EKORNES QM HOLDING AS

ANNUAL

REPORT

EKORNES

QM HOLDING

2023

COMPANY

Company history and ownership 4 - 5

Message from the CEO

6 - 7

Group management 8 - 1

Board of directors in Ekornes AS 12 - 13

CORPORATE GOVERNANCE

Code of Conduct 14 - 15

Sustainability report 16 - 55

BOARD OF DIRECTORS’ REPORT

Board of directors 58

Board of directors’ report 59 - 69

FINANCIAL STATEMENTS

Consolidated financial statements 72 - 77

Notes to the consolidated financial statements 78 - 107

Financial statements Ekornes QM Holding AS 110 - 113

Notes to the financial statements Ekornes QM Holding AS 114 - 119

Statement pursuant to section 5-5 of the securities trading act 120

Independent auditor’s report 122 - 126

Content

Ownership chart as at 31 December 2023

Ekornes QM Holding AS was founded 4 January 2018 with the

purpose of acquiring the Ekornes Group. In May 2018, an offer was

made to purchase the shares of all Ekornes shareholders. The share

purchase was completed in August 2018 and Ekornes AS was delisted

from the Oslo Stock Exchange in October 2018.

Norwegian ultimate parent company Ekornes QM Holding AS is a

subsidiary of Qumei Home Furnishings Group. Qumei Group owns

94,12% of the shares in Qumei Runto S.à.r.l and Hillhouse owns the

remaining shares.

Qumei Runto S.à.r.l owns 100% of the shares in Ekornes QM Holding

AS. The Ekornes Group is the only operational part of the Ekornes QM

Holding Group. The consolidated financial statements comprise the

financial statements of the parent company Ekornes QM Holding AS

and its subsidiaries as at 31 December 2023.

Ekornes QM Holding AS had, as at 31 December 2023, 100%

shareholding and voting rights in Ekornes AS who in its turn has a

100% ownership share and voting rights for all other consolidated

companies.

Company history

and ownership

Qumei Home Furnishings Group Co., Ltd. (China)

Zhimei Chuangshe Home Furnishings (Shanghai)

Co., Ltd. (China)

Qumei Runto S.á.r.l.

(Luxembourg) (Parent)

Ekornes Group Entities

100%

94,12%

100%

NOK 1 200m

secured bond

NOK 1 600m

bank loan

100%

Ekornes AS

5,88%

Zhuhai Deyou Nuohui Equity Investment

Partnership (L.P.) (“Hillhouse”)

Ekornes QM Holding AS

Annual report Ekornes QM Holding 2023 | Company history and ownership Company history and ownership | Annual report Ekornes QM Holding 20234 5

In 2024, Ekornes is celebrating its 90-year anniversary since

its founding by Jens. E. Ekornes in 1934. During almost a

century of innovation and international expansion, Ekornes

has today emerged as Norway’s largest furniture

manufacturer and a global provider of high-quality furniture

built on solid brands: Stressless

, IMG and Svane

. Owing to

strong commercial teams and an extensive network of

department stores and furniture chains, our products are

available in more than 4,000 outlets in 40 countries globally.

In 2023, this translated into total revenues of NOK 4.2 billion

despite challenging market conditions.

I was proud and humbled to take on the position as CEO in

September 2023 and in the past months, I have grown to

know a dedicated organization employing close to 2,800

highly skilled employees. Building on our strong legacy and

through improving operational excellence, we are committed

to delivering on Ekornes’ vision to improve everyday living

for people around the world with quality products.

Industrial strength in our DNA

Innovation, quality and industrialization have been the

principles on which Ekornes has developed its business,

demonstrated through our track record of successful

international brand building.

The Svane

brand, which was established in 1937 has

developed into one of the best-known brands in the

Norwegian bed market with its unique IntelliGel

technology.

The premium Stressless

brand, was brought to market with

the introduction of the revolutionary Stressless

recliner

in 1974, is now recognized by more than 85 million people

worldwide. While the mid-segment IMG brand, which

merged into Ekornes in 2014, has developed into a

discovery brand operating in numerous markets and

collaborating with multiple partners and chains around

the world.

Today, we are developing and manufacturing products

through a global production platform of eight production

facilities in four countries. Our home turf remains

Sykkylven, Norway, where our cornerstone Ikornnes

factory is located. When it opened in 2004, it was one of

the most advanced furniture factories in the world and

through continuous improvements and disciplined

investments, our production platform remains highly

automated and utilizing robot technology, leveraging

industrial strength.

Ability to adapt

During recent years, the furniture industry has

experienced significant volatility and rapidly changing

market conditions. Throughout this turbulent time, our

flexible business model has proven effective in navigating

unpredictable circumstances and adapting accordingly.

When the Covid-19 pandemic hit, “home nesting” effects

boosted sales to extraordinary levels and Ekornes scaled

operations, increasing capacity by over 1,000 employees

from 2019 to the peak in 2022. With disrupted supply

chains, our ability to deliver high quality products with

short delivery times became a competitive advantage and

the company increased revenues considerably while

gaining market shares.

In the post-pandemic period, demand normalized while

soaring inflation reduced consumers’ disposable income.

Addressing the softer markets, we entered 2023 by

announcing a series of operational and financial initiatives

to reduce costs and safeguard profitability. The Ekornes

organization once again proved its ability to adapt as we

concluded the year with annual operating costs lowered by

more than NOK 200 million and working capital reduced

in excess of NOK 400 million. Maintaining a sharp focus on

maximizing operational efficiency, we also concentrated

production in Asia in our Thailand facility, while

discontinuing operations in Vietnam. These efforts have

yielded strong results as our footprint and activity steadily

grows in the region.

The market for mid-market and premium furniture remains

subdued amidst low consumer demand adding stress to

the entire value chain. Succeeding in the current market

requires even more from the organization. A transformation

to sharpen our global product offering and to further

modernize the development of the unique Ekornes brands.

Building on our strong foundation, we will improve

productivity by streamlining operations across the value

chain and maintaining strict cost control, while upping the

standards for execution quality and time-to-market for

new products. These efforts will be accompanied by

showing a winning culture, driven by the determination to

offer relevant design products of exquisite quality, loved by

customers and consumers worldwide.

Long-term resilience s

Our ambition is to deliver responsible and profitable

growth over time. Although the length and magnitude of

the current downturn is uncertain, demand for household

and furniture products is expected to return in the longer

term. In this context, our strategy is simple. We will improve

our ability to deliver attractive brands with an optimal

combination of high quality, functionality, and design,

maximizing the comfort afforded by our armchairs, sofas,

dining furniture and beds.

With efficient production, strong brands, and innovative

product development, enabled by an extensive global

network of partners and dealers, we are positioned to

maintain a strong market position even in softer markets.

Our vision remains firm. We will continue to improve

everyday living for consumers all over the world – as we

have done since 1934.

Message from the CEO

Building on our proud heritage

Tine Hammernes Leopold

CEO of Ekornes

Annual report Ekornes QM Holding 2023 | Message form the CEO Message form the CEO | Annual report Ekornes QM Holding 20236 7

TINE HAMMERNES LEOPOLD (1971)

CEO Ekornes Group

Education: Bachelor of Science Business Administration, California State

University, Sacramento, 1993. Orkla and INSEAD executive leadership

program..

Experience: More than 27 years executive and board experience in the

leading Nordic branded consumer goods company Orkla. Currently holding

position on Bord of Directors at Motek AS, since 2017.

CEO of Ekornes and member of Ekornes Group Management since

September 2023.

FREDRIK ØDEGÅRD NILSEN (1988)

EVP & CFO

Education: Masters of Economics and Business Administration at the

Norwegian School of Economics (NHH) and Master in Management at the

University of Mannheim.

Experience: Various position at ISS Facility Services within Finance, Pricing

and Business Development. CFO at Haut Nordic.

CFO of Ekornes since April 2021 and EVP of Ekornes since September 2023.

Member of Ekornes Group Management since August 2020.

Group management

PETER BJERREGAARD (1965)

SVP Commercial North America

Education: Bachelor Business Administration, Various management course

Henley Business University.

Experience: EVP Commercial for Stressless

in North America since 2004 and

from 2017 also for IMG in North America. Prior to this senior Vice President

ECCO Shoes (Several positions within the ECCO Organization), General Manager

Bang & Olufsen Chicago.

SVP Commercial North America and member of Ekornes Group Management

since March 2020.

LARS WITTEMANN (1963)

SVP Sourcing & Supply Chain

Education: Handelsakademiet/BI Business School, MBA BI Norwegian Business

School, Oslo.

Experience: VP Operations ASSA ABLOY Hospitality Divisjon, General Manager at

VingCard Elsafe in Norway and China.

SVP Sourcing & Supply Chain in Ekornes from November 2015.

Member of Ekornes Group Management since March 2020.

JANNE STRØMMMEN (1972)

SVP Marketing

Education: MBA Brand Management at the Norwegian School of Economics (NHH)

and Bachelor in Marketing at BI Norwegian Business School/Suffolk University Madrid,

Spain.

Experience: Brand Marketing from Stokke, Devold and various advertising agencies.

Before joining Ekornes she held the position as Global Brand Communication Director

for Stokke.

SVP Marketing of Ekornes and member of Ekornes Group Management since January

2022.

TERJE VEBLUNGSNES (1964)

VP ICT & Digitalization

Education: Electrical Engineer.

Experience: Employed in Ekornes since 2021 as responsible for digitalization &

transformation. Managed large scale national and international business transformations

with focus on simplification, modernization and improvement of the value chain by

standardizing processes and master data, building new competencies and implementing

digital solutions.

Member of Ekornes Group Management since May 2023.

Annual report Ekornes QM Holding 2023 | Group management Group management | Annual report Ekornes QM Holding 20238 9

PÅL AAGE NORDAHL (1961)

Managing Director Svane

Education: Hedmark College, graduate in finance and administration. Various leadership

programs business and finance at Copenhagen Business School and Norwegian School

of economics. (NHH/Solstrand).

Experience: Partner and Sales Director Edge Innovation Group, Sales Director Cloetta

AS, Sales Director and Business Development Director Ringnes AS (Carlsberg Group),

Marketing Manager Mills DA, General Manager Bama Gruppen AS, Nordic Marketing

Manager Chiquita Brands International.

Managing Director in Ekornes Beds AS since February 2019, and member of Ekornes

Group Management since March 2020.

OLE BASTIAN EMDAL (1980)

SVP Operations & Product Development

Education: Various management courses (BI Norwegian Management School).

Experience: 16 years experience from the furniture industry. Category Manager

at Bohus (Retail), Category & Market Manager at Møbelringen (Retail),

Sales & Market Manager at Martinsen AS (Wholesale), Owner, sales and

purchasing at Vest Møbel AS, Owner and Managing Director at Stjernemadrassen.

SVP Product Development of Ekornes since January 2022. Member of Group

Management since March 2020.

GURI BRENNHOVD (1973)

SVP Commercial Nordic

Education: Bachelor in Sales and Marketing from Norwegian School of Management.

Experience: 25 years of experience from sales, category and marketing responsibility

of well-known brands (Samsung, Electrolux, Sharp, Apple Computer and Expert Norge)

within the retail/ consumer electronics industry. Her last position was as the Managing

Director of Wilfa Norway.

SVP Commercial Nordic and member of Group Management since August 2022.

CHRISTIN KATHRIN NORDGÅRD (1966)

VP People & Culture

Education: Bachelor of Economics and Business Administration at the Norwegian

School of Economics (NHH) and Master of Management Programs in Human

Resource Management and Employment/Labour Law at BI Norwegian Business

school.

Experience: Various positions at Trelleborg Offshore within Human Resources.

Sales and consultancy at various Staffing- and recruitment companies. Project

administration and expediting in Delivery Projects for the Offshore industry.

VP People & Culture of Ekornes since September 2022, member of Ekornes Group

Management since September 2023.

MARK KELSEY (1974)

SVP Commercial Apac

Education: BSc in Physics from Imperial College, London.

Experience: More than 11 years at Ekornes (several positions including

President Ekornes APAC and President Ekornes Asia), Country Manager UK

& Ireland Fritz Hansen.

SVP Commercial APAC and member of Ekornes Group Management since

March 2020.

JAMES THOMPSON (1979)

SVP Commercial Europe

Education: BA Business Studies (University of South Wales), C. Dir (CGTI).

Experience: Managing Director of Ekornes Ltd since 2017, prior to this 20 years

management experience in retail and hospitality, including Director at Sandals,

Harrods and Heal’s. SVP Commercial Director Europe and MD Ekornes Ltd.

SVP Commercial Europe and member of Ekornes Group Management since

March 2020.

Annual report Ekornes QM Holding 2023 | Group management Group management | Annual report Ekornes QM Holding 202310 11

Group management

Atle Berntzen (1967), Director (employee elected)

Position: Team leader and deputy manager, warehouse/goods inwards at

Ekornes Beds AS.

Education: Upper secondary school (commercial studies major).

Experience: Sales person and warehouse operative at General Motors AS. Warehouse

operative at Ekornes Beds AS.

Stian Ekornes (1963), Director

Position: Investor.

Education: The Norwegian Merchants Institute (today BI Varehandel).

Experience: 30 years’ experience of the furniture industry. Extensive experience as CEO,

board chair and director within the furniture industry, chain management and property

development.

Ruihai Zhao (1965), Chair

Position: Chair and CEO of Qumei Group.

Education: MBA (Cheung Kong Graduate School of Business, China), degrees in

global business management from Tsinghua University, China and University of

Minnesota, USA.

Experience: Founder and chair of Qumei Home Furnishings Group, with more than

30 years’ experience of the furniture industry.

Lars I. Røiri (1961), Vice-Chair

Position: CEO of Flokk Holding AS.

Education:

Master of Economics and Business Administration (BI Norwegian Business School).

Board memberships: Director of Cappelen Holding AS, Glamox AS and the Norwegian

Federation of Industries’ Design Industry Association.

Experience: Commercial management positions at Tomra ASA, Mølnlycke AB and Jordan

AS, CEO of Coloplast AS and HÅG ASA. Membership of the boards of numerous companies,

including Molift AS, Netonnet AB, Enghav AS and Design & Architecture Norway, and of the

Norwegian Advisory Board of the private equity company Ratos.

Yue Qiu (1990), Director

Position: Vice President in Hillhouse Capital.

Education:

MSc in Finance and Private Equity from London School of Economics.

Board memberships: Board observer in Jiangxiaobai.

Experience: Senior Associate in the Carlyle Group London office, responsible for

numerous private equity investments across Europe and APAC. Board observer in

Brintons and Akari Care.

Bente Johnsen, 1972, Director (employee elected)

Position: Seam operator at dep. Aure, Union representative at sewing department, dep.

Aures.

Education:

Studies in carpentry and upholstery, craft certificate as upholsterer.

Board memberships: Deputy chairman of ITAF (Ikornnes Treindustriarbeiderforbund/

Wooden Industry Workers’ Union), director of Cooperation Committee for furniture and

Lærdal.

Experience: I have various experience working as a florist, in the food and travel industry,

as a caretaker at an assisted living facility and production worker at upholstery and sewing

departments at Ekornes since 1997.

Ove Per Skåre (1956), Director (employee elected)

Position: Work in upholstery department of J.E.Ekornes AS.

Education: Diverse courses in Norwegian Confederation of Trade Unions

Experience: Prodcution worker in Velledalen Møbler AS; Foam production in Porolon AS;

Foam, steal and upholstery department in J.E.Ekornes AS; UN Veteran served in Lebanon;

Union representative and health & safety representative in J.E.Ekornes AS; board member

of the Trade Union (ITAF).

The Board of Directors

in Ekornes AS

Annual report Ekornes QM Holding 2023 | The Board of Directors in Ekornes AS The Board of Directors in Ekornes AS | Annual report Ekornes QM Holding 202312 13

Annual report Ekornes QM Holding 2023 | Code of conduct Code of conduct | Annual report Ekornes QM Holding 202314 15

In December 2013, Ekornes published an updated version

of its Code of Conduct and anti-corruption policy. Both of

these are presented below.

Anti-corruption policy – UNs Global Compact

Ekornes has endorsed the UN Global Compact since 2009.

Through participation in the UN Global Compact, Ekornes

is committed to operating its business responsibly in line

with the UN Global Compact’s ten principles, which also

cover anti-corruption. Ekornes also encourages its

business associates to comply with these principles.

Ekornes has drawn up a new system with which to assess

its suppliers’ performance against the Global Compact’s

principles. The system went into effect in 2013.

The UN Global Compact is based on openness, both with

respect to the company’s dealings with all stakeholders and

the challenges Ekornes meets at the local and global level.

Since 2012 Ekornes has been a member of the UN Global

Compact’s Nordic network. Participation in the network

enables Ekornes to exchange experiences with other

businesses which have social responsibility high on the

agenda.

Through the UN Global Compact, Ekornes is obligated to

set goals for and work continuously to improve its

practices in this area. Each year Ekornes reports its

performance to the UN in the form of a Communication on

Progress (COP). This may be found on the company’s

website under ir.ekornes.no/environmental-and-social-

responsibilities.

Ekornes will conduct its business activities responsibly, and

will operate in compliance with all relevant laws,

regulations and strict ethical norms. We support and strive

to live up to the UN’s Global Compact. This means that in

all parts of our operations we will maintain high standards

with regard to:

1. Respect for and compliance with the Universal

Declaration of Human Rights.

2. Respect for workers’ rights and needs.

3. Environmental responsibility.

4. Combatting corruption in Norway and abroad.

This document, “Ethical Values and Anti-Corruption Policy”,

as well as “Objectives and Values”, have been distributed to

all employees. These regulations have also been distributed

to external relations and have been published on the

company’s website www.ekornes.no. Everyone within the

company has a duty to follow up and comply with these

regulations. Managers in all parts of the company have a

special responsibility for their follow-up.

Code of Conduct for the Ekornes Group

1. ‘Objectives and Values’, company regulations,

employment contracts and job descriptions also contain

ethical rules with which the Ekornes Group complies.

The rules contained in this overview should therefore

not be considered exhaustive with respect to the

Group’s ethical standards.

2. A duty of confidentiality contained in company

regulations, employment contracts or job descriptions

does not prevent you from informing a superior should

you become aware of breaches of regulations,

legislation or rules laid down by the authorities. This

also applies to internal guidelines, provisions or issues

that might harm Ekornes’ reputation or other parties’

trust in Ekornes.

3. Ekornes shall comply with the laws, rules and

regulations in the countries in which Ekornes companies

have been established or in which business connections

have been established.

4. In all contact with suppliers of raw materials, machinery,

subsidiary materials and services of any kind, and

contact with customers and other business connections,

we shall aspire to honesty, integrity, openness, as well as

correct and responsible business conduct. The objective

is to arrive at the best offer for Ekornes.

5. Ekornes or employees of Ekornes shall not take part in

“bribery” or its equivalent in order to achieve special

advantages or access to such.

6. Business connections such as those mentioned above

shall not be furnished with more information about

Ekornes than they need to provide a satisfactory offer

with respect to price, level of service, delivery times,

technology and specifications, or what they need to

exercise their business relationship with Ekornes.

7. Suppliers and business connections shall under no

circumstances receive information about other

suppliers and business connections via Ekornes.

8. Employees of Ekornes shall participate in trips, dinners

and events arranged by suppliers and business

connections only when there is a professional reason

for the event/trip, or it provides business-related

opportunities. In cases of such participation the travel,

entertainment and accommodation of employees of

Ekornes shall always be paid by Ekornes.

9. Employees of Ekornes are not permitted to receive

benefits or gifts (in the form of products, services or

trips, etc.) from business connections other than small

promotional items of limited value. The same applies to

private purchases of goods at discounts from suppliers

to Ekornes without the approval of a superior.

Individuals must also avoid becoming in any way

beholden to customers or suppliers.

10. Suppliers and business connections shall be made

aware of the contents of this document and also be

made aware that any attempt to contravene these

ethical rules could result in exclusion.

Accounting and internal control requirements

Ekornes requires transparency in all operations. All

Ekornes entities shall therefore ensure that transactions

are correctly registered and supported by proper

documentation in accordance with local and international

accounting principles. Anti-corruption law requires that

Ekornes has in place effective internal accounting controls

and maintains books and records that accurately reflect

the companies’ transactions. All entities within the Group

must correctly account for income and expenditures and

must ensure that payments are not recorded falsely in

company books. All expenses shall be approved under

standard company procedures, documented and recorded

in accordance with appropriate accounting standards.

Organization and follow-up

This document, “Ethical Values and Anti-Corruption Policy”,

as well as “Objectives and Values”, have been distributed to

all employees. These regulations have also been distributed

to external relations and have been published on the

company’s website IR.ekornes.no. Everyone within the

company has a duty to follow up and comply with these

regulations.

Managers in all parts of the company have a special

responsibility for their dissemination and follow-up. In the

autumn of 2018, a new vision “We improve everyday

living” and a new set of values was adopted. The new values

are Honest, Authentic, Enthusiastic and Adaptable. These

were communicated to all employees through staff

meetings, internal communications channels and eLearning

courses.

Code of conduct

for the Ekornes Group

16 17

Contents

ABOUT THE REPORT

MESSAGE FROM THE CEO

THIS IS EKORNES

SUSTAINABILITY APPROACH

Stakeholder Engagement 20-24

Materiality Assessment 25

Value Chain Assessment 25

IMPROVING ENVIRONMENT

Energy And Emissions 26-27

Air And Water Pollution 27

Water Stewardship 28

Circularity 29-30

Responsible Sourcing 30-31

Biodiversity 31

IMPROVING SOCIAL ENGAGEMENT

Employee Engagement 32-33

Partners Engagement 34

Customer Engagement 35

Community Engagement 36

IMPROVING GOVERNANCE

Sustainability Governance 37

Supply Chain Governance 38

Business Ethics 38

APPENDIX

Appendix A: EU Taxonomy Report 39-50

Appendix B: Sdg Alignment 51

Appendix C: Data Factsheet 52-55

Appendix D: List Of Abbreviations 55

Improving everyday living

in a sustainable manner

18 19

Message from the CEO

Dear Shareholders and Stakeholders,

I am pleased to communicate with you regarding Ekornes’

steadfast commitment to sustainability and the ongoing

efforts to embed sustainable practices throughout our

operations. Sustainability lies at the heart of Ekornes’

values and we recognize the critical role the industry plays

in shaping the world around us. As a furniture company, we

understand the importance of minimizing the

environmental footprint and fostering positive social

impact.

As part of the commitment to transparency and

accountability, Ekornes is currently preparing for the

Corporate Sustainability Reporting Directive (CSRD)

disclosure in the next reporting cycle. This process includes

conducting a Double Materiality Assessment to identify

and address sustainability-related impacts, risks, and

opportunities comprehensively. Additionally, we are

actively reviewing and refining the sustainability strategy

to ensure it remains robust and aligned with the values and

objectives.

Our dedication to sustainability extends beyond

compliance; the sustainability principles are deeply

ingrained in the business practices and decision-making

processes. We are committed to creating sustainable

products that meet the needs of the customers while

minimizing the environmental impact. By setting clear

targets and continuously improving the practices, we aim

to lead the way towards a more sustainable future for

Ekornes and the broader community.

Thank you for your continued support and partnership as

we strive to make a positive difference in the world

through the sustainability initiatives.

Sincerely,

Tine Hammernes Leopold

CEO, Ekornes

Annual report Ekornes QM Holding 2023 | Sustainability report Sustainability report | Annual report Ekornes QM Holding 2023

Ekornes and sustainability

Ekornes Group’s Sustainability Report for the financial year is structured

broadly along the European Union’s Corporate Sustainability Reporting

Directive (CSRD) and the accompanying European Sustainability Reporting

Standards (ESRS). The Group is in the transition process of adapting to the

requirements of the CSRD and expects to be aligned with the ESRS from the

financial year 2024. This report has been reviewed and approved by the

Board of Directors.

The report has generally been prepared on a consolidated basis aligned with

the consolidation of the Group’s financial statements. Due to the availability

of reliable data, some data for parts of the Group are only for the Norwegian

operations. Ekornes is however working to collect the relevant data for all

entities as part of its value chain assessment for the upcoming reporting

cycles. Ekornes is in the process of ensuring compliance with the ESRS from

the financial year 2024. The Group is therefore working to establish adequate

data for every entity in the Group and each relevant part of the value chain for

the upcoming 2024 sustainability reporting cycle.

Ekornes Group is a member of the UN Global Compact and this report

represents the Group’s communication on progress for 2023 to the UN

Global Compact. The report also incorporates Ekornes Group’s first

disclosure as per the EU Taxonomy for the year 2023.

About the Report

20 21

This is Ekornes

Ekornes, is a global furniture company and the largest

furniture manufacturer in the Nordics, celebrating its 90th

anniversary in 2024. The Group‘s headquarters is based on

the west coast of Norway in Sykkylven. The Group houses

Svane

and Stressless

brands that offer premium seating

and sleep category furniture respectively. Ekornes also

offers quality furniture with discovery brands and

private-label with the IMG business. Ekornes Group

manages the design, development, manufacturing, and

distribution of its total operations. With a global presence

spanning 48 markets, Ekornes boasts 19 sales offices

across 13 countries and over 4,000 sales points worldwide,

generating an annual revenue close to NOK 4.2 billion. The

company operates eight factories situated in Norway, the

US, Thailand, and Lithuania, employing approximately

2,800 individuals.

Product management and product development are

centred in Norway, while production is strategically

distributed across factories based on product lines, market

proximity, and cost efficiency. Approximately 40% of

Ekornes’ workforce is located in Norway, with the rest

stationed internationally at production sites and sales

offices.

Sustainability Approach

For almost 90 years, the Ekornes Group has been

synonymous with crafting quality furniture, always

prioritizing unparalleled comfort. Sustainability principles

are deeply ingrained in the brands and product design and

form an integral component of the business operations.

The Group’s goal is to achieve more with less, continually

producing enduring, high-quality products that minimize

environmental impact throughout their lifecycle. Ekornes

believes that a sustainable Ekornes shares the value it

creates among its shareholders, employees, and the

communities affected by its operations.

Ekornes’ sustainability approach is currently governed by

the Group’s Environmental Policy. This policy sets out

commitments, with clear ambitions and targets within

climate and environmental-related matters such as:

• Continuously and transparently improve the

environmental performance to reduce the impact on

the environment;

• Adhere to all regulatory requirements by managing

the environmental performance according to ISO

14001 standards;

• Choose proper materials with long life cycles and as

much as possible from recycled resources and design

the products with a circular perspective;

• Cooperate with research and development

organisations, authorities and other organizations

nationally and internationally; and

• Provide transparency on environmental information,

for example through EPDs.

As a member of the United Nations Global Compact

(UNGC), Ekornes align itself with the UN Sustainable

Development Goals (SDGs) and utilize them as guiding

principles for setting its sustainability targets. Recognizing

sustainability as a fundamental aspect of the business, the

company is in the process of reviewing its sustainability

strategy and will adopt the Corporate Sustainability

Reporting Directive (CSRD)and reporting standards in its

upcoming reporting cycles.

Furthermore, the Group plans to conduct a Double

Materiality Analysis (DMA) in 2024 to deepen the

understanding of the significance of sustainability to the

business model and strategy. The analysis will inform

Ekornes’ future strategic decisions, ensuring alignment

with evolving sustainability standards and the commitment

to responsible business practices.

This year Ekornes also assessed its business activities in

accordance with the requirements of EU taxonomy

regulation. Further details on the assessment can be found

in Appendix C of this report.

Stakeholder Engagement

Ekornes conducted a stakeholder analysis update in 2023,

which encompasses eleven distinct categories of

stakeholders, each with unique needs and expectations

concerning the operations. These insights are integrated

into the ISO 9001:2015 quality management system,

which outlines specific impact areas to be addressed across

all risk scenarios. Regular engagement with stakeholders

takes place through various channels, with their feedback

serving to enhance the performance and inform the quality

management system.

As part of the Double Materiality Assessment (DMA)

Group will be furthering the stakeholder engagement by

involving them in the materiality process. Ekornes plans to

reach out to selected external stakeholders to identify

material sustainability-related impacts, risks, and

opportunities. The findings may prompt adjustments to the

stakeholder engagement practices moving forward,

reflecting the dedication to responsive and responsible

business practices.

Rest of Europe

35%

APAC

17%

Norway

12%

North America

36%

Group

Revenues

Norway

36%

Rest of Europe

14%

APAC

45%

North America

Group

Employees

Oppdaterte

tall

Rest of Europe

35%

APAC

17%

Norway

12%

North America

36%

Group

Revenues

Norway

36%

Rest of Europe

14%

APAC

45%

North America

Group

Employees

Oppdaterte

tall

Production facilities

Norway

Aure

Ikornes

Grodås

Fetsund

Tynes

Morganton

USA

Panevéžys

Lithuania

Bangkok

Thailand

Norway

Aure

Ikornes

Grodås

Fetsund

Tynes

Morganton

USA

Panevéžys

Lithuania

Bangkok

Thailand

Annual report Ekornes QM Holding 2023 | Sustainability report Sustainability report | Annual report Ekornes QM Holding 2023

22 23

Target markets

Annual report Ekornes QM Holding 2023 | Sustainability report Sustainability report | Annual report Ekornes QM Holding 2023

Main target markets

24 25

Stakeholder Needs and expectations Engagement

Customers

The direct customers are dealers, who need the products

delivered according to specications and in accordance

with laws, regulations and standards. Dealers expect

products that enable protability, good marketing

support, communications, and efcient claims handling.

They also recognise the growing demand for sustainable

products from end consumers and expect products in line

with that demand.

Ekornes conducts regular customer satisfaction surveys

in all its target markets and has conducted special focus

and insight interviews with selected customers in

Germany, the US and the UK. The interview collected

customer’s views on the company’s products, feedback

and satisfaction level.

End-users

The dealers sell Ekornes’ products to the end-users

(consumers). Consumers need products without harmful

chemicals and based on sustainable inputs. Consumers

will have high expectations based on marketing and

expect a healthy indoor environment and product that

has been developed and produced sustainably.

For Ekornes, the retailers and wholesalers act as channels

for communication with the consumers – the end-users of

the products. Ekornes ensures communication with its

end consumers through marketing including video and

print advertisements. The Group also share its annual

sustainability reports in the public domain on Ekornes’

website.

Suppliers

Suppliers need prompt payment of deliveries and expect

good communications, adequate specications, and

predictability. Ekornes expects suppliers to comply with

its sustainability requirements like ethical forestry and

upholding human and labour rights, as specied in the

Supplier Code of Conduct

Ekornes conducts an annual supplier audit program that

assesses suppliers’ compliance with Ekornes’ Supplier

Code of Conduct and a self-assessment supplier program

which includes sustainability sourcing certications such

as Forest Stewardship Council (FSC

) and the Leather

Working Group (LWG).

Industry

associaons

Industry associations need adherence to agreements and

tariffs and expect participation in expert groups,

initiatives, projects, and events. Information sharing

among peers is also expected and encouraged. Industry

associations also expect Ekornes to maintain sustainable

operations and to design and deliver sustainable product

alternatives.

Ekornes is a member of multiple recognised industry

associations including the sustainability committee of the

Norwegian Industry Association. The Group ensure

participation in annual product exhibitions and

tradeshows in its location of operations. Ekornes also

promotes industry-level innovation and research for

sustainable product alternatives.

Authories

Ekornes needs to comply with country-specic legal

requirements related to environmental permits, land use,

hazardous waste handling etc. In addition, the country-

specic sustainability reporting requirements are

becoming increasingly important such as CSRD and EU

Taxonomy reporting in the EU.

Ekornes ensures all country-specic and regional

requirements are met for environmental and social

compliance. The Group has started reporting on EU

Taxonomy regulations this year and is currently preparing

to report in line with CSRD from FY 24 onwards.

Cercaon

organisaons

Quality control certications such as ISO 14 001 and

sustainability labels such as FSC

and LWG require

adherence to standards, annual audits, transparency, and

adequate handling of non-conformities.

Ekornes’ four out of eight production facilities are FSC

certied and the Norwegian and American Stressless

production facilities are ISO 14001 certied. Ekornes

compliance with all audit requirements and provides

regular communication as required.

NGOs

These expect a transparent and proactive stance towards

environmental, social and ethical matters.

Ekornes understand the importance of engagement with

local communities and collaborates with various NGOs in

its location of operations to extend philanthropic support.

Ekornes also encourages an open dialogue with national

and global NGOs towards a more sustainable value chain

including its ongoing collaboration with the Rainforest

association for a more transparent leather value chain.

Local

communies

Their needs are focused on production without unlawful

noise and pollution and expect support and engagement

from the company, as well as support for voluntary

organizations and clubs.

Ekornes works with local NGOs to understand the needs

of the local communities, incorporates feedback and

provides support in the form of charitable events.

Employees

The workforce needs proper working environments and

salaries according to tariffs and agreements. They expect

safe and stable jobs, respect for their expertise and

personal development, as well as a good working

environment. The employees also expect the company to

have sustainable operations.

Ekornes strives to have close cooperation with employee

trade unions on all matters, which ensures constructive

dialogue and contributes positively to operations. The

company ensure employee engagement in areas including

inclusion and diversity, health and safety, training and

remuneration.

Owners

Owners need delivery of the products at the right time

and with the right quality, as well as high protability.

The owners also expect the company to design and

deliver sustainable products and reduce its impact on the

environment. Ekornes’ management keeps the company

owners informed and updated on nancial growth and

sustainability performance. They are invited to quarterly

earnings calls and are briefed about all key decisions.

Media

The media expect honest business practices that adhere

to regional laws and regulations, avoidance of

unnecessary pollution and clear and transparent

communication.

Ekornes provides clear and transparent communication

on all sustainability matters including reactive

clarication as well as proactive measures to media

houses as and when required.

Ekornes’ material

souring:

Type

Sourcing region Comments

Wood

Europe (Slovakia

and Germany)

Use only materials certied by the Forest Stewardship Council (FSC

). Program to

obtain FSC

Chain of Custody Certication to verify that FSC

materials have

been used in the entire supply chain. As of 2023, 4 out of 8 Ekornes production

plants have been FCS certied.

Leather

Brazil

Member of the Leather Working Group (LWG) to ensure full traceability and focus

on animal welfare and deforestation.

Texles

Norway, Belgium,

China, Italy

The focus for Ekornes has been towards using durable textiles with high-quality

standards, as well as Oeko-tex certied textiles. Environmental certicates are

being prioritized and certication standards such as GOTS and GRS have been

accepted in the Ekornes value chain.

Plascs

Norway and China

For Stressless

, most plastic components are designed and produced in Norway

with the raw material being sourced from either Sweden, China or the US. For IMG,

all plastic components are sourced from China.

Foam

Norway, Lithuania

and Thailand

All foam is produced by Ekornes in either Norway, Lithuania or Thailand. For all

other production facilities, foam is sourced from Norway. The chemicals used for

foam production are mainly European-based.

Steel

Finland, Sweden

and China

For Norway, Lithuania and the USA, production facilities, steel is mainly sourced

from Finland and Sweden and for Thailand facilities, it is sourced from China. Only

standard components such as steel pipes and wires are sourced from these

countries and further processing is carried out within the prediction facilities

respectively.

Electronics

China

All electronic components including batteries and motors for all Ekornes’

production facilities are sourced from China.

Materiality Assessment

Ekornes has outlined three pillars for its overarching

strategy, integrating sustainability ambitions into its core

objectives. These pillars—Product, Planet, and People—

drive the company’s operational focus areas aimed at

achieving its goals. Aligned with the Group’s business

priorities for enhanced customer focus, optimal utilization

of global production facilities, and dedication to innovation,

these focus areas serve as the cornerstone for sustainable

growth. Further details on why these focus areas are

important for Ekornes and its performance in these areas

can be found in the subsequent chapters of this report.

Over time, these focus areas evolve into key sustainability

targets and Key Performance Indicators (KPIs), enabling

Ekornes to monitor progress toward its 2030 objectives.

Material aspects related to the products encompass

quality, product responsibility, environmentally friendly

materials, circular design, and recyclable materials.

While the forthcoming Double Materiality Assessment

(DMA) in 2024 will provide clarity on sustainability-related

impacts, risks, and opportunities, Ekornes has a

longstanding commitment to sustainability, evident in its

provision of enduring, quality products rooted in circular

design principles.

Value Chain Assessment

Ekornes sources its raw materials, including wood, leather

hides, plastics, foam, steel, and textiles from around the

world. These materials are sourced from various countries

and are utilized in the manufacturing process across the

company’s eight production facilities.

Overall, Ekornes maintains a global supply chain for raw materials, ensuring sustainability, quality, and compliance with

environmental standards throughout the production process.

Annual report Ekornes QM Holding 2023 | Sustainability report Sustainability report | Annual report Ekornes QM Holding 2023

Ekornes’ markets, production and raw materials sourcing

Ekornes’ material soursing: Type

Page 9

Wood

Leather

Texles

Plascs

Foam

Steel

Electronics

Europe (Slovakia

and Germany)

Brazil

Norway, Belgium,

China, Italy

Norway and

China

Norway, Lithuania,

Thailand

Finland, Sweden,

China

Use only materials certified by the Forest Stewardship Council (FSC®)

Program to obtain FSC® Chain of Custody Certification to verify that

FSC® materials have been used in the entire supply chain. As of 2023,

4 out of 8 Ekornes production plants have been FSC® Certified.