of the company. Material aspects of business ethics include zero tolerance of bribery and corruption, and ensuring ethical business conduct, which includes compli - ance with laws as well as the company’s own rules as set out in the Code of Conduct. The company’s operations are conducted in environments where there is a risk of bribery and corruption. This is an inherent risk for a company that purchases and sells in a global market, where goods are transported across national and regional borders. For a more detailed overview of where in the value chain business ethics risks occur, see the illustration of the value chain on page 100. Impact, risk and opportunity management Business conduct policies and corporate culture (G1-1) Alleima’s Sustainability Policy covers all units in the Group and describes the company’s management and oversight of sustainability in order to ensure regulatory compliance. Alleima’s Code of Conduct describes the business principles in selected areas of the business operations. All employees, as well as consultants on long-term contracts, are to receive Code of Conduct training within 90 days of employment. Alleima’s Code of Conduct provides principles for how the company is to do business and establishes responsible, ethical behavior as a requirement. There is also a separate Supplier Code of Conduct. Ethics programs are to be implemented to address compliance in the areas of anti-bribery and corruption, trade, competition law and general data protection. Additional impacts, risks and opportunities related to busi - ness conduct are governed by the Ethics and Compliance Policy. Breaches of the Code of Conduct are to be reported to the relevant manager or through the Speak Up whistleblower channel. Topic Negative / positive impact, risk/opportunity Where in the value chain Corporate culture Alleima’s operations are spread across several regions, which has a major impact on the corporate culture of its units. Depending on how successfully the company’s values, Code of Conduct and other similar frameworks are integrated, both positive and negative impacts can arise. In a worst case scenario, weak governance or shortcomings in the corporate culture could lead to violations of the law. Maintaining a good corporate culture can be the key to successful business. Positive impact, opportunity Corruption and bribery A mapping of Alleima’s value chain showed that corruption risks exist in several of the regions where the company operates. Alleima has a compliance program that addresses anti-bribery and corruption, including the Code of Conduct, employee training and supplier audits. An inability to prevent and detect corruption and bribery could lead to legal proceedings and have a major impact on the company’s brand. Failure to comply with sanctions and competition law could lead to reputational damage and have an impact on earnings as a result of fines. There is therefore a financial risk related to corruption and bribery. Negative impact, risk Supplier management There is a risk that Alleima could unknowingly partner with suppliers who use unsustainable methods or who violate laws and regulations. This could lead to increased costs and a loss of reputation as well as potential legal liability. It could also have a negative impact on the company’s dependence on supply chain partners. Alleima has a Supplier Code of Conduct that all suppliers are expected to sign and follow. Additionally, the company carries out supplier evaluations, including compliance checks such as risk audits and sustainability evaluations. Negative impact, risk Alleima is a group with several units, where the company’s values and Code of Conduct must be successfully integrated. Alleima has a broad value chain and business partners in many regions, some of which have known corruption risks. Alleima has a compliance program that addresses anti-bribery and corruption. Upstream DownstreamOwn operations Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other 120 | Alleima Annual Report 2025
Page 123
ment, exhibition materials, and inventories – passes through customs borders every day, all year round. Understanding and complying with cus - toms laws is important to reduce the risk of disturbances in the supply chain, penalties, or damage to the reputation of the brand. The Ethics and Compliance Policy and customs procedure define the important elements of customs compliance, such as product classification, origin determination and utilization of free trade. Other important elements include relevant staff training, documentation, reporting and management of customs agents. Data privacy The right to privacy includes an individual’s fundamental right to protection of their personal data. Alleima’s commitment to this fundamental right is expressed in the company’s Code of Conduct and implemented as a part of the Ethics and Compliance Policy. The policy establishes the basic prin - ciples and requirements for compliance with data privacy in the Group and applies to all processing of personal data. Long-term sustainable sourcing (G1-2) Alleima has thousands of suppliers in nearly 60 countries, from which we source products, materials and services. It is important that our suppliers share the sustainability values that we uphold. Therefore, all our suppliers are expected to commit to, and comply with, Alleima’s Supplier Code of Conduct. Business relationships are built on honesty, trust and cooperation, the company strives to develop transparency around suppliers’ sustain - ability performance. Responsibility and governance Alleima’s Supplier Code of Conduct applies to all suppliers providing prod - ucts, materials, or services to the company. It contains supplier requirements in areas such as legal compliance, health and safety, human and labor rights, responsible sourcing of minerals and metals, the environment, and business ethics. It also encourages suppliers to adopt climate targets in line with the 2015 Paris Agreement on climate change, and to provide work - ing conditions that enable a healthy work-life balance. The Supplier Code states that suppliers are expected not only to implement the requirements in their own operations, but also to set equivalent requirements in their value chain. Each division is responsible for ensuring that supplier contacts are man - aged sustainably. This is followed up regularly in the company’s sustainabil - ity reviews. It is also important that all employees involved are aware of and understand the requirements in place to maintain sustainable sourcing. Responsible supplier management Through a structured supplier evaluation process, Alleima works to identify, prevent, mitigate and address the supply chain’s negative impacts on the environment and human rights. The process is based on the OECD Due Diligence Guidance for Responsible Business Conduct. The process follows the sustainability requirements set out in the Sup - plier Code of Conduct, and suppliers are assessed as to whether or not they meet these requirements. The supplier sustainability evaluation pro - cess includes controls such as risk screening, sustainability performance evaluation and audits. The tools for risk screening and sustainability perfor - mance evaluation are provided by EcoVadis. Supplier risk identification Suppliers are screened for sustainability risks arising from the fact that they operate in a specific country or industry. This screening covers four areas: environment, labor and human rights, ethics, and sustainable sourcing. The largest supplier risks identified relate to, for example, different kinds of raw materials and how they are extracted as well as operations in high- risk countries such as Brazil, China and India. Assessment and sustainability evaluations High-risk suppliers are prioritized for sustainability performance evaluation. The evaluation covers energy consumption, emissions, biodiversity, waste, employee health and safety, social impact, child labor, forced labor, human trafficking, discrimination and harassment, corruption, anti-competitive practices, and more. The assessment is analyzed by EcoVadis, which creates a scorecard showing the suppliers’ performance within the areas. Compliance Alleima’s compliance program encompasses six main areas: anti-bribery and corruption, the Speak Up whistleblower mechanism, competition law, trade compliance and sanctions, customs, and data privacy. Compliance House is used to identify and manage any shortcomings in compliance and business ethics, which also includes sourcing policies. A Compliance House review is carried out annually for the entire business. This involves a comprehensive assessment of the key compliance risks identified for each entity. This review is conducted collaboratively by the entity’s management team and Alleima’s compliance team. Throughout the annual review process, the effectiveness of existing remedial actions was thoroughly assessed. Any new compliance risks noted were assigned an action plan with a timeline for completion. The results of the audit can also indicate a need for training. Continuous training is a prerequisite for facilitating successful implemen - tation as well as ensuring employees have the awareness needed to adhere to the compliance program. Compliance training is offered to employees in different formats, including e-learning, webinars, and classroom training. There is also specific training for roles identified as high-risk, for example related to corruption. Various parts of the organization may also have a need for special training. Speak Up Employees and partners are expected to alert Alleima to any violation of the company’s Codes of Conduct and policies as well as applicable laws and regulations in countries where the company operates. Receiving reports on violations allows Alleima to improve its work environment, reduce its risks and continuously work to be an ethical and sustainable company. Employees and external stakeholders can file reports through Alleima’s Speak Up whistleblower service. This online service is owned and managed by the compliance function. All reports received are evaluated and, if nec - essary, an internal investigation is carried out. The privacy and integrity of the person reporting the incident are always of the utmost importance. The information reported is kept confidential, and reports can be submitted anonymously if local laws permit. The Ethics and Compliance Policy states that there will be no retaliation taken against an employee or business partner who, in good faith, provides information about a violation. The Speak Up process is designed to comply with appli - cable whistleblowing and data protection laws, including the GDPR. Competition law Any violation of competition law could entail a serious impact and financial consequences for Alleima’s brand. The employees involved risk punishment in the form of imprisonment, personal fines, a ban on serving as a director, and disciplinary actions. As part of its compliance program, Alleima has a common platform aimed at minimizing the risk of a breach of competition law. All employees are individually responsible, as set out in the Code of Conduct, for having a basic understanding of competition law so they can identify situations where issues may occur. Employees in roles where a deeper knowledge of competition law is relevant are also to undergo competition law training every other year to ensure that they have sufficient knowledge. Trade compliance and sanctions Alleima moves goods, tangible as well as intangible, domestically and across national borders. When moving goods, it is vital to comply with applicable trade laws and regulations. This reduces the risk of fines, penal - ties, delays of shipments, loss of export/import privileges, criminal liability, and damage to the Group’s brand. The Ethics and Compliance Policy and the export control procedure are applicable for all Group companies, and the company has committed to following applicable trade laws and regulations in the countries where it operates. All Alleima businesses, companies, and relevant employees worldwide are to be familiar with and adhere to the content of the policy and procedure covering trade compliance. Customs compliance Alleima is a global group with manufacturing and trade operations – and a footprint – in many parts of the world. Our extensive portfolio – made up of different products, including raw material, semi-finished goods, equip - Business conduct (ESRS G1), cont. Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other Alleima Annual Report 2025 | 121
Page 124
Supplier audits Supplier audits are a supplement to the supplier performance evaluation and are conducted by a third party. The extent to which the supplier meets the requirements of the Supplier Code of Conduct is checked during the audit. Audits include document reviews, site visits and interviews with supplier employees. Management of negative impacts Deviations and improvement activities are managed through corrective action plans. If necessary, Alleima offers support in establishing improve - ment activities and provides training to help the supplier improve their understanding of environmental and social matters. If the deviation is too significant or if the supplier does not cooperate, this leads to a risk escala - tion process whereby the matter is raised internally at Alleima for a decision, for example whether to terminate the partnership. However, Alleima’s initial approach is to always try to solve deviations together with the supplier. No supplier contracts were terminated during the year as a result of identified breaches of the Supplier Code. Prevention and detection of corruption and bribery (G1-3) Alleima has business partners in many regions around the world and there is a risk of corruption and bribery in various parts of the company’s value chain. The Group’s compliance work within this area aims to ensure a well- implemented way of working to prevent bribery and corruption from occur - ring and includes processes and tools to detect and counteract any short - comings. The principle of the program stems from the US Foreign Corrupt Practices Act, the UK Bribery Act and other national legislation. It includes risk identification and risk assessment, control elements such as policies, procedures and instructions, and control activities such as record keeping, advice, and support. Training is an important part of the program, as is the process for reporting, following up and carrying out improvement activities. Responsible sourcing of minerals and metals There are major risks related to extracting, trading, exporting, and procuring minerals from conflict and high-risk areas. Alleima is a member of the Responsible Minerals Initiative (RMI), which pro - vides tools and processes for improving compliance and estab - lishing sustainable sourcing processes for minerals originating from conflict or high-risk areas. Alleima sources minerals and met - als exclusively from suppliers that are approved in RMI’s third- party review. To identify, assess and manage risks related to sourcing miner - als and metals, Alleima also follows the OECD Guidelines for Due Diligence and takes appropriate measures. The company con - ducts an annual country-of-origin survey based on OECD guide - lines to identify the smelters and refineries linked to the supply chain. Of the suppliers identified in the country-of-origin survey, 100% returned completed documents in accordance with the RMI’s Conflict Minerals Reporting Template. Alleima’s website includes a statement by the company on responsible sourcing of minerals and metals. The statement, together with Alleima’s Supplier Code of Conduct, forms the basis for responsible sourcing and describes supplier requirements for 3TG (tin, tungsten, tantalum and gold) and cobalt. Business conduct (ESRS G1), cont. Sustainable sourcing Percentage of purchasers who have attended sustainability courses, % 2025 2024 Alleima’s Supplier Code of Conduct and its requirements 60 57 Supplier sustainability evaluation 68 63 Sustainability for sourcing 79 56 Circularity for sourcing 78 49 Climate for sourcing 77 47 Comments on outcome 2025 In 2025, a total of 69 reports were made through the Speak Up system. Of the 69 matters reported, 18 were predicated for investigation by the business integrity function, 48 were referred back to the relevant manager for appropriate investigation and action, and 3 were recorded but deemed not to require any further action. 65 of the reports had been closed by year-end, while 4 were still open, ongoing or awaiting appropriate action. In 2025, we saw a significant improvement in the share of purchas - ers who completed training in sustainability, the Supplier Code of Conduct and its requirements, as well as sustainability evaluations of suppliers. The trainings and distribution are presented in the table above. During the year, work on supply -chain risks continued, resulting in increased compliance with the requirements of our Supplier Code of Conduct. The results from this year’s risk screening show that supplier risks have decreased compared with the previous year. Approximately 40% of the covered purchasing value is now assessed as low risk. During the year, 346 evaluations were carried out in Ecovadis, corre - sponding to 43% of the total purchasing value for the target group. Of the suppliers included in the audit target group, 13% of the covered purchasing value have so far been audited. Six of these audits were carried out during the year. Through the supplier risk screening con - ducted in 2025, 131 suppliers with potential significant negative envi - ronmental impact were identified, and 229 suppliers with potential significant negative social impact. The portion of suppliers that do not meet the requirements of the Supplier Code of Conduct consists mainly of suppliers who have not yet undergone any evaluation since the assessment process began. Reporting principles See Reporting principles on page 126. Outcome 2025, percentage of relevant spend, % 2025 2024 Supplier Code of Conduct signed by contracted suppliers 91 90 Risk-screened suppliers 90 87 Complies with requirements of Supplier Code of Conduct 75 63 Identified improve- ment activities Completed improve - ment activities Supplier assessments Number Environ - ment Social Environ - ment Social Evaluation 346 36 55 15 19 Audit 6 4 74 3 37 Targets and metrics Targets related to business conduct (G1) See page 98. Prevention and detection of corruption and bribery (G1-3) Employees trained in anti-bribery and anti-corruptioin % Share trained in functions at risk 71 Incidents of corruption and bribery (G1-4) During the year, no convictions or fines regarding corruption and bribery were imposed on Alleima. Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other 122 | Alleima Annual Report 2025
Page 125
Appendix Disclosure Location ESRS 2 General disclosures BP-1 General basis for preparation of sustainability statements 96 BP-2 Disclosures in relation to specific circumstances 96 GOV-1 The role of the administrative, management and supervisory bodies 96–98 GOV-2 Information provided to and sustainability matters addressed by the undertaking’s administrative, management and supervisory bodies 96–98 GOV-3 Integration of sustainability-related performance in incentive schemes 98 GOV-4 Statement on due diligence 98 GOV-5 Risk management and internal controls over sustainability reporting 98 SBM-1 Strategy, business model and value chain 99, 100–101 SBM-2 Interests and views of stakeholders 99 SBM-3 Material impacts, risks and opportunities and their interaction with strategy and business model 102 IRO-1 Description of the processes to identify and assess material impacts, risks and opportunities 103–104 IRO-2 Disclosure requirements in ESRS covered by the undertaking’s sustainability statement 123–124 E1 Climate change GOV-3 Integration of sustainability-related performance in incentive schemes 98 E1-1 Transition plan for climate change mitigation 105 SBM-3 Material impacts, risks and opportunities and their interaction with strategy and business model 102, 104, 107 IRO-1 Description of the processes to identify and assess material impacts, risks and opportunities 103–104 E1-2 Policies related to climate change mitigation and adaptation 107 E1-3 Actions and resources in relation to climate change policies 107–108 E1-4 Targets related to climate change mitigation and adaptation 108 E1-5 Energy consumption and mix 108 E1-6 Gross Scopes 1, 2, 3 and Total GHG emissions 109 E2 Pollution IRO-1 Description of the processes to identify and assess material impacts, risks and opportunities 103 E2-1 Policies related to pollution 110 E2-2 Actions and resources related to pollution 110 E2-3 Targets related to pollution 98 E2-4 Pollution of air, water and soil 110 E2-5 Substances of concern and substances of very high concern 110 E3 Water IRO-1 Description of the processes to identify and assess material impacts, risks and opportunities 103 E3-1 Policies related to water and marine resources 111 E3-2 Actions and resources related to water and marine resources 111 E3-3 Targets related to water and marine resources 98 E3-4 Water consumption 111 E5 Resource use and circular economy IRO-1 Description of the processes to identify and assess material impacts, risks and opportunities 103 E5-1 Policies related to resource use and circular economy 112 E5-2 Actions and resources related to resource use and circular economy 112 E5-3 Targets related to resource use and circular economy 113 E5-4 Resource inflows 113 E5-5 Resource outflows 112 Entity-specific disclosure Growth in products that support increased sustainability 114 1. Disclosure requirements in ESRS covered by the undertaking’s sustainability statement (IRO-2) Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other Alleima Annual Report 2025 | 123
Page 126
Appendix, cont. Disclosure Location S1 Own workforce SBM-2 Interests and views of stakeholders 99 SBM-3 Material impacts, risks and opportunities and their interaction with strategy and business model 102 S1-1 Policies related to own workforce 115 S1-2 Processes for engaging with own workforce and workers’ representatives about impacts 115 S1-3 Processes to remediate negative impacts and channels for own workforce to raise concerns 115–116 S1-4 Taking action on material impacts on own workforce, and approaches to managing material risks and pursuing material opportunities related to own workforce, and effectiveness of those actions 115–116 S1-5 Targets related to managing material negative impacts, advancing positive impacts, and managing material risks and opportunities 116 S1-6 Characteristics of the undertaking’s employees 117 S1-9 Diversity metrics 117 S1-14 Health and safety 117 S2 Workers in the value chain SBM-2 Interests and views of stakeholders 99 SBM-3 Material impacts, risks and opportunities and their interaction with strategy and business model 102 S1-1 Policies related to value chain workers 118 S1-2 Processes for engaging with value chain workers about impacts 118 S1-3 Processes to remediate negative impacts and channels for value chain workers to raise concerns 118 S1-4 Taking action on material impacts on value chain workers, and approaches to managing material risks and pursuing material opportunities related to value chain workers, and effectiveness of those action 119 S1-5 Targets related to managing material negative impacts, advancing positive impacts, and managing material risks and opportunities 98 G1 Business conduct GOV-1 The role of the administrative, management and supervisory bodies 97–98 IRO-1 Description of the processes to identify and assess material impacts, risks and opportunities 103 G1-1 Business conduct policies and corporate culture 120 G1-2 Management of relationships with suppliers 121–122 G1-3 Prevention and detection of corruption and bribery 122 G1-4 Incidents of corruption or bribery 122 Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other 124 | Alleima Annual Report 2025
Page 127
Appendix, cont. 2. Alleima’s policies Policy Description Scope Responsibility Code of Conduct Provides principles for how the company is to do business and establishes responsible, ethical behavior as a requirement. All Alleima employees The Board of Directors Supplier Code of Conduct Describes Alleima’s requirements for suppliers regarding the environment, social issues, and responsible and ethical conduct. All suppliers Group Executive Management Sustainability Policy Describes the company’s overall sustainability principles, including its environmental principles. All Alleima employees The Board of Directors People Policy Describes Alleima’s principles and regulations as well as the rights of its employees. All Alleima employees Group Executive Management Procurement Policy Sets out sourcing guidelines and principles. All Alleima employees Group Executive Management Ethics and Compliance Policy Sets out ethical conduct and compliance guidelines and principles. All Alleima employees The Board of Directors 3. Reporting principles This section describes the principles implemented by Alleima with respect to the collection of reported information and the administration of IT sys - tems that contain this information. It also describes reporting processes, defines the concepts and KPIs used, and provides other explanations nec - essary for understanding how the reported metrics are compiled. Environment General Environmental data is derived from Alleima’s sustainability reporting sys - tem. The KPIs compiled are based on information available at the end of the most recent year-end reporting. The following metrics are based on the quarterly reporting process: E1-5, E1-6 excluding Scope 3 emissions, E3-4, E5-4 and E5-5. E2-4 and E2-5 are reported based on an annual mapping and collection of information that is outside the Group’s normal reporting process and systems. E1-5 Energy consumption and mix Information provided under E1-5 is based on a quarterly collection of data that includes the use of fuel for direct combustion within Alleima and indi - rect energy sources produced by external suppliers and used by the com - pany. Collection is based on reporting to the Group’s consolidation system for sustainability data and consists of the amount of fuel consumed and energy values used for electricity, district heating and steam. Fuels are reported by type and categorized as fossil or renewable. Electricity is reported as energy values, without attributing the electricity to source. Categorization of reported electricity is based on the emissions factors used for calculating GHG emissions. These are based on the emissions values calculated using the market-based approach for GHG emissions calculation, which can verify that renewable energy was purchased through, for example, guarantees of origin or renewable energy certificates. Electric - ity with no guarantee of its origin is reported as fossil electricity. E1-6 Total GHG emissions Energy and GHG emissions data are calculated based on reported con - sumption data, in accordance with the GHG Protocol. The conversion factors are established in Alleima’s EHS definitions presented in the man - agement system documentation. For Scope 1, these factors originate from the Swedish Environmental Protection Agency (EPA). For Scope 2, location- based emissions are derived from reported consumption and recalculated using average grid emission factors, originating from the International Energy Agency (IEA). For the market-based emissions, reported consump - tion and specific emission factors based on guarantees of origin are used, or a residual mix factor where guarantees of origin are not available. Where residual mix data could not be obtained, location-based factors were applied. For Scope 3, reported results are based on a combination of activity data primarily from internal sources and, to some extent, emissions data from both internal and external sources. The dataset is considered complete for the most significant emission category. Priority was given to collecting a high share of primary data and supplier-specific emissions data, particularly for raw material purchases in Category 1. Categories 3 and 4 are also based on a high share of primary data. For less significant categories, spend-based data was largely used. Spend- based emissions calculations carry higher uncertainty than activity- based calculations, such as those based on weight, volume, or number of items. The GHG accounting system and data model are based on the Greenhouse Gas Protocol. Conversion factors are sourced from suppliers where avail - able; otherwise, industry averages are used. For spend-based data, con - version factors from Exiobase are applied and adjusted for inflation using IMF data. A general inflation adjustment based on “major advanced econo - mies (G7)” is used, as this category is considered to best reflect the compa - ny’s cost structure among the IMF’s available categories and is therefore most suitable for generic application. E2-4 Pollution of air, water and soil Emissions to air are monitored through continuous measurement of nitro - gen oxide emissions, for example. Mercury is also continuously measured and monitored. In addition, emissions are measured in connection with the inspections of certain facilities. These controls include sample testing of emissions from the steel mill, dust from mechanical processing, nitrogen oxides from combustion and pickling plants, and oil aerosol. Emissions to air are measured by the company’s own measurement specialists and by external measurement consultants. In addition to planned measurements, targeted random measurements have also been carried out. E2-5 Substances of concern and substances of very high concern The process for registering and following up substances of concern and substances of very high concern is covered by Alleima’s environmental management system and is described in a chemical management proce - dure. The chemical management system ensures that substances used in the company are documented. Substances that meet the criteria for substances of concern are com - piled in a separate list. The use of substances of concern and substances of very high concern is mapped annually. Information is collected, docu - mented and compiled by the environmental department at the Sandviken operations, and is based on the mapping carried out by all units. The collected quantities of substances of concern and substances of very high concern are calculated based on the concentration of the sub - stance in question as indicated in the safety data sheet for each product multiplied by the annual consumption of the product. This is then aggregated for each category and main hazard class. Annual consumption is derived through estimates based on the quantity purchased for the year or the estimated quantity purchased. E3-4 Water consumption Water consumption pertains to production units. Wastewater refers to the water used in a production process. The difference between water intake and discharge comprises the water not used in a production process and evaporation from cooling and has therefore not been reported as process wastewater. Reported intake and discharge pertain exclusively to fresh - water. No wastewater is discharged into the sea, discharged into ground - water or sent to third parties for use. Accordingly, reported wastewater is assumed to be exclusively returned to the recipient as surface water. Con - sumption reported in water stressed areas refers to use at production units in areas classified as having high or extremely high water stress based on the Aqueduct water tool from the World Resources Institute (WRI). Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other Alleima Annual Report 2025 | 125
Page 128
Appendix, cont. E5-4 Resource inflows Information for E5-4 metrics includes the metal raw materials that Alleima uses for steel production. The information contains basic data taken directly from manufacturing production systems. The information is contin - uously registered and compiled for reporting on a quarterly basis. The basic data from the source systems is loaded into the consolidation system that handles compilation and KPI calculation. Total weight and total weight of secondary raw materials are the metrics that are collected and compiled. A circularity measure is calculated as the percentage of total weight that consists of secondary raw material. E5-5 Waste E5-5 metrics are part of Alleima’s quarterly sustainability information reporting process. The units use the Group’s consolidation system to carry out this reporting, which consists of detailed information about waste quantities generated during the reporting period. The data is categorized based on the recycling or disposal operations that take place, according to waste fraction. Additional categorization is based on how hazardous the waste is and whether or not it was handled by the company. Recycling clas - sification is based on categories that enable the calculation of circularity measures. Circularity is calculated as the percentage of total weight that is not disposed of. Information about quantities of waste and management methods are, to some extent, based on estimates and calculation models. This is the case when external waste managers are unable to provide actual weights han - dled, for example, or in the event of internal handling since disposed quan - tities are not weighed. In such cases, the values reported are based on calculation models to estimate reportable weight. Company-specific disclosure: Growth in products that support increased sustainability Information for the metric is collected on a quarterly basis from Alleima’s business divisions and consists of data on invoiced product sales during the reporting period. The divisions themselves have determined which products could be considered to support increased sustainability. Informa - tion about the company’s total invoiced sales is collected on a quarterly basis from the company’s financial reporting. The reported KPI is expressed as the percentage of invoiced sales attributable to products that contribute to increased sustainability in relation to total invoiced sales. Growth is expressed in absolute figures, without adjusting for effects on growth rates such as exchange rate effects, price changes and structural effects from acquisitions and disposals. Social information General The reported information is derived from established reporting processes for KPIs in S1-9 and S1-14, with these KPIs representing an important aspect of internal performance follow-up, in addition to the sustainability state - ment. Information for S1-14 also derives from quarterly external communi - cation. The information reported in S1-6 is collected annually for the sus - tainability statement. The same information is used internally and its data quality and compilation principles are managed by the HR support function, which includes a separate IT function for continuous administration of the company’s personnel system. S1-6 Characteristics of the undertaking’s employees and S1-9 Diversity metrics Alleima manages personnel-related information in a Group-wide system. The system has been implemented at all of the company’s units. The data provided for the disclosures related to the characteristics of company’s employees and diversity metrics are based on the information available in the personnel system as of December 31 of the financial year. Reported values pertain to head count unless otherwise stated. S1-14 Health and safety metrics Alleima monitors its health and safety performance globally, using a number of KPIs. This includes the lost time injury frequency rate (LTIFR) and the total recordable injury frequency rate (TRIFR). The total injury frequency rate KPI is a metric that has been normalized to express the number of accidents per million hours worked. Its components consist of the number of accidents during the reporting period, the number of hours worked and a normalization factor. The number of accidents only includes work-related incidents, which is when an incident could have real - istically been prevented from happening by the company’s management system. The accident categories included in the number of work-related accidents are fatal injuries, lost time injuries (LTI), restricted work injuries (RWI) and medical treatment injuries (MTI). An LTI is an accident resulting in time away from work, an RWI is an injury where the injured employee cannot fully per - form their ordinary work, and an MTI is when the employee requires some kind of medical treatment but can perform their normal work thereafter. Worked hours consist of exposure hours, meaning all hours during which someone is exposed to the risk of a work-related incident. The data is derived from the sustainability reporting system, where safety- related indicators and exposure hours are recorded on a monthly basis. Business ethics information General The effectiveness of Alleima’s way of working with business ethics is con - firmed using a data-driven approach. Business ethics disclosures are com - plemented by quantitative data in areas related to ethical conduct and regulatory compliance in the company’s own operations and in the value chain in the form of outcome reporting of observations made during the year, in addition to data covering training initiatives and information about any convictions and fines for violating corruption and bribery laws. Metrics in G1-2 pertaining to the outcome of sustainable supplier man - agement are reported quarterly. Data collection, quality assurance and analysis are managed by Alleima’s purchasing function. Metrics reported in G1-3 and G1-4 that pertain to corporate culture and regulatory compliance are compiled on an annual basis. Data collection, quality assurance and analysis are managed by Alleima’s compliance function. G1-3 and G1-4 Prevention and detection of corruption and bribery and Incidents of corruption or bribery Data for metrics concerning training related to G1-3 are documented in Alleima’s personnel management system based on attendance records for the training sessions held. Employees in at-risk functions have been marked in the reports from the personnel system. Based on the report from the personnel system, the compliance function reports the information for annual data collection in the sustainability reporting consolidation system. Data for metrics covering reports received concerning deviations from applicable laws and from the company’s own rules are handled within the whistleblower function and are treated with high level of confidentiality to ensure trust in the function and to protect the privacy of those involved. This means that access to the original information is limited and the data is thus not subjected to further quality checks. Should such data arise, data on convictions for violations of anti-corrup - tion and anti-bribery laws are reported directly by the compliance function. G1-2 Management of relationships with suppliers Information in G1-2 pertaining to the outcome of sustainable supplier man - agement is reported quarterly. Data collection, quality assurance, compila - tion and analysis are managed by Alleima’s purchasing function. The func - tion’s system for supplier-related information and third-party services for independent supplier sustainability rating and auditing are essential sys - tems. The information they provide forms the basis for assessing the metric of whether suppliers comply with the company’s Supplier Code of Conduct. The suppliers assessed as out of scope are not included in the metric. The boundary was based on the assessment as regulated in the supplier management due diligence process. The boundary was set based on a combination of supplier-related risk and the extent to which Alleima is deemed to be able to influence the supplier. Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other 126 | Alleima Annual Report 2025
Page 129
Appendix, cont. 4. Disclosures stemming from other legislation Disclosure requirements and datapoints Information Regulation Comment Location ESRS 2 GOV-1 21 (d) Board's gender diversity SFDR, Benchmark Regulation 90, 97 ESRS 2 GOV-1 21 (e) Percentage of board members who are independent Benchmark Regulation 86 ESRS 2 GOV-4 30 Statement on due diligence SFDR 98 ESRS 2 SBM-1 40 (d) i Involvement in activities related to fossil fuel activities SFDR, Pillar 3, Benchmark Regulation Not material ESRS 2 SBM-1 40 (d) ii Involvement in activities related to chemical production SFDR, Benchmark Regulation Not material ESRS 2 SBM-1 40 (d) iii Involvement in activities related to controversial weapons SFDR, Benchmark Regulation Not material ESRS 2 SBM-1 40 (d) iv Involvement in activities related to cultivation and production of tobacco Benchmark Regulation Not material ESRS E1-1 14 Transition plan to reach climate neutrality by 2050 EU Climate Law 105 ESRS E1-1 16 (g) Undertakings excluded from Paris-aligned Benchmarks Pillar 3, Benchmark Regulation Not excluded 126 ESRS E1-4 34 GHG emission reduction targets SFDR, Pillar 3, Benchmark Regulation 107 ESRS E1-5 38 Energy consumption from fossil sources disaggregated by sources SFDR 107 ESRS E1-5 37 Energy consumption and mix SFDR 107 ESRS E1-5 40–43 Energy intensity associated with activities in high climate impact sectors SFDR 107 ESRS E1-6 44 Scopes 1, 2, 3 (gross) and Total GHG emissions SFDR, Pillar 3, Benchmark Regulation 108 ESRS E1-6 53–55 Gross GHG emissions intensity SFDR, Pillar 3, Benchmark Regulation 108 ESRS E1-7 56 GHG removals and carbon credits EU Climate Law Not material ESRS E1-9 66 Exposure of the benchmark portfolio to climate-related physical risks Benchmark Regulation Not material ESRS E1-9 66 (a); 66 (c) Disaggregation of monetary amounts by acute and chronic physical risk; Location of significant assets at material physical risk Pillar 3 Not material ESRS E1-9 67 (c) Breakdown of the carrying value of its real estate assets by energy-efficiency classes Pillar 3 Phase-in provisions ESRS E1-9 69 Degree of exposure of the portfolio to climate-related opportunities Benchmark Regulation Phase-in provisions ESRS E2-4 28 Amount of each pollutant listed in Annex II of the E-PRTR Regulation (European Pollutant Release and Transfer Register) emitted to air, water and soil SFDR 109 ESRS E3-1 9 Water and marine resources SFDR 110 ESRS E3-1 13 Dedicated policy for water and marine resources SFDR 110 ESRS E3-1 14 Sustainable oceans and seas SFDR Not material ESRS E3-4 28 (c) Total water recycled and reused SFDR Not material ESRS E3-4 29 Total water consumption in m 3 per net rev- enue on own operations SFDR 110 ESRS 2- SBM 3 - E4 16 (a) i Specification of activities negatively affecting biodiversity-sensitive areas SFDR 96, 103 ESRS 2- SBM 3 - E4 16 (b) Identified material negative impacts with regards to land degradation, desertification or soil sealing SFDR Phase-in provisions ESRS 2- SBM 3 - E4 16 (c) Operations that affect threatened species SFDR Phase-in provisions ESRS E4-2 24 (b) Sustainable land/agriculture practices or policies SFDR Phase-in provisions ESRS E4-2 24 (c) Sustainable oceans/seas practices or policies SFDR Phase-in provisions ESRS E4-2 24 (d) Policies to address deforestation SFDR Phase-in provisions ESRS E5-5 37 (d) Non-recycled waste SFDR 112 ESRS E5-5 39 Hazardous waste and radioactive waste SFDR 112 ESRS 2- SBM 3 - S1 14 (f) Risk of incidents of forced labor SFDR Not material ESRS 2- SBM 3 - S1 14 (g) Risk of incidents of child labor SFDR Not material ESRS S1-1 20 Human rights policy commitments SFDR 114 ESRS S1-1 21 Due diligence policies on issues addressed by the fundamental International Labor Organisation Conventions 1 to 8 Benchmark Regulation 98 ESRS S1-1 22 Processes and measures for preventing trafficking in human beings SFDR Not material ESRS S1-1 23 Workplace accident prevention policy or management system SFDR 114 ESRS S1-3 32 (c) Grievance/complaints handling mechanisms SFDR 115 Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other Alleima Annual Report 2025 | 127
Page 130
Appendix, cont. Disclosure requirements and datapoints Information Regulation Comment Location ESRS S1-14 88 (b) and (c) Number of fatalities and number and rate of work-related accidents SFDR, Benchmark Regulation 116 ESRS S1-14 88 (e) Number of days lost to injuries, accidents, fatalities or illness SFDR 116 ESRS S1-16 97 (a) Unadjusted gender pay gap SFDR, Benchmark Regulation Not material ESRS S1-16 97 (b) Excessive CEO pay ratio SFDR Not material ESRS S1-17 103 (a) Incidents of discrimination SFDR Not material ESRS S1-17 104 (a) Non-respect of UNGPs on Business and Human Rights and OECD guidelines SFDR, Benchmark Regulation Not material ESRS 2- SBM 3 - S2 11 (b) Significant risk of child labor or forced labor in the value chain SFDR 117 ESRS S2-1 17 Human rights policy commitments SFDR 117 ESRS S2-1 18 Policies related to value chain workers SFDR 117 ESRS S2-1 19 Non-respect of UNGPs on Business and Human Rights principles and OECD guidelines SFDR 117 ESRS S2-1 19 Due diligence policies on issues addressed by the fundamental International Labor Organisation Conventions 1 to 8 Benchmark Regulation 98 ESRS S2-4 36 Human rights issues and incidents connected to its upstream and downstream value chain SFDR 118 ESRS S3-1 16 Human rights policy commitments SFDR Not material ESRS S3-1 17 Non-respect of UNGPs on Business and Human Rights, ILO principles or OECD guidelines SFDR, Benchmark Regulation Not material ESRS S3-4 36 Human rights issues and incidents SFDR Not material ESRS S4-1 16 Policies related to consumers and end-users SFDR Not material ESRS S4-1 17 Non-respect of UNGPs on Business and Human Rights and OECD guidelines SFDR, Benchmark Regulation Not material ESRS S4-4 35 Human rights issues and incidents SFDR Not material ESRS G1-1 10 (b) United Nations Convention against Corruption SFDR 119 ESRS G1-1 10 (d) Protection of whistleblowers SFDR 120 ESRS G1-4 24 (a) Fines for violation of anti-corruption and anti-bribery laws SFDR, Benchmark Regulation 120 ESRS G1-4 24 (b) Standards of anti-corruption and anti-bribery SFDR 119 Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other 128 | Alleima Annual Report 2025
Page 131
Turnover 2025 Environmental objective of Taxonomy-aligned activities Economic Activities Code Proportion of Taxonomy-eligible turnover Taxonomy-aligned turnover Proportion of Taxonomy-aligned turnover Climate Change Mitigation Climate Change Adaptation Water Circular Economy Pollution Biodiversity Enabling activity Transitional activity Proportion of Taxonomy-aligned in Taxonomy-eligible % SEK M % % % % % % % % Manufacture of iron and steel CCM 3.9 90 16,471 88 88 – – – – – – T 98 Sum of alignment per objective 88 – – – – – Total turnover 90 16,471 88 88 – – – – – – 88 98 Appendix, cont. Proportion of turnover from products or services associated with Taxonomy-eligible or Taxonomy-aligned economic activities – disclosure covering 2025 2025 Breakdown by environmental objectives of Taxonomy-aligned activities KPI Tota l Proportion of Taxonomy-eligible activities Taxonomy-aligned activities Proportion of Taxonomy-aligned activities Climate Change Mitigation Climate Change Adaptation Water Circular Economy Pollution Biodiversity Proportion of enabling activities Proportion of transitional activities Not assessed activities considered non-material Taxonomy-aligned activities in previous financial year Proportion of Taxonomy-aligned activities in 2024 SEK M % SEK M % % % % % % % % % % SEK M % Turn- over 18,630 90 16,471 88 88 – – – – – – 88 0 17,660 90 CapEx 1,358 53 704 52 52 – – – – – – 52 0 697 55 OpEx 2,572 58 1,470 57 57 – – – – – – 57 0 1,512 58 Proportion of turnover, CapEx, OpEx from products or services associated with Taxonomy-eligible or Taxonomy-aligned economic activities – disclosure covering 2025 (summary) 5. Taxonomy tables Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other Alleima Annual Report 2025 | 129
Page 132
Appendix, cont. OpEx 2025 Environmental objective of Taxonomy-aligned activities Economic Activities Code Proportion of Taxonomy-eligible OpEx Taxonomy-aligned OpEx Proportion of Taxonomy-aligned OpEx Climate Change Mitigation Climate Change Adaptation Water Circular Economy Pollution Biodiversity Enabling activity Transitional activity Proportion of Taxonomy-aligned in Taxonomy-eligible % SEK M % % % % % % % % Manufacture of iron and steel CCM 3.9 58 1,470 57 57 – – – – – – T 98 Sum of alignment per objective 57 – – – – – Total OpEx 58 1,470 57 57 – – – – – – 57 98 Proportion of OpEx from products or services associated with Taxonomy-eligible or Taxonomy-aligned economic activities – disclosure covering 2025 CapEx 2025 Environmental objective of Taxonomy-aligned activities Economic Activities Code Proportion of Taxonomy-eligible CapEx Taxonomy-aligned CapEx Proportion of Taxonomy-aligned CapEx Climate Change Mitigation Climate Change Adaptation Water Circular Economy Pollution Biodiversity Enabling activity Transitional activity Proportion of Taxonomy-aligned in Taxonomy-eligible % SEK M % % % % % % % % Manufacture of iron and steel CCM 3.9 53 704 52 52 – – – – – – T 99 Sum of alignment per objective 52 – – – – – Total CapEx 53 704 52 52 – – – – – – 52 99 Proportion of CapEx from products or services associated with Taxonomy-eligible or Taxonomy-aligned economic activities – disclosure covering 2025 Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other 130 | Alleima Annual Report 2025
Page 133
6. Substances of concern (E2-5) By hazard class 1) Ton Tota l Carcinogenicity, categories 1 and 2 Germ cell mutagenicity, categories 1 and 2 Reproductive toxicity, categories 1 and 2 Endocrine disruption for human health or environment Persistent, Bioaccumulative and Toxic or Very Persistent, Very Bioaccumulative properties Skin and Respiratory sensitisation , category 1 Chronic hazard to the aquatic environment, categories 1 to 4 Hazardous to the ozone layer Specific target organ toxicity, repeated and single exposure, categories 1 and 2 Total amounts of sub- stances of high concern 10,223 Produced at the facility – – – – – – – – – – Leave facility as products – – – – – – – – – – Leave facility as part of products 9,502 9, 502 12 12 – – 9,502 12 – 8,288 Substances that are used at the facility 10,220 10,220 30 50 – – 47 1,168 – 1,113 Substances that are generated at the facility – – – – – – – – – – Leave facility as emissions 3 3 1 1 – – 2 3 – 0 Total amounts of substances of very high concern 16 Produced at the facility – – – – – – – – – – Leave facility as products – – – – – – – – – – Leave facility as part of products 0 – – 0 – – 0 0 – – Substances that are used at the facility 16 3 0 16 – – 12 14 – 15 Substances that are generated at the facility – – – – – – – – – – Leave facility as emissions 0 0 0 0 – – – 0 – 0 1) The same substance can be included in more than one hazard class. Appendix, cont. Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other Alleima Annual Report 2025 | 131
Page 134
Auditor’s limited assurance report of Alleima AB (publ)'s statutory sustainability statement To the general meeting of the shareholders of Alleima AB (publ) corporate identity number 559224-1433 Conclusion We have conducted a limited assurance engagement of the sus - tainability statement for Alleima AB (publ) for the financial year 2025. The sustainability statement is included on page 95–131 in this document. Based on our limited assurance engagement as described in the section Auditor's responsibility, nothing has come to our atten - tion that causes us to believe that the sustainability statement does not, in all material respects, meet the requirements of the Swedish Annual Accounts Act which includes, — whether the sustainability statement meets the requirements of ESRS, — whether the process the company has carried out to identify reported sustainability information has been conducted as described in IRO-1 Description of the processes to identify and assess material impacts, risks and opportunities on page 103 of the sustainability statement, — compliance with the reporting requirements of the EU's Green Taxonomy Regulation Article 8 Basis for conclusion We have conducted the limited assurance engagement in accor - dance with FAR's recommendation RevR 19 Revisorns översiktliga granskning av den lagstadgade hållbarhetsrapporten. Our respon - sibility according to this recommendation is further described in the section Auditor's responsibility. We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our conclusion. Other matter The Sustainability Report for 2024 was prepared in accordance with the Global Reporting Initiative and was subject to our review. Limited assurance of the comparative figures in the Sustainability Report for 2025, in accordance with the current wording of the Annual Accounts Act after 1 July 2024, has therefore not been performed. Other information than the sustainability statement This document also contains other information than the sustain - ability statement and is found on pages sidorna 1–94 and 134–140. The Board of Directors and the Managing Director are responsible for this other information. Our conclusion on the sustainability statement does not cover this other information and we do not express any form of assur - ance conclusion regarding this other information. In connection with our limited assurance engagement on the sustainability statement, our responsibility is to read the informa - tion identified above and consider whether the information is materially inconsistent with the sustainability statement. In this procedure we also take into account our knowledge otherwise obtained in the limited assurance engagement and assess whether the information otherwise appears to be materially mis - stated. If we, based on the work performed concerning this information, conclude that there is a material misstatement of this other infor - mation, we are required to report that fact. We have nothing to report in this regard. Responsibilities of the Board of Directors and the Managing Director The Board of Directors, and the Managing Director, are responsible for the preparation of sustainability statement in accordance with Chapter 6, Sections 12–12f of the Swedish Annual Accounts Act, and for such internal control as the Board of Directors and the Managing Director determine necessary to enable the preparation of the sustainability statement that is free from material misstate - ments, whether due to fraud or error. Auditor’s responsibility Our responsibility is to express a conclusion on whether the sus - tainability report has been prepared in accordance with Chapter 6, Sections 12–12f of the Swedish Annual Accounts Act based on our review. The limited assurance engagement has been con - ducted in accordance with FAR's recommendation RevR 19 Revi- sorns översiktliga granskning av den lagstadgade hållbarhetsrap - porten. This recommendation requires that we plan and perform our procedures to obtain limited assurance that the sustainability statement is prepared in accordance with these requirements. The procedures in a limited assurance engagement vary in nature and timing from, and are less in extent than for, 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 a reason - able assurance engagement been performed. This means that it is not possible for us to obtain such assurance that we become aware of all significant matters that could have been identified if a reasonable assurance engagement had been performed. Our firm applies ISQM 1 (International Standard on Quality Man - agement), which requires the firm to design, implement and operate a system of quality management, including policies and procedures regarding compliance with ethical requirements, professional standards, and applicable legal and regulatory requirements. We are independent of Alleima AB (publ) in accordance with professional ethics for accountants in Sweden and have otherwise fulfilled our ethical responsibilities in accordance with these requirements. A limited assurance engagement involves performing proce - dures to obtain evidence about the sustainability statement. The auditor selects the procedures to be performed, including assess - ing the risks of material misstatements in the sustainability state - ment, whether due to fraud or error. In this risk assessment, the auditor considers the parts of the internal control that are relevant to how the Board of Directors and the Managing Director prepares the sustainability statement, in order to design procedures that are appropriate under the circumstances, but not for the purpose of providing a conclusion on the effectiveness of the company’s internal control. The review consists of making inquiries, primarily of persons responsible for the preparation of the sustainability statement, performing analytical review, and conducting other limited review procedures. Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other 132 | Alleima Annual Report 2025
Page 135
The review procedures primarily include Summary of the work performed Our procedures regarding the process that the company has implemented to identify sustainability information to be reported included, but were not limited to, the following: — Obtaining an understanding of the process by: — Making inquiries to understand the sources of information used by management (e.g., stakeholder dialogues, business plans, and strategy documents); and — Reviewing the company’s internal documentation of its pro - cess; and — Evaluating whether the information obtained from our actions regarding the process implemented by the company is consis - tent with the description of the process in IRO-1 Description of the processes to identify and assess material impacts, risks and opportunities on page 103 of the sustainability statement Our procedures regarding the sustainability report included, but were not limited to, the following: — Through inquiries, obtain a general understanding of the inter - nal control environment, reporting processes, and information systems relevant to the preparation of the information in the sustainability statement — Evaluate whether the information identified by the Process is included in the sustainability statement; — Evaluate whether the structure and the presentation of the sus - tainability statement is in accordance with the ESRS; — Perform inquires of relevant personnel and analytical proce - dures on selected information in the sustainability statement; — Perform substantive assurance procedures on selected infor - mation in the sustainability statement; — Through inquiries and analytical procedures, evaluate support - ing evidence to the methods, assumptions and data for devel - oping significant estimates and forward-looking information; — Obtain an understanding of the process to identify taxonomy- eligible and taxonomy-aligned economic activities and the cor - responding disclosures in the sustainability statement; — The review of taxonomy disclosures included, but was not lim - ited to, the following review procedures: — Conducted inquiries to obtain an understanding of the process and sources of information used in the taxonomy disclosures — Performed substantive testing on a selection of samples regarding disclosures provided in accordance with the EU Green Taxonomy Inherent limitations in preparing the sustainability statement In reporting forward-looking information in accordance with ESRS, the Board of Directors and the Managing Director of Alleima AB (publ) are required to prepare the forward-looking information on the basis of disclosed assumptions about events that may occur in the future and possible future actions by Alleima AB (publ). Actual outcomes are likely to be different since anticipated events frequently do not occur as expected. Stockholm, March 19, 2026 Öhrlings PricewaterhouseCoopers AB Magnus Svensson Henryson Authorized Public Accountant Auditor-in-Charge This is a translation of the Swedish language original. In the event of any differences between this translation and the Swedish language original, the latter shall prevail. Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other Alleima Annual Report 2025 | 133
Page 136
134 | Alleima Annual Report 2025 Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other
Page 137
Other Definitions ...................................................................................................................... 136 Alternative Performance Measures ............................................................ 138 Five-year overview ................................................................................................. 140 Alleima Annual Report 2025 | 135 Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other
Page 138
Financial definitions Adjusted earnings per share Adjusted profit for the period divided by average number of shares outstanding during the year. Adjusted EBIT Operating profit (EBIT) excluding metal price effects and items affecting comparability. Adjusted EBITDA Operating profit (EBIT) before depreciation and amortizations, adjusted for metal price effects and items affecting comparability. Adjusted profit for the period Profit for the period, adjusted for metal price effects, items affect - ing comparability, and income tax effects. Book-to-bill, % The order intake of the period divided by the revenues of the period. Capex Acquisitions and sale of tangible and intangible assets. EBIT Earnings before interest and taxes (Operating profit). EBIT/EBITDA margin, % EBIT/EBITDA in relation to revenues. EBITDA Operating profit (EBIT) excluding depreciations and amortizations. Financial net debt (+) Net debt, excluding net pension and lease liabilities. Free operating cash flow EBITDA adjusted for non-cash items plus the change in net work - ing capital minus investments and disposals of tangible and intan - gible assets and plus the amortization of lease liabilities. Items affecting comparability (IAC) Capital gains and losses from divestments and larger restructuring initiatives, impairments, capital gains and losses from divestments of financial assets as well as other material items having a signifi - cant impact on the comparability. Metal price effects Metal price effect on the operating profit during a particular period from changes in alloy prices arising from the timing differ - ence between the purchase (as included in cost of goods sold) and the sale of an alloy (as included in the revenue) when alloy surcharges are applied. Net debt Interest-bearing current and non-current liabilities, including net pension and lease liability, less cash and cash equivalents. Net working capital Total of inventories, trade receivables, account payables and other current non-interest-bearing receivables and liabilities, including those classified as liabilities and assets held for sale, but excluding tax assets and liabilities and provisions. Net working capital to revenues, % The annual value is the average working capital for four quarters divided by revenues for the full year. Order intake Order intake for a period refers to all orders received for immedi - ate delivery and those orders for future delivery for which delivery dates and quantities have been confirmed. Organic growth, % Change in order intake or revenues after adjustments for ex change rate effects and structural changes such as divestments and acquisitions and alloy surcharges. Return on capital employed, % Rolling 12 months’ operating profit/loss plus financialincome (excl. derivatives), as a percentage of a four-quarter average capital employed. Return on capital employed excluding cash, % Rolling 12 months’ operating profit/loss, as a percentage of a four-quarter average capital employed excluding cash and cash equivalents. Sustainability definitions Exposure hours (ET) Number of hours worked in the time-period by the workforce. Refers to the amount of time where the workforce is exposed to the risk of a work-related incident. Fatal Injury (FI) An Injury that results in the death of a Worker. Injury An occurrence of physical or mental harm in the course of work because of a single or instantaneous event. An Injury will be classi - fied as one of the following: Fatal, Lost Time Injury (LTI), Restricted Work Injury (RWI), Medical Treatment Injury (MTI) or Minor Injury (MI). Lost Time Injury (LTI) An Injury that results in one or more Days Lost from work at some time (not necessarily immediately) after the shift in which the Injury occurred. Lost Time Injury Frequency Rate (LTIFR) Number of Fatal Injuries and Lost Time Injuries per million Expo - sure Hours. Medical Treatment Injury (MTI) An Injury that results in a Worker not being able to return to their Full Normal Duties immediately following any treatment for that Injury (i.e. for the remainder of the current shift), but where they are / would have been able to return to Full Normal Duties on the next calendar day. Minor Injury (MI) An Injury where the worker can immediately return to their Full Normal Duties after receiving treatment for the Injury. Definitions 136 | Alleima Annual Report 2025 Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other
Page 139
Primary Material Virgin material. Recycle rate Secondary material in relation to total material (Primary + Secondary). Restricted Work Injury (RWI) An Injury where the Worker does not have any Days Lost but would have been able to perform only some of their Normal Duties. Scope 1 – Raw materials based CO2 emission from reduction of carbon content in the steel manu - facturing process. Scope 1 – Fuels CO2 emission from fuel combustion. Scope 2 CO2 emission from purchased electricity, heat and steam. Scope 3 CO2 emissions occurring in the company’s value chain, excluding those included in Scope 1 and Scope 2. Secondary Material Recycled material. Total Recordable Injury (TRI) The sum of the number of Fatal Injuries (FI), Lost Time Injuries (LTI), Restricted Work. Injuries (RWI) and Medical Treatment Injuries (MTI). Total Recordable Injury Frequency Rate (TRIFR) Number of Total Recordable Injuries per million Exposure Hours. Product definitions Austenitic steel A stainless steel with austenitic crystal structure which contains high share of nickel and chromium. It combines excellent mechan - ical properties and resistance to corrosion with good ductility and weldability. Bi-polar plates Pre-coated strip steel; bipolar plates for Polymer Electrolyte Fuel Cell (PEFC) applications. Cladding tubes Cladding tubes are used mainly as fuel tubes, with a group of fuel rods containing the fissionable material (uranium) providing fuel for the nuclear reactor. Coated strip steel Stainless steel in strip form and pre-coated for specific needs. Compressor valve steel Strip steel grades with a very high fatigue resistance, especially designed to meet the tough demands on compressor valves. Corrosion Resistant Alloy (CRA) Grade with high mechanical strength and excellent corrosion resistance, e.g. to pitting and crevice corrosion, stress corrosion cracking (SCC), acid and caustic environments, erosion-corrosion. GDI automotive tubing Seamless stainless steel tubing developed for gasoline direct injection (GDI) Heating elements and modules Prefabricated heating modules are designed for a wide range of thermal processing applications up to 1,700° C (3,090° F) element temperature. Heating resistance materials Products used for the manufacture of heating elements, thermo - couples and a range of highly demanding high temperature appli - cations. High-pressure tubing Seamless high-pressure tubes for a variety of high-pressure applications using liquid or gas as the pressure medium, such as hydraulic installations, test benches and water-jet cutting equipment. Hollow bar Hollow bar is a thick-walled stainless steel tube often used for machining components. Hydraulic and instrumentation tubing Hydraulic and instrumentation tubing are supplied with smooth surfaces and close dimensional tolerances reducing the risk of leakages when connecting tubes with couplings. Kanthal APM® Kanthal® APM is an advanced powder-metal l urgical, dispersion-strengthened, ferritic iron-chromium-alumin - ium alloy (FeCrAl alloy) for use at temperatures up to 1,425° C (2,600° F). The alloy is characterized by exceptionally good form stability and oxidation resistance. Kanthal® APMT Kanthal® APMT is an advanced powder metallurgical, dispersion strengthened, ferritic iron-chromium-aluminum alloy (FeCrAlMo alloy) recommended for continuous use up to 1,250° C (2,280° F) in oxidizing and reducing environments. Medical wire Ultra-fine wire specifically for medical devices. OCTG Oil Country Tubular Goods (OCTG) is used as production pipe for transporting oil or gas from the borehole, for water or gas injection in the opposite direction and as casing in the borehole. Polymer Electrolyte Fuel Cells (PEFC) Polymer electrolyte fuel cells are electrochemical devices, con - verting the chemical energy of fuel directly into electrical energy. Rock drill steel Drill steel developed for the manufacturing of top-hammer rock drill rods. Umbilical tubes Umbilical tubes are the lifeline between surface installations and subsea equipment, and link surface and seafloor oil and gas equipment for controls, power or heat. Umbilical tubes are designed for high syste matic pressure at great depth, where thinner walls and high strength are required. Alleima Annual Report 2025 | 137 Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other
Page 140
Alternative Performance Measures This annual report contains certain alternative performance mea - sures that are not defined by IFRS. These measures are included as they are considered to be important performance indicators of the operating performance and liquidity of Alleima. They should not be considered a substitute for Alleima’s financial statements prepared in accordance with IFRS. Alleima’s definitions of these measures are described below, and as other companies may cal - culate non-IFRS measures differently, these measures are there - fore not always comparable to similar measures used by other companies. Organic order intake and revenue growth Change in order intake and revenues after adjustments for exchange rate effects and structural changes such as divestments and acquisitions and alloy surcharges. Organic growth is used to analyze the underlying sales performance in the Group, as most of its revenues are in currencies other than in the reporting currency (i.e SEK, Swedish Krona). Alloy surcharges are used as an instrument to pass on changes in alloy costs along the value chain and the effects from alloy surcharges may fluctuate over time. Adjusted operating profit (EBIT) Alleima considers Adjusted operating profit (EBIT) and the related margin to be relevant measures to present the profitability of the underlying business excluding metal price effects and items affecting comparability (IAC). Metal price effect is the difference between the sales price and purchase price on metal content used in the production of prod - ucts. Metal price effect of operating profit in a particular period arises from changes in alloy prices arising from the timing differ - ence between the purchase, as included in the cost of goods sold, and the sale of an alloy, as included in revenues, when alloy sur - charges are applied. IAC includes capital gains and losses from divestments and larger restructuring initiatives, impairments, cap - ital gains and losses from divestments of financial assets as well as other material items having a significant impact on the compa - rability. Adjusted operating profit (EBIT) and margin: Operating profit (EBIT) excluding items affecting comparability and metal price effects. Margin is expressed as a percentage of revenues. Adjusted operating profit (EBIT) SEK M 2025 2024 Operating profit 938 1,498 Reversal (Note 2): Items affecting comparability 342 0 Metal price effect 275 446 Adjusted operating profit (EBIT) 1,555 1,944 Revenues 18,630 19,691 Adjusted operating profit (EBIT) margin, % 8.3 9.9 Adjusted earnings per share, diluted Alleima considers Adjusted earnings per share (EPS), diluted to be relevant to understand the underlying performance, which excludes items affecting comparability and metal price effects between periods. Adjusted EPS, diluted: Profit/loss, adjusted for items affecting comparability and metal price effects, attributable to equity hold - ers of the parent company divided by the average number of shares, diluted, outstanding during the year. Adjusted profit for the period and adjusted earnings per share, diluted SEK M 2025 2024 Profit for the period 671 1,221 Reversal: Adjustment items EBIT (Note 2) 617 446 Tax on adjustment items -129 -94 Adjusted profit for the period 1,160 1,573 Attributable to Owners of the parent company 1,160 1,573 Non-controlling interests – – Average number of shares, diluted, at the end of the period (millions) 250.855 250.867 Adjusted earnings per share, diluted, SEK 4.62 6.27 Net working capital (NWC) in relation to revenues and return on capital employed (ROCE) Alleima considers NWC in relation to revenues relevant as measure of both the Group’s efficiency and its short-term financial health. Net working capital (NWC): Total of inventories, trade receiv - ables, account payables and other current non-interest-bearing receivables and liabilities, including those classified as liabilities and assets held for sale, but excluding tax assets and liabilities and provisions. Net working capital (NWC) in relation to revenues: Quarter is quarterly annualized and year-to-date numbers are based on a four-quarter average. Alleima considers ROCE to be useful for the readers of its finan - cial reports as a complement in assessing the possibility of imple - menting strategic investments and considering the Group’s ability to meet its financial commitments. In addition, it is useful to also follow ROCE excluding cash, as it is focused on the operating cap - ital employed. Capital employed: Total assets less non-interest-bearing liabili - ties (including deferred tax liabilities). Return on capital employed (ROCE): Rolling 12 months’ operating profit/loss plus financial income (excl. derivatives), as a percentage of a four-quarter average capital employed. ROCE excluding cash: Rolling 12 months’ operating profit/loss, as a percentage of a four-quarter average capital employed excluding cash and cash equivalents. 138 | Alleima Annual Report 2025 Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other
Page 141
SEK M 2025 2024 Inventories 6,813 7,407 Trade receivables 2,426 2,911 Account payables -1,640 -2,249 Other receivables 675 859 Other liabilities -2,052 -2,107 Net working capital 6,222 6,821 Average net working capital 6,666 6,909 Revenues annualized 18,630 19,691 Net working capital to revenues, % 35.8 35.1 Tangible assets 7,742 7,757 Intangible assets 1,950 2,037 Cash and cash equivalents 1,891 1,912 Other assets 10,915 12,077 Other liabilities -4,954 -5,888 Capital employed 17,543 17,895 Average capital employed 17,823 17,407 Operating profit rolling 12 months 938 1,498 Financial income, excl. derivatives, rolling 12 months 35 57 Total return annualized 973 1,554 Return on capital employed (ROCE), % 5.5 8.9 Average capital employed excl. cash 16,135 15,707 Return on capital employed excl. cash, % 5.8 9.5 Free operating cash flow (FOCF) Alleima considers free operating cash flow (FOCF) to be useful to provide an indication of the funds the operations generate to be able to implement strategic investments, make amortizations and pay dividends to the shareholders. Free operating cash flow (FOCF): EBITDA adjusted for non-cash items plus the change in net working capital minus investments and disposals of tangible and intangible assets and plus the amor - tization of lease liabilities. SEK M 2025 2024 EBITDA 1,950 2,410 Non-cash items 301 148 Changes in working capital 86 33 Capex -1,089 -1190 Amortization, lease liabilities -148 -135 Free operating cash flow 1,100 1,266 Net debt to Equity and Net debt to Adjusted EBITDA Alleima considers both Net debt to Equity and Net debt to Adjusted EBITDA to be useful for the readers of its financial reports as a complement for assessing the possibility of dividends, imple - menting strategic investments and considering the Group’s ability to meet its financial commitments. Net debt to Equity ratio is included in Alleima’s financial targets. Net debt: Interest-bearing current and non-current liabilities, including net pension liabilities and leases, less cash and cash equivalents. Adjusted EBITDA: Operating profit (EBIT) before depreciation and amortizations, adjusted for metal price effects and items affecting comparability. Financial net debt Alleima considers financial net debt to be a useful indicator of the business’s ability to pay off all debt, excluding pension liabilities and lease liabilities, at a certain point in time. Financial net debt: Net debt, excluding net pension and lease liabilities. SEK M 2025 2024 Non-current interest-bearing liabilities 916 1,212 Current interest-bearing liabilities 144 134 Prepayment of pensions -34 -65 Cash and cash equivalents -1,891 -1,912 Net debt -864 -631 Net pension liability -589 -820 Leasing liabilities -418 -460 Financial net debt -1,871 -1,911 Adjusted EBITDA 2,485 2,856 Total Equity 16,516 16,614 Net debt/Equity ratio -0.05 -0.04 Net debt/Adjusted EBITDA ratio (multiple) -0.35 -0.22 Alleima Annual Report 2025 | 139 Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other
Page 142
Five-year overview Key figures – Group SEK million 2025 2024 2023 2022 2021 Order intake 17,741 19,419 21,684 22,130 15,681 Organic growth, % -4 -6 -6 19 26 Revenues 18,630 19,691 20,669 18,405 13,847 Organic growth, % 0 1 8 13 -3 Adjusted gross margin, % 21.4 22.3 22.6 21.8 20.6 Adjusted EBITDA 2,485 2,856 3,056 2,540 1,811 Margin, % 13.3 14.5 14.8 13.8 13.1 Adjusted operating profit (EBIT) 1,555 1,944 2,141 1,681 1,055 Margin, % 8.3 9.9 10.4 9.1 7.6 Metal price effects -275 -446 -95 695 487 Items affecting comparability -342 0 0 -254 -176 Operating profit (EBIT) 938 1,498 2,046 2,122 1,379 Margin, % 5.0 7.6 9.9 11.5 10.0 Profit for the period 671 1,221 1,574 1,206 1,228 Adjusted earnings per share, diluted, SEK 4.62 6.27 6.56 3.36 3.82 Earnings per share adjusted for metal price effects, diluted, SEK 3.54 6.27 6.56 2.55 3.27 Earnings per share, SEK 2.68 4.88 6.28 4.76 4.80 Cash flow from operations 2,011 2,123 2,234 687 1,151 Free operating cash flow 1,100 1,266 1,688 505 1,046 Net working capital to revenues,1 35.8 35.1 34.3 32.8 31.2 Return on capital employed, %1 5.5 8.9 12.2 13.2 10.4 Return on capital employed excluding cash, %1 5.8 9.5 12.9 14.2 11.0 Net debt/Equity ratio -0.05 -0.04 -0.02 0.00 0.11 Net debt/Adjusted EBITDA ratio -0.35 -0.22 -0.08 0.01 0.73 Normalized tax rate, % 23.9 23.9 24.2 24.3 24.9 Average number of shares, diluted, at the end of the period (millions) 250.855 250.867 250.876 250.877 250.877 Number of shares at the end of the period (millions) 250.157 250.175 250.467 250.877 250.877 Number of employees2 6,380 6,309 6,110 5,886 5,465 Number of third party workers2 440 516 596 612 413 1) The annual number is based on a four-quarter average. 2) Full-time equivalent. 140 | Alleima Annual Report 2025 Introduction Financial informationStrategy and operations Divisions Corporate governance Sustainability Other
Page 143
Design and production: Alleima and Solberg Photo: Alleima