Baar, March 5, 2024
After the first glimmers of hope in a challenging
market environment and a slight recovery in thefirst half of the year, the geopolitical and macroeconomic situation deteriorated increasingly
from the third quarter onwards. As a result,
Forbo also experienced a slowdown in market
momentum and a resulting decline in demand,
which intensified in the fourth quarter and wasreflected in lower volumes. In addition, the year
was characterized by significant adverse currency effects on net sales and earnings.
Forbo implemented targeted measures to improve profitability and efficiency and further
operational improvements. Our operating
structures were adapted to the lower volumes,
inventories were reduced, and the necessary
sales price increases were implemented. These
measures compensated for the increased personnel cost due to inflation and the continuing
high energy cost. Overall, Forbo achieved a significantly higher cash generation.
Translating local results into the corporate currency resulted in significant currency losses on
net sales (CHF 80 million) and EBIT (CHF 10million).

In the year under review, Forbo generated net
sales of CHF 1,175.2 million (previous year: CHF
1,293.2 million). In local currencies, this represents a decline of 2.9% and corresponds to adecrease in net sales of 9.1% in the corporate
currency due to strongly adverse currency
effects. In local currencies, the three regions
contributed as follows: Asia/Pacific +6.6%,
Europe –3.3%, and the Americas –8.0%.
Forbo's customers' investment activity slowed
noticeably due to increasing global uncertainties. This development was evident in bothdivisions and across all regions.

Operating profit before depreciation and amortization (EBITDA) decreased by CHF 13.5 million (–7.0%) to CHF 179.9 million (previous year:CHF 193.4 million). Group operating profit(EBIT) decreased by CHF 2.7 million (–2.0%) toCHF 129.9 million (previous year: CHF 132.6
million, including one-time impacts). This
resulted in an EBITDA margin of 15.3% (previous year: 15.0%) and an EBIT margin of 11.1%(previous year: 10.3%).

A double-digit EBIT margin was achieved
despite a difficult market environment withdeclining demand and a corresponding significant decline in sales volumes (–9%), significantly adverse currency effects, higher personnel cost due to inflation, and continuing
high energy cost. This was achieved thanks toadjusted operating structures, efficiency measures, and sales price increases (+6%).
The partial decline in raw material prices in thesecond half of the year had only a minor impact
on profitability for the entire year.

Based on the slightly lower operating result, acomparable tax rate of 22.4% (previous year:22.6%) and a positive financial result of CHF+1.9 million (previous year: CHF –1.6 million)
due to foreign exchange gains and interest income, the Group profit increased by 0.9% or
CHF 0.9 million to CHF 102.3 million (previousyear: CHF 101.4 million).

The
division generated
net sales of CHF 796.5 million in the 2023 business year (previous year: CHF 878.0 million),corresponding to a decrease of 3.1% in local
currencies and 9.3% in the corporate currency
due to marked negative currency effects. In local
currencies, the sales development was asfollows: Europe –3.4%, Americas –7.0%, andAsia/Pacific +6.6%.
Demand was strongly affected by the reduced
levels of activity in the construction industry
caused by inflationary cost increases and higher
interest rates. In addition, customers shifted
their capital expenditure from renovation
projects to energy saving investment objects.
The division accounted for 67.8% of Group net
sales in 2023. Operating profit (EBIT) increasedby 7.4% to CHF 94.9 million (previous year:
CHF 88.4 million, including one-time impacts).
The market-driven negative volume development and the corresponding decline in capacity
utilization, the higher personnel cost due to
inflation and very negative currency effects hada significant effect on operating profits. These
were offset to some extent by sales price adjustments and a slight easing of the raw ma-terial prices in the second half of the year. The
EBIT margin increased by 1.8 percentage points
to 11.9% (previous year: 10.1%).
The
division generated net sales of CHF 378.7 million in the year
under review (previous year: CHF 415.2 million), which was equivalent to a decrease of 2.6%
year-on-year in local currencies. The very negative currency effects led to a decline of 8.8% in
the corporate currency. In local currencies, thesales development was as follows: Europe–2.9%, Americas –9.0%, and Asia/Pacific+6.6%.
After years of growth, demand in the globally
important logistics customer segment was verysubdued. In addition, there was no economic
recovery in China, a key market for Movement
Systems. The division accounted for 32.2% ofGroup net sales in 2023. Operating profit(EBIT) decreased by 18.0% to CHF 44.3 million(previous year: CHF 54.0 million), which is attributable to the decline in net sales, the decrease in volumes and resulting underutilizationof capacity at plants, strong negative currency
effects, higher personnel cost due to inflation,and sustained high energy prices. These effects
were offset to some extent by sales price adjustments. The EBIT margin declined by 1.3
percentage points to 11.7% (previous year:13.0%).

Due to strict inventory management and optimized sales and production planning, inventories were reduced by 16.4%, or CHF 52.0 million,
to CHF 264.2 million (previous year: CHF 316.2million). Net cash and cash equivalents amounted to CHF 69.0 million at the end of 2023 (previous year: CHF 21.4 million). This increase ismainly due to the significant reduction in operating working capital. In addition, Forbo held
treasury shares of CHF 81.8 million as at December 31, 2023, valued at the 2023 year-end
price. Free cash flow of CHF 115.9 million morethan doubled (previous year: CHF 50.5 million)
due to the targeted optimization of inventories.
The equity ratio is very solid and has increased
to 61.4% (previous year: 57.3%). Undiluted
earnings per share reflect the slight improve-ment in earnings and increased by 1.1% to CHF
72.55 (previous year: CHF 71.76).

Forbo aims to reduce CO2 emissions further inboth divisions by continuously increasing the
proportion of renewable or recycled raw
materials used in the manufacturing of ourproduct portfolio. Further measures include
expanding local take-back programs forproducts at the end of their life cycle andincreasing the use of renewable energy. In theyear under review, Forbo laid the foundations
for measuring Scope 1, 2, and 3 emissions
following current requirements, which are being
reported for the first time for the entire ForboGroup in 2023.

Dr. Peter Altorfer will not be standing for reelection after almost 20 years with the company. He has made a significant and pivotal
contribution to the further development of theForbo Group with his legal expertise, profoundfinancial knowledge, and many years of professionnal experience. The Board of Directors
owes him an outstanding debt of gratitude forhis exceptional commitment and the trust andcooperation he has shown and wishes him all
the best for the future.
The Board of Directors will propose Jörg
Kampmeyer and Bernhard Merki for election to
the Board of Directors at the Ordinary GeneralMeeting. Bernhard Merki has worked as anentrepreneur since 2019 and is a professional
and independent board member with seats invarious national and international companies.
Jörg Kampmeyer is a managing partner of Gebr.
Knauf KG, one of the world's largest producersof building materials.
In Bernhard Merki, Forbo has gained a Board
member with extensive industrial experiencein both of Forbo's divisions. With Jörg
Kampmeyer, the company has gained anexcellent executive leader with expertise in the

global supply of construction materials and inmarketing and digitalization.
Based on the substantial increase in free cash
flow and the solid equity base, the Board ofDirectors will propose to the Ordinary General
Meeting a dividend of CHF 25 per share (previous year: CHF 23 per share), representing an
increase of 9% and a payout ratio of 34%.

Attractive product and service offerings, highproduct availability, reliable delivery quality,and customer intimacy will be critical successfactors, especially in the current market environment. Therefore, both divisions actively
implement their defined sales and marketing
activities and important operational excellence
initiatives. In a geopolitically volatile and stilltense climate, it is also crucial to deploy thefunds and resources in an entrepreneurial andfocused manner.
Forbo will continue to pursue the successful
strategy of the past years. The company has an
attractive product portfolio in both divisions
and will continue to invest in its sustainableproduct and service offering and growth markets. Both divisions will focus on further
efficiency improvements and progress in all
sustainability areas through digitalization, newproduction technologies, and technology
enhancements. Forbo will exploit external
growth opportunities if and when they create
long-term value.

There is currently no sign of recovery in themarket environment in the short term and,
therefore, 2024 will continue to challenge Forbo
in all areas of the organization.
However, the company is well prepared to face
the currently very challenging market environment with a solid financial foundation that isboth sound and without debts, a proven strategy, and leading market positions. Thanks to its
targeted investments and strategic initiatives,
Forbo will strengthen its competitiveness andcreate the base to take full advantage ofincreasing demand.

Provided the geopolitical and economic
environment does not change significantly,
Forbo expects net sales and Group profit togrow in local currencies. With foreign exchange
rates at current levels, Forbo expects net sales ofaround CHF 1.2 billion and Group profit of up
to CHF 110 million.
Please find further information in the 2023
Annual Report published online this morning:www.forbo.com –> Investors

Forbo is a leading producer of floor coverings,building and construction adhesives, as well as
belts for power transmission and lightweight
conveyor technology.
The sustainable manufacture of environmentally friendly products has long been an integral
part of the strategy. Forbo’s linoleum floor
coverings are made from natural raw materials.
It is biodegradable and carbon negative (cradleto gate), without offsetting. For its manufactureof heterogenous vinyl floor coverings, Forbo
uses the latest generation of phthalate-freeplasticizers. As a proportion of total productweight, textile floor coverings also contain up to45% recycled materials. The BioBelt is a conveyor belt consisting of at least 20% renewable
raw materials. The AmpMiser conveyor belt
allows savings in energy of up to 50%.
The company employs about 5,200 people andhas an international network of 25 sites withproduction and distribution, 6 fabrication
centers, and 47 sales organizations in a total of
39 countries around the world. The company isheadquartered in Baar in the canton of Zug,Switzerland.
The company is listed on SIX Swiss Exchange(security number 354151, ISIN CH0003541510,
Bloomberg FORN SW, Reuters FORN.S).