Negative currency effects and reduced market dynamics impact business performance in the third quarter of 2023, lowering expectations for the year overall

Forbo Holding AG / Key word(s): Miscellaneous Negative currency effects and reduced market dynamics impact business performance in the third quarter of 2023, lowering expectations for the year overall 25-Oct-2023 / 06:45 CET/CEST Release of an ad hoc announcement pursuant to Art. 53 LR The issuer is solely responsible for the content of this announcement. MEDIA RELEASE AD HOC ANNOUNCEMENT PURSUANT TO ARTICLE 53 OF THE SIX EXCHANGE REGULATION LISTING RULES

Baar, October 25, 2023

In the third quarter of 2023, Forbo faced increasingly difficult general conditions. The modest recovery that was tangible in the first half of the year did not continue.

The geopolitical and macroeconomic situation deteriorated noticeably in the third quarter, which had an impact on the economic environment. The construction market has deteriorated significantly not least due to higher interest rates, while the investment activities of Forbo’s customers slowed markedly because of increasing global uncertainties. This trend was apparent in both divisions and all regions. In addition, the expected upswing in China has not yet occurred.

Compared with the first half of 2023, exchange rates have continued to weaken against the very strong Swiss franc. From the present perspective, currency effects over the 2023 business year as a whole will have a negative impact on net sales of around CHF 80 million and some CHF 10 million on EBIT.

In this challenging environment, Forbo will largely offset the significant rise in personnel and energy costs through ongoing measures to secure profitability and the implementation of operational projects in 2023.

For 2023 overall, Forbo expects net sales in the corporate currency to decline by about 10% year on year, with Group profit in the range of around CHF 100 million.

Free cash flow for 2023 will show a marked improvement thanks to focused optimization of net operating working capital. Forbo therefore expects roughly a doubling of the previous year’s value (2022: CHF 50.5 million).

In view of the Group’s sound, solid and debt-free financial foundation, its proven strategy, and leading market positions, Forbo is well prepared to meet the challenges of the demanding market environment it currently faces. The measures to enhance efficiency and the strategic investments implemented at the beginning of the year will continue. These will enable Forbo to improve competitiveness and create the necessary basis to take advantage of increasing demand.