Annual report (Annual Report 2025 2026 04 24 053636 qchr)

2025

Annual report

Table of

contents

James Neuling, CEO

James Neuling, CEO of Belysse Group, commented:

Continued soft market conditions were observed in 2025, in particular in our European Residential business line, while trading within the Commercial business lines in both US and Europe was more resilient. The reported financials of Bentley Mills were also affected by unfavourable USD translation effects.

I want to thank the team who continue to work hard on commercial excellence, efficiency and costs while we are waiting for the markets to recover.

In addition, the European business has been preparing a major upgrade of its ERP system in 2026.

We keep progressing well in our sustainability program, achieving further reductions in CO2 emissions per m² produced of 0.9 kg, a 23% decrease versus the 2018 baseline, increasing the share of recycled content from 33.4% in 2024 to 36.4% in 2025 and successfully re-certifying collections to the latest Cradle to Cradle standards.

Both Bentley and Modulyss upgraded their Cradle to Cradle Certified® portfolios to C2C Certified® Full Scope certification in accordance with Version 4.0.

Review by Division

United States

The decline in FY 2025 Revenues was volume driven and due to unfavourable USD translation, which was partially offset by increased average selling prices.

Full Year 2025 Adjusted EBITDA decreased versus prior year with slightly increased Adjusted EBITDA margin.

Whilst volumes in the second half of the year were lower than the equivalent comparative figure, with Q4 2025 Revenue 8.8% below prior year at constant exchange rate, the order book showed signs of improvement at the end of Q4 2025.

Europe

The market softness continued and negatively influenced volumes and revenues, in particular in the Residential business.

Full year 2025 Adjusted EBITDA decreased as a result of the lower volumes which were partially mitigated by improved pricing, higher share of the Commercial business and reduced fixed expenses.

Other Financial Items Review

Non-Recurring Items below Adjusted EBITDA

The net impact of non-recurring items on the 2025 net result was a negative €5.9m (€0.16 per share) vs. a positive

€0.1m (€0.00 per share) in 2024. The expense in 2025 is mainly related to the implementation of our new ERP system and the recognition for soil remediation and purification in Europe.

Taxation

The Group reported a tax expense for 2025 of €3.5m (€2.3m in 2024) based on an overall loss before tax of €3.1m (profit before tax of €12.9m in 2024). This amount mainly results from the taxing of the profits at our US division and the non-recognition of deferred tax assets on the losses in Europe.

Net Financing Costs

The net financing cost of €12.3m (€10.1m in 2024) primarily represent the interest expenses on external borrowings. This increase is strongly influenced by the USD translation effects in 2025 and the one-time positive impact of the settlement of the Senior Secured Note that matured in 2024.

Earnings per share

Loss per share of €0.18 in 2025 compared to earnings per share of €0.29 in 2024.

Dividend

Given our focus remains on deleveraging and further investing into the business, the Board does not propose a dividend for the year.

As a reminder, our 4-year transformation roadmap which started in January 2022 called BEYOND consists of three pillars

Increased focus on Sustainability through innovative products and production processes

Incremental drive for Efficiency through lean strategies

Emphasis on Agility through Digital and operational improvement initiatives

Sustainability through innovation

Total Scope 1 and 2 CO₂ emissions per m² produced at our manufacturing sites decreased by 23% versus the 2018 baseline. In 2025 we launched several initiatives, including technical modifications to reduce energy consumption, installation of EV charging infrastructure, electrification of the company vehicle fleet, further electrification of forklifts, and we raised our share of renewable energy.

Under our BEYOND program, we committed to 50% recycled content by 2025 for modulyss and Bentley. Both sites delivered on our BEYOND recycled content commitment for 2025, each exceeding the 50% threshold.

In 2025, both modulyss and Bentley re-certified their Cradle to Cradle Certified® collections to the most recent Cradle to Cradle Certified® Product Standard, securing Full Scope certification in line with Version 4.0.

Efficiency Agility

Lean savings for 2025 amounted to €1.7m, driven by 23 improvement initiatives, against a target to deliver €1.5m in this fourth year of BEYOND.

This means that from the start in January 2022 until now, the Lean program has delivered €9.3m in savings, against a target of €8.0m. These savings were driven by strong contributions in particular from quality, material, energy and labour efficiency initiatives.

We are continuously working to further improve our delivery performance and service level to our customers, at the same time managing our end-to-end inventory:

• Our Fast Track quick-ship program at Bentley, designed for maximum flexibility and expedited delivery to the client, covers a wide range of 20 styles representing 38% of modular carpet sales during the year. Orders of 1,500 square yards or less of products in this program will be ready to ship within 10 business days of order.

• Our quick ship program at modulyss.

In the fast-paced world of design & build, time is of the essence. Therefore, we have defined a "quick ship" program covering products across 17 collections, with products ready for shipment within 2 to 4 weeks.

Belysse Group is a leading producer of textile floor coverings with a strong legacy in soft flooring. We create, develop and produce sustainable flooring solutions for commercial and residential applications across the globe. Under premium brands ITC, modulyss, arc edition and Bentley.

Representing a consolidated revenue of €254.2m focusing 90% on North-America and Europe under the premium brands Bentley (US), modulyss, arc edition and ITC (Europe). Belysse employs nearly 1,000 people and operates three manufacturing sites: 2 in Belgium (Tielt and Zele) and 1 in the United States (Los Angeles).

In 2022 the Balta brand was sold to Victoria PLC, together with Rugs, Residential polypropylene and Non-Woven businesses. From then on, the group's main focus lies on developing its commercial and premium residential businesses in Europe and the US, under mother brand Belysse.

Belysse's history spans almost 6 decades. Sixty years of textile innovation, filled with important milestones. From product launches to important corporate evolutions.

Since June 2017, Belysse Group NV has been a public company listed on Euronext Brussels.

United States

Europe

Trendy, comfortable flooring solutions? Look no further! ITC has the perfect product range for any residential application. Tufted broadloom, carpet tiles and rugs that turn any space into a beautiful, cosy haven.

Quality for the most high-end clients. Since 2010, modulyss has been crafting soft flooring solutions for international commercial projects, always with a sharp focus on creativity, functionality, and sustainability. The result? Flooring that elevates every space and occasion.

arc edition transforms rooms worldwide. Whether they have been designed for hospitality, leisure or office, arc edition's wall-to-wall carpet flooring solutions combine passion, creativity and technical know-how. Custom-made solutions that fit your requirements, whatever they may be.

Since 2025, this commercial broadloom range has been integrated into ITC under the name High Performance Collections.

California-based Bentley Mills Inc. has been at the forefront of carpet design for over 45 years. Their broadloom, carpet tile and area rug products can be found in the most stylish interiors across the globe. Timeless, luxurious and sustainable. Bentley Mills Inc. takes its social responsibility to heart, earning them top-industry certifications such as the Cradle to Cradle and NSF® 140. At Bentley Mills, we manufacture Red List Free, PVC free, PFAS free, and Antimicrobial free carpet in a LEED-EB Gold facility in California, operating under the strictest environmental regulations in the nation.

Belysse is active in both Europe and the USA. Belgium houses our headquarters (Waregem), and two production plants (Zele and Tielt), whereas the US has one production plant (Los Angeles).

But it is not only our facilities that can be found across the globe! Our products too are appreciated internationally and that is why we stay close to the A&D community on both sides of the Atlantic. With modulyss showrooms in London, Paris and Ghent, and with Bentley Mills showrooms in New York, Boston, Chicago, Atlanta, Washington DC, Los Angeles and San Francisco.

Europe & US

• Reduction in revenue of 9.3% to €254.4m and a 23.5% decrease in Adjusted EBITDA to €32.5m

• In 2025, our greenhouse gas emission reduction targets were officially validated by the Science Based Targets initiative (SBTi). Our approved near-term targets commit us to reducing our absolute scope 1 and 2 greenhouse gas emissions by 42% by 2030, from a 2023 base year and to reducing our absolute scope 3 greenhouse gas emissions from purchased goods & services and upstream transportation & distribution by 25% within the same timeframe.

• As part of our BEYOND program, we committed to 50% recycled content by 2025 for modulyss and Bentley. Both sites delivered on our BEYOND recycled content commitment for 2025, each exceeding the 50% threshold.

• Both Bentley and modulyss upgraded their Cradle to Cradle Certified® portfolios to C2C Certified® Full Scope certification in accordance with Version 4.0.

  Europe

• Reduction in revenue of 12.2% to €110.5m and a 57% decrease in Adjusted EBITDA to

  €4.5m.

• Unitary price increases were passed onto customers in early 2025 to help offset wage inflation.

• Energy and raw material prices trended downwards in 1H and then stabilized 2H.

  Highlights 2025

  Architects & Designers market segment

• We continue to enhance our service to the A&D community, and strengthen our direct connection with customers while securing more impactful and high-value projects. We again made important and innovative product launches, entrenching modulyss as a renowned first-class supplier of multi category flooring solutions (carpet tiles, LVT, broadloom, customized printed tiles and bespoke chromojet broadloom) across the segments of Workspace, Education, Hospitality and Retail.

• We launched the Broadloom High Performance Collection to replace our Arc Edition. This collection is aimed at the project market and is particularly suited to hospitality. It offers 50 standard designs, using environmentally superior solution dyed nylon as a base for core colours, which can be overdyed for the more discerning customer. This helps us to better manage our inventory and our environmental impact.

• Our recently launched ecoBACK PLUS gained traction in the market and significant buzz as architects and building developers embraced its benefits of 85% recycled and biobased content, and its extremely lightweight composition, offering a 48% reduction in backing weight with primary benefits

  from lower and alternative material use, and secondary benefits from reduced transport emissions.

  Highlights 2025

  • Leading architectural firms featured this in their internal communications.

  • Additions were made to the collection with the Q4 launch of Haelo, building upon the concept and utilising a new concept yarn with 90% certified recycled content.

• The rollout of our Revolt LVT collection gained traction and firms began to adopt this as an add-on to our core activities with our modulyss carpet tiles.

  The Distribution and Retail segment

• The Distribution & Retail environment faced major disruptions in 2025, including the exit of some key players and customer consolidation efforts.

• Customers have shown continued, or renewed, trust in our expertise.

• Limited changes in our product portfolio were aimed at the low-end legacy collections and we remain firmly focused in the high-end segments for Polyamide and Polyester.

• Pricelevelsremain stable in this segment.

United States

• Bentley delivered resilient adjusted EBITDA performance of €29.9m despite a challenging commercial flooring market. Even with softer conditions driven by extended US government shutdowns, a weaker USD and tariff uncertainty. Due to our strong local supply chain, the impact of the newly introduced tariffs was limited. Profitability was supported by a favorable product mix and disciplined cost control.

• Bentley Mills continues the transition of our Nylon 6 and Nylon 6,6 portfolio with strategic launches that is on target of our long-term objectives to balance our premium nylon materials supply.

• We delivered strong performance across core market segments, reinforcing our position as a trusted partner in high-impact commercial environments. We continue to grow in large segments of stadiums & arenas, major retail, and airports by our design, performance and sustainability. Our ease of maintenance, durability, and environmental leadership are favorably highlighted as main decision points from our end users.

• Additionally, we see these wins with prestigious projects turning into annuity business with balanced revenue from stable legacy accounts and

  growth-oriented partnerships to strengthen long-term growth momentum

  • Retail: Continued engagement with national retailers generated recurring revenue tied to store openings, lease renewals, and remodels.
  • Corporate & Headquarters: Served as the standard flooring partner for major global brands, including multi-building headquarters and creative facilities, highlighted by a single corporate campus project exceeding $2M.
  • Hospitality & Events: Supported internationally visible events and temporary installations with reusable flooring systems that generate recurring annual demand.
  • Public & Specialty Markets: Advanced custom design leadership through a landmark convention center project and expanded reach into automotive and specialty retail programs. Maintenance, durability, and environmental leadership are favorably highlighted as main decision points from our end users

• Bentley has made strategic changes within senior leadership that strengthen an already capable organization. New leaders in Operations, Sales, Product Design, and Marketing are already advancing the Bentley brand, improving execution, and positioning the business for accelerated performance in 2025 and beyond.

General requirements

Consolidation

The sustainability statement has been prepared on a consolidated basis. The data is consolidated according to the same principles as the financial statements and covers Belysse Group NV and all its subsidiaries. The scope of consolidation of the consolidated sustainability statement is the same as for the financial statements and covers the fiscal year 2025, ending 31 December 2025.

The sustainability statement is prepared in accordance with the ESRS standards adopted by the EU Commission and in accordance with the EU Taxonomy Regulation. The disclosures included in the E, S and G sections have either been assessed as material according to our double materiality assessment as further described in section IRO-1 Description of the materiality assessment process, or are mandatory according to the ESRS standards.

Reporting scope and boundaries

The sustainability statement covers Belysse's own operations consisting of our three manufacturing sites: 2 in Belgium (Tielt and Zele) and 1 in the United States (Los Angeles), as well as the upstream and downstream value chain where applicable for the different material topics, as further described in section IRO-1 Description of the materiality assessment process.

For a comprehensive view on our value chain, we refer to the flowchart below.

Belysse has not used the option to omit a specific piece of information corresponding to intellectual property, know-how or results of innovation. As a large undertaking with more than 750 employees on average, Belysse is also not exempt from articles 19a(3) and 29a(3) of the Directive 2013/34/EU on sustainability reporting requirements.

The contents of the sustainability statement were subject to a limited assurance report in accordance with ISAE 3000 (Revised). The Independent Auditor 's Report on a Limited Assurance Engagement can be found on page 101.

This sustainability statement uses the standard ESRS 1 definition for time horizons, i.e. short-term = 1 year, medium-term = 1 - 5 years, long-term = more than 5 years.

In case value chain data estimations have been used or in case there are outcome uncertainties related to the metrics disclosed in the sustainability statement, this is disclosed along with the respective metrics within the relevant section.

Sources of measurement uncertainty

Metrics that include value chain data estimation using indirect sources are our Scope 3 GHG emissions from purchased goods & services. Where available, supplier specific information has been used, but for many raw materials and suppliers we needed to rely on generic, sector-average emission factors. The accuracy of this information is deemed sufficient as the databases used as the source for these generic emission factors are also widely used for 3rd party verified life cycle analysis.

We will continue to work with our value chain to get access to specific carbon emission information if and when this becomes available.

Estimations were also used for the transport distances covered by our raw materials and sold products, resulting in Scope 3 GHG emissions from upstream transport. The approach to these estimations is further detailed in section E1-6 Gross scopes 1, 2, 3 and total GHG emissions.

Uncertainty in metrics has been identified to be applicable to the following data points in the sustainability statement:

• The financial impacts of material risks and opportunities as reported in section 'SBM-3 Material impacts, risks and opportunities' are high level estimates based on the best judgement of internal Business and Finance experts.

• For scope 1 fugitive emissions in Europe, a minor estimation was required for product collections combining SDN and printed yarns. A conservative worst case assumption was applied by treating all relevant volumes as fully printed.

• As explained above, a significant part of our Scope 3 Green House Gas emissions were based on estimations.

• Withdrawal of rain water in our Tielt plant is calculated based on average rainfall rather than actual measurements.

• Water consumption and water discharge in our Los Angeles plant are assumed to be equal to water withdrawal as we don't measure the water discharge or evaporation - this overstates our actual water consumption.

• Recycled packaging for Bentley Mills: assumptions were used in terms of quantity of packaging used per type of finished product.

• The number of training hours per person for our employees in Bentley Mills are estimated; for our employees in Europe these hours are fully tracked.

Prior period restatements

Belysse's previous sustainability statement on FY2024 stated that the SBTi validated greenhouse gas reduction target covering scope 3 spanned the following GHG categories: purchased goods and services, upstream transportation and distribution and end-of-life treatment of sold products (table 2, page 53). This is restated and is presented correctly in our E1-4 and E1-6 sections on greenhouse gas targets and emissions, more specifically in tables 2 and 3 on GHG targets (in line with SBTi targets) and in table 5 GHG emissions. The scope 3 target covers the following scope 3 categories: purchased goods and services and upstream transportation and distribution. The target is in line with a 1.5°C pathway and is validated by the Science Based Targets Initiative (SBTi).

Belysse clarifies that the greenhouse gas target table presented in the FY2024 report was not in line with qualitative statements (in that same report) and the validated SBTi target.

Use of phase-in provisions

Where the ESRS and the Quick Fix Delegated Act (Commission Delegated Regulation (EU) 2025/1416) allows, Belysse has made use of phase-in provisions for certain data points that are subject to a phase-in for the reporting year. This has been applied for forward-looking financial information. These are further specified in the relevant section of the sustainability statement.

In reporting forward-looking information in accordance with the ESRS, Belysse is required to prepare the forward-looking information based on disclosed assumptions about events that may occur in the future and possible future actions by the company.

The actual outcome is likely to be different since anticipated events frequently do not occur as expected.

Forward-looking information relates to events and actions that have not yet occurred and may never occur.

No disclosure of impending developments or matters in course of negotiation has been omitted in the sustainability statement.

Presenting comparative information

This reporting year marks our second cycle of disclosure under the CSRD and ESRS frameworks. This report contains comparative information (FY2025 versus FY2024) for all metrics presented.

For FY2025, Belysse reviewed the double materiality process (DMA) for appropriateness as required by ESRS, given its dynamic nature. The DMA process was updated to reflect changes in operating context and stakeholder expectations. Impact, Risk, and Opportunity (IRO) assessments were revisited and rescored by stakeholder proxies where relevant, leveraging insights from benchmarking, comparing collected data versus thresholds in relevant legislation, first-year audit procedures, and enhanced ESG expertise. Some changes were identified in the IROs, and the set of material topics changed. This was validated by the ESG Committee as appropriate, considering stability of the business environment, relevance of material topics based on benchmarking and acquired ESG expertise, and alignment with ESRS requirements. The outcome of the updated double materiality assessment is presented in IRO-1.

Emission factors were updated to the latest available data in section E1, including updated emission factors where more specific supplier data became available. Some minor corrections were also applied to the product categories in the purchased raw materials data when last year's data was found incorrect. Additional minor adjustments were made to the background data for Section E5 like small corrections to product-specific weights, recycled content percentages, and product category assignments.

In section "E5-2 actions and resources related to resource use and circular economy", a table is presented showing the number of Cradle to Cradle Certified ® products for Modulyss and Bentley. In FY2025 we corrected and harmonized the counting methodology for Modulyss and Bentley. In FY2024, Modulyss already counted certifications at product-backing-color (SKU) level, while Bentley counted only by product and backing (colors excluded).

From FY2025 onward, both regions apply the SKU-level approach: every product, on every backing, in every color.

Disclosures from other legislations or generally accepted sustainability reporting standards and frameworks

All Green House Gas data points (GHG scope 1-3) are reported based on the Green House Gas Protocol.

Disclosures incorporated by reference

Any incorporations by reference, referring to other sections of the sustainability statement or other chapters of the annual report, are explicitly stated in the relevant sections of the sustainability statement.

Governance

As outlined in the Strategic Report chapter of the Annual Report, Sustainability is one of the three strategic pillars of Belysse, defined as part of our 4-year transformation BEYOND roadmap which started in January 2022.

We refer to the Corporate Governance chapter of the Annual Report, section 'The Board and Committees' for a full description of the various governance bodies within Belysse Group NV (Board of Directors, Management Committee, Audit Committee, Remuneration and Nomination Committee and ESG Committee) explaining their composition, experience and functioning.

ESG Committee

In November 2023, the Board of Directors has established an ESG Committee. The Committee is chaired by Vanessa Temple, independent and non-executive director of the Company.

On 31 December 2025, the members of the ESG Committee are:

In accordance with its Terms of Reference, the purpose of the ESG Committee is to monitor regulatory requirements and ensure the Company complies with them, to monitor the impacts as well as key risks and opportunities that the Company faces in relation to environmental, social and governance factors that have an impact on the long-term performance of the Company.

The ESG Committee will oversee the Company's conduct, performance and reporting on such material ESG matters, inform the Board and make recommendations to the Board where decision, action or improvement is needed.

Board of Directors

In addition to having a dedicated ESG Committee established, sustainability is also firmly integrated into existing governance structures and business processes. Relevant members of the European and US Management team are responsible for monitoring, managing, and overseeing the implementation of policies, actions, and targets related to effective management of specific IROs -as further detailed in the corresponding policy sections of each material ESG topic.

The Sustainability team supports the business in managing IROs, developing the sustainability strategy and external as well as internal ESG reporting.

Sustainability related expertise is currently deemed to be sufficiently present in the ESG Committee, Board of Directors, European & US Management teams and Sustainability team.

The ESG Committee reviews all relevant ESG topics related to material impacts, risks and opportunities at least 3 times per year, including any applicable changes in ESG regulations, progress against the defined ESG targets on CO2 emission intensity, water consumption, use of recycled content in our products, recycling of production waste and progress on the projects, initiatives and actions driving our progress against these targets.

Any information relevant to the Board of Directors, as well as any decision requiring Board of Director approval, is raised by the ESG Committee at least 3 times per year to the Board of Directors or relevant Board Committee: the Remuneration and Nomination Committee and/or the Audit Committee.

Sustainability-related performance has so far not been structurally integrated in the incentive schemes of the Board or management. Specific members of the Management team did have sustainability-related targets or the delivery of sustainability-related projects as part of their variable compensation objectives for 2025.

The proportion of variable remuneration dependent on sustainability-related targets and/or impacts varies by individual, depending on their role, their direct impact on specific ESG topics and the overall composition of their variable remuneration plan. The terms of these incentive schemes are recommended by the Remuneration and Nomination Committee and approved by the Board of Directors.

Belysse's sustainability risk management is structurally embedded in the Board of Directors oversight like any other material risks relevant to Belysse, specifically for sustainability through the ESG Committee and its connections to the other Board Committees where relevant. The approach is based on several elements:

• Annual review of the double materiality assessment, including external and stakeholder input

• Annual strategy review by the Board of Directors

• Strong connections with industry associations to ensure we stay close to any relevant sustainability topics, changes or trends

• Clear sustainability objectives that go beyond but include compliance with any changes in regulation or legislation, through close collaboration between our Sustainability, HSE, Legal, Finance and HR teams

• Robust policies and procedures have been established to cover the necessary ESG aspects

• Regular internal and external communication about our sustainability efforts and progress towards reaching our sustainability objectives

• Use of internal compliance checks as well as external assurance, often in the context of sustainability and ISO certifications, or on request of our customers as part of an ESG audit

  Sustainability reporting risk management and internal controls

  We identified that the main risks associated with our sustainability reporting relate to the accuracy and completeness of data, especially where ESG data is based on value chain data estimation or subject to uncertainty in metrics, as described in section BP-2 Specific circumstances.

  Sustainability information is gathered from various departments, primarily Finance, HSE, Operations and Human Resources. The accuracy of our sustainability reporting relies on internal control mechanisms, which are the responsibility of the Sustainability team. To maximally guarantee the reliability of the collected data, existing reports that are firmly embedded in operational and financial day-to-day processes have been used as the primary data source, where possible. As many quantitative data points relate to ESG targets that have been internally and externally reported by Belysse for several years, we apply robust variance analysis to further ensure data reliability and comparability to previous reporting periods.

  The main industry specific Environmental risks that are most closely monitored, are Circular economy (via the European Green Deal) and Climate change:

  European Green Deal

  With the European Green Deal, the European Commission aims to transform the EU into a modern, resource-efficient and competitive economy, where there are no net emissions of Green House Gases by 2050 and where economic growth is decoupled from resource use. Many of the policies, designed to realize this ambition have an impact on our business.

  EU Emission Trading System (ETS)

  In Belgium, Belysse falls under the EU ETS Directive. ETS stands for (CO2) Emissions Trading System. The revised EU Emissions Trading System (EU ETS) Directive, applicable for the 2021-2030 period, strengthens the EU's climate ambition by accelerating the reduction of the overall emissions cap. As part of the Fit for 55 package, the allocation of free emission allowances has been revised, with a progressive phase-out for sectors covered by the Carbon Border Adjustment Mechanism (CBAM), while maintaining targeted protection against carbon leakage during the transition.

  Belysse closely monitors regulatory developments under the EU ETS. The production site in Tielt currently operates installations subject to EU ETS requirements, while the site in Zele has an installed capacity below the EU ETS threshold and therefore remains out of scope.

  Carbon Border Adjustment Mechanisms (CBAM)

  The Carbon Border Adjustment Mechanism (CBAM) is an EU instrument designed to equalise carbon costs between EU production and imports of carbon-intensive goods. CBAM has applied in a transitional phase since 1 October 2023, during which importers are already subject to reporting obligations for the embedded Green House -gas emissions of covered goods. The definitive regime will enter into force on 1 January 2026, maintaining reporting requirements and introducing the purchase of CBAM certificates corresponding to those emissions. At this stage, CBAM covers imports of cement, iron and steel, aluminium, fertilisers, electricity and hydrogen. The European Commission has proposed to expand CBAM from 1 January 2028 to selected steel- and aluminium-intensive downstream products, while the scope has not been extended to additional materials such as plastics.

  Belysse continues to monitor any changes to the CBAM scope.

  General information

  Extended producer responsibility (EPR)

  With a set of Extended Producer Responsibility Policies, the European Union is driving the economy towards a higher level of circularity, by making companies responsible for their products at the end of their life. This encourages not only eco-design, but also the structured collection and treatment of waste, and the maximization of circular practices such as reuse, remanufacturing and recycling.

  • France is the first European country to implement a legislative EPR system. Our other neighbouring countries are expected to follow soon.

  • The Netherlands have introduced an EPR for apparel and home textiles (excluding carpets) in July 2023. It is expected that more complex textile products, like carpets, will follow in the coming years.

  • Discussions on an EPR scheme are ongoing in the UK as well. In the UK, EPR is already in place across several sectors, including packaging, WEEE, batteries and soon it will be in place for textiles (fashion). Flooring is increasingly being discussed within this policy context due to disposal costs, limited recycling, and environmental impacts. It is however not yet clear how carpets will be classified. Modulyss is a member of the UK Sustainable Flooring Alliance, which has the mission to support the flooring industry to reduce the amount of textile and resilient flooring in the UK going to landfill and to encourage and support more sustainable design and solutions leading to a circular economy.

  • In 2026, Belysse will participate to Circula-TEX, which is a Horizon Europe project that aims to support the EU strategy for Sustainability and Circular Textiles. The main objective is to guide the harmonised implementation of Extended Producer Responsibility (EPR) schemes across Europe.

  • An EPR system for matrasses exists in Belgium since 2021. It is expected that a similar system will be set up for textile floor coverings as well.

  • In the United States, Extended Producer Responsibility (EPR) requirements are expanding at state level, particularly for carpet and packaging. California was the first state to implement carpet EPR through its Carpet Stewardship Program, under which manufacturers fund the collection and recycling of post-consumer carpet via per-unit fees. The program is administered through the Carpet America Recovery Effort (CARE), and fee adjustments are under consideration pending regulatory approval. New York adopted similar carpet EPR legislation in 2022 covering carpet, carpet pad and synthetic turf. Following regulatory delays, producer reporting and programme implementation are now expected to begin in 2027, with manufacturers responsible for financing collection and recycling infrastructure statewide.

• EPR legislation for packaging has also been adopted or is progressing in several states. Oregon and Colorado require producer data reporting beginning in 2025 (for 2024 data), with programme fees to follow once cost structures are finalised. Maine's packaging EPR programme requires producers to join a Producer Responsibility Organisation (PRO) and begin reporting from 2026. Maryland and Minnesota are in earlier implementation phases, currently conducting programme needs assessments that will inform future producer obligations later in the decade. In most of these states, Circular Action Alliance (CAA) has been approved as the PRO responsible for programme administration.

  Requirements, including the definition of the obligated producer, vary by state and continue to evolve.

• Separately, California's Proposition 65 continues to affect product compliance. Vinyl acetate was added to the Prop 65 list in January 2025, which may trigger warning requirements from January 2026 unless exposure levels fall below a forthcoming safe harbour threshold.

  General information

  Circular Economy Action Plan (CEAP)

  The EU CEAP announces initiatives along the entire life cycle of products, targets how products are designed, promotes circular economy processes, encourages sustainable consumption, and aims to ensure that waste is prevented and the resources used are kept in the EU economy for as long as possible.

  • The Eco-design for Sustainable Products Regulation (ESPR) sets requirements for how products are designed to improve their circularity and other environmental sustainability aspects. For Belysse, this means that we will have to adjust the design of our products to comply with these requirements. Belysse is member of different working groups and norm committees, such as the project 'CISUFLO', who are writing recommendations for our sector. As such, we can give our input and are well informed about potential future expectations.

  • Within the ESPR, products will be required to give a 'Digital Product Passport' (DPP), aimed to enhance the traceability of products and facilitate repair, reuse, remanufacturing and recycling. For the textile floor coverings sector, the PRODIS system is proposed as DPP. All Modulyss and ITC products are already registered in PRODIS.

  • The EU Plastics Strategy, together with the Single-Use Plastics Directive (EU) 2019/904 and the forthcoming Packaging and Packaging Waste Regulation (PPWR), places a strong focus on plastic packaging through mandatory recycled content targets for beverage bottles (at least 25 % recycled plastic in PET bottles by 2025 and 30 % by 2030). While EU legislation does not impose a formal "bottle-to-bottle" recycling obligation, these requirements may increase demand for high-quality recycled PET for food-contact packaging, potentially leading to Information on drought and the awareness around it is still limited today, but the economic consequences of drought could be considerably bigger than from any other climate effect.

Impact of climate change on resources

We are reliant on polymers - polyamide, polyester and polypropylene yarns or granules - derived from the petrochemical sector as the main material for our floor coverings. So evidently, the protection of our planet is of primary concern.

Impact of climate change on manufacturing and products

While we need to reduce our carbon footprint to comply with the European Green Deal and the governmental regulations on emissions in Belgium (federal and regional) and the US, we need to be aware of the risks presented by climate change: global warming, drought, rising sea levels and extreme weather. These risks all have the potential to impact our business, and we are taking steps to minimise these risks.

Impact of water scarcity

All our production plants are located above sea level, so there is currently little risk from rising sea levels caused by global warming. However, our production processes - particularly dyeing and printing - rely heavily on water. The region of Flanders, Belgium, has one of the lowest water reserves per capita. This is caused by the combination of a high population density and a rather low

presence of surface and groundwater. Climate change is already disrupting this fragile balance. We will make further investments in water recycling or process changes that allow lower water consumption, focusing on our production site in Tielt. We are also working actively with the Flemish Government on optimising the sources of water used, for example the 'WaterProof' project on the Tielt North industrial estate where our Tielt production site is located. The aim of this project is to maximize the use of water from rainwater. This project will enable us to use water from a large rainwater basin that will be installed close to our factory.

Strategy

At Belysse, we are a team of experts with a strong legacy in soft flooring. We create, develop and produce sustainable flooring solutions. This is our core business, but while doing so we consider it as our responsibility to take care of our people, to make products that create value for our customers without harming the environment, and to ensure profitability for our shareholders.

For an overview of our value chain, we refer to the flowchart in section BP-1 General basis for preparation of the sustainability statement. Additional information on resource inflows can be found in section E5-4 Resource inflows, while additional information on customer groupings is described in section S4-SBM3 Material impacts, risks and opportunities and their interaction with strategy and business model.

Interaction with strategy and business model

As outlined in the Strategic Report chapter of the Annual Report, Sustainability is one of the three strategic pillars of Belysse, defined as part of our 4-year transformation BEYOND roadmap, and is therefore firmly embedded in our overall Company strategy:

This BEYOND roadmap includes establishing Company-wide sustainability related targets covering the main sustainability matters and challenges ahead for Belysse, with a particular focus on Environmental topics. These targets, associated policies and actions are further described in the relevant sections of the sustainability statement.

Main products, markets and market segments

Belysse has a strong focus on North-America and Europe under the premium brands Bentley (US), modulyss, arc edition and ITC (Europe), catering to the commercial and premium residential markets.

Belysse employs nearly 1,000 people and operates three manufacturing sites: 2 in Belgium (Tielt and Zele) and 1 in the United States (Los Angeles). Our consolidated revenue in 2025 was €254.2, all in the Flooring industry and primarily in the textile sector. We refer to section BP-1 'General basis for preparation of the sustainability statement' for an overview of our value chain, as well as section E5-2 'Actions and resources related to resource use and circular economy' respectively S4-SBM3 'Material impacts, risks and opportunities and their interaction with strategy and business model' for more details on our upstream and downstream value chain.

People

We are an integrated soft floorcovering manufacturer with nearly 1,000 employees, so people are naturally at the heart of our business, and of our success. We believe that we must create a positive and collaborative working environment where employees' personal development is promoted, to reach our objectives. By strong and transparent communication about our values and our strategic goals, everyone across the organisation can contribute to their achievement.

As staunch promotors of physical and mental wellbeing in the workplace, health and safety remains our top priority. We have worked incessantly to raise safety awareness and promote safety leadership, investing in prevention campaigns and rigorous training, and continuously increasing our adoption of digital tools.

Planet

Belysse is headquartered in Europe and has production sites in Belgium and the US. Two of our three manufacturing plants fall under the purview of EU policies and the associated EU Sustainable Finance Action Plan, which aims to redirect capital flows towards sustainable economic activities, integrate sustainability-related risks into decision-making, and enhance transparency in financial markets. It underpins EU sustainability disclosure instruments such as the Corporate Sustainability Reporting Directive (CSRD) and the EU Taxonomy. The European Green Deal aims to make Europe climate-neutral by 2050. Belysse fully supports the shift from a linear to a circular economy and is fully aware of its responsibilities in this transition.

After the Divestment, we have reassessed the milestones that were set in 2018. Based on our progress so far and the plans we have laid out for the coming years, we don't see the need to reformulate our goals.

Business Ethics

Belysse is dedicated to running its business under the applicable laws, as well as the highest standards of integrity and ethical practices. That is why we are making continuous efforts to raise awareness for our legal compliance programme. In 2025, e-courses were organised and completed by the employees on Anti-Bribery and Corruption, Antitrust and Information Security. The internal compliance policies have been updated in accordance with the actual legislation, and a formal Code of Conduct is still in preparation (to be completed in 2026).

When relevant, these stakeholder interests and views are raised to the ESG committee according to the process described in GOV-1 'The role of the administrative, management and supervisory bodies' and GOV-2 'Information provided to and sustainability matters addressed by Belysse administrative, management and supervisory bodies'.

Risks & opportunities' financial effects have been estimated on an annual basis, with the exception of required investments (climate, pollution) and governance-related risks which would be accumulated values over the indicated time horizon, as we would expect these investments or governance risks to occur as one-time events rather than recurring over multiple years. These high-level estimates are based on the best judgement of internal Business and Finance experts and were assessed as EBITDA impact, except for required investments which would be capitalized expenses. Our DMA has not identified any material risks and opportunities for which there is significant risk of material adjustment within the next annual reporting period to carrying amounts of assets and liabilities reported in related financial statements.

As sustainability is a key pillar in the overall strategy of Belysse and the identified IROs are in line with the material ESG topics already identified through materiality analysis in prior years, we assess that the nature, expected time horizon and potential impact of these IROs do not require us to adapt our strategy and business model beyond our ability to adjust if or where needed. As described above in more detail in the 'Effects & responses of Belysse', we assess that in general we can manage the identified IROs through policies, targets, and actions that fit within the context of our existing business model and strategy.

There has been a limited number of changes in the materiality of IROs compared to the previous reporting period, which is presented in IRO-2.

In 2020, Belysse conducted a first Materiality Analysis to identify the key ESG topics relevant to the Company.

In 2023, we decided to expand the scope of our Materiality Analysis to include the 'outside-in' as well as the 'inside-out' perspective. A so-called 'Double Materiality Assessment' was carried out.

In 2024, this Double Materiality Assessment was updated to ensure full compliance with CSRD requirements.

In 2025, the Double Materiality Assessment was updated based on latest insights as well as benchmarking with industry peers.

Value chain mapping

Our materiality assessment process has not focused on specific activities, business relationships, geographies or other factors that give rise to heightened risk of adverse impacts - it is fully covering the activities of Belysse Group and all its subsidiaries.

As part of the DMA, Belysse has assessed material impacts, risks and opportunities across all operations and the value chain:

• Upstream value chain consisting of suppliers

• Own operations consisting of our 3 production plants in Tielt, Zele and Los Angeles, and our employees

• Downstream value chain consisting of our customers, consumers and end-users

  The assessment also extends to the different internal and external stakeholders that we impact through our operations; these stakeholder groups are further described in the section "Key stakeholder engagement" below.

  Time horizons

  In the assessment of impacts, risks and opportunities, we apply the time horizons as defined in ESRS 1:

• Short-term being the reporting year

• Medium term covering 1-5 years

• Long term covering a time horizon beyond 5 years

  Key stakeholder engagement

  At Belysse, we are very much aware of the importance of stakeholder engagement for the future sustainability of our business.

  	Affected stakeholders	Engagement method	Users of the report	Engagement method
  Internal	Executive leadership team	Workshop	Selected members of the Board of Directors	Workshops
  	Employees	Survey	Lender	Desktop research
  	Key people for ESG topics within the company	Workshops	Analysts and investors	Desktop research
  External	Customers	Survey	Government, institutional bodies	Desktop research
  	Suppliers	Survey	Federations	Interview
  	Local communities	-	Scientific knowledge centers	Desktop research
  	Partners	Survey / interview	Press & media	Desktop research

  To get external feedback on our IRO list, we reached out to both affected stakeholders and users of the report. The engagement methods were adjusted to the specific stakeholder, and included workshops, direct interviews, surveys and desktop research.

  Based on the combined feedback of internal and external stakeholders, the materiality of each identified IRO was assessed by assigning an impact score:

• likelihood and severity of the impact based on irremediability, scale & scope (Impacts)

• time horizon, likelihood & the magnitude of their financial effect (Risks and Opportunities).

  General information

  Membership of Associations

  We also leveraged the insights of several industry associations and federations of which we are a member, through focused interviews to complement the desktop research we used to capture the point of view of scientific knowledge centres, government & institutional bodies and broader press & media. We considered these interviews as particularly important to ensure we had a sufficiently broad view on impacts, risks and opportunities affecting the wider sector, and to make sure we also considered IROs with a potentially longer time horizon.

  
  
  
  
  

  The actual double materiality assessment process was carried out in three phases:

  
  
  

  Impact, Risk and Opportunity Identification

  Belysse, a company with local production but global supply chains and sales markets, has an impact on people and the environment. The analysis thereof, the 'Inside-Out perspective', was summarized in the list of impacts.

  Not only does Belysse have an impact on people and the environment, our Company is also impacted by ESG-activity outside of our Company. The result of the 'Outside-In' perspective was analysed, resulting in a list of Risks and Opportunities.

  Impacts, risks and opportunities were identified independently, but any interdependencies between Impacts and Risks or Opportunities have been clearly identified and ultimately used to re-balance the financial and impact materiality of linked IROs to ensure a consistent approach.

  First, we defined a materiality long list, using the ESRS standards as a compass and having workshops with internal subject matter experts on each of the ESRS standards.

  Interviews or focus group sessions with internal experts were conducted to identify the key risks and opportunities for each ESRS sub-topic, from an operational, legal, financial or commercial perspective.

  Interviews and targeted surveys with internal and external stakeholders were conducted to identify actual and potential impacts.

  General information

  Impact, Risk and Opportunity Assessment

  These different inputs were consolidated in an Impacts, Risks & Opportunities ("IRO") framework.

  In this framework, Impacts (actual and potential) and Risks & Opportunities (short, medium and long term) were assessed using CSRD requirements to rank all ESG topics and determine which are most material for Belysse:

  A focus group consisting of internal Operations, Services, Sustainability, HSE, R&D, Finance, Legal, Sales & Marketing, Procurement and HR subject matter experts evaluated:

• All identified risks and opportunities in terms of time horizon, likelihood and size of the financial effect - informed by feedback from external stakeholder interviews and surveys. The combination of these 3 aspects resulted in a financial materiality. All identified impacts in terms of likelihood, irremediability, scale and scope - informed by feedback from external stakeholder interviews and surveys. The combination of these 4 aspects resulted in an impact materiality.

• Likelihood of occurrence for risks and opportunities has been evaluated on a range from unlikely to highly likely; the size of the financial effect has been estimated on a magnitude ranging from < €1m, €1-5m, €5-10m and ≥ €10m

• Likelihood of impacts has been evaluated as either actual (100% likelihood) or the likelihood of occurrence for potential impacts

• Irremediability has been assessed as how difficult it would be to reverse the impact in terms of possibility to reverse and cost & effort required to do so, ranging from easily remediable to irremediable

• Scale has been assessed on a range from limited to very significant

• Scope has been assessed on a range from local to global

A materiality threshold was applied to all impacts, risks and opportunities: all IROs above the threshold are considered to be material for Belysse; the material IRO's were endorsed by the ESG committee, the Audit Committee and by the Board of Directors.

Any (sub-)topic containing a material IRO is considered as material for Belysse. The resulting list of material (sub-)topics was discussed with the ESG Committee, also in light of the benchmarking exercise with industry peers.

Sustainability related impacts, risks and opportunities are evaluated in the same way as any other business IROs affecting Belysse, with ultimate oversight by the Board of Directors, directly or indirectly through the ESG committee and its connections to the other Board committees.

The material topics are:

1. Green House Gas emissions

   GHG emissions, from electricity and gas consumption in our own production processes, as well as up- and downstream in our supply chain, mainly driven by raw materials, upstream & downstream transport and end-of-life treatment of products

2. Water consumption

   Consumption of groundwater, grey water and rainwater in our own production processes

3. Operational Waste

   Waste resulting from our own production processes

4. Training and Development

   Provide an environment for employees that stimulates their professional development through training and coaching

5. Energy Consumption

   Gas and electricity consumption in our own production processes

6. Material efficiency

   Raw material consumption in our own production processes

7. Material selection & Eco-design

   Design of our products, the impact of types of raw materials sourced such as recycled or renewable materials and circularity to enable reuse and recycling at the end of products' life

8. Products end-of-life

   Environmental impact from end-of-life treatment of our products, managed by setting up systems and services for collection, reuse and recycling

9. Health and Safety

   Create a working environment where any physical or mental harm is prevented, and where workers' health is positively promoted

10. Product Transparency

    Provide relevant, fact based and verified product information to our customers

    General information

11. Products Safety

    Ensure that our products are safe to use at all times for consumers and end users

12. Business conduct

    Managing risks and opportunities that impact business governance within our own operations

    E5 Resource use & Circular economy

    • Material selection & eco-design S4 Consumers and end-users

    • Product transparency

    • Products safety

      G1 Governance, risk mgt & internal control

    • Business conduct

This Double Materiality Matrix provides an overview of the ESG topics that are important for Belysse. Material topics and subtopics are shown in the non-grey squares.

There has been a limited number of changes in the materiality of IROs compared to the previous reporting period

Belysse provides further explanation on topics that were assessed as non-material.

Ongoing benchmarking and data collection on emitted pollutants have led Belysse to revise the assessment of pollution related IROs. Belysse does not exceed the threshold for releases in the Annex II of Regulation (EC) No 166/2006 of the European Parliament and of the Council.

Pollution is strictly regulated in both Belgium and California. In Belgium, companies must obtain an environmental permit and comply with increasingly stringent environmental legislation, including Vlarem, Vlarema (waste) and Vlarebo (soil). These frameworks govern and monitor emissions to air and water.

In California, Bentley operates under some of the strictest environmental regulations in the US. The company reports air emissions through AER (Annual Emissions Reports), Criteria Pollutants, TAC (Toxic Air Contaminants) and ODC (Ozone Depleting Compounds). Additional reporting obligations arise from SCAQMD (South Coast Air Quality Management District), as well as wastewater and solid waste requirements under the Los Angeles County Sanitation Districts (LACSD)

The non-materiality assessment of Biodiversity loss from own operations and supply chain, is based on the DMA by internal and external experts, complemented by the use of the WWF Biodiversity Risk filter. These assessments enable us to understand the degree to which our business model depends on the local ecosystem and confirm that none of our production facilities are located in or near biodiversity-sensitive or protected areas.

Ongoing benchmarking and data collection on impacts and risks have led Belysse to revise the assessment of IROs related to workers in the value chain. Belysse requires all suppliers to sign and show compliance with our supplier code of conduct which we introduced in 2021 and which includes clear expectations regarding social, safety and environmental performance. It stipulates that suppliers must ensure that their own suppliers, contractors and other business partners comply with our requirements. Belysse reserves the right to audit compliance with the code on-site. Our supplier code of conduct is based on the 'United Nations Guiding Principles on Business and Human Rights' and explicitly states that we expect our suppliers to comply with these UN Guiding Principles on Business and Human Rights, as well as the 8 core International Labour Organization Conventions, but covers more than only Human Right topics. It explicitly requires suppliers to address the following material topics for Belysse in relation to our value chain:

• Show compliance with applicable laws and regulations

• Respect Human and Labour Rights, including the protection of internationally recognized human rights, prohibiting the use of forced, indentured or involuntary labour (including modern slavery and human trafficking) and child labour, anti-discrimination, freedom of association and the effective recognition of the right to collective bargaining, empowering employees and other stakeholders to anonymously report concerns or potential unlawful practices at the workplace without retaliation, fair wages

• Adhere to health and safety standards, including healthy and incident free working environment, providing appropriate health and safety information and equipment, ensure that their products or parts do not contain any product, material or substance prohibited by the legislation or regulations, addressing the European REACH procedures or the applicable national equivalent

• Limit their environmental impact

• Follow standards for ethical business conduct

Signing the supplier code of conduct is a mandatory requirement to become a supplier of Belysse. Our supply chain management system is supported by an external partner who can conduct on-site audits at our suppliers' facilities. We make use of the world's most widely used social audit to inform our approach to mitigate potential negative impacts. To our knowledge, the types of value chain workers who could be materially impacted by Belysse are not workers who are particularly vulnerable to negative impacts, whether due to their inherent characteristics or to the particular context. We have had no cases of non-respect of the UN Guiding Principles, the ILO Declaration on Fundamental Principles and Rights at Work, or the OECD Guidelines for Multinational Enterprises involving workers in our value chain. Belysse has no general process to engage directly with value chain workers, but in addition to the on-site audits, we have the whistleblowing tool in place, and suppliers or workers at our suppliers can use the compliance@belysse.com e-mail address or the contact page on our website to file any complaints. These channels are available to any value chain worker, so far, no concerns or issues have been raised to us by workers in our value chain. If any concerns or issues were raised, they would follow the same process as described for issues raised by people in our own workforce through the whistleblowing tool.

We also mitigate risks structurally through a multi-sourcing strategy. For all key raw materials, we ensure that we work with multiple suppliers and maintain alternatives outside higher-risk regions. This strategy is continuously reviewed by the relevant internal steering committees and overseen by the Board of Directors for significant changes.

Given the robustness of our Supplier code of conduct, the contractual obligations imposed on suppliers, our audit and grievance mechanisms, the absence of substantiated cases, and the structural risk-mitigation inherent in our sourcing strategy, the potential negative impacts, risks and opportunities related to workers in the value chain are considered limited. Based on our double materiality assessment, "Workers in the Value Chain" is therefore assessed as non-material for Belysse.

Belysse does not take part in any political influence and lobbying activities. Therefore, political influence and lobbying activities is assessed as non-material.

Belysse is focused on obtaining a well-balanced working capital. For that reason, we strive to agree payment terms with our largest suppliers that are in line with those granted to the customer. Based on our double materiality assessment, payment practices do not represent a material impact, risk or opportunity for Belysse.