Honkarakenne Oyj : Financial Statements and Board of Directors Report 2023

20The year of wood living

23

Board of Director's Report and Financial Statemets

HONKARAKENNE Board of directors' report and financial statements 2023

Index

BOARD OF DIRECTORS' REPORT

1 Jan-31 Dec 2023

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CONSOLIDATED FINANCIAL STATEMENTS (IFRS)

Consolidated statement of comprehensive income		12
Consolidated statement of financial position			13
Consolidated statement of cash flows			14
Consolidated statement of changes in equity		15
Accountingpoliciesusedintheconsolidatedfinancialstatements		16
Notes to the consolidated financial statement			26
Other infromation		50

PARENT COMPANY FINANCIAL STATEMENTS (FAS)

Parent company's income statement		59
Parent company's balance sheet		59
Parent company's cash flow statement		61
Accounting principles of the parent company		62
Notes to the parent company's financial statements		63
Dividend proposal		71
Signatures for the financial statements	71
and board of directors' report
Auditor´s report		72

Honka Halti, Savonlinna, Finland

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Board of Directors' Report 1 Jan-31 Dec 2023

Honkarakenne Group's revenue (net sales) amounted to EUR 46.3 million (2022: EUR 71.7 million and in 2021: EUR 69.7 million). The Group's operating profit amounted to EUR -0.1 (4.2; 3.7) million, profit before taxes to EUR -0.3 (3.6; 3.6) million and earnings per share to EUR -0.04 (0.47; 0.56).

The Board of Directors proposes to the Annual General Meeting that no dividend be paid for the financial year that ended on 31 December 2023 (2022: EUR 0.25). The Annual General Meeting also proposes that a repayment of capital of EUR 0.09 per share be distributed from the invested unrestricted equity fund. No capital repayment is paid on shares held by the parent company.

Business Review

Compared to the previous year, the Group's operating environment remained challenging throughout the financial year. The Group's net sales for the financial year fell 37 per cent short of the previous year and amounted to EUR 46.3 (73.7) million. Compared with the corresponding period of the previous year, turnover in Finland decreased by 42 per cent and in exports by 23 per cent. The decrease in export turnover was mainly due to the fact that earlier sales to Russia could not yet be replaced by net sales in new export areas and lower turnover in the Japanese market. Net sales for the first half of the comparison year included the last project deliveries to Russia in the order and production process. Exports excluding Russia were almost on level with the previous year.

The Group's order book fell 35 percent short of the previous year's level and was EUR 18.8 million (29.0).

interest rate levels and the recession. Net sales amounted to EUR 31.8 million (54.8). Compared to previous years, the profitability of the consumer business increased, project lead times shortened and customer satisfaction improved.

Compared to the previous financial year, net sales decreased more in the consumer business than in the project business. In terms of sales, the second half of the year was better than the first in project construction. In recent years, nearly 100 school, day care and nursing home solutions have been delivered across Finland. In 2023, deliveries were made, for example, to Järvenpää, Vaasa, Vantaa, Lappeenranta, Nokia, Salo and Joensuu. The demand for and interest in healthy log care facilities has developed favourably.

Revenue distribution

Finland

Exports

Total

Jan-Dec/2023	Jan-Dec/2022
69%	74%
31%	26%
100%	100%

At the beginning of the year, Honkarakenne and its founding contractor partners won the contract to build a new block of log apartment buildings and terraced houses in Järvenpää's new Anni-täti residential area. Due to a complaint, the town plan for the area has not yet been legally confirmed.

In the beginning of the year, Honka launched a new terraced house concept for founding contracting and in the autumn for the Honka MultiStorey™ concept development project. Honka MultiStorey™ offers a multistorey building instructions and a concept on how to make a safe, low-carbon log block

	Revenue, EUR million	Jan-Dec/2023	Jan-Dec/2022	Change
	Finland	31.8	54.8	-42%
	Exports	14.5	18.9	-23%
	Total	46.3	73.7	-37%

Finland also includes billet sales and the sale of process byproducts for recycling.

Exports include all other countries except Finland.

In Finland, net sales decreased by 42% as the construction and housing markets weakened significantly during the financial year 2023. The decrease was sharp throughout the year, both due to high cost and

of flats. The solution can be applied not only to residential blocks of flats but also to other types of buildings, such as offices, schools and hotels. Honka MultiStorey™ enables a combination of logs and concrete in multistorey construction.

Development of domestic demand is expected to increase from the previous year. There is still uncertainty in the market and if the recession is prolonged, it may negatively affect the decision to start building new leisure and especially detached houses.

Demand for exports was slow in the early part of the year and picked up slightly before the turn of the year. The order book decreased by 23% from the previous financial period and was EUR 14.5 million (18.9).

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HONKARAKENNE Board of directors' report and financial statements 2023

The difference is mainly due to the net sales from the last deliveries to Russia during the comparison year and the weaker net sales accumulation in Japan. The largest single export deliveries consisted of project business deliveries to new leisure centres located in Asian region. These site deliveries included, for example, a hotel building with a recreational area reception building and individual holiday houses.

In exports we focused on collection development, acquiring new customers, customer meetings and participation in trade fairs and export events. Regional importer and agent activities were clarified and strengthened through new importers and local partners. After the end of the year, a new Honka sales office was opened in Stockholm.

The Japanese organization was strengthened with in-house architectural expertise, it invested in B2B sales and opened a new office and showroom in Tokyo. The subsidiary completed a comprehensive strategy work based on which the business will be developed further in the coming years.

The demand and net sales of project exports in the Asian region developed positively. A recovery can also be seen in other export regions, such as Germany. There is also uncertainty as to whether the demand will be reflected in new orders and deliveries and with what timing. Interest rates, inflation and construction costs have remained at relatively high levels in different export countries. The Group's exports to China are at a complete standstill and measures for its own agency are being assessed.

Freight deliveries, which toward the end of the year were directed to Asian regions had to be moved to longer routes away from the Suez Canal due to the instability of the region. This is to some extent reflected in longer delivery times and rising freight costs in exports. The spill-over effect may negatively impact new orders or shift deliveries forward.

Financial Position, Result, and Key Figures

The Group's operating result for the financial year was EUR -0.1 million (4.2) and profit before taxes was EUR -0.3 (3.6) million. Adjusted operating result was EUR +0.3 million (4.2) and adjusted result before taxes was EUR +0.2 million (3.6).

Non-recurring adjustment items include EUR 0.5 million in cost items allocated to the financial year as a result of change negotiations, which were arising from salary during the notice period and other costs related to redundancies.

Financial items include valuation of the Japanese yen EUR -0.5 million (-0.3) and repayment of other financial assets EUR +0.4 million (-0.3).

Production profitability weakened as production volumes decreased. Unit price costs increased, and they could not be fully covered by a decrease in the purchase price of raw materials.

In order to ensure the result for the financial year, the temporary lay-off and adjustment measures initiated in the previous financial year were continued starting at the beginning of the year. In addition, change negotiations leading to redundancies were conducted in the parent company. The negotia- tions, which ended in June, resulted in a total of 22 redundancies. In addition, a lay-off authorisation

was sought from the negotiations, which allows personnel to be laid off as a short- or longer-term adjustment measure if necessary.

In addition to adjustment measures, the focus continued to be on promoting and implementing development projects in line with the strategy, as a result of which project profitability and customer experience have been improved. In the export focus markets, emphasis was placed on developing the sales and retail network and acquiring new customers.

Group's key figures	Jan-Dec/2023	Jan-Dec/2022	Jan-Dec/2021
Revenue (net sales), EUR million	46.3	73.7	69.7
Operating profit/loss, EUR million	-0.1	4.2	3.7
Adjusted operating profit/loss, EUR million	0.3	4.2	3.7
Profit before taxes, EUR million	-0.3	3.6	3.6
Adjusted profit before taxes, EUR million	0.2	3.6	3.6
Average number of employees	183	190	178
Average number of employees in
person-years	174	183	170
Undiluted earnings per share, EUR	-0.04	0.47	0.56
Diluted earnings per share, EUR	-0.04	0.47	0.56
Equity ratio, %	64.3	66.6	60.7
Return on equity, %	-1.4	15.8	21.0
Equity per share, EUR	2.79	3.10	2.88
Gearing ratio, %	-18.2	-53.8	-51.3

Honkarakenne reports in accordance with the European Securities and Markets Authority's (ESMA) recommendation on alternative key figures (sometimes also called alternative performance measures). An alternative key figure is a financial key figure other than a financial key figure specified or designated in IFRS. The term 'adjusted' is therefore used instead of the previous term 'excluding non-recurring items'. The company classifies significant transactions regarded as affecting the comparison between reporting periods as adjustment items. These include, but are not limited to, significant restructuring costs, significant impairment losses or reversals, significant gains, and losses on disposals of assets, or other significant income or expenses that differ from ordinary activities.

The Group's key figures and their calculation formulas are presented in Note 33.

Order Book

The Group's order book was 35% lower than last year and amounted to EUR 18.8 million (29.0). Order book refers to orders with a delivery date within the next 24 months. Some orders may have a financing or building permit condition.

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Financing and Liquidity

At the end of 2023, Honkarakenne's financial position was good. The Group's equity ratio was 64.3% (66.6). Gearing was negative at -18.2%(-53.8). The Group's net financial liabilities amounted to EUR -3.0 million (-9.8), so the Group's liquid assets exceeded its financial liabilities. The Group's liquid assets including other financial assets were EUR 6.4 million (12.6). The Group's EUR 3.0 million (3.0) overdraft facility was not in use at the time of the financial statements.

Investments

The Group's gross investments in 2023 amounted to EUR 1.8 million (1.0), excluding right-of-use assets in accordance with the IFRS 16 standard and investment grants received.

The investments during the financial year focus mainly on replacement investments in the log line, gluer and laminated timber plane at the Karstula plant. Installation of the laminated timber plane began at the end of the year and implementation of the line was completed in early 2024. An export offer calculation module was introduced in the ERP system. The Customer 360 project was launched in the autumn, in connection with which a new customer management and project tracking system will be introduced during spring 2024.

Research and Development

During the financial period, we focused especially on developing product solutions for export markets and continued to focus on log structures suitable for larger public buildings in particular. Honkarakenne's log product project for public and large buildings was part of the Ministry of the Environment's Wood Building Programme, which had also granted funding for the project. Utilizing the solutions developed in the project, Honkarakenne developed and launched a multistorey construction concept in the autumn, with which Honka introduces the multistorey construction opportunities of logs to its builders more widely. Honka MultiStorey™ provides instructions and a concept on how to build a safe, low-carbon log block of flats. The solutions can be applied not only to residential blocks of flats but also to other types of buildings, such as offices, schools and hotels.

The aim of the project and program is to increase the use of wood in construction to promote climate targets. Wood is a renewable raw material and wood construction is part of sustainable use of forests.

The Group's R&D costs for the financial year were EUR 0.6 million (0.4), representing 1.3% (0.5) of net sales.

The Group has not capitalised development costs during the financial period.

Major Operational Risks

The risks and uncertainties of Honkarakenne relate to negative changes in the operating environment of the Group and its customers, increased costs of raw materials and components, their availability and the functioning of the overall supply chains. If demand falls from the current level in the operating environment and costs remain high, it may have significant effects on the Group's earnings development.

The economic uncertainty in the Group's operating environment is negatively reflected in business and consumer confidence. High inflation and persistently high interest rates continue to increase short-term economic risks.

The uncertainty of the military aggression initiated by Russia and all its effects on business are difficult to assess.

Replacing the order book lost in the Russian market area with other export markets may be prolonged or uncertain in the current global market situation. If the war is prolonged or expands it can have a considerable negative effect on the Group's business, financial position and operating profit.

The valuation of items in the balance sheet is based on the management's current estimates. Any changes to these estimates may affect the company's financial performance.

Environment

Eco-friendliness, longevity and energy efficiency are the strengths of log house construction. As a building material, renewable wood is an ecologically sustainable choice. As wood grows, it binds carbon dioxide, which is stored in the walls of a solid wood house for centuries. At the same time, as the new forest grows, it binds more carbon dioxide, which slows down climate change. For responsible consumers, choosing wood as a material for a house is an obvious way to take future generations into account.

Honkarakenne takes account of the environment by carefully utilising the wood raw material, saving en- ergy, recycling waste and using recyclabes. In its operating policy, Honkarakenne is committed to sustainable forestry through the traceability of wood (PEFC), and wood is not purchased from areas covered by conservation programmes.

The new stricter energy regulations also require new log products, which have been and will continue to be developed at Honka. In many ways, the factory's operations aim for the best environmental outcome. Investments in research and development make it possible to introduce new environmentally friendly production technologies. ETA approval and thus the right to CE marking are part of ensuring the high-quality and environmentally friendly operation of Honkarakenne.

Environmental aspects are implemented at Honkarakenne as efficient production operations. Careful utilisation of raw materials, energy saving, utilisation of by-products and recycling of waste for recovery are part of responsible environmental activities. Honkarakenne uses low-quality sawn timber from production in its packaging, and wooden recyclable packaging materials are stamped in accordance with the EU standard. Some of the cut-off,second-quality and waste timber is used chipped for energy produc- tion. Honkarakenne's cutter chips are delivered for further utilisation as bedding for agricultural needs, and the surplus log chips generated in production are processed into chip wool.

Honkarakenne sorts and pre-processes packaging plastic films and plastic-based binding materials. Recycled materials are delivered for further processing. Other waste is sorted at the factories by variety

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HONKARAKENNE Board of directors' report and financial statements 2023

and delivered for recycling or post-storage. Waste transport agreements have been concluded with regional waste management companies.

The associated company Puulaakson Energia Oy produces all the thermal energy required in the Karstula factory. It also supplies thermal energy to the heating network of the municipality of Karstula. The power plant uses the by-products from the Karstula factory, such as bark, sawdust and dry chips, as fuel. Honkarakenne's holding in the company is 25.9%.

Strategy 2022-2024 and Sustainability

The aim of the strategy, which will be in force until the end of 2024, is to strengthen Honkarakenne Oyj's position as Finland's largest exporter of wooden buildings. With the new export-driven strategy, the Group is seeking to increase its net sales in the strategy period with a focus on profitability. The profitability objectives are based on process efficiency, while enhancing the customer and employee experience.

Honkarakenne Group's vision is to become the leader in environmentally friendly and healthy housing in our chosen market areas. The Group's mission is to improve the quality of people's lives and housing.

Honkarakenne's strategic objectives for the 2022-2024 period are:

• Increasing exports by focusing on and allocating resources to selected markets
• Increased profitability through further enhancing the customer and employee experience
• A responsible leader focused on health and the future

To implement the strategy, the Group's key functions are undergoing various assessment and development projects that support the progress of the strategy. Due to the changed market situation, investments have been focused on increasing sales and projects that improve profitability. At the beginning of the year, the Customer Experience for Profitable Growth transformation program was implemented to reorganize the business to ensure a better customer experience and a more profitable business. In addition, market studies and projects concerning the renewal of partners and distribution channels are ongoing in the various export focus markets.

Sustainability is a key part of Honkarakenne's strategy. Honkarakenne Group is continuously developing its production, services and selection to enable healthier, more ecological and better-quality living. Our choices are guided by human and natural vitality. Honkarakenne's sustainability programme, 'We are building the future', is based on the changes we have identified in our operating environment, our ethical principles, recognised expectations of our staff and other stakeholders, and understanding the customer in our main markets. Responsible purchasing and eco-friendly production are at the core of our business, and we are constantly developing the health and safety of our houses.

As part of Honkarakenne's sustainability program, the parent company uses 100% guaranteed electricity produced with a renewable energy source with carbon dioxide emissions of 0 g/kWh in all its own locations.

Honkarakenne states that it does not consider long-term targets as market guidance for any particular year of the strategy period.

The Honka Brand

The core of the Honka brand is the close relationship with nature and Finnish happiness. Honka's yellow is the colour of hope and joy. Honka helps every customer realize the dreams that are important to them and Honka has the honour to convey the vitality of the northern forests.

Personnel

The group had 169 (191; 186) employees at the end of the financial year. The Group's average number of personnel, measured in person-years, totalled 174 persons (183; 170) during the year. The number decreased by 9 persons from the comparison period. The Group employed an average of 183 (190; 178) people in 2023.

At the end of the financial year, the parent company had 163 (186; 181) employees, and the annual average was 177 (179; 173) employees. The number of employees in the parent company decreased mainly due to personnel reductions due to the decisions of the change negotiations.

Of Honkarakenne Oyj's personnel, 79% (80; 79) worked at the Karstula factory and 22% (20; 21) at other locations. Clerical employees and management accounted for 65% (63; 64) of the parent company's personnel. Women accounted for 22% (23; 22) of the parent company's personnel. At the end of the year, part-time employees accounted for 3% (2; 3) of all employees. Temporary employees accounted for 1% (4; 4).

Expenses arising from the Group's employee benefits totalled EUR 8.1 million in the financial year 2023. In the previous year, they were EUR 10.6 million and in 2021 they were EUR 10.1 million.

In its February meeting, the Board of Directors of the Group's parent company decided to reward all employees under the rules of the personnel fund established in December based on the good performance achieved in the financial year 2022. These bonuses were paid to the persons covered by the staff fund after the Annual General Meeting in April.

Due to low demand and weak market outlook, the parent company had to undergo change negotiations aimed at adjusting its personnel, which ended in June and eventually resulted in the termination of employment of 9 production employees and 13 salaried employees. In the same negotiations, the parent company sought authorization to lay off personnel for a short or longer period during the financial years 2023 and 2024, if the financial or production situation so requires.

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As a result of the measures taken, personnel costs and other expences caused by redundancies totalling EUR 0.5 million were recognized in the parent company's result.

During the financial year, we strengthened our occupational safety culture and focused on preventive occupational safety measures, such as safety rounds, safety observations and corrective measures, as well as risk assessments. Compared to the previous year, the number of accidents at work decreased by half and amounted to three. As in the previous year, the occupational well-being survey was conducted at the end of the year. The number of responses received reached an excellent level and was 90% (83) and eNPS was 28.0 (39.9).

At the end of November, a joint personnel day was held, where we focused on being together, team- building and promoting the shared Honka spirit after a challenging year.

The company utilises a management system with ISO 9001 and ISO 14001 certifications.

Board of Directors and Senior Management

In 2023, the members of Honkarakenne Oyj's Board of Directors were: Arto Halonen, Timo Kohtamäki, Maria Ristola, Kari Saarelainen, Kyösti Saarimäki (until 20.4.2023) and Antti Tiitola (since 20.4.2023). Kyösti Saarimäki has been the Chairman of the Board until 20.4.2023 and after that Timo Kohtamäki has been the Chairman of the Board.

Ernst & Young Oy, member of the Finnish Institute of Authorised Public Accountants, was reappointed as auditor of the company, with Elina Laitinen, APA, as chief auditor.

During the financial year Honkarakenne's Executive Group consisted of: Marko Saarelainen, President

• CEO; Juha-Matti Hanhikoski, Vice President, Production; Eino Hekali, Vice President, Product; Maarit Jylhä, CFO; Petri Perttula, Business Vice President, Operations Finland; and Maarit Taskinen, Vice President, Operations Export.

Group Structure

The parent company of Honkarakenne Group is Honkarakenne Oyj, which is domiciled in Karstula. The company's production facility and headquarters are located in Karstula (Finland), and the company has a customer service centre and exhibition area in Tuusula (Finland). The company also has sales offices across Finland and a representative in Beijing, China.

The company's subsidiaries include Alajärven Hirsitalot Oy and Honka-Kodit Oy in Finland; Honka

Japan Inc. in Japan; Honka Blockhaus GmbH in Germany, and Honkarakenne SARL in France. Honka

Management Oy has been merged with the parent company at 30.11.2023.

Honkarakenne Group's operating companies include the parent company Honkarakenne Oyj (Finland),

the subsidiaries Honka Japan Inc. (Japan) and Honka Blockhaus GmbH (Germany), and the associated

company Puulaakson Energia Oy (25.9%). In addition, the consolidated financial statements includeThe non-settlingHonka Fusion log 20 years the subsidiaries Honkarakenne SARL (France), Alajärven Hirsitalot Oy and Honka-Kodit Oy.

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HONKARAKENNE Board of directors' report and financial statements 2023

Management Incentive Schemes

Honkarakenne's Board of Directors decides annually on the management's bonuses. In 2023, the management bonus was three-tiered and tied to the budgeted operating margin. The first-tier bonus for the members of the Executive Group was a supplementary pension payment equivalent to one month's salary plus 5,000 of Honkarakenne Oyj's Series B shares for the President & CEO. The secondtier bonus consisted of the first-tier bonus and a cash bonus worth one month's salary plus 5,000 of Honkara- kenne Oyj's Series B shares for the President & CEO. The scheme's third-tier bonus corresponded to the first and second-tier bonuses, a supplementary pension payment equivalent to one month's salary plus 5,000 of Honkarakenne Oyj's Series B shares for the President & CEO.

The pension scheme is a defined contribution plan.

Honkarakenne does not currently have a valid long-term incentive scheme for management.

Shares and Shareholders

The company has two series of shares, Series A and Series B, with different dividend and voting rights. From the distributable profit, EUR 0.20 will first be paid for Series B shares. Then EUR 0.20 will also be paid for Series A shares, after which the remaining profit will be distributed equally among all shares. A Series B share carries one (1) vote, and a Series A share carries twenty (20) votes.

Shares and votes:

	Shares	Votes
Series A	300,096	6,001,920
Series B	5,911,323	5,911,323
Total	6,211,419	11,913,243

Honkarakenne's share capital is EUR 9,897,936.00. The shares have no nominal value.

Treasury Shares

Honkarakenne did not acquire any of its own shares during the financial year. In April, Honkarakenne transferred 8,333 of the company's Series B shares to the company's President & CEO as part of the President & CEO's 2022 bonus. At the end of the financial year, the Group held 321,052 of its own Series B shares with an acquisition price of EUR 1,186,556.34. Treasury shares account for 5.17% of all the com- pany's shares and 2.69% of all votes. The acquisition cost has been deducted from shareholders' equity in the consolidated financial statements.

Trading in Shares

Honkarakenne's Series B shares are listed on Nasdaq Helsinki Oy's Small Cap list under the trading symbol HONBS. At the balance sheet date, the share price was EUR 3.22. The highest price for the year was EUR

4.98 and the lowest EUR 2.85. At the end of the financial year, market capitalisation was at EUR 19.0 million (the value of Series B shares has been used for unlisted Series A shares). The trading value of B shares was EUR 2.9 million, and the related trading volume was 0.8 million shares.

Key Figures per Share		2023	2022	2021
Earnings per share	EUR	-0.04	0.47	0.56
Dividend per share *)	EUR	0.0	0.25	0.00
Dividend payout ratio	%	-	53.0	-
Repayment of equity
payout ratio	%	222.1	-	44.4
Effective dividend
yield	%	0,0	5.8	-
Equity per share	EUR	2.79	3.10	2.88
P/E ratio		-79.5	9.2	13.0
SHARE PRICE DEVELOPMENT
Highest share price of
the year	EUR	4.98	7.72	8.48
Lowest share price of
the year	EUR	2.85	3.72	4.11
Share price at
balance sheet date	EUR	3.22	4.34	7.32
Market capitalisation
**)	EUR million	19.0	25.5	43.0
Share turnover	trading value, EUR million	2.9	7.7	25.1
	trading volume, 1,000 pcs	758	1,483	3,792
	% of total shares	12.9	25.2	64.6

ADJUSTED NUMBER OF SHARES

at the end of the financial year, (1,000 pcs)	5,890	5,887	5,877
average during the period, (1,000 pcs)	5,888	5,880	5,872

*) The Board of Directors' proposal for the 2023 financial year. **) The price of a B-share has been used as the value of an A-share.

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Shareholders

At the end of the financial year, the company had a total of 5,279 shareholders, of which 9 were nominee -registered. The holdings of several investors can be managed through one nominee-registered shareholder

The company's major shareholders on 31 December 2023 by number of shares

Name		Series A	Series B	Total
1	AKR-Invest Oy		1,040,600	1,040,600
2	Saarelainen Oy	136,275	509,190	645,465
3	Saarelainen Marko Tapani	25,470	346,300	371,770
4	Honkarakenne Oyj		321,052	321,052
5	Nordea Nordic Small Cap Fund		251,457	251,457
6	Keskinäinen Työeläkevakuutusyhtiö Varma		222,812	222,812
7	Ristola Arimo Kalervo	20,000	82,135	102,135
8	Skandinaviska Enskilda Banken Ab (Publ)
	Helsingin Sivukonttori (Nominee-reg.)		96,454	96,454
9	Ruuska Pirjo Helena	5,950	78,817	84,767
10	Syrjänen Eva Annika Elisabeth		81,382	81,382
11	Nordea Henkivakuutus Suomi Oy		81,000	81,000
12	Etola Markus Eeriki		80,000	80,000
13	Saarelainen Erja Anneli	4,480	56,742	61,222
14	Pim Partners Ab		58,000	58,000
15	Ruponen Sonja Helena		54,500	54,500
16	Yli-Krekola Antti Veikko		53,277	53,277
17	Localbitcoins Holding Oy		52,631	52,631
18	Savolainen Paul-Petteri		48,807	48,807
19	Valkila Erkka Ilpo Eerik		45,700	45,700
20	Saarelainen Mauri Olavi	10,456	28,377	38,833
21	Saarelainen Paula Sinikka	11,703	24,958	36,661
22	Saarelainen Hanna Miira Maria	6,971	28,029	35,000
23	Karhulahti Veikko Kalevi		34,211	34,211
24	Saarelainen Sirkka Liisa		31,900	31,900
25	Salmelin Simo Markku Juhani		30,806	30,806

Name		Series A	Series B	Total
	Privatum Oy		29,000	29,000
26
27	Nieminen Jorma Juhani		25,000	25,000
28	Saarelainen Merja Anita		23,948	23,948
29	Tugent Oy		22,899	22,899
30	Saarelainen Kari Matti	5,950	16,118	22,068

Foreign and nominee-registered shares on 31 December 2023

Shareholders	Number of	% of all shares	Votes	% of votes
shares
Total foreign	17	7,684	0.12	50,133	0.42
Total nominee-regis-
tered (foreign)	5	24,687	0.40	24,687	0.21
Total nominee-regis-
tered (Finland)	4	112,706	1.81	112,706	0.95
Total	26	145,077	2.34	187,526	1.57
Number of shares
issued		6,211,419	100.0	11,913,243	100.0
Distribution of share capital by size category on 31 December 2023
		Number of	% of all	Number of	% of all shares
	shareholders	shareholders	shares
1-100		2,763	52.3	106,902		1.7
101-500		1,648	31.2	417,090		6.7
501-1,000		460	8.7	356,707		5.7
1,001-5,000		326	6.2	685,423		11.0
5,001-10,000		31	0.6	238,872		3.8
10,001-50,000		34	0.6	744,460		12.0
50,001-100,000		10	0.2	703,233		11.3
100,001-500,000		5	0.1	1,269,226		20.4
Over 500,001		2	00	1,686,065		27.1
Total		5,279	100.0	6,207,978		99.9
Of which nominee-registered		9	9	137,393		2.2
Waiting list		0	0	0		0
Joint account				3,441		0.1
Number of shares issued				6,211,419		100.0

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HONKARAKENNE Board of directors' report and financial statements 2023

Distribution of share capital by size category on 31 December 2023

	Number of	% of all	Number of	% of all shares
	shareholders	shareholders	shares
Companies	145	2.7	2,356,359	37.9
Financial and insurance
institutions	8	0.2	452,922	7.3
Public entities	1	0.0	222,812	3.6
Households	5,102	96.6	3,130,731	50.4
Non-profit organisations	6	0.1	6,421	0.1
Foreign ownership	17	0.3	38,733	0.6

Grand total			5,250	100.0	6,207,978	99.9
Of which nominee-registered		9	0.2		137,393	2.2
Waiting list			0			0	0.0
Joint account						3,441	0.1
Number of shares issued			100.0		6,211,419	100.0
Shareholding of the Board of Directors and the President & CEO on 31 December 2023
	Series A	Series B	Total	% of all shares	Votes	% of votes
Board's
shareholding	5,950	20,758	26,708		0.43	139,758	1.17
President & CEO's
shareholding *)	25,470	346,300	371,770		5.99	855,700	7.18
Total	31,420	367,058	398,478		6.42	995,458	8.36

*) incl. shareholdings of an underage child

The information provided on shareholders is based on the company's shareholder list maintained by Euroclear Finland Oy. Each nominee-registered shareholder has been entered in the share register as a single shareholder. The holdings of several investors can be managed through one nominee-registered shareholder.

Flagging Notifications

During the financial year 2023, no flagging notifications have been received.

Management Transactions

Honkarakenne's management transactions concerning the company's securities during the review period have been published as stock exchange releases and are available on Honkarakenne's website.

Board Authorisations

On 20 April 2023, the Annual General Meeting decided, that the company's Board of Directors is au- thorised to repurchase a maximum of 400,000 of the company's own B-shares with the company's unrestricted equity.

The Board of Directors also has the authorisation to decide on a share issue, either against payment or free of charge, and the issue of special rights, entitling to shares referred to in Chapter 10, Section 1 of the Limited Liability Companies Act, in one or more tranches.

Pursuant to the authorisation, the Board of Directors may issue new shares and/or dispose of a maximum of 1,500,000 of the old Series B shares held by the company, including those shares that may be issued under special rights.

Both authorisations will remain in force until the next Annual General Meeting but expire on 30 June 2024 at the latest.

Redemption Clause

If a Series A share is transferred to a shareholder other than the company's shareholder on basis other than inheritance, testament or matrimonial right, the Board must be notified of the transfer in writing.Within 30 days of receiving notification of the transfer, the Board of Directors has the right to redeem the Series A shares for the company at carrying amount according to the previous financial statements using the reserve fund or other assets exceeding the share capital. If the Series A shares are not redeemed for the company, the Board of Directors must immediately inform the shareholders holding the company's Series A shares of these matters. Holders of Series A shares have the right of redemption at the above-mentioned price within 30 days of the above-mentioned notice. If more than one shareholder wishes to exercise that right, the redeemable Series A shares are to be distributed among them based on their holding of Series A shares in the company or, if that is not possible, by drawing lots. The company's Series B shares are not subject to the right of redemption but are freely transferable.

Shareholders' Agreement

Saarelainen Oy and certain private Honkarakenne Oyj shareholders within the Saarelainen family signed an amended shareholders' agreement on 17 February 2009. The parties to the agreement have agreed that the private shareholders will make an effort to exercise their voting rights unanimously at the company's General Meetings. If they are unable to reach consensus, the private shareholders will vote in favour of the position supported by Saarelainen Oy. According to the agreement, when electing representatives of the Saarelainen family to Honkarakenne Oyj's Board of Directors, the private shareholders must reach a unanimous decision. If a consensus cannot be reached, Saarelainen Oy's General Meeting will decide which family members are to be elected based on the majority of votes cast at the meeting.

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