===== SIDA 1 ===== Annual and Sustainability Report 2023 ===== SIDA 2 ===== Contents 01 Introduction to EQT 4 A differentiated leader in active ownership 5 EQT at a glance 6 EQT’s business model 7 EQT’s financial model 02 Reflections on 2023 and beyond 9 Letter from the Chairperson 10 Letter from the CEO 12 2023 in brief 13 Towards our targets 03 Private markets and EQT 16 The private ownership model 17 Private markets are set for structural growth 18 EQT and its clients 20 Strengthening relationships with the private wealth segment 04 EQT’s strategy 23 Creating the global leader in active ownership strategies 24 Strategic developments since the IPO 25 A diversified global platform 26 EQT’s long-term strategic priorities 05 EQT AB – the listed entity and revenue model 28 EQT AB – the listed entity 29 Explaining management fees and carried interest 06 EQT Playbook 32 EQT Playbook 33 Thematic investment approach 36 Local-with-locals 36 House of Value Creation 37 Governance model 37 EQT Network 39 Digitalization 40 Sustainability 07 People 46 People at the core of EQT’s success 47 Developing people 48 Diversity, equity and inclusion as a value creation lever 49 EQT Foundation – guardian of EQT’s core values 08 Financial statements 52 Board of directors’ report 56 Consolidated financial statements with notes 91 Parent company financial statements with notes 100 Proposal for the distribution of net income 101 Signatures of the board of directors and the CEO 102 Managing risks 109 Auditor’s report 09 Sustainability notes 114 Sustainability notes 139 GRI content index 143 Auditor’s Limited Assurance Report 10 Corporate governance 145 Corporate governance report 145 Statement of Purpose 11 Additional information 159 The EQT AB share 162 Additional fund information for selected funds 164 Additional fund performance information 165 Alternative performance measures (APM) 168 Definitions 169 AGM-information A global leader in active ownership EQT Annual and Sustainability Report 2023 / Page 1 Contents Download print optimized PDF About this report EQT AB (publ) 556849-4180 reports the Group’s financial and non-financial information in a joint report. The formal annual report consists of a Board of directors’ report and financial statements including notes and has been audited by external auditors. EQT’s sustainability reporting is found in the following chapters and pages: Reflections on 20223 and beyond (14), Private Markets and EQT (19), EQT Play- book (32-35, 40-44), People (46-48) and in the Sustainability notes (114–142). The Sustainability Report has been prepared in accordance with the GRI 2021 Standards and a GRI content index has been prepared. EQT’s sustainability reporting further fulfills the requirement for a statutory sustainability report found in the Swedish Annual Accounts Act. This report is also available in Swedish. In the event of discrepancies, the Swedish original will supersede the English version. Data as of 31 December 2023, unless otherwise stated. ===== SIDA 3 ===== Vision What we strive for To be the most reputable investor and owner. Our values What we stand for High performing Respectful Entrepreneurial Informal Transparent Mission What we do and how With differentiated talent and the best global network, EQT uses a thematic investment strategy and distinctive value creation approach to create superior returns for EQT’s investors. Purpose Why we exist To future-proof companies and make a positive impact for all. EQT Annual and Sustainability Report 2023 / Page 2 Contents Download print optimized PDF Introduction to EQT 3 A differentiated leader in active ownership 4 EQT at a glance 5 EQT’s business model 6 EQT AB’s financial model 7 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 4 ===== BPEA VIII IMG Academy (Nord Anglia) EQT Private Equity Asia, in partnership with existing portfolio company Nord Anglia Education, acquired IMG Academy, a leading education institution supporting over 100,000 student-athletes. With a sports-led approach to holistic education and empowering student-athletes, IMG Academy benefits from strong secular tailwinds, including growing focus on health and wellbeing within academia and increased spending on education. With Asia being IMG Academy’s largest source of international students, EQT and Nord Anglia plan to support its overseas expansion and leverage partnership opportunities between the two institutions, including integrating IMG Academy’s sports-focused education services in Nord Anglia’s global platform spanning 33 countries. 01 Introduction to EQT 4 A differentiated leader in active ownership 5 EQT at a glance 6 EQT’s business model 7 EQT’s financial model ===== SIDA 5 ===== A differentiated leader in active ownership EQT enters its fourth decade as a leader in active owner- ship. With a Nordic heritage and focus on thematic invest- ments, it is primed to build on the first 30 years. 1) Source: PEI 300 list; Infrastructure Investor, top 100; PERE, top 100, by commitments raised during the past five years. 2) Average sales between entry and exit of realized portfolio companies, as per December 31, 2023. For EQT Private Capital EU&NA: Refers to realized assets within EQT Mid Market strategy and EQT V-VIII. For EQT Infrastructure: Refers to realized assets within EQT Infrastructure I-III. 3) Weighted sales CAGR between entry and exit of realized portfolio companies, as per December 31, 2023. For BPEA Fund VI-VIII. Value-based culture Respectful High-performing Entreprenurial Transparent Informal Local-with-locals in countries representing 80% of global GDP A global leader1) EQT Private Equity no. 3 EQT Infrastructure no. 5 EQT Exeter no. 10 Read more in People Read more in Strategy Read more in Strategy Future-proofing companies Average compounded annual sales growth in the EQT funds’ portfolio companies: 17% 13% 12% Private Capital EU & NA2) Private Capital Asia3) EQT Infrastruc - ture2) Thematic and sector based approach World-class capabilities in digitali - zation and sustainability 32 portfolio companies with validated science-based targets Read more in EQT Playbook Read more in EQT Playbook Read more in EQT Playbook EQT Playbook EQT Annual and Sustainability Report 2023 / Page 4 Contents Download print optimized PDF Introduction to EQT 3 A differentiated leader in active ownership 4 EQT at a glance 5 EQT’s business model 6 EQT AB’s financial model 7 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 6 ===== EQT funds EQT has EUR 130bn in FAUM in more than 50 active EQT funds. The EQT Private Equity and EQT Infrastructure funds target a gross return of 2.0–2.5x and 1.7–2.2x respectively, on the invested capital over the life of the funds. EQT at a glance EQT manages companies and assets worth more than EUR 232 billion, across Private Equity, Infrastructure and Real Estate. EQT AB Group The EQT AB Group manages, advises and invests in the EQT funds. EQT’s revenues comprise management fees from the EQT funds, a share of profits (carried interest) and investment income from the EQT funds. EBITDA1) €1,226m Employees 1,838 Offices in 26 countries Revenue1) €2,131m EQT funds’ portfolio companies and assets EQT’s investment advisory teams advise the EQT funds which, together with the management teams, deliver on a comprehensive value creation plan for each portfolio company and asset during the EQT funds’ ownership. Clients 1,200 Total AUM €232bn Number of portfolio companies Employees in portfolio companies ~300 ~700,000 1) Adjusted figures. 2) Includes funds since inception. For EQT Private Capital Asia, funds BPEA VI, BPEA VII and BPEA VIII are included. Private Capital % of FAUM Realized Gross MOIC Net IRR Private Capital Europe & North America 43+57 2.7x 19% Private Capital Asia2) 13+87 2.4x 17% Real Assets % of FAUM Realized Gross MOIC Net IRR EQT Infrastructure 28+72 2.5x 16% EQT Exeter 17+83 2.5x 20% 42% 28% 13% 17% Portfolio companies Current number of buildings Square meter real estate 2,030 37m Assets EQT Annual and Sustainability Report 2023 / Page 5Introduction to EQT Contents Download print optimized PDF Introduction to EQT 3 A differentiated leader in active ownership 4 EQT at a glance 5 EQT’s business model 6 EQT AB’s financial model 7 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 7 ===== 3 EQT’s business model 3 Future-proof and drive performance • The EQT investment advisory team, together with the res- pective portfolio company’s management team and board, executes on a comprehensive value creation plan during the EQT fund’s ownership. • Companies and assets are transformed through digitali- zation, sustainable transfor- mation, add-on acquisitions, geographic expansion, and investments in people. The EQT funds are typically invested and realized within ten years. Through an active ownership approach, companies and assets are transformed to become more relevant, more sustainable, more efficient and more valuable. The funds then return the capital to clients as it realizes investments. 5 34 2 1 5 EQT’s clients commit capital to EQT funds Source and invest in companies and assets Future-proof and drive performance Realize investments Return capital to clients 1 EQT’s clients commit capital to EQT funds • EQT’s clients include pension funds investing capital to meet future pension obliga- tions, sovereign wealth funds responsible for its citizens’ savings, or families managing wealth for future generations. • To cater to its cli ents’ invest- ments objectives, EQT has raised larger funds and added new investment strategies. 2 Source and invest in companies and assets • The EQT funds invest in mar- ket leading companies and assets, supported by long- term secular growth trends. • The companies often play a critical role in societies – for example by catalyzing transition to sustainable energy sources, or providing digital infrastructure. 4 Realize the investment Having executed on its value creation plan, EQT realizes the investment, often to a strategic investor, another fund man- ager, or in some cases, via a public market listing. 5 Return capital to clients As the fund realizes its invest- ments, capital is returned to the clients and the fund is typically terminated within ten years. A business model based on a commitment to invest clients’ capital, drive value creation, and generate consistent, attractive returns over five to ten years. EQT Annual and Sustainability Report 2023 / Page 6Introduction to EQT Contents Download print optimized PDF Introduction to EQT 3 A differentiated leader in active ownership 4 EQT at a glance 5 EQT’s business model 6 EQT AB’s financial model 7 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 8 ===== EQT’s financial model … and a predictable and well managed cost base EQT’s operating expenses consist mostly of direct personnel expenses or operating expenses closely related to the personnel base and size of operations, such as external consultants. … drive growth in FAUM If the EQT funds create strong relative returns, this will translate into investor demand for successor funds, growth in fee-generating assets under management and, consequently, growth in management fees. With complementary revenue streams … Attractive returns in the EQT funds increases the potential to generate carried interest and investment income. Consistent and attractive client returns … EQT’s financial model is based on the delivery of consistent and attractive returns to fund investors. Private Capital Europe & North America 2.7x Private Capital Asia 2.4x EQT Infrastructure 2.5x EQT Exeter 2.5x EQT’s financial model is simple and scalable. It is based on the delivery of consistent and attractive returns to fund investors. EQT AB Group’s revenues consist of two complementary streams: management fees as well as carried interest and investment income. 20232022202120202019 Realized Gross MOIC FAUM Management fees Revenues, illustrative Carried interest and investment income Operating expenses, illustrative Personnel expenses 70+30+I Other operating expenses EQT Annual and Sustainability Report 2023 / Page 7Introduction to EQT Contents Download print optimized PDF Introduction to EQT 3 A differentiated leader in active ownership 4 EQT at a glance 5 EQT’s business model 6 EQT AB’s financial model 7 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 9 ===== EQT VIII Schülke EQT Private Equity sold Schülke, a leader in infection prevention and treatment for the healthcare industry, to a consortium of family offices. Having acquired Schülke in 2020, EQT Private Equity helped drive Schülke to double digit annual revenue growth and almost doubled EBITDA in its core healthcare business in three years. Schülke was repositioned to focus on the healthcare and life science market, while expanding into new geographies and sales channels. It also underwent a sustainability transformation; launched a pioneering green hospital-grade product line, transitioned to green electricity, and signed up to the Science-Based Targets initiative. 02 Reflections on 2023 and beyond 9 Letter from the Chairperson 10 Letter from the CEO 12 2023 in brief 13 Towards our targets ===== SIDA 10 ===== Since we founded EQT in 1994, the private mar- kets industry has grown to be a major driver in the global economy. It supports millions of jobs, facilitates innovation across sectors, and is for example a driving force behind the digitaliza- tion and energy transition of societies. And yet, it’s easy to forget that the industry is still rela- tively young, with its history dating back just a few decades. Now the industry is evolving and maturing, and the largest players are pulling further ahead. EQT is well placed to remain at the forefront of this trend. Performance is key At EQT’s inception, the industry was nascent and fragmented. Firms typically focused on a single strategy in a specific geography. Over time, the best performing managers built on their early success to expand into new asset classes or geographies. In EQT’s case, we expanded out of Europe into the US and Asia, and became one of the first to translate the private equity ownership model into infra- structure. At EQT, we are active owners, not asset managers. Strong governance is at the heart of our approach to ownership. We transform companies and assets based on long-term perspectives, while enabling management teams to be decisive in the moment. EQT has developed rapidly over the past 30 years. However, the culture and long-term mindset that the Wallenbergs once brought to EQT has remained. We believe that being informal, transparent, and respectful creates a high-performing culture. We want to ensure that all stakeholders have aligned incentives, we aim to create win-win situations, and to form long-term relationships. It is also vital that we have the best talent working at EQT. We like entrepreneurs, people who push boundaries and strive for the best. We also believe in the power of collaboration, as many minds are always better than one. At EQT we want to hire people that combine the best of both these worlds. With these ingredients in place, we believe we put portfolio companies and assets in the best position possible to focus on what ulti- mately matters: driving performance. Anyone can hope to benefit from an uptick in market valuations. But if you apply an active owner- ship approach, have the best talent, and work closely with a management team to future- proof a business, then company performance will improve during and beyond ownership. That way we can drive the portfolio compa- nies and assets to have a positive impact on the world in which they operate, while at the same time delivering consistent returns to our clients, whatever the market environment. It’s a mutually reinforcing cycle. Doing good is simply good business. The future landscape The number of private market firms boomed in the period after the global financial crisis. But in recent years we have seen market con- ditions tighten, and the fundraising market has turned more challenging. Firms with strong performance track records, a proven ability to generate returns across cycles, and the resources to continuously be ahead of the curve are winning. As a result, industry consolidation is accelerat- ing. We are seeing the best performing smaller firms partnering with global platforms to secure their long-term future. You can see this trend at play in EQT’s history since our IPO in 2019. We have identified gaps in our platform and selec- tively addressed them, successfully executing five strategic transactions that have built the firm into a major player. Christian and the team now have a proven playbook and we are an attractive home for high-performing firms with global ambitions and matched culture. Staying true to the fundamentals I’m pleased to say that we enter our fourth decade in our strongest position ever. Our teams are performance-driven, unafraid to make ambitious but thoughtful decisions, and bring diverse perspectives. We have a robust global platform, with strengths in areas such as AI, sustainability and digitalization, which I believe will play a pivotal role in the future of all businesses. And we have stayed true to our original fundamentals: being a thematic investor, an active owner, and a values-driven and entrepreneurial firm. The Board is united in its appreciation of the dedication the Executive Committee and the entire EQT organization have shown. Mar- kets in 2023 were not easy to navigate and yet performance remains strong. We would also like to thank the senior leaders in our Industrial Advisor Network for their constant support, who all bring invaluable insight, experience and networks to support the portfolio compa- nies and investment advisory teams. Letter from the Chairperson At the forefront of an industry’s evolution “I’m pleased to say that we enter our fourth decade in our strongest position ever.” Conni Jonsson Founder and Chairperson Most importantly, we would like to thank EQT’s clients and shareholders for their trust. The past 30 years would not have been a success without your support and we look forward to what is next to come. Conni Jonsson Founder and Chairperson EQT Annual and Sustainability Report 2023 / Page 9Reflections on 2023 and beyond Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Letter from the Chairperson 9 Letter from the CEO 10 2023 in brief 12 Towards our targets 13 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 11 ===== Letter from the CEO Forward thinking from the start Exploring new strategic avenues More than a decade ago, our infrastructure strategy made its first investment along the energy transition theme with the acquisition of NORD. We continue to believe that the energy transition is one of the most important issues for society to solve in the coming decades, reshaping all economies. Having long recog- nized the role that private capital can play in this journey, we intend to continue building on our track record in the energy transition within infrastructure. We are also reinforcing our leadership in healthcare, with the recent launch of EQT Healthcare Growth, a buyout strategy focused on scaling innovative, fast-growing European companies in this space. When combined with EQT Life Sciences and our flagship private equity strategy, which has committed over 40% of allocations to healthcare in recent vintages, EQT can now support companies in every stage of their development. In Asia, we introduced the BPEA Mid-Mar- ket Growth. This new strategy is the latest inno- vation from our Asia team, which has fully transitioned into EQT’s global platform and is now known as EQT Private Capital Asia. EQT is now one of few with a global approach and local teams in every major Asian region. “Being forward thinking from the start does not just apply to our investment strategies. It is also at the core of how we future-proof our group and the portfolio.” Christian Sinding CEO and Managing Partner Perhaps the most important step in our expansion over the last year was launching EQT Nexus and EQRT, our first products tai- lored to individual investors. EQT has histori- cally raised around eight percent of capital from the private wealth segment. Through these ever-green strategies, we are now enabling a broader client base to access the world of EQT and private markets investing. EQT has always strived to be the best owner possible. We aim to make a positive impact for all by actively transforming companies and assets that play a meaning- ful part in tomorrow’s economy. As we enter our fourth decade, the goal remains the same: to always be innovating, as we embrace opportunities like climate action and AI. Its all about being forward thinking from the start. EQT Annual and Sustainability Report 2023 / Page 10Reflections on 2023 and beyond Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Letter from the Chairperson 9 Letter from the CEO 10 2023 in brief 12 Towards our targets 13 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 12 ===== Harnessing innovation in dealmaking, AI and sustainability Being forward thinking from the start does not just apply to our investment strategies. It is also at the core of how we future-proof our group and the portfolio. Our investment teams, embedded in coun- tries representing over 80 percent of global GDP, are supported by top entrepreneurs and global executives in our network of more than 600 Industrial Advisors. They help EQT to source deals and help ensure we have the insights needed to drive transformation. Part of value creation is also ensuring we exit investments at the best time. We have been innovating to lengthen the runway for key assets – such as with EQT Infrastructure’s lat- est partnership with existing portfolio com - pany EdgeConneX to develop data centers in new markets – and exploring new ways to capture liquidity, for example by setting in motion a public conversation about alterna- tive exit paths including “private IPOs”. EQT is a pioneer in the application of AI in the private markets industry. For the best part of a decade we have been building Mother- brain, our proprietary platform which now encompasses around 30 employees. This team is increasingly working directly with portfolio companies to leverage the power of AI, for instance by finding add-on targets. Under- scoring our ambitious efforts in the realm of AI, we were awarded EQT’s first ever patent on automation and AI. Our digital capabilities have been recognized as best-in-class and we remain committed to growing this capability. 2023 was also an exciting year for us in terms of decarbonization as our work with the Science Based Targets initiative, one of EQT’s flagship climate commitments, gained speed. At year-end 32 portfolio companies had vali- dated SBTs with another 28 in the process, sur- passing our target of 40% coverage across our funds’ portfolio companies, by invested equity. Next, we will tackle the pathway to net zero for our real estate assets. A recent achievement I am excited about is the launch of the EQT thinQ Client Academy which is designed to help advance future-proofing the private markets industry, with a focus on sustainability and AI. A priority in the new year is to spark debate on this platform amongst our commu- nity of clients and sustainability experts. Our commitment for 2024 Looking back on the last year, I’m proud of what we have achieved. Guided by our Nordic, industrialist heritage, we doubled down on driving real, tangible improvements in the portfolio by investing in expansion, driving profitability, increasing resilience, and pursu - ing innovation in sustainability, digitalization and AI. We now have an eventful 12 months ahead of us, with a healthy investment pipe- line across geographies and asset classes. I’m equally excited by our long-term vision. While solidifying our leadership in our existing strategies, we will selectively grow and fill white space in the platform. Most importantly, our focus will remain laser-focused on secur- ing outstanding performance for an expanding client base, while remaining true to our funda- mental philosophy of active ownership. I am confident that as we enter 2024 and EQT’s fourth decade, we will remain forward-think- ing – as we have been from the start. Christian Sinding CEO and Managing Partner “Perhaps the most important step in our expansion over the last year was launching EQT Nexus and EQRT, our first strategies tailored to individual investors.” Christian Sinding CEO and Managing Partner EQT Annual and Sustainability Report 2023 / Page 11Reflections on 2023 and beyond Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Letter from the Chairperson 9 Letter from the CEO 10 2023 in brief 12 Towards our targets 13 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 13 ===== • EQT launched its first semi-liquid strategy, EQT Nexus, providing access for individuals to a diversified portfolio of EQT’s funds. Read more Private Markets • During the year, work to integrate and optimize synergies with BPEA (now Private Capital Asia) was completed. • EQT opened an office in Seoul, and EQT Infrastructure made its first investment in South Korea with SK Shieldus. • EQT published its net zero guidelines. Read more EQT’s website • EQT was included in the Dow Jones Sustainability indicies for the second consecutive year. 2023 in brief • In 2023, EQT raised more than EUR 27bn1). EQT reached the target fund size for EQT X, and finalized fund- raising during the first quarter of 2024 with 21.7bn of fee-generating AUM. Fundraising continued for EQT Infrastructure VI, with EUR 13.7bn of fee-generating commitments as of year-end. • EQT Exeter Industrial Value Fund VI held its final close at USD 4.9bn of fee-generating commitments, exceeding its target size of USD 4.0bn. While 2021 was an exceptionally strong exit year, exit activity was muted in 2022 and 2023 due to broader market uncertainties. Investment activity was reaccelerated in 2023, increasing by 60% compared to 2022. Fee-generating AUM (FAUM) EUR bn 0 30 60 90 120 150 20232022202120202019 36 52 73 113 130 Investments by EQT funds EUR bn 0 7 14 21 28 35 20232022202120202019 10 13 21 12 18 Gross EQT funds exits 0 7 14 21 28 35 20232022202120202019 EUR bn 7 3 31 11 6 All key EQT funds are on or above plan to meet Gross MOIC targets. Investment performance On plan Above plan Private Capital EQT IX EQT VII BPEA VIII EQT VIII EQT X BPEA VII Real Assets EQT Infrastructure IV EQT Infrastructure III EQT Infrastructure V EQT Infrastructure VI 1) Including co-investments. Total AUM €232bn Key events Value creation Fundraising Investment and exit activity for the EQT funds EQT Annual and Sustainability Report 2023 / Page 12Reflections on 2023 and beyond Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Letter from the Chairperson 9 Letter from the CEO 10 2023 in brief 12 Towards our targets 13 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 14 ===== The Board has proposed an increased dividend per share of SEK 3.60 (SEK 3.00) for the fiscal year 2023, to be paid in two installments in 2024. Towards our targets: Financial The EQT AB Board has adopted the following medium to long-term financial targets over a fund cycle. In 2023, adjusted total revenue amounted to EUR 2,131 m, an increase of 39%. Management fees increased by 48% , driven by Private Capital and Infrastructure, as well as the full-year contribution of BPEA, now Private Capital Asia. Revenue growth Total revenue growth over time to exceed the long-term growth rate of the private markets industry. EUR m 0 400 800 1,200 1,600 2,000 2,400 20232022202120202019 570 762 1,623 1,536 2,131 EUR m 0 100 200 300 400 20232022202120202019 197 234 270 316 384 2) 2.20 2.40 2.80 3.00 3.60 Adjusted EBITDA amounted to EUR 1,226 m, corresponding to a margin of 58%. EBITDA margin Adjusted EBITDA margin to be in the range of 55 percent to 65 percent. Margin Dividend per share Dividend policy To generate a steadily increasing dividend per share. 1) Adjusted figures. 2) The Board has proposed a dividend of SEK 3.60 per share, corresponding to approximately EUR 384 million, using EUR/SEK rate 11.096 as of 31 December 2023 and based on the total number of shares outstanding as of 31 December 2023. EBITDA / EBITDA margin1) EUR m 0 300 600 900 1,200 1,500 20232022202120202019 262 385 1,100 46% 51% 68% 829 54% 1,226 58% Revenue1) Dividend Management fees Carried interest & investment income EQT Annual and Sustainability Report 2023 / Page 13Reflections on 2023 and beyond Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Letter from the Chairperson 9 Letter from the CEO 10 2023 in brief 12 Towards our targets 13 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 15 ===== Accountable leadership Integrate sustain - ability into decision- making, linking incentives and ensuring transparency. Sustainability governance • EQT established a Sustainability Committee in 2022. In 2023, a new format for annual sustainability training for the board was set and the first annual training was held in March 2023. • EQT submitted it s first Communication of Progress to United Nations Global Compact for 2023, having become an official signatory to their principles the year before. • To further drive accountable leadership, EQT has linked sustainability performance to incentives, from 2023 also as part of the share program. Sustainability governance 88% of the EQT funds’ portfolio companies have appointed board sustainability champions to ensure accountability 85% EQT funds’ portfolio companies have identified a transformational KPI 25% of the EQT funds’ portfolio companies are formal signatories of the United Nations Global Compact Regenerative processes Respecting and restoring nature and adapting to climate change. Equitable business Ensuring equal rights and oppor- tunities across all aspects of the business. Path to Net Zero1) Gender diversity EQT AB EQT funds2) Employee engagement 8.0 employee engagement score Employee engagement 82% of the EQT funds’ portfolio companies have conducted an employee engage - ment survey Reducing Scope 3 emissions from business travel by 30% by 2030 Reducing Scope 1 & 2 emissions by 50% by 20302) 2030 target 2023202220212019 baseline 406 253 339 387 203 Metric tons CO2e 2030 target 2023202220212019 baseline 12,593 5,142 15,392 17,386 8,815 Metric tons CO2e Path to net zero3) 60 of EQT funds’ portfolio companies have been set on path to net zero4) 32 of these have received validated science-based targets (SBTs), this equals 44% portfolio coverage 5) 94% floor area for real estate assets acquired within the reporting year with a decarbonization plan 6) Towards our targets: Sustainability EQT’s long-term sustainability ambitions and current performance of operational KPIs. 1) Current science-based target scope, excluding EQT Exeter and EQT Private Capital Asia. 2) The metrics cover EQT funds’ portfolio companies within EQT Private Equity, EQT Future, EQT Infrastructure and BPEA VII-VIII, i.e. the investment strategies where EQT funds typically have control or co-control. Data as per 31 December 2022 unless otherwise stated. 3) Data as per 31 December 2023. 4) Defined as EQT funds’ portfolio companies with commitments or submissions of targets to SBTi (28) or with validated SBTs (32), including portfolio companies exited during the year. 5) Based on % invested equity, according to SBTi’s guidelines for private equity firms. 6) Percentage floor area of acquisitions with 1.5 degree-aligned decarbonization plans divided by the total floor area of acquisition since Jan 1, 2023, excluding land acquisitions. Gender distribution among top 20% earners 22% women 78% men Gender distribution among top 20% earners, average share 29% women 71% men Gender diversity average share Wo men Men Wo men Men 29+71 Board of Directors 33+67 Management Board of Directors3) Management 22+78 22+78 Renewable electricity 50% average share renewable electricity in portfolio companies 16 megawatts (MW) of installed and operational renewable energy capacity at properties owned by EQT Exeter3) Renewable electricity 100% share renewable electricity in EQT’s offices 33% 22%22%29% 67% 78%78%71% EQT Annual and Sustainability Report 2023 / Page 14Reflections on 2023 and beyond Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Letter from the Chairperson 9 Letter from the CEO 10 2023 in brief 12 Towards our targets 13 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Sustainability notes 113 Corporate governance 144 Additional information 158 22% 78% ===== SIDA 16 ===== EQT Infrastructure VI Lazer Logistics EQT Infrastructure acquired Lazer Logistics, the largest provider of outsourced yard management and trailer spotting services in North America. Outsourced yard management is a mission-critical service, facilitating the safe, efficient, and low-carbon movement of goods throughout the supply chain. The sector is growing, supported by tailwinds including: precision logistics becoming a source of differentiation for companies, domestic manufacturing and eCommerce penetration growing, and supply chain decarbonization proliferating. EQT will help position Lazer for long-term success by leveraging its track record of investing in North American Transportation and Logistics assets and its expertise in fleet electrification and digital acceleration initiatives. 03 Private markets and EQT 16 The private ownership model 17 Private markets are set for structural growth 18 EQT and its clients 19 In practice: Launch of EQT thinQ Client Academy 20 Strengthening relationships with the private wealth segment 21 In practice: Introducing EQT Nexus ===== SIDA 17 ===== The private ownership model Private markets, with its investment universe, pres- ents attractive investment oppor tunities. The oppor- tunity is growing as access to long-term capital and a superior governance model means that companies are increasingly staying private for longer. The private ownership model Private ownership provides a superior ownership model for many companies and assets. Access to capital, deep sector and operational expertise, and global insights allow for rapid scaling and transformation of companies and assets, based on strong governance and aligned incentives. Large investment universe and attractive opportunities Over the past 25 years, value creation has gradually shifted to private markets, where companies and assets can be developed, without the requirements and costs associated with a public listing. At the same time, privately held compa- nies, spanning ventures to large caps, offer increased port folio diversification and unique risk/return combinations. Public vs. private equity-backed companies1) US Private Equity-backed companies US public companies 0 2,000 4,000 6,000 8,000 10,000 20162012200820042000 Governance • Direct ownership and control Systematic value creation model • Sector and operational expertise Capital • Access to equity and debt • Flexible capital structures Reporting obligations • Transparent reporting to fund investors • Lower costs and requirements than those imposed on listed companies Aligned incentives • Management ownership 1) WorldBank and Pitchbook M&A Report. EQT Annual and Sustainability Report 2023 / Page 16Private markets and EQT Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 The private ownership model 16 Private markets are set for structural growth 17 EQT and its clients 18 Strengthening relationships with the private wealth segment 20 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 18 ===== Private markets are set for structural growth Private markets have provided higher returns compared to public mar- kets, and offer diversifica- tion benefits to investors, with low correlation to other asset classes. Higher returns compared to public markets1) Private markets have historically achieved high returns compared to public markets, even when accounting for the impact of fees2). EQT’s outperformance has been driven by its active ownership and thematic investment approach. 1) EQT EQT Private Capital key funds performance. 2) Source: Cambridge Associates. 3) Source: Cambridge Associates, “Ex US Developed Markets Private Equity & Venture Capital” , September 2023. The index (public market equivalent) is a horizon calculation based on data compiled from private equity and venture capital funds. Annualized net returns. 4) Source: Capital IQ. 5) Sources: BCG (Sep 2023). Low relative correlation with other asset classes Private market investments, influenced by distinct factors and dynamics, offer diversification and risk mitigation. 5 years 15% +14% 21% 10 years 14% +13% 21% Outlook for the private markets industry Private markets have experienced strong growth in AUM in recent years. The market is expected to grow further, supported by increased investment allocations as institutional and individual investors seek to invest in private markets. 0 3 6 9 12 15 2030E2026E2023E ~$8T ~$10T ~$14T +9% EQT Private Equity1) Private Equity Index3) MSCI World Index (Equities)4) 8%7% Annualized returns comparison Private markets AUM development5) excl. credit and hedge funds EQT Annual and Sustainability Report 2023 / Page 17Private markets and EQT Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 The private ownership model 16 Private markets are set for structural growth 17 EQT and its clients 18 Strengthening relationships with the private wealth segment 20 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 19 ===== EQT and its clients EQT is dedicated to being a long-term partner for its clients. It is focused on strengthening its client relationships, presenting compelling investment opportunities, and expanding access to its funds. Additionally, EQT is committed to introducing new strategies and successor funds. Clients invest to meet long-term return targets EQT’s clients include pension funds investing capital to meet future pension obligations, sovereign wealth funds responsi - ble for its citizens’ savings, and families managing wealth for future generations. EQT is also growing its partnership with private clients, families, insurance companies, endowments, and foundations. A diversified client base EQT has over 1,200 clients invested in active EQT funds. Since 2019, the number of clients has tripled. No individual client represents more than 5 percent of EQT’s committed capital. Commitments by client geography Middle East Nordics Rest of Europe APAC Americas Commitments by client type Other Private wealth Insurance companies Asset managers Sovereign wealth funds Pension funds 20232019 38% 41% 13% 20% 15% 11% 8% 15% 11% 8% 9% 11% 20232019 25% 32% 23% 20% 23% 26% 6% 20% 12% 13% 1) Prequin, Future of Alternatives 2028, October 2023. Excludes Private Debt. 2) Capital weighted based on commitments in EQT IX. In 2023, the fund- raising environment con tinued to face headwinds. In this competitive environ- ment – with global fundraising volumes1) being down more than 25% from peak levels in 2021 – we successfully raised EUR 27bn, including co-investments. Suzanne Donohoe Chief Commercial Officer Fundraising highlights 85% re-ups in EQT X 2) EUR 27bn raised during 2023, including co-investments EQT Annual and Sustainability Report 2023 / Page 18Private markets and EQT Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 The private ownership model 16 Private markets are set for structural growth 17 EQT and its clients 18 Strengthening relationships with the private wealth segment 20 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 20 ===== In 2023, EQT leveraged its robust sustainability ambitions and extensive global investor network to launch the EQT thinQ Client Academy. The Academy is designed to spearhead sustainable transformation across the private markets. Open to all clients, the Academy aims to enhance understanding of future-proofing topics, such as Sustainability and AI. It caters to a wide range of investment advisory professionals, including senior capital allocators and sustainability experts, fostering an environment of mutual learning and leadership in sustain- ability practices. The Academy successfully hosted its first three events in the fall of 2023. Successfully navigating major thematic shifts, such as the energy transition, demands rigorous disci- pline to ensure these changes work in our favor. It’s about more than just adapting; it’s about leading and actively shaping the change. I firmly believe there are such incredible opportunities for driving lasting change. If the investor com- munity makes a conscious choice to discard what you might call business as usual and embrace a new path forward – there’s no better moment to do that than now. Launch of EQT thinQ Client Academy Collaborating with clients to drive sustainable transformation In practice EQT thinQ Client Academy is a newly established platform for knowledge-sharing and collabora- tion to drive sustainable transformation in the industry and beyond. EQT thinQ Client Academy events 2023 Energy transition – the investment opportunity of the century Keynote speaker: Francesco Starace Lifting private markets leadership in sustainability Keynote speaker: Paul Polman Francesco Starace joined EQT Infrastructure as Partner in 2023, bringing deep experience and expertise in energy and transition related industries. In 2023, he was also appointed chair of the Science-Based Targets initiative. Paul Polman is the Co-chair of EQT Future’s Mission Board and the former CEO of Unilever. He works to mobilise busi- ness around the UN Sustainable Development Goals and is co-author of ‘Net Positive’. “Impact at Scale” dinner during the annual GIIN Impact summit During this year’s Impact Summit organized by The Global Impact Investing Network (GIIN), EQT hosted its inaugural ‘Impact at Scale’ dinner, gathering 85 individuals from across the impact investing ecosystem. During the evening, speakers and guests shared learn- ings and insights on the pathways and friction points for private equity in advancing impact investing. All agreed that they are seeing asset owners increasingly allocating pools of capital for impact products. EQT Annual and Sustainability Report 2023 / Page 19Private markets and EQT Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 The private ownership model 16 Private markets are set for structural growth 17 EQT and its clients 18 Strengthening relationships with the private wealth segment 20 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 21 ===== Accelerating EQT’s private wealth efforts EQT has historically raised ~8% from the private wealth segment. During 2023, EQT accelerated its efforts with private wealth. Both through its close-ended funds and through the launch of two semi-liquid funds, EQT Nexus and EQRT. EQT Nexus provides access to a diversi- fied portfolio of EQT’s funds, and EQRT focuses on direct investments in commer- cial real estate. Strengthening relationships with the private wealth segment Private wealth represents half of all global wealth, but the segment is currently under allocated to private markets. During the coming decade, private wealth’s share of global alternatives AUM is expected to grow with a CAGR of 12%. Private markets investing aligns with the demands of the private wealth segment Private investors increasingly seek asset classes like private equity for diversification and risk reduction, given its lower correlation with public markets. Many private wealth investors also have longer investment hori- zons, often spanning multiple generations. The private markets industry, with its longer investment timeframes, aligns well with these objectives. Individual investors have historically faced difficulties investing in the private markets industry, due to: • Limited access • Large minimum investment sizes • Longer holding periods of more than ten years • Cash distributions over time, and the need to regularly make new commitments to funds. Increasing allocations from private investors Bain (2023) projects that institutional capital allocated to alternative investments will grow 8% annually over the next decade. Individual wealth invested in alternatives, meanwhile, is expected to grow 12% annually over that period, albeit from a much smaller base. The ~USD 9T of new capital is expected to come primarily from high-net-worth individuals. Source: Bain: Why private equity is targeting individual investors (2023). 0 10 20 30 40 50 60 70 80 Private wealth investors 12% Institutional investors 8% All investors 9% $26T $61T $22T $47T $4T $13T Estimated global alternatives AUM by investor type 2022 2023 2022–32 CAGR +9% +8% +12% Read more about EQT Nexus EQT Annual and Sustainability Report 2023 / Page 20Private markets and EQT Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 The private ownership model 16 Private markets are set for structural growth 17 EQT and its clients 18 Strengthening relationships with the private wealth segment 20 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 22 ===== In May 2023, EQT launched its first fund for private investors – EQT Nexus. With this fund, EQT broadens its investor base, and for the first time offers individuals the opportunity to access EQT’s wide range of strategies through one single investment. EQT Nexus is an open-ended and semi-liquid fund that seeks to invest in EQT’s high-performing private markets funds and make direct co-investments in companies alongside these funds. Through one single investment, investors in EQT Nexus will get access to a diversified EQT portfolio managed by the same teams that have been deliver- ing consistent returns to institutional investors for nearly 30 years1). EQT Nexus benefits Easy access A door just opened to EQT’s funds and direct co-investments alongside EQT funds through one single investment. Diverse investment universe Diversify your portfolio with invest- ments in a wide range of growth areas across the globe. Long-term value We aim to invest in and support good companies in selected sectors with strong future potential. Invest with the experts Benefit from EQT’s local approach and expert network that select investments. Read more Go private to seize new opportunities Learn more Ready to diversify your portfolio? Our fund EQT Nexus has a compelling strategy, spreading your assets across various sectors and regions.… Introducing EQT Nexus In practice 1) Past performance of EQT funds or any underlying portfolio company is not representative of the return any investor in EQT Nexus might expect to receive. To read more about EQT Nexus, please visit nexus.eqtgroup.com With the launch of EQT Nexus, EQT has doubled down on building increased brand awareness, with on-going marketing activities to address a new client group. EQT Annual and Sustainability Report 2023 / Page 21Private markets and EQT Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 The private ownership model 16 Private markets are set for structural growth 17 EQT and its clients 18 Strengthening relationships with the private wealth segment 20 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 23 ===== EQT X Dechra EQT Private Equity launched a recommended cash acqui- sition for Dechra Pharmaceuticals, a UK-based global developer, manufacturer and supplier of animal health products. Founded 25 years ago, today Dechra has operations in 26 countries and nearly 2,500 employees. With medical innovation accelerating and pet owner- ship increasing, the animal health sector is expected to benefit from long-term growth and Dechra is well positioned to participate in this opportunity. EQT Private Equity plans to support Dechra by leveraging its experience in the animal health value chain, investing in the company’s innovative pipeline, and driving global expansion. 04 EQT’s strategy 23 Creating the global leader in active ownership strategies 24 Strategic developments since the IPO 25 A diversified global platform 26 EQT’s long-term strategic priorities ===== SIDA 24 ===== EQT Exeter 56+28+16 17% of FAUM Creating the global leader in active ownership strategies EQT aims to continue to deliver strong risk-adjusted returns to further solidify its position in its existing strategies. It is also selectively moving into adjacent complementary strategies where EQT has a clear path to success. Private Capital 5656+20+24+20+24 55% of FAUM Infrastructure 56+28+1 28% of FAUM Top 3 Top 5 Top 10 The Global Leader Top 3 Global position today1) Long-term ambition2) 1) Refers to USD bn raised during the past five years - PEI 300 list. - Infrastructure Investor, top 100. Refers to Value-add Infrastructure. - PERE, top 100. Refers to Private Real Estate. 2) Based on capital raised. Focus and action To reach the long-term ambition, EQT Private Capital EU & NA and EQT Private Capital Asia will aim to scale their strategies to their full potential through industry leading performance and collaboration across the global platform. EQT Infrastruture’s ambition is to deepen its sector expertise and value creation approach to secure infrastructure thought leader - ship. This will enable it to scale existing and recently launched strategies, as well as develop new strategies that serve clients further. EQT Exeter’s focus will be to continue fund series in the US and Europe, achieving best-in-class performance through vertical integration and a locals-with-locals approach, while simultane - ously building out Asia. Top 3 EQT Annual and Sustainability Report 2023 / Page 23Strategy Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 Creating the global leader in active ownership strategies 23 Strategic developments since the IPO 24 A diversified global platform 25 EQT’s key long-term strategic priorities 26 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 25 ===== Strategic M&A EQT is evaluating potential growth opportuni - ties to fill white space, but the bar for M&A is high, with cultural fit and focus on performance being uncompromisable. New strategies Over time, EQT could expand its strategies with strategies focused on specific investment themes, geographies, or expand its ability to support companies from early stage to maturity. Scale flagship funds Based on strong performance, EQT has continued to scale it’s flagship funds. 2018 2019 2020 2021 2022 2023 Strategic developments since the IPO Since its IPO in 2019, EQT has developed into a firm entirely focused on active ownership strategies. EQT has acchieved this through three main avenues. 1) Includes EQT X with fee-generating assets under management of 21.7bn (as announced on 27 Feb 2024) and EQT Infrastructure VI at its target fund size of EUR 20bn. Exeter BPEA Exited Credit EQT Growth Healthcare GrowthEQT Future EQT Active Core Infrastructure BPEA Mid Market Growth Life Sciences Partners Bear Logi Redwood IPO EQT VIII Infra IV ≈ €20 bn EQT IX Infra IV ≈ €30 bn EQT X Infra IV ≈ €40 bn1) EQT Annual and Sustainability Report 2023 / Page 24Strategy Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 Creating the global leader in active ownership strategies 23 Strategic developments since the IPO 24 A diversified global platform 25 EQT’s key long-term strategic priorities 26 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 26 ===== A diversified global platform With the combination with Exeter and BPEA (now Private Capital Asia), EQT is now a global leader in active ownership strategies, diversified cross sectors and geographies. Real AssetsPrivate Capital Asia Infrastructure Real Estate Europe and North America 13+87 EUR 17bn EUR 55bn 43+57 Growth Private Equity Future Active Core Industrial & Logistics Value-Add Office & Life Sciences Residential EUR 36bn 28+72 EUR 22bn 17+83 FAUM EUR 130 bn Total AUM EUR 232 bn Mature Companies Emerging Companies Early Stage Technology Early Stage Healthcare EQT Annual and Sustainability Report 2023 / Page 25Strategy Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 Creating the global leader in active ownership strategies 23 Strategic developments since the IPO 24 A diversified global platform 25 EQT’s key long-term strategic priorities 26 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 27 ===== EQT’s long-term strategic priorities As EQT enters its fourth decade, the focus for the next decade centers on four key areas: performance, investment strategies, clients, and the development of a unified EQT platform. EQT remains dedicated to delivering strong performance, prioritizing clients’ objectives, future-proofing portfolio companies, and ensuring long-term success as one EQT. By applying all the tools in the EQT Playbook, EQT will aim to secure performance for its clients through focus on thematic investing, using functional experts, global sector collaboration and sub-sector expertise. EQT will focus on growing its flagship funds, its current and recently launched initiatives, while selectively launching new initiatives. Continue to build strong and new client relationships and distribution partnerships, across institutional clients and Private Wealth. Build a world-class scalable organiza- tion to enable EQT’s growth. Build the most AI- literate investment organiza- tion and retain leadership in sustain- ability while building the EQT brand. EQT will maintain its leadership position in Europe, grow its presence in North America and aim to become the number one player in Asia. EQT will selectively pursue M&A expansion to fill white space. Performance Investment strategies Clients One EQT platform EQT Annual and Sustainability Report 2023 / Page 26Strategy Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 Creating the global leader in active ownership strategies 23 Strategic developments since the IPO 24 A diversified global platform 25 EQT’s key long-term strategic priorities 26 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 28 ===== BPEA VII Coforge EQT Private Equity Asia’s strategy exited Coforge, a multinational Digital IT Solutions & Technology Consulting Services provider headquarted in India. The Company’s proprietary platforms power critical business processes for companies in 21 countries, with 26 delivery centers across nine countries. Ideally positioned in one of EQT’s core sectors, Tech Services, under the ownership tenure Coforge doubled its revenue and EBITDA, crossing USD 1 billion of revenue in April 2023. EQT helped strengthen Coforge’s organic growth through enhancing its sales organization and re-aligning its go-to-market strategy, while supporting the recruit- ment of industry leading leadership, and executing on an ambitious M&A agenda. 05 EQT AB – the listed entity and revenue model 28 EQT AB – the listed entity 29 Explaining management fees and carried interest ===== SIDA 29 ===== EQT AB – the listed entity Portfolio companies and assets ~300 portfolio companies 2,030 current number of buildings Shareholders 55,000 shareholders own EQT AB, which is listed on Nasdaq Stockholm Board and Executive Committee 23% Other EQT Partners and employees1) 29% Other free float2) 31% Investor AB 15% Wallenberg Invest AB 2% EQT Foundation 1% EQT funds €130bn FAUM 51 active funds EQT AB Group EQT’s shareholders own EQT AB. Dividends from EQT AB to its shareholders. … and is allo- cated manage- ment fees and a share of profits. EQT AB Group manages, advises and invests in the EQT funds … Fund investors, via the funds, provide capital to acquire and develop the port- folio companies … … and receive returns from their investments. Investment management Investment Advisory Professionals provide advice to the fund man- agers with respect to the EQT funds’ portfolio companies as part of EQT’s governance model. Investment advisory Private Capital Real Assets 1) Lock-ups expiring 2024-2028 (not held by the Board and EQT Executive Committee). 2) Including shares held by Partners and Employees which are not subject to lock-ups. EQT Annual and Sustainability Report 2023 / Page 28EQT AB – the listed entity and revenue model Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT AB Group – the listed entity 28 Explaining management fees and carried interest 29 EQT Playbook 31 People 45 Financial statements 50 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 30 ===== FAUM drives contractual management fees with good visibility Illustrative split of revenues during the life of a fund Explaining management fees A typical EQT fund life can be divided into two phases, a com- mitment period and a post-commitment period. The commit- ment period for a fund represents the time when the relevant EQT fund sources investments and calls on capital contributions from the fund investors to finance the acquisition of the fund investments. During the commitment period, the management fee is normally calculated as a percentage of commitments to the fund. An EQT fund normally enters the post-commitment period at the end of a set period of time, or once approximately 80–90 percent of total commitments are invested and a successor fund is activated. During the post-commitment period, man- agement fees are normally calculated on the invested capital. As an EQT fund realizes investments, the fund’s invested capital will decline and the management fees will therefore decline in absolute terms, as more and more of the fund’s investments are realized. When fundraising has been completed, no further commit- ments are accepted, meaning the majority of EQT funds are normally closed-ended. Management fees typically do not depend on underlying market valuations. Management fee generation is supported by increasing the size of successor funds, as well as developing and scaling new business lines. EQT AB Group is typically also entitled to a share of fund profits, so-called carried interest (see next page). • Management fees are typically based on committed capital when a fund sources new investments and calls on capital contributions. • During the post-commitment period, fees are typically based on invested capital, which gradually decreases as fund investments are realized. • Management fees grow with the capital committed in successor funds. • Management fees are based on FAUM. • All of EQT’s FAUM is fee-generating AUM. • Recognition of carried interest under IFRS depends on fund profits and is only recognized when minimum return requirements have been met. 10987654321 Management fees Carried interest Year10987654321 Committed capital Invested capitalFund 1 Committed capitalI nvested capitalFund 2 Year FAUM Committed capitalFund 3 10987654321 Committed capitalI nvested capitalFund 1 Committed capital Invested capitalFund 2 Year FAUM Committed capitalFund 3 EQT Annual and Sustainability Report 2023 / Page 29EQT AB – the listed entity and revenue model Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT AB Group – the listed entity 28 Explaining management fees and carried interest 29 EQT Playbook 31 People 45 Financial statements 50 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 31 ===== Total value at Gross MOIC of 2.0x 200 Explaining carried interest Carried interest aligns interests between EQT AB Group, the Group’s Investment Advisory Professionals and the fund investors through profit-sharing. EQT AB Group, the Investment Advisory Professionals and other potential Carried Interest Participants invest in the EQT funds through a Special Limited Partner (SLP). In return, the carried interest participants are entitled to receive carried interest and investment income. Subject to the relevant fund’s profits exceeding a certain minimum return to fund investors (“hurdle rate”), typically between 6–8 percent annual return, profits are nor- mally split 80 percent to fund investors and 20 percent to Carried Interest Recipients as of which EQT AB Group would normally be entitled to 35 percent of the carried interest. The amount is variable and fully dependent on the performance of the relevant EQT fund. Drawn commitments incl. fees and expenses =112 Invested capital 100 Management fees and expenses Fund profits 88 Fund investors 70 (80%) Carried interest 18 (20%) EQT AB EQT professionals and certain advisors Carried interest distribution Split in a typical fund An illustrative fund realizes a gross return of 2.0x on invested capital. Tested against the hurdle (typically 6–8% annual return) 12 EQT AB Group to receive 35% of carried interest in a typical fund. 6 (35%) 12 (65%) Total value and invested capital Management fees and expenses Distribution of profits If fund profits exceed the hurdle, carried interest is earned on all profits. EQT Annual and Sustainability Report 2023 / Page 30EQT AB – the listed entity and revenue model Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT AB Group – the listed entity 28 Explaining management fees and carried interest 29 EQT Playbook 31 People 45 Financial statements 50 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 32 ===== EQT Dementia Fund QurAlis EQT Life Sciences, investing from the EQT Dementia Fund, co-led an oversubscribed $88 million Series B financing into QurAlis in December 2022. QurAlis is a clinical-stage biotechnology company developing breakthrough medicines for neurodegenera- tive diseases. The company is advancing a deep pipeline of therapeutic candidates, with its two most advanced programs in clinical development for amyotrophic lateral sclerosis (ALS). QurAlis’ proprietary technologies enable them to directly target the molecular mechanisms that underly neurodegeneration in precisely defined patient popula- tions. The company is pioneering this ‘precision neurol- ogy’ approach with the aim to deliver new treatments for patients. 06 EQT Playbook 32 EQT Playbook Thematic investment approach: 33 Private Capital 34 EQT Infrastructure 35 EQT Exeter 36 Local-with-locals 36 House of Value Creation 37 Governance model 37 EQT Network 38 In practice: Building a connected community for investment excellence 39 Digitalization & AI with Motherbrain 40 Sustainability 41 In practice: Net zero pathway 42 In practice: Diversity, equity and inclusion (DE&I) as a driver of employee recruitment, engagement and retention 43 In practice: Powering cleaner mobility solutions 44 In practice: Contributing to solutions to address today’s challenges, creating winners in tomorrow’s economy ===== SIDA 33 ===== EQT Playbook With a thematic investment approach, EQT funds seek to invest in high-quality companies with growth potential in attractive industries. Value creation EQT funds’ portfolio companiesSources of value creation EQT Playbook Guided by underlying macro trends, the EQT funds invest in good companies and assets with a mission to help them develop into great and sustainable companies that can prosper, under EQT funds’ ownership and beyond. The investments develop through the implementation of strategies geared towards growth and opera- tional excellence. Sales growth and margin expansion are achieved through geographic expansion, new products, acquisitions and strategic re-orientation and more. 1) Average sales and EBITDA CAGR between entry and exit of realized portfolio companies, as per December 31, 2023. For EQT Private Capital EU&NA: Refers to realized assets within EQT Mid Market strategy and EQT V-VIII. For EQT Infrastructure: Refers to realized assets within EQT Infrastructure I-III 2) Weighted sales and EBITDA CAGR between entry and exit of realized portfolio companies, as per December 31, 2023. For BPEA Fund VI-VIII EQT Playbook 1 2 3 45 6 7 Private Capital EU & NA Private Capital EU & NA1) Private Capital Asia Private Capital Asia2) Net IRR Sales CAGR Realized Gross MOIC EBITDA CAGR EQT Infrastructure EQT Infrastructure1) EQT Exeter 16%12% 20% 19%17% 17%13% 2.5x16% 2.5x 2.7x19% 2.4x18% Fund performance Private Capital EQT Infrastructure 40% 55% 15% –10% 56% 22% 17% 4% Sales expansion Multiple expansion Margin expansion Debt pay-down EQT Annual and Sustainability Report 2023 / Page 32EQT Playbook Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 EQT Playbook 32 Thematic investment approach – Private Capital 33 Thematic investment approach – EQT Infrastructure 34 Thematic investment approach – EQT Exeter 35 Local-with-locals 36 House of Value Creation 36 Governance model 37 EQT Network 37 Digitalization & AI with Motherbrain 39 Sustainability 40 People 45 Financial statements 50 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 34 ===== 1 Thematic investment approach – Private Capital EQT’s business segment Private Capital invests with a thematic approach combined with deep sector expertise, focused on leading non-cyclical companies. Themes Climate & Nature Health & Wellbeing Access & Equality Resilience & Transparency Our Connected World Modularization of Technology Distributed ownership & Decentralization Digitalization Sustainability Sectors and sub-sectors Healthcare • MedTech • Life Science Tools/ Diagnostics • Pharma & rel. services • Healthcare IT Services • Critical capability outsourcing • Network Services • Tech Services Industrial Tech • Automation/ Internet of Things • Sustainability Tech • Food Tech Technology • Software • Fintech • Consumer internet • Digital media Private Capital Europe & North America 5+18+29+48+E Industrial technology, 5% Services, 18% Technology, 29% Healthcare, 48% Private Capital Asia 7+43+8+18+24++E Industrial technology, 7% Services, 43% Technology, 8% Healthcare, 18% Tech services, 24% Sector split of the portfolio, by percent invested for the active portfolio EQT Playbook 1 2 3 45 6 7 BPEA VIII Indira IVF In 2023, EQT acquired a majority stake in Indira IVF, the largest provider of fertility services in India, having facili - tated more than 125,000 successful pregnancies to date. Indira IVF operates in one of the fastest growing markets globally for assisted reproductive technology services, driven by India’s large addressable population, low market penetration, rising marriage age, and declining fertility rates. EQT will invest in Indira IVF’s R&D capabilities and technol- ogy, while further broadening its footprint across India and exploring expansion into neighboring markets, to make fertility services and reproductive health more accessible to couples. EQT Annual and Sustainability Report 2023 / Page 33EQT Playbook Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 EQT Playbook 32 Thematic investment approach – Private Capital 33 Thematic investment approach – EQT Infrastructure 34 Thematic investment approach – EQT Exeter 35 Local-with-locals 36 House of Value Creation 36 Governance model 37 EQT Network 37 Digitalization & AI with Motherbrain 39 Sustainability 40 People 45 Financial statements 50 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 35 ===== 1 Thematic investment approach – EQT Infrastructure EQT Infrastructure seeks to identify infrastructure companies that provide an essential service to society, have long-term stable or growing underlying demand, predictable cash flows and a stable business model. Sectors and sub-sectors Sector split of the portfolio, by percent invested for the active portfolio EQT Infrastructure 40+25+20+15+E Digital, 40% Energy and environment, 25% Social, 20% Transport, 15% EQT Playbook 1 2 3 45 6 7 Digital • Fast & Reliable Connectivity • Edge & Latency- Limitations • Internet of Things • Network Sharing • Cloud Adoption Energy & Environment • Resource Efficiency • Circular Economy • Energy Transition • Decarbonization • Decentralization • Electrification Transport & Logistics • Sustainable Supply Chains • Accessible Mobility • E-Commerce • Connectivity • Automation Social • Healthcare Consumerization • Global Population Growth • Changing Demographics • Health & Wellbeing EQT Infrastructure VI Statera Statera is a UK-based battery storage and flexible generation infrastructure developer and oper- ator with 1 gigawatt (GW) of flexible generation in operation and under construction, enough to power around 750,000 homes. Demand for stability services and dispatchable generation from batteries is expected to grow at speed as a result of rapid deploy- ment of intermittent renewable generation and the gradual decom- missioning of thermal capacity. EQT Infrastructure is committed to further investing in Statera’s ongoing development of battery storage and other flexible energy projects, which is expected to play an integral part in helping the UK reach its net zero targets. EQT Annual and Sustainability Report 2023 / Page 34EQT Playbook Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 EQT Playbook 32 Thematic investment approach – Private Capital 33 Thematic investment approach – EQT Infrastructure 34 Thematic investment approach – EQT Exeter 35 Local-with-locals 36 House of Value Creation 36 Governance model 37 EQT Network 37 Digitalization & AI with Motherbrain 39 Sustainability 40 People 45 Financial statements 50 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 36 ===== 1 Thematic investment approach – EQT Exeter EQT Exeter acquires, develops, and manages logistics, office, life science, and residential real estate properties that meet the changing needs of tenants based on logistical, commercial, and demographic trends. EQT Playbook 1 2 3 45 6 7 Sectors EQT Exeter Industrial Value Fund VI & EQT Exeter Industrial Core-Plus Fund IV Tripoint Logistics Center In December 2023, EQT Exeter acquired a strategically located industrial portfolio along Interstate 5 in the Central Valley, California. This acquisition includes four buildings, totaling 1.48 million square feet, and boasts tenancy from Fortune 500 companies. The portfolio’s Core-Plus component features three buildings: a cross-docked facility leased to Tesla, and two others with blue-chip tenants. These buildings have a staggered lease rollover schedule, ensur- ing stable occupancy. In the Value-Add segment, there’s an opportunity to attract new tenants to the remaining building. EQT Exeter plans immediate upgrades, such as a speculative office build-out, dock door packages, electrical enhancements, and LED lighting, to make the property near move-in ready and boost its leasing appeal. Industrial & Logistics Consumption and e-commerce growth in combination with global supply chain expansion. 84+16 Office & Life Sciences Repriced assets from paradigm shifts in demand patterns and R&D economic drivers. 2+98 Multifamily Meds, Eds, and Tech investments in target markets and reconfiguration of housing demand. 3+97 Diversified EQT Exeter’s presence in Asia and BPEA’s Real Estate funds. 10+90 of invested capital of invested capital of invested capital of invested capital 84% 2% 3% 10% EQT Annual and Sustainability Report 2023 / Page 35EQT Playbook Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 EQT Playbook 32 Thematic investment approach – Private Capital 33 Thematic investment approach – EQT Infrastructure 34 Thematic investment approach – EQT Exeter 35 Local-with-locals 36 House of Value Creation 36 Governance model 37 EQT Network 37 Digitalization & AI with Motherbrain 39 Sustainability 40 People 45 Financial statements 50 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 37 ===== 3 House of Value Creation 3 2 Local-with-locals DigitalizationSustainability Functional excellence Full potential plan Sector and sub-sector playbooks Thematic and tailored value-creation Talent management G&A Fitness Best-in-class finance Indirect procurement Crisis management CAPEX efficiency EQT believes that local knowledge, local busi- ness relationships, local presence and access to local deal flow are all critical to securing a competitive edge in private markets. This approach has resulted in close, long-term relationships between EQT, private owners and companies. EQT’s value creation framework includes value creation levers, such as revenue enhancements, management changes, pricing, cost improve- ments and more transformational levers such as strategic realignment and add-on acquisitions. Since the combination with BPEA, now EQT Private Capital Asia, the house of value creation has now integrated learnings and best prac- tices from across the business lines. EQT Playbook 3 45 6 7 2 1 EQT Playbook 3 45 6 7 2 1 Offices in 26 countries 74 nationalities represented EQT Annual and Sustainability Report 2023 / Page 36EQT Playbook Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 EQT Playbook 32 Thematic investment approach – Private Capital 33 Thematic investment approach – EQT Infrastructure 34 Thematic investment approach – EQT Exeter 35 Local-with-locals 36 House of Value Creation 36 Governance model 37 EQT Network 37 Digitalization & AI with Motherbrain 39 Sustainability 40 People 45 Financial statements 50 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 38 ===== 4 Governance model EQT’s governance model is designed to enable accountability, promote fast decision- making and empower EQT funds’ portfolio companies’ CEOs, while allowing for informal free-thinking. The model is built upon clear roles and responsibilities for the management of the portfolio company, its board and the EQT AB Group. It is underpinned by a TROIKA forum consisting of the portfolio company’s Chair- person (typically appointed from the EQT Network), a responsible advisory partner at EQT and the portfolio company’s CEO. The TROIKA is a sparring partner to the CEO and keeps EQT well-informed of the performance in the portfolio company. EQT Playbook 3 45 6 7 2 1 5 EQT Network Since its foundation, EQT has built a global network of advisors with a variety of back- grounds, including entrepreneurs and current or former executives of major international corporations. Many of these relationships have evolved from EQT’s connection to the Wallenberg sphere and its global network that spans across industries and sectors. The advisors in the EQT Network add operational and strategic expertise and experience to the EQT funds’ portfolio companies. EQT Playbook 3 45 6 7 2 1 TROIKA Portfolio company CEO Chair- person of the Board EQT Advisory represen - tative Read more Unlocking value through the EQT Network Conni Jonsson, EQT's founder & Chairperson, and Jean Salata, Founder & Head of BPEA (now EQT Private Capital Asia) and Chairperson of EQT Asia, discuss the role of the chair during a panel debate hosted at the EQT Asia Pacific Chairperson & Senior Advisor Conference. EQT Annual and Sustainability Report 2023 / Page 37EQT Playbook Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 EQT Playbook 32 Thematic investment approach – Private Capital 33 Thematic investment approach – EQT Infrastructure 34 Thematic investment approach – EQT Exeter 35 Local-with-locals 36 House of Value Creation 36 Governance model 37 EQT Network 37 Digitalization & AI with Motherbrain 39 Sustainability 40 People 45 Financial statements 50 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 39 ===== Unlocking value through the EQT Network Building a connected community for investment excellence The EQT Network keeps EQT ahead of the curve by ensuring that the investment advisory teams and portfolio ompanies have access to the best talent, both during due diligence, as well as during the value creation phase. In practice EQT Playbook 3 45 6 7 2 1 Digitalizing the EQT Network The selection of Advisors for the EQT Network is guided by EQT’s fundamental investing principles; a local-with- locals approach, investing thematically into future- proofed sectors. The Network is composed of Advisors with a wide array of functional, geographic and sub-sec- tor expertise. To maximize the impact of the Network, EQT has built bespoke internal systems and processes, partic- ularly in Motherbrain, to connect the right investment advisory professional to the right Advisor. Further embedding portfolio talent support EQT continues to emphasize the importance of high- performing and well-aligned management teams and boards. External studies consistently demonstrate that the quality of leadership talent is key to executing successful value creation plans. With the aim to ensure EQT has a market-leading posi- tion in this area, EQT has built the capability to support investment advisory professionals and portfolio compa- nies in the setting up and running of both C-suite and Board Member search mandates, as well as management and board assessment processes. Developing the wider Network during 2023 Introduced in 2021, the virtual EQT Network Forums are further being developed as the key platform for portfolio companies to connect and share knowledge and experi- ences. The Forums are often co-hosted by leading indus- try experts and in 2023, the Forums were attended by more than 350 participants spanning Tech, Digital and Sustainability leaders, CFOs, CHROs, and EQT Industrial Advisors, from across the portfolio. In 2023, EQT introduced three new topical themes: • EQT AI Forums • EQT Procurement Forum • EQT Troika Forum Advisors per region 16+56+28+E Asia, 16% Europe, 56% Americas, 28% A picture from the client event BPEA EQT APAC Investor Day 2023, held on 16 November 2023 in Hong Kong. EQT Annual and Sustainability Report 2023 / Page 38EQT Playbook Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 EQT Playbook 32 Thematic investment approach – Private Capital 33 Thematic investment approach – EQT Infrastructure 34 Thematic investment approach – EQT Exeter 35 Local-with-locals 36 House of Value Creation 36 Governance model 37 EQT Network 37 Digitalization & AI with Motherbrain 39 Sustainability 40 People 45 Financial statements 50 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 40 ===== 6 Digitalization & AI with Motherbrain Motherbrain – From sourcing and due diligence to value creation Revolutionizing the private markets industry with digital innovation, Motherbrain stands at the forefront of a transformative era. Launched in 2016, Motherbrain has revolutionized early-stage tech invest- ment sourcing. Originally a tool for EQT Ventures, it now plays a key role in EQT’s thematic investment approach, enriching the entire investment pro- cess, from sourcing to value creation, with machine learning and AI. Beyond tracking traditional deal life-cycles, Motherbrain offers an in-depth, analysis of a company’s journey, merging data with EQT’s cor- porate memory and advanced algo- rithms. This innovation enables swifter, more strategic decision-making. In 2023, Motherbrain expanded across EQT’s business lines, broaden- ing access to its insights and capabili- ties, and enhancing our portfolio approach. This expansion democra- tized access to critical insights and the platform’s robust capabilities, facili - tating a more integrated and informed approach across the entire portfolio. The year also saw Motherbrain Labs develop an AI-powered M&A sourcing tool, demonstrating EQT’s ability to leverage technology for investment strategy. The Motherbrain team at EQT isn’t just using digital tools; they are pio- neers, reshaping the digital mindset in private equity. By leveraging the immense power of Big Data and Machine Learning, they’re not just staying ahead of the curve — they are defining it, giving EQT a cutting - edge advantage in a rapidly evolving industry. Motherbrain has identified 17 investments to EQT Ventures EQT Playbook 3 45 6 7 2 1 EQT’s aim is to support the EQT funds’ portfolio companies in driving digital transformation and developing them into world-class digital leaders in their respective industries. To achieve this, EQT has made significant investments in its own digital teams, infra- structure and capabilities. One of EQT’s prioritized digital missions is to continu- ously make each EQT fund an ever-smarter buyer, owner and seller. EQT looks to apply industry-specific and best-in-class digital approaches and tools throughout every stage of an EQT fund’s investment cycle, from the sourcing of deals to the due dili- gence of potential opportunities and the support in improvement of the portfolio companies. From sourcing … ... to due diligence … ... to value creation EQT Annual and Sustainability Report 2023 / Page 39EQT Playbook Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 EQT Playbook 32 Thematic investment approach – Private Capital 33 Thematic investment approach – EQT Infrastructure 34 Thematic investment approach – EQT Exeter 35 Local-with-locals 36 House of Value Creation 36 Governance model 37 EQT Network 37 Digitalization & AI with Motherbrain 39 Sustainability 40 People 45 Financial statements 50 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 41 ===== 7 Sustainability EQT Playbook 3 45 6 7 2 1 EQT believes that doing good is good business. This means investing in a way that aims to maximize returns for clients while also benefiting society and the planet. In 2023, EQT adopted a new sustainability strategy which accelerates EQT’s commitment to future-proof- ing EQT funds’ portfolio companies and assets, thereby making a positive impact. The strategy is twofold, build- ing on a set of value creation levers aiming to improve operational sustainability and focusing on growing revenues from sustainable products and services. In pursuing both factors, EQT aims to make the EQT funds’ investments more resilient and, ultimately, valuable for the long term. Improving operational sustainability With its nine firmwide value creation levers EQT aims to drive operational sustainability through initiatives pro - moting accountable leadership, equitable business prac - tices and regenerative processes across the EQT funds’ portfolio companies and assets. EQT’s active ownership approach enables EQT to scale successes and learnings across the portfolio, creating impact at scale across the EQT funds. For current status Towards our targets The nine value creation levers1) Improving operational sustainability Growing sustainable revenue streams Future- proofed with premium valuation Growing sustainable revenue streams Guided by EQT’s thematic investment approach, EQT funds invest behind sustainability trends and target high-quality companies, aiming to grow sustainable revenue streams such as promoting products and services that contribute to a green economy or improve health and well-being. EQT recognizes the increasing expectations of transparency while regulators sharpen their defini- tions of what is to be considered sustainable. EQT is piloting a methodology to enable the identification and growth of sustainable revenue streams, initially targeting the sustainability themes below: • Climate and nature • Health and well-being Read more about the integration of sustainability the investment and value creation process in Sustainability notes EQT’s Responsible Investment & Ownership Policy 1) Performance against these levers is currently monitored for EQT funds’ portfolio companies within EQT Private Equity, EQT Future, EQT Infrastructure and BPEA VII-VIII, i.e. the investment strategies where EQT funds typically have control or co-control. For EQT Exeter’s assets, only lever 8 and 9 are applicable. The baseline was developed in 2023, and some KPIs still remain to be included, see ‘Towards our targets’ for current status. Tracking and measuring will continue to be a work in progress. 1 Business specific transforma - tional KPIs 2 Sustainability champion in the Board 3 Signatory to the UN Global Compact principles 4 Sustainability incentives to Board or management Accountable leadership 5 Diversity in the Boards and C-suite with maximum 60% of the same gender, cultural background, and socio- economic origin 6 Gender balance in the top 20% earners 7 Employee engagement Equitable business practices 8 Path to net zero 9 Renewable electricity consumption Regenerative processes EQT Annual and Sustainability Report 2023 / Page 40EQT Playbook Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 EQT Playbook 32 Thematic investment approach – Private Capital 33 Thematic investment approach – EQT Infrastructure 34 Thematic investment approach – EQT Exeter 35 Local-with-locals 36 House of Value Creation 36 Governance model 37 EQT Network 37 Digitalization & AI with Motherbrain 39 Sustainability 40 People 45 Financial statements 50 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 42 ===== Improving operational sustainability Net zero pathway EQT Playbook 3 45 6 7 2 1 Climate change is a global issue impacting all economies. EQT is commited to supporting the decarbonization agenda and recognizes it’s importance to driving long-term financial performance. EQT intends to support the EQT funds’ portfolio companies on their net zero pathways. In prac- tice, this means supporting the EQT funds’ port- folio companies to develop decarbonization targets and plans and supporting them in deliv- ering on the plan during the ownership period. EQT also acknowledges the importance of addressing climate change’s physical and transition risks and recognizes its potential to severely impact humans, ecosystems, and the global economy; read more in Sustainability notes. EQT’s science-based targets (SBTs), encom- passing both corporate operations and the EQT funds’ portfolio companies and real estate assets. During 2023, EQT published its Net Zero Guidelines, describing EQT’s carbon emission reduction plan to achieve net zero alignment by 2040. Read more about SBTs for EQT’s corporate operations Towards our targets Sustainability notes Net zero guidelines EQT funds’ portfolio companies1) EQT funds’ real estate assets3) Targets 2030 100% of portfolio companies owned for at least 24 months to have own SBTs validated. 50% of portfolio companies owned for at least 24 months to be on track with their SBT plan. 2040 100% of portfolio companies owned for at least 24 months to be on track to achieve their 1.5°C aligned decarbonization plans. Status By the end of 2023, 60 of the EQT funds’ portfolio companies had started their SBT journey2), wherof 32 had received validated targets. Targets 2030 50% of assets owned for at least 24 months to be on track with their 1.5°C aligned decarbon- ization plan. 2040 100% of assets owned for at least 24 months to be on track with their 1.5°C aligned decar- bonization plans. Status By the end of 2023, 94%4) of the floor area of real estate assets acquired within the reporting year had developed decarbonization plans. EQT targets achieving the below by 2030 and 2040: 1) Where the EQT funds’ owns at least 25% of fully diluted shares and excluding venture capital. 2) Defined as EQT funds’ portfolio companies with commitments or submissions of targets to SBTi (28) or with validated SBTs (32), including portfolio companies exited during the year. In addition, 14 portfolio companies had initiated the process to set SBTs. 3) Including floor are of real estate assets where EQT Exeter funds holds direct asset ownership, and held for at least 24 months. 4) Percentage floor area of acquisitions with 1.5 degree-aligned decarbonization plans divided by the total floor area of acquisition since Jan 1, 2023, excluding land acquisitions.In practice EQT Annual and Sustainability Report 2023 / Page 41EQT Playbook Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 EQT Playbook 32 Thematic investment approach – Private Capital 33 Thematic investment approach – EQT Infrastructure 34 Thematic investment approach – EQT Exeter 35 Local-with-locals 36 House of Value Creation 36 Governance model 37 EQT Network 37 Digitalization & AI with Motherbrain 39 Sustainability 40 People 45 Financial statements 50 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 43 ===== Improving operational sustainability Diversity, equity and inclusion (DE&I) as a driver of employee recruitment, engagement and retention The technology sector typically sees high attrition rates, often leading to increased operational costs, loss of talent, and innovation disruption. To innovate around talent retention, EQT joined forces with six portfolio companies in India, owned by the EQT Private Capital Asia funds, with a combined base of over 70,000 employees. EQT Playbook 3 45 6 7 2 1 Key insights from the study An analysis of the portfolio company data showed that 30-50% of women left their jobs due to family - related reasons. Notably, the study revealed that companies that believed they had high maternity return rates actually saw many returning employees leave within nine months of their return. This indi- cated a gap in support for women transitioning back to work. Furthermore, 5-8% of attrition was attributed to the prolonged duration of promotions compared to the expected timelines at the middle management level. This disparity can impact em- ployee motivation and a sense of fairness. Another significant finding was a 35% reduction in women working shifts in the 31–40 age group, underscoring a distinct challenge in retaining female employees within this demographic. Driving employee value proposition through DE&I Throughout this study, EQT Private Capital Asia has actively supported the development of various tal- ent retention initiatives. These include reevaluating work-life balance policies, parental policies, career advancement opportunities, and overall organiza- tional culture to support diversity at all levels. The initiatives are expected to reduce attrition, with “The data demonstrated that men and women stay and leave for different reasons. Leveraging these insights, we have rolled out a revamped version of our women’s leadership program and introduced a management growth initiative catering to top talents across all genders.” Chief People Officer at Straive In practice potential annual savings of USD 20–30m for the portfolio companies. These insights also point to the need for more tailored practices that address the specific needs of different employee groups, especially women. In adressing these challenges at scale, EQT can contribute to fostering a more inclusive and equi- table workplace in the EQT funds’ portfolio com- panies and enhance their overall organizational effectiveness and attractiveness as an employer. EQT Annual and Sustainability Report 2023 / Page 42EQT Playbook Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 EQT Playbook 32 Thematic investment approach – Private Capital 33 Thematic investment approach – EQT Infrastructure 34 Thematic investment approach – EQT Exeter 35 Local-with-locals 36 House of Value Creation 36 Governance model 37 EQT Network 37 Digitalization & AI with Motherbrain 39 Sustainability 40 People 45 Financial statements 50 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 44 ===== Growing sustainable revenue streams Powering cleaner mobility solutions EQT Playbook 3 45 6 7 2 1 In practice Nordic Ferry Infrastructure, headquartered in Oslo, Norway was formed in February 2022 through the combination of the two local ferry and express boat operators, Molslinjen and Torghatten, as well as the addition of Öre- sundslinjen (former ForSea) in January 2023. It is the leading pan-Nordic floating bridge oper- ator with a well-diversified portfolio of 70 routes. The maritime industry shifts towards sus- tainability mandates replacing fossil-fueled ferries with vessels powered by green energy and electricity. In this transformation, EQT sees good opportunities for value creation and growth. As such, EQT Infrastructure is on a transformation journey to create the leading sustainable floating bridge operator. Today, 30% of the Nordic Ferry Infrastructure group revenue is generated by low emissions con- tracts with 50% expected to be low/zero by 2026. Going forward, EQT Infrastructure will continue supporting the electrification and progress fleet decarbonization plan based on contract re-tendering in Norway and explore new technologies in Denmark. Additionally, EQT will continue exploring new technologies and investing in hydrogen with a Landmark hydrogen fuelled ferry route to be launched end of 2025. Read more about EQT Infrastructure Thematic investment approach 1) Compared to 2022-baseline. Energy & Environment Energy Transition –40% Reduction target in CO 2 emissions by 2030 1) #1 Operator of the world’s largest electric ferry Transport & Logistics Accessible Mobility +110 ferries Running across 70 routes +25 million Passengers transported annually Nordic Ferry Infrastructure connects to the following EQT Infrastructure thematic themes: EQT Annual and Sustainability Report 2023 / Page 43EQT Playbook Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 EQT Playbook 32 Thematic investment approach – Private Capital 33 Thematic investment approach – EQT Infrastructure 34 Thematic investment approach – EQT Exeter 35 Local-with-locals 36 House of Value Creation 36 Governance model 37 EQT Network 37 Digitalization & AI with Motherbrain 39 Sustainability 40 People 45 Financial statements 50 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 45 ===== Growing sustainable revenue streams Contributing to solutions to address today’s challenges, creating winners in tomorrow’s economy EQT Playbook 3 45 6 7 2 1 1) Classified as an Article 9-fund under the SFDR (Sustainable Finance Disclosure Regulation). Article 9 Funds are those that have sustainable investment as its objective. 2) EQT VI first invested in Anticimex in 2012, and EQT Future invested in 2021. EQT VIII invested in SHL Medical in 2020, and EQT Future invested in 2022. EQT Future invested in Bloom in 2023. EQT Future investments2) SHL Medical designs and develops auto- injector mechanisms enabling patients to treat chronic diseases in their homes. EQT Future invested with the aim to enable patient autonomy, leading to a greater adherence to treatment plans, better overall outcomes, and a decre- ased burden on the healthcare system. Since the investment, SHL has reached more than 2 million patients with its inno- vative devices and is quickly becoming a sustainability leader in the industry, with a dedicated sustainability team that drives circularity, decarbonization, and innova- tion across SHL’s operations. Bloom Fresh International innovates in table grape to enhance resilience with varieties that require fewer fungicides and less water, reducing the agricul- tural system’s stress and promoting soil health. EQT Future’s impact case focuses on promoting regenerative agriculture practices in this sector by planting new, more sustainable seed- lings, reducing fungicide use,and sup- porting soil research, using techniques like environmental DNA testing. Anticimex is a leading global specialist in pest control. EQT Future invested in 2021, in order to expedite the roll-out of a new, digital biocide-free product called SMART by introducing a com- prehensive employee incentive pro- gram. EQT and Anticimex are now actively demonstrating the benefits of eco-friendly pest control to customers and the wider market to promote and accelerate the adoption of similar nature-positive solutions across the industry. Launched in 2021, EQT Future1) is a lighthouse, impact-driven strategy that focuses on mature companies with market-shaping impact potential. EQT Future combines EQT’s private equity expertise with rigorious impact measurement and management tools, including impact-linked incentives and impact accelera- tion plans to drive performance and transform industries for the better. In practice “With each investment, we underwrite a core impact case that is colinear with the commercial case and then actively support our boards and management teams to deliver real-world results, and to evidence their impact performance with innovative measurement techniques.” Jen Braswell Head of Impact, Private Capital Europe & North America “With EQT Future, we are investing in market leaders across two themes – Climate & Nature and Health & Well-Being - where we support them either to scale impactful products and services, or to pivot towards those. By doing this, we not only create more valuable companies, but we also act as a cata- lyst for transforming their entire industry, and delivering impact at scale.” Simon Griffiths Partner, Head of EQT Future Advisory Team EQT Annual and Sustainability Report 2023 / Page 44EQT Playbook Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 EQT Playbook 32 Thematic investment approach – Private Capital 33 Thematic investment approach – EQT Infrastructure 34 Thematic investment approach – EQT Exeter 35 Local-with-locals 36 House of Value Creation 36 Governance model 37 EQT Network 37 Digitalization & AI with Motherbrain 39 Sustainability 40 People 45 Financial statements 50 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 46 ===== EQT Infrastructure VI SK Shieldus In 2023, EQT Infrastructure acquired SK Shieldus, a leading South Korean integrated security operator. The Company provides central monitoring and dispatch services to 680,000 commercial customers, and provides Managed Security Service for cybersecurity monitoring. SK Shieldus, which was EQT Infrastructure’s first invest- ment in South Korea, leverages digital and connected infrastructure to deliver services that make South Korean society safer from both physical and cyber threats. SK Shieldus will be able to leverage EQT’s sector experience within physical and cyber security, and strong digitaliza- tion capabilities to enable more tailored and digitized security service offerings for its customers. 07 People 46 People at the core of EQT’s success 47 Developing people 48 Diversity, equity and inclusion as a value creation lever 49 EQT Foundation – guardian of EQT’s core values ===== SIDA 47 ===== Values EQT’s values have fostered an organization that consistently delivers high performance. They influence collaboration, how EQT advises the portfolio companies, and how EQT posi- tively impacts the world. It is imperative that these values continue to underpin the perfor- mance of a global EQT. EQT’s continued growth and success will be enabled by a continued emphasis on humility, collaboration, accountability and continuous improvement. EQT believes that encouraging people to be themselves contributes to a more diverse and inclusive workplace where individ- uals feel valued for who they are. EQT’s core values apply globally with a local flavour and are embedded in EQT’s strategic focus, people management and development programs. Consistently applying the same set of values across the world reinforces EQT’s culture, protects its ability to perform for clients and retains its heritage, whilst embracing a global mindset. People at the core of EQT’s success With the considerable growth in the number of employees and geographic footprint in the last three years, EQT’s values are more important than ever. Acting with integrity and humility. Through our actions, we show regard and gratitude towards our stakeholders and colleagues. Being open and honest, with each other as well as with external stakeholders. We raise issues and face reality when difficulties arise. Maximizing our effort and results through collaboration. We feel an urgency to take action and make an impact – everything can be improved at all times. Being inclusive and non- hierarchical – everyone is encouraged to be themselves and is expected to speak their mind. We all contribute to an engaging, friendly and fun work environment. Being innovative and account- able. We take risks, persevere through challenges and learn from our mistakes to succeed in the long run. Respectful High performing Entrepreneurial Transparent Informal EQT’s five core values form the foundation of our culture Employees per segment 37+34+29+E Central, 37% Real Assets, 34% Private Capital, 29% Employees by region 23+18+23+36+E Americas, 23% Asia-Pacific, 18% Nordics, 23% Rest of Europe, 36% People Number of employees (FTE+) 0 400 800 1,200 1,600 2,000 20232022202120202019 EQT has hired ahead of growth and built a well invested platform. Hence, hiring remained limited in 2023. Selec- tive hiring will continue in 2024 in key strategic areas, such as private wealth. EQT Annual and Sustainability Report 2023 / Page 46People Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 People at the core of EQT’s success 46 Developing people 47 Diversity, equity and inclusion as a value creation lever 48 EQT Foundation – guardian of EQT’s core values 49 Financial statements 50 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 48 ===== EQT Academy The EQT Academy has been at the core of talent development for all employees over the past decade. It is a learning and development platform designed to drive business impact, value creation and individual growth. The Academy embeds the firm’s history, purpose, culture, values and strategy – simply what makes EQT unique. The Academy is organized into four pillars: Developing people EQT focuses on developing the highest performing individual employees, leaders and teams to deliver superior outcomes for the EQT funds’ portfolio companies, resulting in the best returns for EQT’s clients. In 2023 the Academy expanded the flag- ship program offering by introducing EQuesT for new Partners, which provides guidance on how to be both a successful partner and a future EQT leader. The expansion of the E-cademy plat- form has continued, delivering virtual and hybrid programs. The toolset is also available for all business lines to create, shape and deliver specific training which can then be leveraged across EQT. Key areas of delivery for this year have been onboarding, sustainability, risk/ compliance, cybersecurity and technology enablement. “Glocal” programs have been added which provide quality, global content deliv- ered locally to ensure EQT’s global work- force is enabled with the right skills and capabilities. This supports the ability to scale whilst ensuring consistency and local relevance. E-cademy Digital learning focused on busi- ness priorities, embedded into the daily workflow Academy Flagship Courses to global career and per- sonal develop- ment journey Mentoring and coaching initiatives integrated across EQT Academy Onboarding Academy on Demand Targeted open catalogue learn- ing, supporting individual and team needs Academy Glocal Global learning programs experi- enced locally EQT Annual and Sustainability Report 2023 / Page 47People Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 People at the core of EQT’s success 46 Developing people 47 Diversity, equity and inclusion as a value creation lever 48 EQT Foundation – guardian of EQT’s core values 49 Financial statements 50 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 49 ===== Diversity, equity and inclusion as a value creation lever Increasing diversity to create high-performing teams For many years EQT has focused on increasing the ratio of women, and we have improved gen- der balance in boards and management, in both EQT and across portfolio companies. While significant progress has been made in this area, this continues to be an important area of focus. EQT has introduced a new global ambition to apply a broader lens on diversity, equity and inclusion, informing how high-performing teams are composed, homogeneity reduced and diversity of thought increased. Going forward, EQT will take a more system- atic approach to creating broader, diverse rep- resentation across our management teams. EQT is reframing and broadening the focus by setting an ambition of a maximum of 60% of team members of the same gender, cultural background, and socio-economic origin in our Board, C-Suite and top earners. This global ambition will be implemented across EQT’s business lines and the portfolio compa- nies, taking into account geographical, cultural and business contexts. Strengthening DE&I capabilities During 2023, a DE&I resource hub was devel- oped and launched containing educational modules and associated toolkits. The hub enables EQTarians to build their understanding of what DE&I means at EQT, our diversity ambi- tions, our approach to driving change, and how we will build diversity of thought. Everyone at EQT should have the confidence and capability to take action, get involved in initiatives and drive change within DE&I. EQT is a promoter of equal opportunity and inclusion for all employees and recognizes that multiple dimensions of diversity are prerequisites for innovation, better decision making, talent retention, and financial performance. EQT Annual and Sustainability Report 2023 / Page 48People Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 People at the core of EQT’s success 46 Developing people 47 Diversity, equity and inclusion as a value creation lever 48 EQT Foundation – guardian of EQT’s core values 49 Financial statements 50 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 50 ===== EQT Foundation – guardian of EQT’s values Since its inception, EQT has had a multi-stakeholder approach, originating from the founding concept in 1994 of being “more than capital”. In 2020, EQT AB solidified this commitment by becoming one of the first companies in the world to enshrine its Statement of Purpose in its Articles of Association. In the same spirit, the EQT Foundation, owning around one percent of the shares in EQT AB, acts as a steward of the company’s purpose, its values and its contribution to society. A guardian of EQT’s values The EQT Foundation complements EQT with the purpose of pushing the frontiers of impact: supporting entrepreneurs and scientists bring- ing breakthough science from lab to market and engaging with philanthopies to help unlock their full potential. While investing in breakthrough technologies, it also aims to aid the uptake of investment practices that inte- grate impact creation in company valuations. The governing body, The EQT Foundation Members’ Committee, comprises those Part - ners who donated shares to establish the foundation at the time of the IPO, and senior employees at EQT who are nominated and elected to join the Committee. In addition to electing the Board of EQT Foundation and providing input to the impact strategy of the foundation, the committee acts as a guardian of EQT’s values, and provides feedback to the management of EQT. The governance mecha- nism was created to upkeep the partnership feeling, joint ownership, and deep caring for the long-term development of EQT. The committee also provides a way for EQT to stay connected to senior leaders who have been instrumental in building EQT, even after they retire. Election of ambassadors that represent the future EQT Being elected to the EQT Foundation Members’ Com mittee is a merit-based promotion for senior employees based solely on how well they adhere to EQT’s values. It also offers the opportunity to lead investment deals on behalf of the Foundation, which is reserved for employees who are considered to be cultural ambassadors. Engaging with the Foundation enables employees to experience the Partner role, learn about emerging technologies, and build their investment expertise. This involve- ment is recognized as an integral part of the career development at EQT, providing employ- ees with ample opportunities to work across teams and business lines, sharing knowledge, cultural codes, and their passion for a more inclusive and regenerative tomorrow. New members appointed to the EQT Foundation Members’ Committee This year, the EQT Foundation Members’ Committee welcomed four new senior employees at EQT, elected based on their long-term commitment to safeguarding the EQT values and their contribution to society. A warm welcome to Masoud Homayoun, Alex Darden, Eric Liu, and Jean Salata. Masoud Homayoun Partner, Head of Value-Add Infrastructure Advisory Team Alex Darden Partner, Value-Add Infra structure Advisory Team Eric Liu Partner, Head of Private Equity North America Advisory Team Jean Salata Head of EQT Private Capital Asia and Chair person of EQT Asia Stockholm New York New York Hong Kong About EQT Foundation EQT Foundation is the philanthropic arm of EQT, founded to safeguard the EQT values and push the frontiers of impact. A philanthropic investor with a focus on novel and deeptech solutions for climate and health. EQT Foundation combines catalytic capital with engagement and expertise from EQT employees to help entrepreneurs and scientists bring breakthrough science from lab to market. EQT Annual and Sustainability Report 2023 / Page 49People Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 People at the core of EQT’s success 46 Developing people 47 Diversity, equity and inclusion as a value creation lever 48 EQT Foundation – guardian of EQT’s core values 49 Financial statements 50 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 51 ===== 08 Financial statements 52 Board of directors’ report 56 Consolidated financial statements with notes 91 Parent company financial statements with notes 100 Proposal for the distribution of net income 101 Signatures of the board of directors and the CEO 102 Managing risks 109 Auditor’s report EQT Mid Market Europe Ellab EQT Private Equity sold Ellab to Novo Holdings, which manages the assets and wealth of the Novo Nordisk Foundation, one of the world’s largest philanthropic enter- prise foundations. Ellab provides validation and monitoring solutions and services for biotech and pharmaceutical processes. During ownership, Ellab shifted its customer focus towards high-growth industries such as biotech and cell & gene therapies. By the time of sale, Ellab served all top 20 biotech companies and all top 40 pharmaceutical companies globally. This resulted in Ellab tripling its revenues, EBITDA and employee numbers, while experiencing approximately 20 percent annual organic revenue growth and completing 15 add-ons. ===== SIDA 52 ===== Contents Board of directors’ report ......................................................................52 Financial statements ................................................................................56 Consolidated income statement ........................................................56 Consolidated statement of comprehensive income ............. 56 Consolidated balance sheet ..................................................................57 Consolidated statement of changes in equity ........................... 58 Consolidated statement of cash flows ...........................................59 Notes to the financial statements Note 1 General information.................................................................... 60 Note 2 Accounting policies .....................................................................60 Note 3 Use of judgements and estimates .....................................64 Note 4 Operating segments ..................................................................64 Note 5 Revenue ..............................................................................................66 Note 6 Other operating expenses ..................................................... 66 Note 7 Employees, senior executives and board of directors ..............................................................................67 Note 8 Audit fees and expenses ...........................................................73 Note 9 Financial income and expenses ..........................................73 Note 10 Income taxes ..................................................................................73 Note 11 Intangible assets ...........................................................................74 Note 12 Property, plant and equipment ..........................................75 Note 13 Accounts receivable and other current assets ....................................................................................................................75 Note 14 Equity ..................................................................................................76 Note 15 Interest bearing liabilities ......................................................77 Note 16 Other liabilities ..............................................................................77 Note 17 Accrued expenses and prepaid income .......................77 Note 18 Financial instruments and financial risks ....................77 Note 19 Leases ..................................................................................................81 Note 20 Cash flow specifications........................................................82 Note 21 Pledged assets and contingent liabilities ....................82 Note 22 Events after the reporting period .....................................82 Note 23 Related parties .............................................................................83 Note 24 Subsidiaries .................................................................................. 84 Note 25 Earnings per share ................................................................... 88 Note 26 Business combination .............................................................88 Parent company financial statements Parent company income statement ...................................................91 Parent company balance sheet ...........................................................92 Parent company statement of changes in equity.....................93 Parent company statement of cash flows ....................................94 Parent company notes Note 1 Accounting policies ......................................................................95 Note 2 Revenue ..............................................................................................96 Note 3 Other operating income ..........................................................96 Note 4 Other operating expenses ..................................................... 96 Note 5 Employees and personnel expenses ............................... 96 Note 6 Audit fees and expenses ..........................................................96 Note 7 Operating leases ..........................................................................96 Note 8 Profit/loss from participations in subsidiaries ..........96 Note 9 Interest income and similar profit/loss items .............97 Note 10 Interest expense and similar profit/loss items .........97 Note 11 Income taxes ...................................................................................97 Note 12 Intangible assets ..........................................................................97 Note 13 Property, plant and equipment ..........................................97 Note 14 Participations in subsidiaries ............................................. 98 Note 15 Other securities held as non-current assets ............. 98 Note 16 Financial instruments and risk management .......... 99 Note 17 Other long-term receivables ..............................................99 Note 18 Prepaid expenses and accrued income ......................99 Note 19 Revolving credit facility .......................................................... 99 Note 20 Number of shares and quota value ...............................99 Note 21 Interest bearing liabilities ..................................................... 99 Note 22 Accrued expenses and prepaid income .....................99 Note 23 Pledged assets and contingent liabilities ................. 99 Note 24 Related parties ........................................................................... 99 Note 25 Events after the reporting period ................................... 99 Proposal for the distribution of net income ..............................100 Signatures of the Board of directors and the CEO ...............101 Managing risks ...........................................................................................102 Auditor’s report ..........................................................................................109 EQT Annual and Sustainability Report 2023 / Page 51Board of directors’ report Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Board of directors’ report 52 Consolidated financial statements with notes 56 Parent company financial statements with notes 91 Proposal for the distribution of net income 100 Signatures of the board of directors and the CEO 101 Managing risks 102 Auditor’s report 109 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 53 ===== Board of directors’ report The Board of directors and the CEO of EQT AB (publ) (reg. no. 556849-4180) with its registered office in Stockholm, Sweden submit the annual report and consolidated financial statements for the 2023 financial year. REVENUES AND NET INCOME Revenues for the period increased to EUR 2,084.4m (EUR 1,497.3m). Carried interest and investment income amounted to EUR 118.4m in 2023 compared to EUR 168.8m in 2022. Adjusted revenues of EUR 2,130.8m (EUR 1,536.5m) are adjusted by removing the fair value adjustment of acquired contractual rights to carried interest. Impact on adjusted revenues from foreign exchange rate differences (using fixed foreign exchange rates), amounted to negative EUR 28.2m. Total operating expenses during the year amounted to EUR 1,391.4m (EUR 991.2m), and is mainly driven by the build-out of the organization as well as personnel expenses as a result of performed acquisitions. EBITDA increased to EUR 693.1m (EUR 506.1m) corresponding to a margin of 33.2% (33.8%). Adjusted EBITDA amounted to EUR 1,226.4m (EUR 829.5m) corresponding to a margin of 57.6% (54.0%). Impact on adjusted EBITDA from foreign exchange rate differences (using fixed foreign exchange rates), amounted to negative EUR 0.6m. Depreciation and amortization amounted to EUR 54.1m (EUR 43.8m), primarily related to facility lease agreements. Amortization of acquisition related intangible assets amounted to EUR 364.1m (EUR 153.6m) and relates to amortization of iden- tified surplus values. Net financial income and expenses amounted to EUR -35.5m (EUR -45.6m). This is primarily comprised of interest expenses of EUR -42.2m (EUR -33.9m) relating to the sustainability-linked bonds issued by EQT AB in April 2022 and May 2021 as well as currency translation differences. Income taxes amounted to EUR -100.2m (EUR -86.9m). Net income for the period from continuing operations decreased to EUR 139.2m (EUR 176.2m). Adjustment items affecting net income from continuing operations, including tax effects, amounted to EUR 880.2m (EUR 478.0m). Adjusted net income for the period from continuing operations amounted to EUR 1,019.4m (EUR 654.2m). Earnings per share for continuing operations before and after dilution amounted to EUR 0.117 (EUR 0.171) and EUR 0.117 (EUR 0.171), respectively. Adjusted earnings per share for continuing operations before and after dilution amounted to EUR 0.860 (EUR 0.634) and EUR 0.859 (EUR 0.634), respectively. Adjustment items affecting EBITDA in 2023 amounted to EUR 533.4m and relates to an adjustment of revenues for fair value step-up on acquired contractual right to carried interest, and an adjustment of the part of the considerations subject to lock-up, inte- gration costs as a result of performed acquisitions and the non-cash portion of equity incentive program cost. The part of the consider- ations subject to lock-up is treated as a personnel expense from an accounting perspective and recorded in the income statement over the lock-up period. Adjustment items affecting EBITDA in 2022 amounted to EUR 323.4m and related to an adjustment of revenues for fair value step-up on acquired contractual right to carried interest and an adjustment of the part of the considerations subject to lock-up as well as transaction and integration costs as a result of performed acquisitions. The part of the considerations subject to lock-up is treated as a personnel expense from an accounting perspective and recorded in the income statement over the lock-up period. CASH FLOW AND FINANCIAL POSITION Goodwill and Other intangible assets amounted to EUR 5,280.3m (EUR 5,796.9m). The decrease of EUR 516.6m is mainly driven by amortization and exchange rate differences. Property, plant and equipment amounted to EUR 171.5m (EUR 170.5m). Financial investments increased by EUR 62.3m to EUR 730.7m (EUR 668.4m) primarily driven by increased investments from EQT AB Group into EQT funds. Current assets amounted to EUR 2,899.2m (EUR 2,801.1m). The increase was primarily driven by an increase in cash and cash equivalents. Cash and cash equivalents at the end of the period amounted to EUR 1,114.0m (EUR 644.9m). Net debt amounted to EUR 886.0m (EUR 1,355.1m in net debt). Equity decreased to EUR 6,003.6m (EUR 6,398.7m). The decrease is mainly explained by the, in 2023, decided dividend (paid during 2023). Non-current liabilities amounted to EUR 2,472.9m (EUR 2,522.9m). Current liabilities amounted to EUR 731.8m (EUR 681.0m). EXPECTATIONS FOR 2024 EQT will continue fundraising for its flagship funds within existing strategies, as well as certain new strategies, whilst gradually building its private wealth distribution channels. Having strengthened its teams in recent years, EQT has reduced the pace of hiring and expects primarily to make selective hires to support growth in focus areas such as Private Wealth, and the regions of North America and Asia. With significant capital to deploy from recent fundraisings, EQT will continue to make thematic investments, and drive performance across the EQT funds’ portfolio companies. PERSONNEL Number of full-time equivalent employees (FTE), at year-end 2023, amounted to 1,777 (1,669). EQT has hired ahead of growth and built a well invested platform. Hence, hiring remained limited in 2023. SIGNIFICANT EVENTS DURING THE YEAR Significant events and transactions EQT Infrastructure VI, which has a target fund size of EUR 20.0bn, was activated in December 2022. As of the date of the publication of the Year-end Report, the fund had secured commitments of close to EUR 14.5bn. Fundraising is set to continue well into 2024, and the fund is expected to meet its target fund size. Fundraising continued for EQT X. The fund reached its target fund size of EUR 20bn. EQT Exeter Industrial Value Fund VI held its final close at USD 4.9bn of fee-generating commitments, exceeding its target size of USD 4.0bn. EQT’s Annual Shareholders’ Meeting on 30 May 2023 resolved to adopt two new incentive programs, the EQT Share Program and the EQT Option Program. The new EQT Share Program and the EQT Option Program replace the old EQT Share Program adopted by the Annual Shareholders’ Meeting in 2019. The objective of the programs is to align employees’ performance to the interest of the shareholders, based on performance metrics tailored to EQT AB’s strategic goals on an annual basis. EQT Annual and Sustainability Report 2023 / Page 52Board of directors’ report Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Board of directors’ report 52 Consolidated financial statements with notes 56 Parent company financial statements with notes 91 Proposal for the distribution of net income 100 Signatures of the board of directors and the CEO 101 Managing risks 102 Auditor’s report 109 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 54 ===== EQT completed a repurchase of 1.8m shares, with the objective of over time offsetting the dilution impact from EQT’s Incentive Programs. In the fourth quarter, EQT increased the number of ordinary shares held in treasury with 59.3 million ordinary shares through a share issuance. The new shares are expected to be delivered to participants in EQT’s Share and Option Programs, depending on the outcomes of the long-term programs. EQT currently holds 61,106,376 ordinary shares in treasury, which are not entitled to divi- dends or votes at shareholders’ meetings. Excluding shares held in treasury by EQT, there are 1,184,823,591 outstanding shares in EQT. EQT launched its first semi-liquid fund, EQT Nexus, providing access for individuals to a diversified portfolio of EQT’s funds. EQT AB has in recent years made balance sheet investments which have now been transferred to EQT Nexus to seed the fund, which starts off with NAV of approximately EUR 350m and previously made fund commitments of approximately EUR 700m. In December 2022, the EU member states agreed to implement the OECD model rules for a global minimum tax framework (Pillar Two) for financial years commencing on or after 31 December 2023. The EQT AB Group is in scope of the Pillar Two Rules, setting forth a minimum tax of 15 percent on income arising in each jurisdiction where the group operates. EQT has assessed the expected impact of Pillar Two income taxes for 2024 and onwards. EQT estimates the Adjusted effective tax rate (ETR) measured on Adjusted earnings before tax (EBT) excluding carried interest and investment income to range between 18 to 20 percent, of which Pillar Two income taxes are estimated to account for 2 to 4 percentage points. The estimates may however be affected by a range of factors affecting both the underlying Adjusted ETR and the Pillar Two income taxes, including legislative developments and local implementation. The Swedish Tax Agency is reviewing the Swedish taxation of certain current and former EQT employees with respect to carried interest, and in particular whether carried interest should be taxed as employment income. EQT understands that the review covers carried interest related to certain EQT funds and specific years. EQT and the relevant individuals have filed taxes based on existing case law in the area. The final conclusion of the review is expected to take several years. INCENTIVE PROGRAMS EQT 2019 Share program The last grant of the EQT Share program (established in 2019) was done in March 2023. Each annual grant consisted of amounts to be converted to class C shares in EQT AB. All class C shares allotted are subject to a three-year holding period, with no vesting condi- tions, after which the class C shares are converted into ordinary shares. The class C shares carry the same economic rights as ordinary shares in the company and carry one-tenth (0.1) vote each. During 2019, a new share issue of 8,663,490 class C shares was carried out and subsequently repurchased for the purpose of delivering class C shares within the scope of the share program. In relation to the 2019 grant, 365,406 class C shares were allotted to the participants in the beginning of 2020. In relation to the 2020 grant, 348,106 class C shares were allotted to the participants in the beginning of 2021. In relation to the 2021 grant, 385,499 class C shares were allotted to the participants in the beginning of 2022. In relation to the 2022 grant, 496,056 class C shares were allotted to the participants in the beginning of 2023. EQT 2023 Share program The EQT Share Program (established in 2023) consists of ordinary shares in EQT AB. The Program is divided into five separate annual grants, each subject to a one-year performance period and a three-year holding period. Depending on the achievement of certain performance targets during the performance year, an amount may be awarded which after the performance period is settled in the total number of outstanding shares in EQT AB that corresponds to the amount awarded. With certain limited excep- tions, no vesting conditions apply during the three-year holding period. Based on the number of shares as of 31 December 2022, the maximum dilution for the EQT Share Program is one percent in total. EQT intends, over time, to repurchase shares to offset the dilution related to the EQT Share Program. Performance in relation to targets for Adjusted Revenue growth, Adjusted EBITDA margin and a sustainability assessment has resulted in a gross share grant level of EUR 34.1m, of which EUR 16.7m was cash cost. EQT 2023 Option program The EQT Option Program (established in 2023) consists of options which upon exercise entitle the option holders to acquire ordinary shares in EQT AB. The Program is divided into five separate annual grants, each subject to a one-year performance period and a three-year holding period. Depending on the achievement of certain performance targets during the performance year, an amount may be awarded which after the performance period is settled in the number of options that corresponds to the amount awarded. With certain limited exceptions, no vesting conditions apply during the three-year holding period. The option exercise period commences after the holding period. Based on the number of shares as of 31 December 2022, the maximum dilution for the EQT Option Program is four percent in total. EQT intends, over time, to repurchase shares to offset the dilution related to the EQT Option Program. Total grant level for EQT Option program recognized in 2023 was EUR 24.7 m of which none was cash cost. RELATED PARTIES No significant related party transactions have occurred during the period. EVENTS AFTER THE REPORTING PERIOD EQT introduced the new Healthcare Growth Strategy, a dedicated healthcare buyout strategy. On 27 February 2024, EQT announced that EQT X had reached its hard cap with fee-generating assets under management of 21.7bn. PARENT COMPANY The parent company’s profit before tax amounted to SEK 5,211.3m (SEK 2,741.8m). The increase is mainly explained by a timing effect of dividends from subsidiaries. THE SHARE EQT AB’s ordinary shares are listed on Nasdaq Stockholm in the Large Cap segment. As of 31 December 2023, there were 1,184,823,591 outstanding shares in EQT. EQT currently holds 61,106,376 ordinary shares in treasury. Including shares held in treasury by EQT, there were 1,244,700,306 ordinary shares and 1,229,661 non-listed class C shares. Ordinary shares carry 1 vote per share and class C shares carry 0.1 vote per share. The quota value of the shares is SEK 0.1. See Note 14 for further information. In addition to what is disclosed in Note 14 there are no restric- tions on the transferability of shares due to statutory provisions, articles of association or, as far as EQT AB is aware, in shareholders agreements. For information regarding changes in EQT’s share capital and lock ups entered into, please refer to the heading “Events after the reporting period” and “Restrictions on transferability above” . SUSTAINABILITY In accordance with Chapter 6, Section 11 of the Swedish Annual Accounts Act, EQT has elected to prepare the statutory sustain- ability report separately from the Board of directors’ report. The scope of the statutory sustainability report is given on page 1. EQT Annual and Sustainability Report 2023 / Page 53Board of directors’ report Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Board of directors’ report 52 Consolidated financial statements with notes 56 Parent company financial statements with notes 91 Proposal for the distribution of net income 100 Signatures of the board of directors and the CEO 101 Managing risks 102 Auditor’s report 109 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 55 ===== GUIDELINES FOR EXECUTIVE REMUNERATION (REMUNERATION POLICY) The guidelines for executive remuneration approved by the Annual Shareholders’ Meeting 2023 are presented in Note 7. During 2023 there was one deviation from the remuneration guidelines, which was resolved by the Board through the remuneration committee. This related to a variable cash bonus payment made to EQT AB’s Chief Commercial Officer, Suzanne Donohoe during 2023. Suzanne Donohoe received a variable bonus without application of a one-year measurement period, as required under the remuneration guideline and was deemed necessary for EQT AB Group’s business strategy, long term growth ambitions, target market development and long-term value growth for its shareholders. No other devia- tions from the guidelines were made during 2023. Set forth below are the board’s proposed guidelines for executive remuneration, to be adopted by the Annual Shareholders’ Meeting 2024. Guidelines for executive remuneration (Remuneration Policy) The CEO and other members of the Executive Committee (exec- utive management) fall within the provisions of these guidelines. To the extent a Board member conducts work for EQT, in addition to the board work, consulting fees and other compensation for such work may be paid. The guidelines are forward-looking, i.e. they are applicable to remuneration agreed, and amendments to remuneration already agreed, after adoption of the guidelines by the Annual Shareholders’ Meeting 2024. These guidelines do not apply to any remuneration separately decided or approved by the shareholders’ meeting. EQT has a clear remuneration philosophy (including for variable cash) applicable across the whole group which also governs the remuneration to the Executive Committee and links compensation to the EQT AB Group’s business strategy, sustainability, long-term interests and long-term value growth for its shareholders. Most important is to incentivize fund performance and ensure aligned interest with our limited partners in the EQT funds, EQT AB’s shareholders as well as EQT’s long term approach. EQT is a performance driven organization focused on long-term value creation in line with our culture. Team performance and individual performance are important – therefore we reward both. Perfor- mance is key to our success and we award higher performance with higher compensation. To be able to achieve the business goals, EQT needs to be able to attract and retain world class talent suitable for each role. To achieve this, EQT applies market competitive total compensation. EQT compensates locally based on geography and in line with local practice and regulations, taking into account, to the extent possible, the overall purpose of these guidelines. The principles in these guidelines enable EQT AB to offer the Executive Committee a competitive total remuneration. For more information regarding the EQT AB Group’s business strategy, please see EQT AB’s webpage, www.eqtgroup.com. Share-related incentive programs The EQT Share Program and the EQT Option Program are imple- mented in the EQT AB Group. The programs were resolved by the Annual Shareholders’ Meeting 2023 and are therefore excluded from these guidelines. The EQT Option Program includes members of the Executive Committee in EQT AB. The performance criteria used to assess the outcome of the EQT Option Program are tied to the individual’s current role scope and contribution to EQT’s per- formance through value creation and future proofing, the share price development, adding value to the wider EQT Platform as well as impact on delivering on EQT’s sustainability ambitions. The par- ticipants will receive employee stock options free of charge, with an exercise period occurring during a one-month period starting the day after the publication of EQT AB’s financial report for the time period January - March three years after grant. Each employee stock option entitles the participant to acquire one ordinary share in EQT AB at a price corresponding to the price per ordinary share as of the date of grant. The EQT Share Program, resolved upon by the Annual Shareholders Meeting 2023. For the EQT Share Program, the performance targets are tied to the EQT AB Group’s financial targets, EQT’s general competitiveness, the individual meeting or exceeding EQT’s highly set expectations on adding value to the EQT Platform as well as impact on delivering on EQT’s sustainability ambitions. The program includes Partners and senior employees, members of the Executive Committee are generally not participants of the EQT Share Program. The partici- pants invest a variable amount (financed by EQT) in ordinary shares after a performance year, whereupon an approximately three-year holding period follows. The Annual Shareholders’ Meeting 2019 also resolved on an EQT Share Program, under which no new investments in EQT AB shares are made, with holding periods until 2026. For more information regarding the EQT Share Program and EQT Option Program, including the cri- teria which the outcome depends on, please see EQT AB’s remu- neration report, available on eqtgroup.com/shareholders/. Types of remuneration, etc. The remuneration shall be on market terms and may consist of the following components: fixed remuneration, variable cash remuner- ation, pension benefits and other benefits. The shareholders’ meeting may – irrespective of these guidelines – resolve on, among other things, share-related or share price-related remuneration. Fixed remuneration The fixed remuneration, i.e. base salary, should be competitive and reflect responsibility and performance. Variable remuneration The satisfaction of criteria for awarding variable cash remuner- ation, within the EQT Bonus program, shall be measured over a period of one year. The variable cash remuneration may amount to no more than 200 percent of the annual base salary. The EQT Bonus program consists of a performance assessment of the business as well as an individual performance assessment. Important business performance factors determining the size of the bonus is the success of the underlying business measured by business performance in the funds (investments and exits as well as portfolio and fund performance), business profitability, fund- raising, sustainability as well as organizational development. The individual performance is assessed versus agreed targets as well as meeting, exceeding or not meeting high set individual perfor- mance expectations for the individual in the current role. To which extent the criteria for awarding variable cash remu- neration has been satisfied shall be evaluated/determined when the measurement period has ended. The remuneration committee shall be responsible for the evaluation so far as it concerns variable remuneration to the CEO. For variable cash remuneration to other members of the Executive Committee, the CEO shall be responsible for the evaluation. For financial objectives, the evaluation shall be based on the latest financial information made public by EQT AB. The Executive Committee partly consists of owners of EQT AB. Owners that owned above 1.5 percent of the shares of EQT AB at IPO or at relevant acquisition may not be comprised by the EQT Bonus program, i.e. variable cash remuneration, nor any of the rel- evant share-related incentive programs. Therefore, total remuner- ation for part of the Executive Committee consists of base salary, pension benefits and other benefits. Pension All members of the Executive Committee shall be covered by defined contribution pension plans, for which pension premiums shall be based on the members’ base salary and paid by the company during the period of employment. For current members of the Executive Committee pension contributions shall be based on base salary and follow contribution levels in accordance with local market practice, except for the application of a cap. For EQT Annual and Sustainability Report 2023 / Page 54Board of directors’ report Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Board of directors’ report 52 Consolidated financial statements with notes 56 Parent company financial statements with notes 91 Proposal for the distribution of net income 100 Signatures of the board of directors and the CEO 101 Managing risks 102 Auditor’s report 109 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 56 ===== Sweden, this means that it shall be comparable to the old BTP-plan with a contribution cap for base salary exceeding 40 Income base amounts. The pension premiums shall amount to no more than 25 percent of the annual base salary. Other benefits Other benefits, such as insurances (health, life, travel), sports con- tributions or occupational health services, should be payable to the extent this is considered to be in line with market conditions in the market concerned. Premiums and other costs relating to such benefits may amount to no more than 25 percent of the annual base salary. Executive Committee members who relocate for the purposes of the position or who work in other multiple countries may also receive such remuneration and benefits as are rea- sonable to reflect the special circumstances associated with such arrangements, taking into account the overall purpose of these guidelines and alignment with the general policies and practices within EQT AB Group applicable to cross border work. Recommendation to invest in EQT AB shares The Board recommends each Executive Committee member (who do not already have such holding) to acquire, over a three-year period, EQT AB shares or similar instruments corresponding to at least one year’s base salary, before taxes and excluding other remuneration. Termination of employment and terms for severance pay for the CEO A twelve month notice period will apply if notice is given by the CEO or EQT AB. The CEO’s employment terms include a non-competition clause. If used, this would entitle the employee to an additional com- pensation corresponding to a maximum of twelve months’ salary, however, reduced by any remuneration paid by a new employer. Termination of employment and terms for severance pay for senior executives In the event of notice being given by the EQT AB Group, a notice period of nine months applies, while in the event of notice being given by the senior executive a period of notice of six months applies. The senior executives’ employment terms also include a non-competition clause. If used, this entitles the employee to an additional compensation corresponding to a maximum of nine months’ salary, however, reduced by any remuneration paid by a new employer. Base salary during the notice period and severance pay may not together exceed an amount corresponding to the base salary for eighteen months. When termination is made by the executive, the notice period may not exceed six months, without any right to severance pay. Salary and employment conditions for employees taken into account during preparations of these guidelines In the preparation of the Board’s proposal for these remuneration guidelines, salary and employment conditions for employees of the EQT AB Group have been taken into account by including infor- mation on the employees’ total income, the components of the remuneration and increase and growth rate over time, in the remuneration committee’s and the Board’s basis of decision when evaluating whether the guidelines and the limitations set out herein are reasonable. The decision-making process to determine, review and implement the guidelines The Board has established a remuneration committee. The commit- tee’s tasks include preparing the Board’s decision to propose guide- lines for executive remuneration. The Board shall prepare a pro- posal for new guidelines at least every fourth year and submit it to the shareholders’ meeting. The guidelines shall be in force until new guidelines are adopted by the shareholders’ meeting. The remuner- ation committee shall also monitor and evaluate programs for variable remuneration for the Executive Committee, the application of the guidelines for executive remuneration as well as the current remuneration structures and compensation levels in the EQT AB Group. The current members of the remuneration committee are independent of EQT AB and its Executive Committee. The CEO and other members of the Executive Committee do not participate in the Board’s processing of and resolutions regarding remunera- tion-related matters in so far as they are affected by such matters. Deviation from the guidelines The Board may temporarily resolve to deviate from the guidelines, in whole or in part, if in a specific case there may be special cause for the deviation and a deviation should be necessary to serve the EQT AB Group’s business strategy, sustainability, long-term interests and long-term value growth for its shareholders, or to ensure the EQT AB Group’s financial viability. As set out above, the remuneration committee’s tasks include preparing the Board’s resolutions in remuneration-related matters. This includes any resolutions to deviate from the guidelines. Description of material changes to the guidelines and how the views of shareholders’ have been taken into consideration Compared to the guidelines previously adopted the following material changes have been made, the guidelines have been adjusted to ensure that suitable compensation can be provided in case of relocations and cross-border work, which is important considering the EQT AB Group’s global operations. CORPORATE GOVERNANCE EQT prepares its Corporate Governance Report as a separate document from the statutory annual report. Please see page 145. PROPOSAL FOR THE DISTRIBUTION OF NET INCOME The Board of directors proposes a dividend for 2023 of SEK 3.60 per share, to be paid out in equal installments in June and December 2024, respectively. Holders of ordinary shares and Class C shares are equally entitled to dividend. The dividend will be based on the number of shares outstanding as of each record date. Standing at the disposal (in SEK) of the annual shareholders’ meeting, in accordance with the balance sheet of EQT AB: Share premium reserve 60,051,499,466 Profit brought forward -1,901,595,962 Net income 5,326,508,088 Total 63,476,411,592 The board proposes that, following approval of the balance sheet of EQT AB for the financial year 2023, the annual shareholders’ meeting should distribute the earnings as follows: Dividend to shareholders: SEK 3.60 per share 4,265,364,9281) Retained earnings 59,211,046,664 Total 63,476,411,592 1) Based on the number of outstanding shares at 31December 2023. The amount of the dividend may change up until each record date. It is the Board’s opinion that the proposed dividend is justifiable taking into consideration the demands that the nature, scope and risks of EQT’s operations place on the size of EQT AB’s and EQT AB Group’s equity, and EQT AB’s and EQT AB Group’s consolidation needs, liquidity and financial position in general. EQT Annual and Sustainability Report 2023 / Page 55Board of directors’ report Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Board of directors’ report 52 Consolidated financial statements with notes 56 Parent company financial statements with notes 91 Proposal for the distribution of net income 100 Signatures of the board of directors and the CEO 101 Managing risks 102 Auditor’s report 109 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 57 ===== Consolidated income statement 1 January – 31 December EUR m Note 2023 2022 Management fees 5 1,966.1 1,328.5 Carried interest and investment income 5 118.4 168.8 Total revenue 2,084.4 1,497.3 Personnel expenses 7 –705.3 –501.5 Acquisition related personnel expenses 7 –436.4 –200.8 Other operating expenses 6, 8 –249.7 –288.9 Total operating expenses –1,391.4 –991.2 Operating profit before depreciation and amortization (EBITDA) 693.1 506.1 Depreciation and amortization 5, 11, 12 –54.1 –43.8 Amortization of acquisition related intangible assets 26 –364.1 –153.6 Operating profit (EBIT) 274.9 308.7 Net financial income and expenses 9 –35.5 –45.6 Profit before income tax 239.4 263.1 Income taxes 10 –100.2 –86.9 Net income for the period from continuing operations 139.2 176.2 Net income for the period from discontinued operations –9.3 0.1 Net income 129.9 176.3 Attributable to: Owners of the parent company 129.9 176.3 Non-controlling interests – – 129.9 176.3 Earnings per share, EUR 25 before dilution 0.110 0.171 of which continued operations 0.117 0.171 after dilution 0.109 0.171 of which continued operations 0.117 0.171 Average number of shares before dilution 1,185,754,323 1,031,955,891 after dilution 1,186,434,306 1,032,594,481 Consolidated statement of comprehensive income 1 January – 31 December EUR m 2023 2022 Net income 129.9 176.3 Other comprehensive income Items that are or may be reclassified subsequently to the income statement Foreign operations – foreign currency translation differences net of tax –229.7 –273.1 Other comprehensive income for the period –229.7 –273.1 Total comprehensive income for the period –99.8 –96.8 Attributable to: Owners of the parent company –99.8 –96.8 Non-controlling interests – – –99.8 –96.8 EQT Annual and Sustainability Report 2023 / Page 56Financial statements Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Board of directors’ report 52 Consolidated financial statements with notes 56 Parent company financial statements with notes 91 Proposal for the distribution of net income 100 Signatures of the board of directors and the CEO 101 Managing risks 102 Auditor’s report 109 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 58 ===== Consolidated balance sheet EUR m Note 31.12.2023 31.12.2022 ASSETS Non-current assets Goodwill 11 2,132.6 2,172.2 Other intangible assets 11 3,147.7 3,624.7 Property, plant and equipment 12 171.5 170.5 Financial investments 18 730.7 668.4 Other financial assets 18 16.7 40.4 Other non-current asset 5 17.8 15.2 Deferred tax assets 10 92.1 110.2 Total non-current assets 6,309.1 6,801.5 Current assets Current tax assets 30.5 29.4 Accounts receivable and other current assets 18, 13 343.7 350.4 Accrued but yet not paid carried interest 5 896.1 915.0 Acquisition related prepaid personnel expenses 26 344.7 791.0 Other prepaid expenses and accrued income 170.2 70.4 Cash and cash equivalents 1,114.0 644.9 Total current assets 2,899.2 2,801.1 TOTAL ASSETS 9,208.3 9,602.6 EUR m Note 31.12.2023 31.12.2022 EQUITY AND LIABILITIES Equity 14 Share capital 11.8 11.2 Other paid in capital 5,593.2 5,593.2 Reserves –450.0 –220.4 Retained earnings including net income 848.4 1,014.7 Total equity attributable to owners of the parent company 6,003.6 6,398.7 Non-controlling interest – – Total equity 6,003.6 6,398.7 Liabilities Non-current liabilities Interest-bearing liabilities 15, 19 2,020.8 2,017.4 Lease liabilities 15, 19 91.2 100.1 Deferred tax liabilities 10 360.8 405.3 Total non-current liabilities 2,472.9 2,522.9 Current liabilities Lease liabilities 15, 19 34.3 31.4 Current tax liabilities 50.6 40.4 Accounts payable 18 12.2 15.8 Other liabilities 16 114.2 94.8 Accrued expenses and prepaid income 5, 17 520.5 498.6 Total current liabilities 731.8 681.0 Total liabilities 3,204.6 3,203.9 TOTAL EQUITY AND LIABILITIES 9,208.3 9,602.6 EQT Annual and Sustainability Report 2023 / Page 57Financial statements Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Board of directors’ report 52 Consolidated financial statements with notes 56 Parent company financial statements with notes 91 Proposal for the distribution of net income 100 Signatures of the board of directors and the CEO 101 Managing risks 102 Auditor’s report 109 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 59 ===== Consolidated statement of changes in equity Attributable to owners of the parent company EUR m Share capital Other paid in capital Translation reserve Retained earnings Total equity Non- controlling interest Total equity Opening balance at 1.1.2023 11.2 5,593.2 –220.4 1,014.7 6,398.7 – 6,398.7 Total comprehensive income for the period Net income 129.9 129.9 – 129.9 Other comprehensive income for the period –229.7 –229.7 – –229.7 Total comprehensive income for the period – – –229.7 129.9 –99.8 – –99.8 Transactions with owners of the parent company Dividends –298.5 –298.5 – –298.5 Share issue 0.5 – 0.5 – 0.5 Cancelling of C shares –0.0 0.0 – – – Bonus issue 0.0 –0.0 – – – Equity incentive programs 40.6 40.6 – 40.6 Repurchase of own shares and/or participations –38.0 –38.0 – –38.0 Total transactions with owners of the parent company 0.5 – – –295.8 –295.3 – –295.3 Closing balance at 31.12.2023 11.8 5,593.2 –450,0 848.4 6,003.6 – 6,003.6 Attributable to owners of the parent company EUR m Share capital Other paid in capital Translation reserve Retained earnings Total equity Non- controlling interest Total equity Opening balance at 1.1.2022 9.4 1,763.9 52.7 1,116.8 2,942.8 – 2,942.8 Total comprehensive income for the period Net income 176.3 176.3 176.3 Other comprehensive income for the period –273.1 –273.1 –273.1 Total comprehensive income for the period – – –273.1 176.3 –96.8 – –96.8 Transactions with owners of the parent company Dividends –291.0 –291.0 –291.0 Share issues 1.8 3,829.5 3,831.3 3,831.3 Transaction cost (net of tax) –0.1 –0.1 –0.1 Equity incentive programs 12.7 12.7 12.7 Total transactions with owners of the parent company 1.8 3,829.3 – –278.4 3,552.7 – 3,552.7 Closing balance at 31.12.2022 11.2 5,593.2 –220.4 1,014.7 6,398.7 – 6,398.7 EQT Annual and Sustainability Report 2023 / Page 58Financial statements Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Board of directors’ report 52 Consolidated financial statements with notes 56 Parent company financial statements with notes 91 Proposal for the distribution of net income 100 Signatures of the board of directors and the CEO 101 Managing risks 102 Auditor’s report 109 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 60 ===== Consolidated statement of cash flows EUR m Note 2023 2022 Cash flows operating activities 20 Operating profit (EBIT), continuing operations 274.9 308.7 Adjustments: Depreciation and amortization 418.2 197.4 Changes in fair value –22.5 –5.9 Foreign currency translation differences –15.0 –14.2 Other non-cash adjustments 479.5 213.4 Recorded, yet not paid carried interest 5 –95.8 –162.9 Paid carried interest 5 114.7 190.3 Increase (–) /decrease (+) in accounts receivable and other receivables –121.5 –96.6 Increase (+) /decrease (–) in accounts payable and other payables 17.6 18.1 Income taxes paid –105.3 –99.2 Net cash from operating activities 944.8 549.2 Cash flows investing activities Investment in intangible assets –0.5 –0.2 Acquisition of property, plant and equipment –23.1 –30.8 Investment in financial investments –208.3 –86.6 Proceeds from disposals of financial investments 168.6 26.2 Interest received 24.3 6.7 Consideration paid net of acquired cash – –1,455.5 Final earn-out divestment Credit 11.2 – Investment in non-current assets –11.0 –7.2 Net cash from (+) / used in (–) investing activities –38.8 –1,547.6 Cash flows financing activities EUR m Note 2023 2022 Dividends paid –298.4 –291.0 Repayment of borrowings – –23.9 Proceeds from borrowings – 1,483.1 Payment of lease liabilities –31.6 –14.2 Interest paid –47.7 –8.7 Share issues 0.5 –0.1 Purchase of own shares and/or participations –38.0 – Net cash from (+) / used in (–) financing activities –415.2 1,145.0 Net increase (+) / decrease (–) in cash and cash equivalents 490.8 146.7 Cash and cash equivalents at the beginning of the period 644.9 587.9 Foreign currency translation differences –21.7 –89.6 Cash and cash equivalents at the end of the period 1,114.0 644.9 EQT Annual and Sustainability Report 2023 / Page 59Financial statements Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Board of directors’ report 52 Consolidated financial statements with notes 56 Parent company financial statements with notes 91 Proposal for the distribution of net income 100 Signatures of the board of directors and the CEO 101 Managing risks 102 Auditor’s report 109 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 61 ===== Notes Furthermore, the amendments clarify that accounting policy information that relates to immaterial transactions, other events or conditions is immaterial and need not be disclosed. Other changes in IFRS that were effective from 2023 have had not material effect on the EQT AB Group’s financial statements. In December 2021, the members of the Organisation for Economic Co-operation and Development (OECD)/G20 Inclusive Framework on Base Erosion and Profit Shifting published the Pillar Two model rules designed to address the tax challenges arising from the digitalisation of the global economy. In December 2022, the EU member states agreed to implement the Pillar Two model rules for a global minimum tax framework for financial years commencing on or after 31 December 2023. EQT AB Group is in scope of the Pillar Two Rules, setting forth a minimum tax of 15 percent on income arising in each jurisdiction where the group operates. It is unclear if the Pillar Two rules create additional temporary differ- ences, whether to remeasure deferred taxes for the Pillar Two rules and which tax rate to use to measure deferred taxes. In response to this uncertainty, on 23 May 2023 and 27 June 2023, respectively, the IASB and AASB issued amendments to IAS 12 ‘Income taxes’ introducing a man- datory temporary exception to the requirements of IAS 12 under which a company does not recognise or disclose information about deferred tax assets and liabilities related to the Pillar Two rules. EQT AB Group has applied the temporary exception. Basis of measurement Assets and liabilities are measured at historical cost, with the exception of financial investments which are measured at fair value. Use of judgments and estimates in the financial statements Preparation of financial statements requires the use of judgment and accounting estimates that affect the application of the EQT AB Group’s accounting policies and the reported amounts of assets, liabilities, income and expenses. Revisions of estimates are recognized prospectively. The judgments, made by the management when applying IFRS, which may have significant effects on the financial statements and estimates that may contribute to significant adjustments in the financial statements of the following financial year are described in Note 3 Use of judgments and estimates. STANDARDS ISSUED BUT NOT YET EFFECTIVE New or revised standards and interpretations issued by the IASB and the IFRS Interpretations Committee but not yet effective, are expected to have an immaterial impact on the EQT AB Group’s financial statements in the future periods of initial application. BASIS OF CONSOLIDATION AND BUSINESS COMBINATIONS Subsidiaries and control Control Subsidiaries are entities controlled directly or indirectly by EQT AB. The EQT AB Group controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. From an IFRS 10 perspective EQT AB Group is considered an investment entity. In accordance with IFRS 10 an investment entity is an entity whose business purpose is to invest funds solely for returns from capital appreci- ation, investment income or both and evaluate the performance of its investments on a fair value basis. As an investment entity EQT AB Group is exempt from consolidating subsidiaries that are investments and mea- sures them at fair value through profit or loss instead. Subsidiaries that serve in a supporting function such as investment services continue to be consolidated in accordance with IFRS 10 and those that are not providing investment services will be recognized at fair value instead of being consolidated. Non-consolidated special entities According to IFRS 10 Consolidation, an investor that has control over only specified and ring-fenced assets and liabilities within a legal entity, should, for consolidation purposes, treat portions of the entity as a deemed separate entity (silo). The specified assets of one silo is not available to meet obligations of other parts of the legal entity, including in the event of insolvency. Each silo’s assets are the only source of payment for specified obligations of the silo. Silos that are not directly or indirectly controlled by EQT AB are not considered to be subsidiaries and are accordingly not consolidated. See Note 3 for further information of significant judgments used. Note 1 General information EQT AB (publ), reg. no. 556849-4180, is a company domiciled in Stockholm, Sweden with its ordinary shares listed on Nasdaq Stockholm. The visiting address is Regeringsgatan 25, 111 53 Stockholm, Sweden. The registered postal address is Box 16409, 103 27 Stockholm, Sweden. The consolidated financial statements of the financial year ended as of 31 December 2023 comprise EQT AB (“the Company”) and its direct and indirect subsidiaries, together referred to as the ”EQT AB Group” . Note 2 Accounting policies BASIS OF ACCOUNTING Compliance with legislation and standards The consolidated financial statements have been prepared in accor- dance with IFRS Accounting Standards (IFRS) published by the Interna- tional Accounting Standards Board (IASB) as adopted by the EU as of 31 December 2023. Additional disclosure requirements in the Swedish Annual Accounts Act (1995:1554) have been applied in accordance with RFR 1 Complementary Accounting rules for groups issued by the Swedish Financial Reporting Board. EQT AB’s consolidated financial statements were authorized for issue by the Board of directors and the CEO on 15 March 2024. The consoli- dated financial statements are subject to approval by the annual share- holders’ meeting on 27 May 2024. ACCOUNTING POLICIES The accounting policies applied in these consolidated financial state- ments are the same as those applied in the annual report 2022. The Group has adopted the amendments to IAS 1 regarding disclosure of accounting policies. The amendments replace all instances of the term ‘significant accounting policies’ with ‘material accounting policy infor- mation’ . Accounting policy information is material if, when considered together with other information included in an entity’s financial state- ments, it can reasonably be expected to influence decisions that the primary users of general-purpose financial statements make on the basis of those financial statements. The effect of adopting the amend- ments has been limited as the accounting policies presented historically and presently have been deemed as material. EQT Annual and Sustainability Report 2023 / Page 60Notes Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Board of directors’ report 52 Consolidated financial statements with notes 56 Parent company financial statements with notes 91 Proposal for the distribution of net income 100 Signatures of the board of directors and the CEO 101 Managing risks 102 Auditor’s report 109 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 62 ===== Funds Each EQT fund, being composed of one or more Limited Partnerships (or the equivalent) is managed by a general partner and/or a manager (jointly “Fund Manager”). The Fund Manager is normally a direct or indirect subsidiary of EQT AB. The authority and powers of the Fund Manager are defined in the Limited Partnership Agreement (or similar). Determining whether or not a Fund Manager should consolidate its managed funds is based on judgments of whether the Fund Manager is acting as a principal or an agent to the fund for accounting purposes. The assessment of the EQT AB Group’s expected level of return is based on the funds’ performance, i.e. the variable returns. Should a fund gen- erate variable return EQT AB Group would be entitled to between two and seven percent of the variable return, which is not considered to meet the control criterion in IFRS on link between power and return. Instead, EQT AB Group is considered to be an agent in relation to the fund investors, for accounting purposes and, accordingly the funds are not consolidated. DISCONTINUED OPERATIONS AND DISPOSAL GROUPS HELD FOR SALE Discontinued operations consist of the business segment Credit. “Net income for the period from discontinued operations” is presented as a single amount after tax at the end of the Consolidated income statement. Comparative figures are restated. From the date of classification as held for sale, assets and liabilities related to the disposal group are presented as a single current asset item and a single current liability item on the balance sheet, labelled “Assets classified as held for sale” and “Liabilities directly associated with assets classified as held for sale” . Comparative figures are not restated. At the time of classification of assets as held for sale, the assets are recognized at the lowest of their carrying amount and fair value less cost to sell. However, financial assets are exempted and are measured according to the accounting policies applicable to assets that are not classified as a holding for sale. REVENUE The EQT AB Group’s revenue is generated from fund management services, carried interest and investment income. The parties of agreements of fund management services comprise the EQT AB Group and the investors of each fund. Accordingly, the group of investors of each fund are identified as the customer of the EQT AB Group for accounting purposes. EQT AB Group is the recipient of the revenue. For fund management services there is only one single performance obligation for each fund and its investors. The performance obligation comprises identifying and evaluating investment and divestment oppor- tunities, providing support on structuring, fund management and moni- toring and reporting on an ongoing basis over the life of each fund. The different activities are considered interrelated and part of the same obligation to perform fund management services for the benefit of the investors. EQT AB Group is entitled to consideration consisting of fixed fees based on either committed capital or the cost of invested capital, and variable profit sharing fully dependent on the performance of the relevant fund and the fund’s underlying investments. The integrated revenue model of management fees and carried interest and investment income are described in more detail below. The following describes the types of contracts, the services included in the performance obligations and when performance obligations are satisfied which determines the timing of revenue recognition. Management fees The performance obligation of the EQT AB Group is to manage and support the funds, through the Fund Managers, on an ongoing basis. To manage and support on an ongoing basis represents a series of distinct services that increments on an ongoing basis and together is treated as one single performance obligation. Management fees are recognized over time over the life of each fund. The management fee is based on agreements over the life of each fund, generally with the term of 10–12 years occasionally subject to one or more 12 months’ extension periods. The fee charged is normally based on commitments until the termi- nation of the commitment period and thereafter based on the total cost of investments not yet realized or written off. If any investments remain after the term date management fees are charged on the total acqui- sition cost of such investments but at a lower rate for each six-month period until the agreed extension period expires. Typically the fees during the commitment and divestment period are payable half-yearly in advance and adjusted in the following half-year period, should any triggering events have occurred. Examples of trig- gering events include launch of a successor fund, commencement of the divestment period/end of commitment period and multiple closings in funds in fundraising. Carried interest Carried interest is a share of profits that the EQT AB Group receives through its holdings in the Special Limited Partners as variable consider- ation fully dependent on the performance of the relevant fund and the development of the fund’s underlying investments. The EQT AB Group is entitled to an agreed share of accumulated profits exceeding agreed thresholds (“hurdles”) over the expected life of each individual fund. Recognition of carried interest is normally assessed based on a three-step model: • Hurdle assessment; the total hurdle is determined by the sum of total accumulated drawdowns paid by the Limited Partners (“LPs”) and total accrued minimum return attributable to the LPs (the “Preferred return”) as of the reporting date. • Total discounted value assessment; the fair value of unrealized investments is determined as of the reporting date. The unrealized fair value will be adjusted, in accordance with established precautionary principles, to the extent that carried interest revenue should only be recognized once it is highly probable that the revenue would not result in a significant reversal of cumulative revenue recognized at final realization of the fund. The fund’s other assets/liabilities and any total proceeds from realized investments as of reporting date are then added to the equation, and thus constitutes the total discounted value of the fund. • Carried interest recognition assessment; if the total discounted value exceeds the total hurdle, carried interest revenue is recognized. Revenue is only recognized to the extent it is highly probable that the revenue would not result in significant revenue reversal of any accumulated revenue recognized on final fund settlement. The reversal risk is managed through adjustments of current fair values of unrealized investments through discounts of normally 30 to 50 percent. The discount applied is based on the assessed risk level for each fund. The discount applied is reviewed semi-annually. Carried interest is normally either payable on a whole fund basis, in installments at the time of realization of investments, or in combinations of the two. Payment is further subject to satisfaction of certain tests relating to claw backs i.e. repayment requirements on final settlement of the fund. See Note 3 for further information of significant judgments used in the process of applying the accounting policies on revenue recognition of carried interest. Investment income Investment income consists primarily of changes in fair value of the EQT AB Group’s underlying fund investments. Changes in fair value are recognized in the income statement. Capital gains on realized invest- ments are normally distributed within 3–5 days of an exit. For further information on accounting policies for financial instruments, see Note 2 “Financial instruments” . Note 2 cont. EQT Annual and Sustainability Report 2023 / Page 61Notes Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Board of directors’ report 52 Consolidated financial statements with notes 56 Parent company financial statements with notes 91 Proposal for the distribution of net income 100 Signatures of the board of directors and the CEO 101 Managing risks 102 Auditor’s report 109 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 63 ===== Cost of obtaining a contract The EQT AB Group, on a selective basis, makes use of placement agents or other local representatives/agents in certain jurisdictions, where its own personnel is not authorized to market the funds. The fee is capi- talized as a non-current assets representing cost of obtaining contract. The cost of obtaining the contracts is expected to be recovered over the fund commitment period. The benefit of the cost is primarily considered to be attributable to the period when the fund investments are carried out. Therefore, the useful life of the asset is the commitment period which is expected to be between three to six years. The asset is amortized on a straight-line basis. FINANCIAL INCOME AND FINANCIAL EXPENSES Financial income comprises primarily translation gains. Financial income also comprises interest on bank balances. Financial expense comprises translation losses and interest on interest-bearing liabilities and finance lease liabilities. Other financial income and expenses are insignificant. FINANCIAL INSTRUMENTS The EQT AB Group’s financial assets consist of financial investments, accounts receivable and other receivables and cash and cash equivalents. Financial liabilities comprise accounts payable, short and long-term interest-bearing liabilities and other financial liabilities. Cash and cash equivalents consist of on-demand deposits with credit institutions. Recognition and initial measurement Accounts receivable are initially recognized when issued. All other financial assets and financial liabilities are initially recognized when the EQT AB Group becomes a party to the contractual provisions of the instrument. Financial assets (other than accounts receivable) and financial liabil- ities are initially measured at fair value plus, for assets or liabilities not sub sequently measured at fair value through the income statement, transaction costs that are directly attributable to their acquisition or issue. Accounts receivable are initially measured at the transaction price. Classification and subsequent measurement of financial assets and financial liabilities Financial assets A financial asset is initially classified into one of three measurement categories. The classification depends on how the asset is managed (business model) and the characteristics of the asset’s contractual cash flows. The measurement categories for financial assets are as follows: • Fair value through profit or loss (FVPL) • Fair value through other comprehensive income (FVOCI) • Amortized cost (AC) Financial assets are measured at amortized cost if both of the f ollowing conditions are met: • The financial asset is held within a business model whose objective is to realize the cash flows from the financial assets by holding the financial assets and collecting its contractual cash flows over the life of the assets and • The contractual terms of the financial asset give rise to cash flows that are solely payments of principal and interest on the principal amount outstanding. Financial assets measured at amortized cost include accounts receivable, other long-term as well as short-term receivables and cash and cash equivalents. Financial assets are measured at FVOCI if both of the following conditions are met: • The financial asset is held within a business model whose objective is to realize the cash flows from the financial assets both by collecting the contractual cash flows and selling financial assets and • The contractual terms of the financial asset give rise to cash flows that are solely payments of principal and interest on the principal amount outstanding. The EQT AB Group does currently not have any financial assets measured at FVOCI. A financial asset shall be measured at FVPL unless it is measured at amortized cost or at FVOCI. Financial assets measured at FVPL currently include Financial investments. Financial liabilities Financial liabilities are either measured at amortized cost or at FVPL. All of the EQT AB Group’s financial liabilities are measured at amortized cost using the effective interest rate method. Impairment of financial assets A loss allowance is recognized to reflect the expected credit losses on financial assets not recognized at FVPL. For accounts receivable and contract assets, the loss allowance is measured at an amount equal to the expected losses under the entire lifetime of the accounts receivable and the contract assets. For other receivables and bank balances the loss allowance is measured at an amount equal to the 12 month expected credit losses, as long as there has been no significant increase in credit risk since initial recognition. The 12 month expected credit losses are the portion of the expected credit losses that result from default events that are possible within 12 months after the reporting date or a shorter period if the expected life of the instrument is less than 12 months. If there is a significant increase in credit risk, a loss reserve is instead recognized to reflect the expected credit losses under the entire lifetime of the asset. Credit losses are measured as the present value of all cash shortfalls, i.e. the difference between the cash flows due to the entity in accordance with the contract and the cash flows that the EQT AB Group expects to receive. Expected credit losses are discounted using the effective interest rate of the asset. The loss allowance is deducted from the gross carrying amount of the assets in the balance sheet. Impairment of financial assets measured at amortized cost are reversed if the expected losses decrease. Financial guarantee contracts Financial guarantee contracts are contracts that require the issuer to make specified payments to reimburse the holder for a loss that it incurs because a specified debtor fails to make payment when it is due in accordance with the original or modified terms of a debt instrument. Financial guarantee contracts are initially measured at fair value and subsequently at the higher of i) the amount initially recognized less, when appropriate, the cumulative amount of income recognized in accor- dance with the principles of IFRS 15 Revenue from Contracts with Cus- tomers, and ii) the amount of the expected credit loss allowance deter- mined in accordance with IFRS 9 Financial Instruments. Fair value measurement Fair value is the price that would be received on sale of an asset or paid to transfer a liability in an orderly transaction between market partici- pants at the measurement date in the principal market or, in its absence, the most advantageous market to which EQT AB Group has access at that date. When appropriate, the EQT AB Group measures the fair value of an instrument using the quoted price in an active market for that instrument. A market is regarded as active if transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. If there is no quoted price in an active market, the EQT AB Group uses valuation techniques that maximize the use of relevant observable inputs and minimize the use of unobservable inputs. The chosen valuation Note 2 cont. EQT Annual and Sustainability Report 2023 / Page 62Notes Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Board of directors’ report 52 Consolidated financial statements with notes 56 Parent company financial statements with notes 91 Proposal for the distribution of net income 100 Signatures of the board of directors and the CEO 101 Managing risks 102 Auditor’s report 109 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 64 ===== technique incorporates all of the factors that market participants would take into account in pricing a transaction. INTANGIBLE ASSETS Goodwill As from the acquisition date, goodwill acquired in a business combi- nation is allocated to each cash-generating unit (CGU) or group of cash-generating units of the EQT AB Group expected to benefit from the synergies of the combination. Goodwill is measured at cost less accumu- lated impairment losses. Impairment test is undertaken annually in the fourth quarter or more frequently if events or changes in circumstances indicate potential impairment loss, see below. Expenditures for internally generated goodwill are recognized in the income statement as expenses when incurred. Other intangible assets Other intangible assets constitutes acquired customer contracts, investor relationships, licenses and trademarks and are accounted for at cost less accumulated amortization and any accumulated impairment losses. IMPAIRMENT At each reporting date, the EQT AB Group reviews its assets to determine whether there is any indication of impairment. Impairment of Property, plant and equipment and Intangible assets Impairment tests are performed as soon as any indications of impairment losses arise for individual assets or cash-generating units. Goodwill , the recoverable amount is estimated at least annually, irrespective of any indication of impairment or not. If an asset does not generate largely independent cash inflows and its fair value less cost of disposal cannot be used, the assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or cash-generating units. In assessing value in use, the estimated future cash flows after tax are discounted to their present value using an after tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or cash-generating unit. An impairment loss is recognized if the carrying amount of an asset or cash-generating unit exceeds its recoverable amount. Impairment losses are recognized in the income statement. Any impairment loss to be recognized for a cash-generating unit is allocated primarily to goodwill and secondly pro rata to other assets of the cash- generating unit. EQUITY Purchase of treasury shares Acquisitions of treasury shares are recognized as a reduction of equity. Proceeds from the sale of treasury shares are recognized as an increase in equity. Any transaction costs are recognized directly in equity. EMPLOYEE BENEFITS Short-term employee benefits Short-term employee benefits are estimated and are expensed as the related service is provided. A liability is recognized for the amount expected to be paid if the EQT AB Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably. Defined contribution plans Defined contribution plans comprise the pension-plans in which the EQT AB Group’s obligation is limited to the fees the EQT AB Group undertakes to pay. In that case, the size of the employee’s pension depends on the fees paid by the EQT AB Group to the plan or to an insurance company and the return on capital invested. Consequently, it is the employee who carries the actuarial risk (the compensation will be lower than expected) and the investment risk (that the invested assets will be insufficient to provide the expected benefits). Obligations for contributions to defined contribution plans are expensed as the related service is provided. Defined benefit plans Defined benefit plans are plans for post-employment benefits other than defined contribution plans, where the employer is obligated to pay future pensions to the retiree on a certain benefit level. Termination benefits Termination benefits are expensed at the earliest of: • When the EQT AB Group can no longer withdraw the offer of those benefits and • When the EQT AB Group recognizes costs for a restructuring program including the terminations. Benefits expected to be settled within 12 months of the reporting date are recognized as current liabilities. Benefits not expected to be settled within 12 months of the reporting date are recognized at present value as long-term liabilities. Share-based payments The share incentive program with separate annual grants during five years is recognized as an equity- settled share-based payment. In each tranche, participants may earn a bonus during an initial performance year, for the sole purpose of investing in shares in EQT AB following said performance year. The shares cannot be sold during the following three-year period. No vesting conditions apply during this period. The expense is for each tranche recognized over the initial performance year, with a corresponding amount recognized directly in equity. Expense for social security charges is recognized in an equivalent manner, with a corresponding entry as a liability. During 2023, in addition to the share program, an employee stock option plan was implemented with an annual grant for the years 2023– 2027, the options are granted free of charge, where the first perfor- mance year is 2023 with a subsequent three-year holding period. Like the share program, it is classified as an equity settled plan and an expense is recognised for the performance period of one year except for new hires and future leaders employed during the year, who have a service requirement also during the holding period. Note 2 cont. EQT Annual and Sustainability Report 2023 / Page 63Notes Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Board of directors’ report 52 Consolidated financial statements with notes 56 Parent company financial statements with notes 91 Proposal for the distribution of net income 100 Signatures of the board of directors and the CEO 101 Managing risks 102 Auditor’s report 109 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 65 ===== Note 3 Use of judgments and estimates The management of the EQT AB Group makes estimates and assumptions concerning the future as well as exercises judgment in applying the accounting principles when preparing financial statements. Estimates and judgments are continually evaluated and the assessments are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The resulting accounting estimates will, by definition, seldom equal the related actual results. The sources of uncertainty in the assessments given below refer to those that entail a risk that the value of assets or liabilities may have to be significantly adjusted during the following year, together with significant judgments in the application of the EQT AB Group’s accounting policies. IMPAIRMENT TEST OF GOODWILL When calculating the recoverable amount of cash-generating units, several assumptions about future circumstances and estimates of parameters have been made. Changes to these assumptions and estimates could affect the carrying amount of goodwill (see Note 11). A declining growth rate and reduced operating margin would result in a lower recoverable amount. The reverse applies if the calculation of the recoverable amount is based on a higher growth rate or margin. Were future cash flows to be discounted at a higher rate of interest, the recov- erable amount would be lower. Conversely, the recoverable amount would be higher with a lower discount rate. The impairment test for the period did not give rise to any impairment in respect of goodwill. CARRIED INTEREST Carried interest is a share of profits that the EQT AB Group receives through its holdings in the Special Limited Partners as variable consider- ation fully dependent on the performance of the relevant fund and the development of the fund’s underlying investments. The EQT AB Group is entitled to an agreed share of accumulated profits exceeding agreed thresholds (“hurdles”) over the expected life of each individual fund. Estimates are needed to assess the risk that achieved earnings will be reversed before realization, due to risk of lower future overall perfor- mance of the fund, considering the remaining exposure of unrealized investments and time until winding up of the fund. Management of the EQT AB Group needs to make assumptions and use estimates when determining whether or not revenue should be rec- ognized including the timing and measurement of revenue from carried interest. Revenue should only be recognized to the extent it is highly probable that the revenue would not result in significant reversal of any accumulated revenue recognized on final settlement. The reversal risk is managed through adjustments of current fair values of unrealized investments through discounts of normally 30 to 50 percent. The discount applied is based on the assessed risk level for each fund. The discount applied is reviewed semi-annually. The carrying amount of the net contract asset related to carried interest at 31 December 2023 was EUR 896.1m (EUR 915.0m), see Note 5. INVESTMENT INCOME Investment income consist primarily of changes in fair value of the EQT AB Group’s underlying fund investments. Determining the fair value for the investments require subjective assessment with varying degrees of judgement regarding e.g. liquidity, pricing assumptions, the current eco- nomic and competitive environment and the risks affecting the specific financial asset. The valuation is determined based on management’s judgment about the assumptions to reflect what market participants would use in pricing the asset. The valuation techniques applied by the EQT AB Group for valuing the financial investments are applied consis- tently, and only change if deemed necessary to reflect a representative fair value. The carrying amount of financial investments at 31 December 2023 was EUR 730.7m (EUR 668.4m), see Note 18. NON-CONSOLIDATED SPECIAL ENTITIES According to IFRS 10 Consolidation, an investor that has control over only specified and ring-fenced assets and liabilities within a legal entity, should, for consolidation purposes, treat portions of the entity as a deemed separate entity, a so called “silo” . The silo concept means that the EQT AB Group only consolidates the silo and not the whole entity. The specified assets of one silo is not available to meet obligations of other parts of the legal entity. Each silo’s assets are the only source of payment for specified obligations of the silo. Silos that are not directly or indirectly controlled by EQT AB are not considered to be subsidiaries and are accordingly not consolidated. EQT AB is an indirect investor in each EQT fund, typically through separate entities, one separate entity for each EQT fund. These indirectly owned entities have different shareholders with different economic rights and responsibilities. In general, these entities have different share classes, one share class tracking carried interest related movements and one share class tracking management fee related movements. The man- agement fee share class is 100 percent held by the EQT AB Group and consolidated in full. The carried interest related share class tracks invest- ments and proceeds from the EQT AB Group’s investments in the funds, via its holding in the Special Limited Partners, see Note 2 “Sub sidiaries and control” . Note 4 Operating segments The CEO of EQT AB Group has been identified as the chief operating decision maker. EQT AB Group is divided into operating segments based on how the CEO reviews and evaluates the operation. The operating seg- ments correspond to the internal reporting used to assess performance and to allocate resources. EQT’s operations are divided into two business segments: Private Capital and Real Assets. The operations of both business segments consist of providing investment management services in the private investment markets. The investment management services comprise i.a. structuring and investment advice, investment management and monitoring as well as reporting and administrative services. The business segment Private Capital consists of the strategies EQT Ventures, EQT Life Sciences, EQT Healthcare Growth, EQT Growth, EQT Private Equity, EQT Private Capital Asia, EQT Future and EQT Public Value. The business segment Real Assets consists of the strategies EQT Value-Add Infrastructure, EQT Active Core Infrastructure and EQT Exeter. The CEO assesses the operating segments based on the line items pre- sented below, primarily on revenue and Gross segment results. Segment revenues has been adjusted by removing the fair value adjustment of acquired contractual rights to carried interest. Accordingly, the acquired contractual right to carried interest reflects the sellers carrying amount adjusted to EQT AB Group’s accounting policies, i.e. the accrued income excluding the fair value uplift made at the acquisition date in the consoli- dated accounts of EQT AB Group. The difference between the carrying amount and fair value of accrued carried interest is primarily due to the constraint requirements of IFRS 15 of variable performance-based income reflected through the application of the Group’s prudent revenue recognition model for carried interest. Expenses directly incurred by each respective business segment are included in Gross segment result, whereas items reported under Central have not been allocated to any business segment. Central consists of EQT AB Group Management, Client Relations and Capital Raising, Fund Operations, EQT Digital and other specialist teams such as HR and Group Finance. Reconciliations consist of revenue adjustments (see above) as well as items affecting comparability. Items affecting comparability in 2022 relate to an adjustment of the part of the considerations subject to lock-up and transaction and integration costs as well as amortization of identified surplus values in relation to performed acquisitions. The part of the considerations subject to lock-up is treated as a personnel expense from an accounting perspective and recorded in the income statement over the lock-up period. Items affecting comparability in 2023 relate to an adjustment of the part of the considerations subject to lock-up, EQT Annual and Sustainability Report 2023 / Page 64Notes Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Board of directors’ report 52 Consolidated financial statements with notes 56 Parent company financial statements with notes 91 Proposal for the distribution of net income 100 Signatures of the board of directors and the CEO 101 Managing risks 102 Auditor’s report 109 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 66 ===== integration cost as well as amortization of identified surplus values in relation to performed acquisitions and the non-cash portion of equity incentive program cost. The part of the considerations subject to lock-up is treated as a personnel expense from an accounting per- spective and recorded in the income statement over the lock up period. GEOGRAPHICAL AREAS EQT AB Group’s business of providing fund management services cannot reliably and fairly be reviewed by geographical areas. The EQT AB Group’s fund investors may often be located in multiple jurisdic- tions and the funds through which the fund investors invest are located in a few centers where fund management services are provided, principally Luxembourg. Note 4 cont. January–December 2023 EUR m Private Capital Real Assets Central Total adjusted Items affecting comparability Revenue adjustment IFRS reported Total revenues 1,255.9 836.7 38.2 2,130.8 –46.4 2,084.4 Personnel expenses –658.8 –46.5 –705.3 Acquisition related personnel expenses – –436.4 –436.4 Other operating expenses –245.6 –4.0 –249.7 Total operating expenses –296.9 –226.3 –381.2 –904.4 –486.9 – –1,391.4 Gross segment result1) / EBITDA2) 958.9 610.4 –342.9 1,226.4 –486.9 –46.4 693.1 Margin, % 76.4% 73.0% 57.6% 33.2% Depreciation and amortization –54.1 –54.1 Amortization of acquisition related intangible assets – –364.1 –364.1 EBIT 1,172.3 –851.1 –46.4 274.9 Net financial income and expense –35.5 –35.5 Income taxes –117.4 17.3 –100.2 Net income for the period from continuing operations 1,019.4 –833.8 –46.4 139.2 Net income for the period from discontinued operations – –9.3 –9.3 Net income 1,019.4 –843.1 –46.4 129.9 1) Gross segment result relate to the segments Private Capital and Real Assets. 2) EBITDA relates to Central, Total adjusted and IFRS reported. January–December 2022 EUR m Private Capital Real Assets Central Total adjusted Items affecting comparability Revenue adjustment IFRS reported Total revenues 747.1 779.1 10.3 1,536.5 –39.2 1,497.3 Personnel expenses –491.5 –10.0 –501.5 Acquisition related personnel expenses – –200.8 –200.8 Other operating expenses –215.5 –73.5 –288.9 Total operating expenses –218.5 –207.5 –281.1 –707.0 –284.2 – –991.2 Gross segment result1) / EBITDA2) 528.6 571.7 –270.8 829.5 –284.2 –39.2 506.1 Margin, % 70.8% 73.4% 54.0% 33.8% Depreciation and amortization –43.8 –43.8 Amortization of acquisition related intangible assets – –153.6 –153.6 EBIT 785.6 –437.7 –39.2 308.7 Net financial income and expense –45.6 –45.6 Income taxes –85.8 –1.1 –86.9 Net income for the period from continuing operations 654.2 –438.8 –39.2 176.2 Net income for the period from discontinued operations – 0.1 0.1 Net income 654.2 –438.7 –39.2 176.3 1) Gross segment result relate to the segments Private Capital and Real Assets. 2) EBITDA relates to Central, Total adjusted and IFRS reported. EQT Annual and Sustainability Report 2023 / Page 65Notes Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Board of directors’ report 52 Consolidated financial statements with notes 56 Parent company financial statements with notes 91 Proposal for the distribution of net income 100 Signatures of the board of directors and the CEO 101 Managing risks 102 Auditor’s report 109 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 67 ===== Note 5 Revenue MANAGEMENT FEES The EQT AB Group earns management fees for fund management ser- vices, typically based on agreements over the life of each fund, generally with a term of 10–12 years. Management fee is a recurring revenue and the fees are predominately based on the committed capital during the commitment period and the cost of invested capital during the divestment period. The management fee is payable half-yearly in advance and adjusted in the following half-year period should any triggering events occur. Examples of triggering events include launch of a successor fund, com- mencement of the divestment period/end of commitment period and multiple closings in funds in fundraising. For further information of the EQT AB Group’s management fee, see Note 2 “Management fees” . CARRIED INTEREST Carried interest is a share of profits that the EQT AB Group receives through its holdings in the Special Limited Partners as variable consider- ation fully dependent on the performance of the relevant fund. Carried interest is either payable at the end of the life of the fund or paid as installments at the time of realized investments within each fund, or a combination thereof. For further information of the EQT AB Group’s carried interest, see Note 2 “Carried interest” . INVESTMENT INCOME Investment income consists primarily of changes in fair value of the EQT AB Group’s underlying fund investments. Changes in fair value are rec- ognized in the income statement. Capital gains on realized investments are normally distributed within 3–5 days of an exit. CONTRACT ASSETS AND CONTRACT LIABILITIES Contract assets are reported within Accrued but yet not paid carried interest and Other prepaid expenses and accrued income. Contract lia- bilities are reported within Accrued expenses and prepaid income, see Note 17. Deferred income and accrued income are reported as contract assets and contract liabilities, respectively. The EQT AB Group presents contract assets and liabilities relating to carried interest and manage ment fee sep- arately. The contract asset and liability regarding management fee arise from timing differences between the time of generating the revenues and payment. The timing difference is mainly related to the beginning of the life of a fund, before the final close of a fund, or after the end of the commitment period of the fund. Specifications of changes in contract assets and contract liabilities related to carried interest 2023 2022 EUR m Contract assets Contract liabilities Contract assets Contract liabilities Opening balance 915.0 – 472.9 – Revenue recognized during the period 95.8 162.9 Realization of carried interest –114.7 –190.3 Acquisition of entitlement – 512.9 Translation differences 0.0 –43.4 Closing balance 896.1 – 915.0 – Specifications of changes in contract assets and contract liabilities related to management fee 2023 2022 EUR m Contract assets Contract liabilities Contract assets Contract liabilities Opening balance 41.0 –23.6 33.6 –9.6 Transfers from contract assets recognized at the beginning of the period to receivables –41.0 –33.6 Revenue recognized that was included in the contract liability balance at the beginning of the period 23.6 9.6 Revenue recognized during the period not yet invoiced/ not yet chargeable 126.6 41.0 Payment in advance during the period for performance obligations not yet performed –16.9 –23.6 Closing balance 126.6 –16.9 41.0 –23.6 Cost of obtaining a contract EUR m 2023 2022 Opening balance 15.2 15.1 Additions 11.0 7.2 Depreciation -8.3 –7.2 Total changes net 2.7 0.0 Closing balance 17.8 15.2 LONG-TERM CONTRACTS Management fee is normally calculated on the underlying EQT funds’ committed capital during the commitment period, between 3–6 years, depending on fund duration. After the commitment period has ended, the investment cost is used as basis for calculating management fee. During this period, management fee is based on the respective fund’s remaining invested capital measured at cost. In addition to management fees, the EQT AB Group may be entitled to carried interest via its holdings in Special Limited Partners as a variable consideration based on the per- formance of the fund and its underlying investments. The life of a fund is uncertain, and is depending on the progress of the fund management work, market development and both investment and divestment oppor- tunities arising. The life of a fund is normally 10–12 years. Carried interest is dependent on the performance of the investments, including volatility in the market, resulting in a large number of possible outcomes. Timing and magnitude of future revenue is therefore con- sidered uncertain and cannot be reliably estimated. Accordingly, no such disclosures are provided. Disclosures of commitments are presented in Note 18. CLIENTS EQT AB Group has a broad client base where no single client comprises more than 10 percent of revenue. Note 6 Other operating expenses EUR m 2023 2022 External services and consultants1) 107.1 165.7 IT expenses and Office expenses 53.2 42.7 Administrative expenses1) 89.4 80.5 Total other operating expenses 249.7 288.9 1) Summary of items affecting comparability In 2023 items affecting comparability of EUR 3.3m (External services and consultants) and EUR 0.5m (Administrative expenses) relates to integration costs as a result of per- formed acquisitions. In 2022 items affecting comparability of EUR 61.2m (External services and consultants) and EUR 11.8m (Administrative expenses) relates to transaction and integration costs as a result of performed acquisitions. EQT Annual and Sustainability Report 2023 / Page 66Notes Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Board of directors’ report 52 Consolidated financial statements with notes 56 Parent company financial statements with notes 91 Proposal for the distribution of net income 100 Signatures of the board of directors and the CEO 101 Managing risks 102 Auditor’s report 109 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 68 ===== Note 7 Employees, senior executives and board of directors GUIDELINES FOR REMUNERATION TO THE CEO AND OTHER SENIOR EXECUTIVES DURING 2023 At the annual shareholders’ meeting held on 30 May 2023, it was resolved to adopt the following guidelines for remuneration and other terms of employment for the CEO and other senior executives. Guidelines for executive remuneration The CEO and other members of the Executive Committee (executive management) fall within the provisions of these guidelines. To the extent a Board member conducts work for EQT, in addition to the board work, consulting fees and other compensation for such work may be paid. The guidelines are forward-looking, i.e. they are appli- cable to remuneration agreed, and amendments to remuneration already agreed, after adoption of the guidelines by the Annual Share- holders’ Meeting 2023. These guidelines do not apply to any remuner- ation separately decided or approved by the shareholders’ meeting. EQT has a clear remuneration philosophy (including for variable cash) applicable across the whole group which also governs the remuneration to the Executive Committee and links compensation to EQT AB Group’s business strategy, sustainability, long-term interests and long-term value growth for its shareholders. Most important is to incentivize fund performance and ensure aligned interest with our limited partners in the EQT funds, EQT AB’s shareholders as well as EQT’s long term approach. EQT is a perfor- mance driven organization focused on long-term value creation in line with our culture. Team performance and individual performance are important – therefore we reward both. Performance is key to our success and we award higher performance with higher compen- sation. To be able to achieve the business goals, EQT needs to be able to attract and retain world class talent suitable for each role. To achieve this, EQT applies market competitive total compensation. EQT compensates locally based on geography and in line with local practice and regulations, taking into account, to the extent possible, the overall purpose of these guidelines. The principles in these guide- lines enable EQT AB to offer the Executive Committee a competitive total remuneration. For more information regarding the EQT AB Group’s business strategy, please see EQT AB’s webpage, www.eqtgroup.com. Share-related incentive programs The EQT Share program was resolved by the shareholders’ meeting and is therefore excluded from these guidelines. The EQT Share program included members of the Executive Committee in EQT AB. The performance criteria used to assess the outcome of the EQT Share program are distinctly linked to the EQT AB Group’s business strategy, sustainability, long-term interests and value growth for its shareholders. These performance criteria comprise financial targets, inter alia, revenue growth and EBITDA, and in addition thereto the general competitiveness as well as the individual meeting or exceeding EQT AB’s highly set expectations on adding value to the EQT platform. The participants will invest a variable amount (financed by EQT) in C shares after a performance year, whereupon a three-year (approximately) holding period follows. For more infor- mation regarding the EQT Share program, including the criteria which the outcome depends on, please see EQT AB’s remuneration report, available on eqtgroup.com/shareholders/. The Board has proposed to the Annual Shareholders’ Meeting 2023 to adopt a new EQT Share program and an incentive program con- sisting of employee stock options (the “EQT Option Program”).1) These incentive programs will be resolved upon by the Annual Shareholders’ Meeting 2023 and are therefore excluded from these guidelines. The new EQT Share program will be similar to the current EQT Share program. The EQT Option Program will consist of five annual grants of employee stock options. The employee stock options will be granted free of charge to the participants. The exercise period will be approximately three years after the date of grant. Each employee stock option entitles the participant to acquire one ordinary share in EQT at a price corresponding to the price per ordinary share as of the date of grant. More information is included in the proposal presented in the notice to the Annual Shareholders’ Meeting 2023. Type of remuneration, etc. The remuneration shall be on market terms and may consist of the fol- lowing components: fixed remuneration, variable cash remuneration, pension benefits and other benefits. The shareholders’ meeting may – irrespective of these guidelines – resolve on, among other things, share-related or share price-related remuneration. Fixed remuneration The fixed remuneration, i.e. base salary, should be competitive and reflect responsibility and performance. Variable remuneration The satisfaction of criteria for awarding variable cash remuneration, within the EQT Bonus program, shall be measured over a period of one year. The variable cash remuneration may amount to no more than 200 percent of the annual base salary. The EQT Bonus program consists of a performance assessment of the business as well as an individual performance assessment. Important business performance factors determining the size of the bonus is the success of the underlying business measured by business performance in the funds (investments and exits as well as portfolio and fund performance), business profitability, fundraising, sustain- ability as well as organizational development. The individual perfor- mance is assessed versus agreed targets as well as meeting, exceeding or not meeting high set individual performance expecta- tions for the individual in the current role. To which extent the criteria for awarding variable cash remuner- ation has been satisfied shall be evaluated/determined when the measurement period has ended. The remuneration committee shall be responsible for the evaluation so far as it concerns variable remu- neration to the CEO. For variable cash remuneration to other members of the Executive Committee, the CEO shall be responsible for the eval- uation. For financial objectives, the evaluation shall be based on the latest financial information made public by EQT AB. The Executive Committee partly consists of owners of EQT AB. Owners that owned above 1.5 percent of the shares of EQT AB at IPO or at relevant acquisition may not be comprised by the EQT Bonus program, i.e. variable cash remuneration, nor any of the relevant share-related incentive programs. Therefore, total remuneration for part of the Executive Committee consists of base salary, pension benefits and other benefits. Pension All members of the Executive Committee shall be covered by defined contribution pension plans, for which pension premiums shall be based on the members’ base salary and paid by the company during the period of employment. For current members of the Executive Com- mittee pension contributions shall be based on base salary and follow contribution levels in accordance with local market practice, except for the application of a cap. For Sweden, this means that it shall be com- parable to the old BTP-plan with a contribution cap for base salary exceeding 40 Income base amounts. The pension premiums shall amount to no more than 25 percent of the annual base salary. Other benefits Other benefits, such as insurances (health, life, travel), sports contri- butions or occupational health services, should be payable to the extent this is considered to be in line with market conditions in the 1) The Annual Shareholders’ Meeting 2023 adopted the EQT Share and EQT Option Programs. The guidelines for executive remuneration has been updated accordingly and the updated proposal for the Annual Shareholders’ Meeting 2024 can be found in the Board of directors’ report. EQT Annual and Sustainability Report 2022 / Page 67Notes Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Board of directors’ report 52 Consolidated financial statements with notes 56 Parent company financial statements with notes 91 Proposal for the distribution of net income 100 Signatures of the board of directors and the CEO 101 Managing risks 102 Auditor’s report 109 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 69 ===== market concerned. Premiums and other costs relating to such benefits may amount to no more than 25 percent of the annual base salary. Recommendation to invest in EQT AB shares The Board recommends each Executive Committee member (who do not already have such holding) to acquire, over a three-year period, EQT AB shares or similar instruments corresponding to at least one year’s base salary, before taxes and excluding other remuneration. Termination of employment and terms for severance pay for the CEO A twelve month notice period will apply if notice is given by the CEO or EQT AB. The CEO’s employment terms include a non-competition clause. If used, this would entitle the employee to an additional com- pensation corresponding to a maximum of twelve months’ salary, however, reduced by any remuneration paid by a new employer. Termination of employment and terms for severance pay for senior executives In the event of notice being given by the EQT AB Group, a notice period of nine months applies, while in the event of notice being given by the senior executive a period of notice of six months applies. The senior executives’ employment terms also include a non-competition clause. If used, this entitles the employee to an additional compen- sation corresponding to a maximum of nine months’ salary, however, reduced by any remuneration paid by a new employer. Base salary during the notice period and severance pay may not together exceed an amount corresponding to the base salary for eighteen months. When termination is made by the executive, the notice period may not exceed six months, without any right to severance pay. Salary and employment conditions for employees taken into account during preparations of these guidelines In the preparation of the Board’s proposal for these remuneration guidelines, salary and employment conditions for employees of the EQT AB Group have been taken into account by including information on the employees’ total income, the components of the remuneration and increase and growth rate over time, in the remuneration commit- tee’s and the Board’s basis of decision when evaluating whether the guidelines and the limitations set out herein are reasonable. The decision-making process to determine, review and implement the guideline The Board has established a remuneration committee. The commit- tee’s tasks include preparing the Board’s decision to propose guide- lines for executive remuneration. The Board shall prepare a proposal for new guidelines at least every fourth year and submit it to the shareholders’ meeting. The guidelines shall be in force until new guidelines are adopted by the shareholders’ meeting. The remuner- ation committee shall also monitor and evaluate programs for variable remuneration for the Executive Committee, the application of the guidelines for executive remuneration as well as the current remuneration structures and compensation levels in the EQT AB Group. The current members of the remuneration committee are independent of EQT AB and its Executive Committee. The CEO and other members of the Executive Committee do not participate in the Board’s processing of and resolutions regarding remuneration- related matters in so far as they are affected by such matters. Deviation from the guidelines The Board may temporarily resolve to deviate from the guidelines, in whole or in part, if in a specific case there may be special cause for the deviation and a deviation should be necessary to serve the EQT AB Group’s business strategy, sustainability, long-term interests and long-term value growth for its shareholders, or to ensure the EQT AB Group’s financial viability. As set out above, the remuneration com- mittee’s tasks include preparing the Board’s resolutions in remunera- tion-related matters. This includes any resolutions to deviate from the guidelines. Description of material changes to the guidelines and how the views of shareholders’ have been taken into consideration Compared to the guidelines previously adopted, the Board has included a recommendation to Executive Committee members to acquire shares or similar instruments in EQT. The recommendation has been made to further align the interests of the Executive Committee members with the shareholders’ interests. PROPOSED GUIDELINES FOR EXECUTIVE REMUNERATION (REMUNERATION POLICY) For future remuneration policy to be approved by the annual share- holders’ meeting 2024, see the proposal in the Board of directors’ report. Salary and remunerations to employees EUR m 2023 2022 Salaries, bonuses and remunerations 1,021.8 603.4 Pension expenses, defined contribution plans 19.5 16.5 Social security expenses 53.6 44.2 1,094.9 664.0 Other personnel related expenses 46,8 38.2 Personnel expenses 1) 1,141.7 702.3 1) Whereof EUR 436.4m (EUR 200.8m) relates to personnel expenses as a result of performed acquisitions, see Note 26. Average number of employees 2023 whereof women whereof men 2022 whereof women whereof men USA 388 38% 62% 333 37% 63% Sweden 360 46% 54% 323 46% 54% UK 208 52% 48% 160 52% 48% Luxembourg 144 50% 50% 107 48% 52% China, Hong Kong 108 54% 46% 43 55% 45% Germany 102 41% 59% 100 40% 60% Singapore 72 43% 57% 40 41% 59% The Netherlands 45 37% 63% 47 42% 58% Japan 41 34% 66% 20 40% 60% Australia 37 27% 73% 24 36% 64% Spain 30 34% 66% 23 31% 69% France 29 37% 63% 26 42% 58% China, Shanghai 28 48% 52% 8 53% 47% Switzerland 26 44% 56% 21 52% 48% Denmark 21 64% 36% 23 57% 43% South Korea 21 39% 61% 15 36% 64% India 21 24% 76% 4 21% 79% Italy 18 47% 53% 16 42% 58% Norway 10 39% 61% 10 32% 68% Finland 7 27% 73% 7 29% 71% Poland 4 25% 75% 3 14% 86% Ireland 3 33% 67% 1 0% 100% Mexico 2 0% 100% 1 0% 100% Brazil 1 0% 100% 1 0% 100% Austria 1 30% 70% 1 100% 0% Belgium 1 0% 100% 1 0% 100% Total 1,727 44% 56% 1,359 43% 57% Note 7 cont. EQT Annual and Sustainability Report 2022 / Page 68Notes Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Board of directors’ report 52 Consolidated financial statements with notes 56 Parent company financial statements with notes 91 Proposal for the distribution of net income 100 Signatures of the board of directors and the CEO 101 Managing risks 102 Auditor’s report 109 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 70 ===== Board and senior executives split by gender Proportion of women 2023 2022 Board (parent company) 29% 38% Senior executives 33% 27% The EQT AB Group’s executive committee consisted of twelve persons in 2023, Suzanne Donohoe joined in January. In January 2024 Masoud Homayoun joined. The executive committee consisted of eleven persons in 2022. The senior executives are employed by different companies in the EQT AB Group. REMUNERATION TO THE MEMBERS OF THE BOARD OF DIRECTORS Fees and other remuneration to the members of the Board, including the chairperson, are resolved by the annual shareholders’ meeting. At the annual shareholders’ meeting held on 30 May 2023, it was resolved that EUR 295,800 shall be paid to the chairperson of the Board and EUR 134,640 to each of the other board members who are not employed by the company. In addition, EUR 40,000 will be paid to the chairpersons of the audit committee, remuneration committee and sustainability committee, respectively, and remuneration to each of the other members of the relevant committees should be EUR 20,000 each. The board members are not entitled to any benefits following termination of their assignments as board members. The meeting further resolved that the compensation to the Board shall be paid in shares in EQT AB. Salaries and other remunerations and pension expenses for the board of directors and senior executives EUR m 2023 2022 Salaries, bonuses and remunerations 12.6 8.7 (whereof bonuses) 5.6 2.0 Equity incentive programs 10.3 1.7 Pension expenses 0.5 0.4 23.4 10.9 Note 7 cont. EQT Annual and Sustainability Report 2022 / Page 69Notes Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Board of directors’ report 52 Consolidated financial statements with notes 56 Parent company financial statements with notes 91 Proposal for the distribution of net income 100 Signatures of the board of directors and the CEO 101 Managing risks 102 Auditor’s report 109 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 71 ===== Salaries and other remunerations to senior executives and board of directors 2023 EUR m Base salary, board fee Bonus Pension expenses Other benefits Equity 1) incentive programs Total Chairperson of the board (Conni Jonsson) Remuneration from parent company 0.3 – – – – 0.3 Remuneration from subsidiaries 0.1 – 0.0 0.0 – 0.1 Board member (Marcus Wallenberg) Remuneration from parent company 0.2 – – – – 0.2 Remuneration from subsidiaries – – – – – – Board member (Margo Cook) Remuneration from parent company 0.2 – – – – 0.2 Remuneration from subsidiaries – – – – – – Board member (Johan Forssell) Remuneration from parent company 0.2 – – – – 0.2 Remuneration from subsidiaries – – – – – – Board member (Diony Lebot) Remuneration from parent company 0.2 – – – – 0.2 Remuneration from subsidiaries – – – – – – Board member (Nicola Kimm) Remuneration from parent company 0.1 – – – – 0.1 Remuneration from subsidiaries – – – – – – Note 7 cont. 2023 EUR m Base salary, board fee Bonus Pension expenses Other benefits Equity 1) incentive programs Total Board member (Gordon Orr)2) Remuneration from parent company 0.2 – – – – 0.2 Remuneration from subsidiaries – – – – – – Board member (Brooks Entwistle) Remuneration from parent company 0.2 – – – – 0.2 Remuneration from subsidiaries – – – – – – CEO (Christian Sinding) Remuneration from parent company 0.2 – – – – 0.2 Remuneration from subsidiaries 0.4 – 0.0 0.0 – 0.4 Other senior executives (11 persons) Remuneration from parent company 0.7 0.9 0.2 0.0 2.8 4.6 Remuneration from subsidiaries 4.1 4.7 0.2 0.1 7.6 16.6 Total 6.9 5.6 0.5 0.1 10.3 23.4 Remuneration from parent company 2.4 0.9 0.2 0.0 2.8 6.2 Remuneration from subsidiaries 4.5 4.7 0.3 0.1 7.6 17.2 1) The renumeration relates to amounts awarded in relation to the EQT Share Program and the EQT Option Program. Awarded amounts for 2023 will be settled using options implying that the full value of the renumeration is a non-cash cost for the Group. 2) Gordon Orr have during 2023 provided consultancy services to EQT in addition to his assignment as board member. Remuneration for such consultancy services are included in the column “Base salary, board fee” . For further information, see Note 23. EQT Annual and Sustainability Report 2022 / Page 70Notes Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Board of directors’ report 52 Consolidated financial statements with notes 56 Parent company financial statements with notes 91 Proposal for the distribution of net income 100 Signatures of the board of directors and the CEO 101 Managing risks 102 Auditor’s report 109 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 72 ===== 2022 EUR m Base salary, board fee Bonus Pension expenses Other benefits Equity incentive programs Total Chairperson of the board (Conni Jonsson) Remuneration from parent company 0.4 – – – – 0.4 Remuneration from subsidiaries 0.1 – 0.0 – – 0.1 Board member (Marcus Wallenberg) Remuneration from parent company 0.2 – – – – 0.2 Remuneration from subsidiaries – – – – – – Board member (Margo Cook) Remuneration from parent company 0.2 – – – – 0.2 Remuneration from subsidiaries – – – – – – Board member (Johan Forssell) Remuneration from parent company 0.2 – – – – 0.2 Remuneration from subsidiaries – – – – – – Board member (Diony Lebot) Remuneration from parent company 0.2 – – – – 0.2 Remuneration from subsidiaries – – – – – – Board member (Nicola Kimm) Remuneration from parent company 0.2 – – – – 0.2 Remuneration from subsidiaries – – – – – – Board member (Edith Cooper)1) Remuneration from parent company 0.1 – – – – 0.1 Remuneration from subsidiaries – – – – – – Board member (Gordon Orr)1) Remuneration from parent company 0.3 – – – – 0.3 Remuneration from subsidiaries – – – – – – Board member (Brooks Entwistle) Remuneration from parent company 0.1 – – – – 0.1 Remuneration from subsidiaries – – – – – – Note 7 cont. 2022 EUR m Base salary, board fee Bonus Pension expenses Other benefits Equity incentive programs Total CEO (Christian Sinding) Remuneration from parent company 0.4 – – – – 0.4 Remuneration from subsidiaries 0.1 – 0.0 0.0 – 0.2 Deputy CEO (Caspar Callerström)2) Remuneration from parent company 0.2 – 0.0 0.0 – 0.3 Remuneration from subsidiaries – – – – – – Other senior executives (10 persons) Remuneration from parent company 0.8 1.0 0.2 0.0 1.2 3.2 Remuneration from subsidiaries 3.2 1.0 0.1 0.0 0.5 4.9 Total 6.6 2.0 0.4 0.0 1.7 10.9 Remuneration from parent company 3.2 1.0 0.2 0.0 1.2 5.7 Remuneration from subsidiaries 3.4 1.0 0.2 0.0 0.5 5.2 1) Gordon Orr and Edith Cooper have during 2022 provided consultancy services to EQT in addition to their assignment as board members. Remuneration for such consultancy services are included in the column “Base salary, board fee” . For further information, see Note 23. 2) Deputy CEO until 11 October 2022. REMUNERATIONS TO SENIOR EXECUTIVES AND OTHER EMPLOYEES EQT Board and its remuneration committee resolves on remuneration in the form of equity-based incentive programs. The remuneration committee further resolves on the remuneration for the Exec- utive Committee. EQT AB Group has an internal Com- pensation Committee that establishes and approves remuneration in the form of levels of salary, bonus, pension and other benefits for employees in EQT. The total remuneration may consist of base salary, bonus, equity-based incentive programs, pension and other benefits. The bonus is related to annual achievement on both group wide and individual targets. Target achievement of bonus is determined in the beginning of the subsequent year. Most employees are part of the EQT Bonus program. Variable remuneration for CEO and senior executives CEO Christian Sinding has not been part of the EQT Bonus program. Most executive committee members are entitled to variable remuneration through the EQT Bonus program. EQT INCENTIVE PROGRAMS EQT 2019 Share program The last grant of the EQT Share Program (established in 2019) was done in March of 2023. Each annual grant consisted of amounts to be converted to class C shares in EQT AB. All class C shares allotted are subject to a three-year holding period, with no vesting conditions, after which the class C shares are converted into ordinary shares. The class C shares carry the same economic rights as ordinary shares in the company and carry one-tenth (0.1) vote each. EQT Annual and Sustainability Report 2022 / Page 71Notes Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Board of directors’ report 52 Consolidated financial statements with notes 56 Parent company financial statements with notes 91 Proposal for the distribution of net income 100 Signatures of the board of directors and the CEO 101 Managing risks 102 Auditor’s report 109 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 73 ===== EQT 2023 Share program The EQT Share Program (established in 2023) consists of ordinary shares in EQT AB. The Program is divided into five separate annual grants, each subject to a one-year performance period and a three-year holding period. Depending on the achievement of certain performance targets during the performance year, an amount may be awarded which after the performance period is settled in the total number of outstanding shares in EQT AB that corresponds to the amount awarded. With certain limited exceptions, no vesting condi- tions apply during the three-year holding period. Based on the number of shares as of 31 December 2022, the maximum dilution for the EQT Share Program is one percent in total. EQT intends, over time, to repurchase shares to offset the dilution related to the EQT Share Program1). EQT 2023 Option program The EQT Option Program (established in 2023) consists of options which upon exercise entitle the option holders to acquire ordinary shares in EQT AB. The Program is divided into five separate annual grants, each subject to a one-year performance period and a three-year holding period. Depending on the achievement of certain performance targets during the performance year, an amount may be awarded which after the performance period is settled in the number of options that corresponds to the amount awarded. With certain limited exceptions, no vesting conditions apply during the three-year holding period. The option exercise period commences after the holding period. Based on the number of shares as of 31 December 2022, the maximum dilution for the EQT Option Program is four percent in total. EQT intends, over time, to repurchase shares to offset the dilution related to the EQT Option Program1). EQT share program (2019) summary2) Performance period Grant year Shares granted Dilution impact from shares granted 2020 2021 348,106 0.04% 2021 2022 385,499 0.04% 2022 2023 496,056 0.05% Total 1,229,661 0.13% EQT share program (2023) summary (indicative)3) Performance period Grant year Shares to be granted Dilution impact from shares to be granted 2023 2024 679,983 0.06% EQT option program (2023) summary (indicative)4) Performance period Grant year Options to be granted Max dilution - options 2023 2024 3,825,939 0.24% PERFORMANCE TARGETS AND COST EQT 2023 Share Program Performance in relation to targets for Adjusted Revenue growth, Adjusted EBITDA margin and a sustainability assessment has resulted in a gross share grant level of EUR 34.1m, of which EUR 16.7m was cash cost. EQT 2023 Option Program The granting of options is based on participants’ individual fulfillment of targets in the performance framework including (i) Building and developing cross-platform collaboration, (ii) Responsible and appro- priate cost management, (iii) Growth from a business line focused management to firm wide leadership, (iv) Tangible contribution to the sustainability goals of the company, (v) Developing new business areas for EQT. Total grant level recognized in 2023 was EUR 24 .7 m of which none was cash cost. Non-cash cost The total non-cash cost for the EQT 2023 Option Program and 2023 Share Program amounts to EUR 42.1m. Dilution Assuming a share price corresponding to year end 2023 of SEK 285, 679,983 shares3) and 3,825,939 options4) would be granted, respectively, in 2024. As a result, the dilution impact from the Share Program would be 0.06%. The Option Program will only be dilutive in case the EQT AB share price at exercise is above the share price at grant. The exercise price is capped at 4x the share price at grant. Given the net strike mechanics, any gain above the share price at grant and up to the cap will be settled in shares. As such, dilution in relation to the Option Program is capped at 75% of the number of options granted, or 0.24%. 1) EQT intends, over time, to repurchase shares to offset the dilution related to the EQT Share Program and EQT Option Program. During 2023 EQT has completed a repurchase of 1.8m shares. 2) Shares granted and subject to holding period at year end stemming from grants 2021–2023 are C shares not yet converted to ordinary shares. Dilution metrics calculated based on share count at IPO (952,983,900). 3) Indicative figures assuming a share price corresponding to year end 2023 of SEK 285 . To be granted in March 2024. Dilution metrics calculated based on share count as of 31 December 2022 (1,186,127,535). 4) Indicative figures assuming a share price of SEK 285 (year end 2023) and a corre- sponding option value of SEK 72 . To be granted in March 2024. Dilution metrics calculated based on share count as of 31 December 2022 (1,186,127,535). Other benefits EQT AB Group offers all employees a variety of non-monetary benefits, such as occupational health service, health insurance, life insurance, employee fitness programs and sports contributions. Certain investments by senior executives Certain members of the board of EQT AB and senior executives of EQT AB Group, including the CEO of EQT AB, have invested in various carried interest and employee co-investment schemes related to the EQT funds. The returns (in the form of investment income and capital appreciation) are fully dependent on the performance of the relevant fund and the fund’s underlying investments. Pension terms The EQT AB Group has defined contribution plans that generally follows a specific table for level of contributions based on age and/or income level. Wherever possible, the contributions are only made on base salary up to locally set caps. Payments to these plans are made on a continuous basis according to the rules of each plan. The expenses for defined contribution plans in 2023 amounted to EUR 19.5m (EUR 16.5m). The chairperson of the board, Conni Jonsson, has a defined benefit pension plan which has been secured through a trust. The defined benefit plan consists partly of a guaranteed amount corresponding to the accumulated amount of historical contributions and partly of a variable amount corresponding to the fair value of the trust’s net assets in excess of the guaranteed amount. If the fair value of the trust’s net assets is lower than the guaranteed amount EQT AB Group is obliged to contribute the difference. As of 31 December 2023, EQT AB Group’s part of the fair value of the trust’s net assets, converted to euro, amounted to EUR 2.3m (EUR 3.0m) and the guaranteed amount amounted to EUR 0.6m (EUR 0.8m). From January 2018, there have been no further contributions to the trust. Note 7 cont. EQT Annual and Sustainability Report 2022 / Page 72Notes Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Board of directors’ report 52 Consolidated financial statements with notes 56 Parent company financial statements with notes 91 Proposal for the distribution of net income 100 Signatures of the board of directors and the CEO 101 Managing risks 102 Auditor’s report 109 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 74 ===== Note 8 Audit fees and expenses EUR m 2023 2022 KPMG Audit services 2.2 2.0 Tax consultancy 0.1 0.1 Other services – 0.1 Other auditors Audit services – 0.1 Audit services refer to the legally required examination of the annual report and the book-keeping, the board of director’s and the CEO’s management and any other audit examinations or agreed-upon proce- dures determined by contract. This includes other work assignments which rest upon the Company’s auditor to conduct, and advising or other support justified by observations in the course of the audit. Note 10 Income taxes EQT AB Group has operations in different jurisdictions. Each jurisdiction has its own tax legislation and regulations. Constant changes of the income tax rules and the interpretation of the legislation create expo- sures regarding income taxes. The complexity of rules related to income taxes in different jurisdictions and the accounting for these require management’s involvement in judgments and estimates. These estimates might differ from the actual outcome. EQT AB Group has documented guidelines, processes and controls for managing both income taxes and other taxes. Through these pro- cesses the Group ensures that tax risks are identified and mitigated through tax risk identification processes. Taxes recognized in the income statement EUR m 2023 2022 Current tax expense (–)/tax income (+) Current tax expense / income for the year –115.4 –72.0 Tax attributable to prior years –0.1 –0.5 –115.5 –72.5 Deferred tax expense (–)/tax income (+) Deferred tax related to temporary differences 15.3 –14.4 15.3 –14.4 Total reported income tax –100.2 –86.9 Reconciliation of effective tax rate EUR m 2023 2022 Profit before income tax 239.4 263.1 Tax at parent company’s statutory rate 20.6% –49.3 –54.2 Effect of: Foreign tax rates1) –42.7 –9.9 Non-deductible expenses –105.5 –70.5 Non-taxable income2) 81.4 61.1 Change in non-recognized tax losses 16.7 –10.2 Tax attributable to prior years –0.1 –0.5 Other –0.7 –2,6 Reported effective tax –100.2 –86.9 Recognized deferred tax assets and liabilities Change in deferred tax in temporary differences 2023 EUR m Deferred tax asset Deferred tax liability Property, plant and equipment 2.2 0.0 Intangible assets 60.2 360.8 Other 7.8 0.0 Tax loss carry-forward 22.0 – 92.1 360.8 2022 EUR m Deferred tax asset Deferred tax liability Property, plant and equipment 2.2 0.5 Intangible assets 91.9 404.9 Other 4.2 0.0 Tax loss carry-forward 12.1 – 110.2 405.3 The change in deferred tax in the balance sheet amounts to EUR 26.5m (EUR –425.9m). The part of the change not recorded in the income statement predominantly relates to FX effects. 1) The effect of foreign tax rates is comprised of EUR –14.7m relating to tax rates applied in subsidiary jurisdictions deviating from the parent company statutory tax rate and EUR –28.0m relating to tax rates applied in purchase price accounting deviating from the parent company statutory tax rate. 2) Non-taxable income includes income that is not subject to taxation and income/ entities not recognized for tax purposes under the normal corporate income tax regime of the relevant jurisdiction, e.g. dividends and capital gains subject to local participation exemption regimes. Note 9 Financial income and expenses EUR m 2023 2022 Interest income 37.5 8.5 Translation gains 13.4 23.4 Other financial income 0.1 0.1 Financial income 51.1 32.0 Interest expenses –57.1 –43.8 Translation losses –23.9 –29.4 Other financial expenses –5.5 –4.5 Financial expenses –86.5 –77.7 Net financial income and expenses –35.5 –45.6 All interest income and expenses from financial assets and financial liabilities are measured at amortized cost. EQT Annual and Sustainability Report 2022 / Page 73Notes Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Board of directors’ report 52 Consolidated financial statements with notes 56 Parent company financial statements with notes 91 Proposal for the distribution of net income 100 Signatures of the board of directors and the CEO 101 Managing risks 102 Auditor’s report 109 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 75 ===== Note 11 Intangible assets EUR m Goodwill Capitalized deve lopment costs Intangible assets related to acquired businesses Other intangible assets Accumulated cost Opening balance 1.1.2023 2,172.2 12.1 3,835.9 101.4 Additions 42.6 – – 0.5 Translation difference –82.2 – –127.3 0.0 Closing balance 31.12.2023 2,132.6 12.1 3,708.6 101.9 Accumulated amortization and impairment Opening balance 1.1.2023 – –12.1 –212.2 –100.4 Amortization – – –364.1 0.0 Translation difference – – 14.3 –0.4 Closing balance 31.12.2023 – –12.1 –562.0 –100.9 Carrying amount 2,132.6 – 3,146.6 1.1 Accumulated cost Opening balance 1.1.2022 836.1 12.1 773.3 108.0 Additions 1,362.9 – 3,274.8 0.2 Translation difference –26.7 – –212,1 –6.8 Closing balance 31.12.2022 2,172.2 12.1 3,835.9 101.4 Accumulated amortization and impairment Opening balance 1.1.2022 – –12.1 –57.3 –106.2 Amortization – – –153.6 –1.4 Translation difference – – –1.4 7.2 Closing balance 31.12.2022 – –12.1 –212.2 –100.4 Carrying amount 2,172.2 – 3,623.7 1.0 The Group’s intangible assets arise primarily from acquired businesses, see Note 26. These acquired intangible assets consist largely of goodwill but also trademark, contracts and investor relations. For information on amortization, see the accounting policies in Note 2. Goodwill Goodwill is mainly attributable to performed acquisitions, see Note 26, but also a small portion relating to the acquisition of EQT Partners AB, including subsidiaries, in 2007. Goodwill is tested for impairment at the lowest level within the EQT AB Group where goodwill is monitored for internal management purposes, which is the Real Asset segment and Private Capital segment respectively. Amortization principles The amortization is made, applying the straight-line method, over the estimated useful life, unless the useful life is indefinite. Goodwill and other intangible assets with indefinite useful life or development assets that are not yet ready for use, are reviewed for impairment annually or more frequently if there are indications of any potential impairment from events or changes in circumstances. Intangible assets and deter- minable useful lives are amortized from the point in time they are available for the intended use. Estimated useful life: Investor relationships 15 year Software 3 years Trademark 5-8 years Development costs 5 years Customer contracts Remaining term of contracts, between 4–15 years Amortization methods and useful lives are reviewed at each reporting date and adjusted if appropriate. Impairment test of units containing goodwill The recoverable amount was based on its value in use. The value in use was determined by discounting the expected future cash flows gen- erated from the continuing use of the operation’s net operating assets. The following discount rates and long-term growth rates were used: Private Capital 31.12.2023 31.12.2022 Discount rate post-tax, % 9.9 – Discount rate pre-tax, % 11.2 – Annual cash flow growth beyond year 5, % 2.0 – Real Assets 31.12.2023 31.12.2022 Discount rate post-tax, % 8.8 8.8 Discount rate pre-tax, % 9.9 9.9 Annual cash flow growth beyond year 5, % 2.0 2.0 The discount rate used in the impairment test is the post-tax WACC, assuming no debt financing (i.e. equal to the cost of equity). The cost of equity has been calculated according to the Capital Asset Pricing Model (CAPM) and is based on the risk-free interest rate with addition of the market risk premium multiplied with the assumed beta value (based on beta values of similar quoted companies) and a size premium. Cash flows were projected for a period of five years, assuming constant annual growth thereafter. The cash flow forecasts are based on the budget for the following year and the long term forecast for years two to five. The operating profit forecast was based on future outcomes taking into account past experiences. Terminal growth rate, assumed from year six and onwards, is applied to an assumed stable cash flow in year five. The impairment test resulted in a value in use higher than the car- rying amount with significant headroom. Management believes that any reasonable possible change in any of the key assumptions would not cause the carrying value of goodwill to exceed the recoverable amounts. EQT Annual and Sustainability Report 2022 / Page 74Notes Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Board of directors’ report 52 Consolidated financial statements with notes 56 Parent company financial statements with notes 91 Proposal for the distribution of net income 100 Signatures of the board of directors and the CEO 101 Managing risks 102 Auditor’s report 109 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 76 ===== Note 13 Accounts receivable and other current assets EUR m 2023 2022 Expenses to be recharged 71.5 23.8 Drawdown receivable 67.8 57.2 Other receivables on fund 104.3 122.4 Other receivables 100.1 147.0 Total other current assets 343.7 350.4 Note 12 Property, plant and equipment Owned assets EUR m Equipment Leasehold improvement Acquisition cost Opening balance 1.1.2023 16.3 57.8 Additions 3.3 19.8 Disposals –0.8 –2.6 Translation difference –0.5 –0.3 Closing balance 31.12.2023 18.3 74.8 Depreciation Opening balance 1.1.2023 –10.1 –20.3 Depreciation –3.0 –9.0 Disposals 0.5 0.8 Translation difference 0.3 0.3 Closing balance 31.12.2023 –12.3 –28.2 Carrying amount 6.0 46.6 Acquisition cost Opening balance 1.1.2022 13.2 41.6 Additions 4.1 17.0 Disposals –1.1 –0.7 Translation difference 0.1 –0.2 Closing balance 31.12.2022 16.3 57.8 Depreciation Opening balance 1.1.2022 –9.4 –14.0 Depreciation –1.7 –6.2 Disposals 1.1 0.0 Translation difference –0.1 –0.1 Closing balance 31.12.2022 –10.1 –20.3 Carrying amount 6.2 37.5 Right-of-use assets EUR m Office premises Opening balance 1.1.2023 126.8 Depreciation –33.7 Other changes, net 25.8 Closing balance 31.12.2023 118.9 Opening balance 1.1.2022 115.9 Depreciation –27.4 Other changes, net 38.3 Closing balance 31.12.2022 126.8 Total Property, plant and equipment EUR m 2023 2022 Equipment 6.0 6.2 Leasehold improvement 46.6 37.5 Office premises 118.9 126.8 Carrying amount 171.5 170.5 Depreciation principles Depreciation is made over the asset’s estimated useful life using the straight-line method. Leased assets are also depreciated over the asset’s useful life or, if shorter, the term of the lease considering any extension or termination options, that are judged to be reasonably certain to be used, see Note 2 “Leases” . The estimated useful life: Equipment 3–5 years Leasehold improvements 3–10 years Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate. EQT Annual and Sustainability Report 2022 / Page 75Notes Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Board of directors’ report 52 Consolidated financial statements with notes 56 Parent company financial statements with notes 91 Proposal for the distribution of net income 100 Signatures of the board of directors and the CEO 101 Managing risks 102 Auditor’s report 109 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 77 ===== Note 14 Equity Shares 2023 2022 Ordinary shares Issued per 1 January 1,185,028,524 986,280,140 Converted C shares 365,406 – New share issue 59,306,376 198,748,384 Buy-back –61,106,376 – Issued per 31 December – paid 1,183,593,930 1,185,028,524 Total numbers of C shares outstanding 1,229,661 1,099,011 Total number of outstanding shares 1,184,823,591 1,186,127,535 All ordinary shares carry one vote and class C shares carry 0.1 vote. The class C shares carry the same economic rights as ordinary shares. During the year EQT completed a repurchase of 1.8m shares, with the objective of over time offsetting the dilution impact from EQT’s Incentive Programs. In the fourth quarter, EQT increased the number of ordinary shares held in treasury with 59.3 million ordinary shares through a share issuance. The new shares are expected to be delivered to participants in EQT’s Share and Option Programs, depending on the outcomes of the long-term programs. EQT currently holds 61,106,376 ordinary shares in treasury, which are not entitled to dividends or votes at shareholders’ meetings. Excluding shares held in treasury by EQT, there are 1,184,823,591 outstanding shares in EQT. During 2023 (based on performance 2022), and in line with the EQT incentive programs, 496,056 of the class C shares has been allocated to participants in the programs and is hence outstanding as of 31 December 2023. During 2023, EQT cancelled 7,068,423 class C shares held by EQT. Since 24 September 2019, EQT’s ordinary shares are listed on Nasdaq Stockholm Large Cap. DIVIDEND DISTRIBUTION TO THE OWNERS OF THE PARENT COMPANY The Board of directors proposes a dividend to the shareholders of SEK 3.60 per share for the fiscal year 2023. The dividend is proposed to be paid out in two equal installments, SEK 1.80 with record date 29 May 2024 and SEK 1.80 with record date 2 December 2024. The Board of directors of EQT AB has adopted a dividend policy which aims to generate a steadily increasing annual dividend per share. EQUITY MANAGEMENT The EQT AB Group maintains a financial position that supports the confidence of investors, creditors and the market, and provides a basis for continued development of business operations, and that the long-term returns generated to the shareholders are satisfactory. RESTRICTIONS ON TRANSFERABILITY At the time of the listing of EQT AB in 2019, and in relation to various subsequent acquisitions (including Exeter, Life Science Partners and BPEA), certain current and former employees have agreed, with certain exceptions, to not, without the prior written consent from EQT AB, sell or transfer their respective share holdings in EQT AB during a certain period of time (lock-up undertaking). In addition to the restriction on selling or transferring the share- holding, the acquisition related lock-up undertakings also generally include vesting conditions under a “leaver put option clause” or a share forfeiture mechanism. The shares within the previous EQT share program (adopted by the shareholders 2019) constitute non-listed class C shares, with rights to receive dividends and with 0.1 vote, that will be held for three years before being converted into ordinary shares that can be traded. The ordinary shares allocated to participants within the current EQT Share Program (adopted by the shareholders 2023) are subject to a holding period of three years following each relevant time of allo- cation. During such holding period, the shares can not be transferred or disposed. Other than the above there are no restrictions on the transferability of the EQT AB shares due to statutory provisions, the articles of asso- ciation or, as far as the Company is aware, any agreement. An overview of the expiry of various lock-up undertakings can be found below. 2023 2024 2025 2026 2027 2028 #of shares released (in millions) Feb Sep Feb Sep Feb Sep Feb Sep Feb Sep Feb Sep IPO 64 98 100 87 63 63 Exeter 7 14 LSP 2 2 4 BPEA 16 29 29 29 29 29 Total – 87 2 143 – 129 – 120 – 93 – 93 % of number of shares 7.0% 0.2% 11.5% – 10.3% – 9.6% – 7.4% – 7.4% EQT Annual and Sustainability Report 2022 / Page 76Notes Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Board of directors’ report 52 Consolidated financial statements with notes 56 Parent company financial statements with notes 91 Proposal for the distribution of net income 100 Signatures of the board of directors and the CEO 101 Managing risks 102 Auditor’s report 109 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 78 ===== Note 18 Financial instruments and financial risks FINANCIAL RISK MANAGEMENT FRAMEWORK The EQT AB Group conducts a risk management framework to mit- igate and control EQT AB Group’s financial risks in a cost-efficient manner. The financial risk management is covered in the EQT AB Group Finance Policy. The policy is reviewed yearly, and any new version must be approved by EQT AB Group’s Board of directors who has the ultimate responsibility for the establishment and control mechanisms of the Group’s risk management. The EQT AB Group is exposed to the following financial risks: • Credit risk • Liquidity risk • Market risks (interest rate risk, currency risk, revaluation risk of holdings in EQT funds) CREDIT RISK Credit risk arises from the potential financial loss in the event a counter- party to EQT AB Group is unable to fulfil its obligations towards the EQT AB Group. This relates primarily to receivables and contract assets, cash held at bank accounts, any derivative instruments outstanding with a positive fair value and any financial guarantees. The credit risk expo- sures are regularly reviewed to assess exposures and concentrations of risks in accordance with procedures set out in EQT AB Group’s Treasury Guidelines. The book value of financial assets represents the EQT AB Group’s maximum exposure to credit risks. At 31 December 2023 financial assets amounted to EUR 3,245.0m (EUR 2,668.8m). The financial guarantees are further described below under heading Financial guarantees. Receivables and contract assets The Group’s exposure to credit risk from receivables and contract assets is defined by the characteristics of the individual counter- parties, primarily consisting of EQT funds. Credit risks are reviewed on a regular basis and there are no significant credit risks identified as of the balance sheet date, nor have there been any during the reporting period. The Group regularly reviews expected credit losses for receivables and contract assets, primarily based on historical losses. The Group has historically not suffered any material losses from receivables and contract assets and there are no receivables post due at the balance sheet date (none). The expected credit loss at the balance sheet date is therefore considered insignificant (insignificant). Cash and cash equivalents The financial credit risk exposure mainly arises from cash deposits held on bank accounts. EQT AB Group’s Treasury Guidelines stipulates which banks that are approved for cash deposits and relationships are closely monitored by the Group’s Treasury department. The minimum official credit rating for a counterparty, in terms of deposits, is BBB (S&P, or S&P equivalent). As of 31 December 2023, the Group held cash and cash equivalents of EUR 1,114.0m (EUR 644.9m). Expected credit losses are assessed on a regular basis primarily based on external credit ratings for the counterparties and infor- mation about historical losses. The EQT AB Group has historically not suffered any losses from cash and cash equivalents. As of 31 December 2023, the expected credit losses is considered insignificant and reflects the short maturities of the deposits and the credit quality of counterparties reflected in the external credit ratings (insignif- icant). Distribution of cash and cash equivalents by credit rating of counter- parties: Credit rating 31.12.2023 A+ 81% A– 18% BBB 1% Total 100% Credit rating 31.12.2022 A+ 79% A– 21% BBB 0% Total 100% Financial guarantees The EQT AB Group has guaranteed to cover certain carried interest claw-back obligations related to the EQT VIII, EQT IX, EQT X, EQT Growth, EQT Future, EQT Infrastructure IV, EQT Infrastructure V and EQT Infrastructure VI funds. Under the limited partnership agreement of each applicable fund vehicle, an assessment will be made at termi- nation of the fund to determine if there has been an overpayment of carried interest to the Special Limited Partner (being the recipient of carried interest). Any overpayment of carried interest will in the first Note 17 Accrued expenses and prepaid income EUR m 2023 2022 Accrued personnel expenses 263.5 195.8 Accrued consultancy fees 25.7 38.1 Other accrued expenses 157.1 160.0 Prepaid income 74.1 104.7 520.5 498.6 Note 16 Other liabilities EUR m 2023 2022 Other current liabilities Drawdown 6.4 2.8 Other 107.8 91.9 114.2 94.8 Note 15 Interest bearing liabilities For more information regarding the EQT AB Group’s exposure to interest risks and foreign currency risks, in respect of interest-bearing liabilities, see Note 18. EUR m 2023 2022 Non-current liabilities Lease liabilities1) 91.2 100.1 Bond loan2) 2,020.9 2,017.4 2,112.1 2,117.5 Current liabilities Short-term loans – – Loans from credit institutions – – Current portion of lease liabilities1) 34.3 31.4 34.3 31.4 1) Lease liabilities, for further information, see Note 19. 2) Bond loan, for further information, see Note 18. EQT Annual and Sustainability Report 2022 / Page 77Notes Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Board of directors’ report 52 Consolidated financial statements with notes 56 Parent company financial statements with notes 91 Proposal for the distribution of net income 100 Signatures of the board of directors and the CEO 101 Managing risks 102 Auditor’s report 109 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 79 ===== Note 18 cont. instance be satisfied by a return of amounts which are placed into escrow to cover a claw-back scenario. In the unlikely event that amounts held in escrow would be insufficient to cover the claw-back liability, then the guarantee may be called upon to cover the balance. At 31 December 2023, no carried interest had been generated, nor paid, from EQT IX, EQT X, EQT Growth, EQT Future, EQT Infrastructure IV, EQT Infrastructure V or EQT Infrastructure VI (none). EQT VIII has generated and paid EUR 104.1m in carried interest (EUR 75.2m). As of 31 December 2023, it is estimated that EQT AB Group does not have any exposure related to these guarantees (none). For the benefit of a working capital facility for a number of carry schemes, the EQT AB Group has issued a guarantee of EUR 50.0m (EUR 100.0m) to the financial institutions providing this facility. According to the terms of this guarantee, the EQT AB Group will pay to the financial institution the relative amount due under the facility agreement if a carry scheme is in default on debt repayment, i.e. the maximum exposure to credit risk, at 31 December 2023 amounts to EUR 50.0m (EUR 100.0m). In order to facilitate certain individuals’ financing, through loans from a financial institution, of investments in carry schemes related to funds raised since 2015, the EQT AB Group has issued guarantees to the relevant financial institution. According to the terms of these guarantees, the EQT AB Group will pay to the lender any amounts due under the loan agreements due to the individuals being in default on debt repayment. In addition, the individuals have entered into agree- ments with the EQT AB Group, by which they have agreed to reim- burse the EQT AB Group for any amount that the EQT AB Group has paid to the lender under the guarantee. The total amount covered by the guarantees, i.e. the maximum exposure to credit risk, at 31 December 2023 amounts to EUR 28.9m (EUR 34.6m). The amounts related to financial guarantees has not had any significant effect on the EQT AB Group’s financial position at 31 December 2023 and has not affected the EQT AB Group’s profit or loss for 2023. LIQUIDITY RISK The EQT AB Group’s liquidity risk relates to its ability to meet obliga- tions associated with liabilities and commitments that are settled by cash payments. The EQT AB Group manages its liquidity risk by ensuring sufficient liquidity to meet its obligations when due under both normal as well as stressed conditions. The Group performs cash forecasting, updated at least on a monthly basis. On 21 December 2020, EQT signed a five-year EUR 1 billion revolving credit facility (RCF). The RCF is not limited to a specific currency, it can be utilized in both EUR and USD, by both EQT AB and EQT Treasury AB. On 25 April 2022 the RCF was increased to EUR 1.5 billion. As of 31 December 2023 the RCF was undrawn. On 14 May 2021, EQT AB issued a EUR 500m sustainability-linked bond with a maturity of 10 years. The annual coupon rate is 0.875 percent. On 6 April 2022, EQT AB issued a EUR 750m sustainability-linked bond with a maturity of 6 years and a coupon rate of 2.375 percent, and also a EUR 750m sustainabili- ty-linked bond with a maturity of 10 years and a coupon rate of 2.875 percent. The bonds further increased the EQT AB Group’s financial flexibility and are used for corporate purposes, supporting the EQT AB Group’s growth initiatives and long-term strategy. Both the RCF and the bonds are linked to ESG-related objectives, meaning that the interest rates of the bonds and the RCF are increased if the targets are not achieved, and the interest rate of the RCF is lowered if the targets are met. It underscores EQT’s approach to sustainability as an integral part of the EQT AB Group’s business model and the EQT funds’ portfolio companies. Cash and cash equivalents as of 31 December 2023 amounted to EUR 1,114.0m (EUR 644.9m). Distribution of remaining contractual cash flows of the EQT AB Group’s financial liabilities: Carrying amount Expected maturity EUR m 31.12.2023 Total 2024 2025 After 2025 Interest-bearing liabilities 2,020.8 2,286.1 43.8 43.8 2,198.5 Accounts payable 12.2 12.2 12.2 – – Other liabilities 72.9 72.9 72.9 – – Accrued expenses 179.3 179.3 179.3 – – Leasing liabilities 125.5 130.4 31.3 28.4 70.7 Remaining commitments 527.9 Total 2,410.6 3,208.8 339.5 72.2 2,269.2 Carrying amount Expected maturity EUR m 31.12.2022 Total 2023 2024 After 2024 Interest-bearing liabilities 2,017.4 2,329.7 43.8 43.8 2,242.1 Accounts payable 15.8 15.8 15.8 – – Other liabilities 59.3 59.3 59.3 – – Accrued expenses 194.3 194.3 194.3 – – Leasing liabilities 131.5 141.3 30.0 28.3 83.0 Remaining commitments 1,057.2 Total 2,418.2 3,797.6 343.1 72.1 2,325.1 Translation into EUR of amounts denominated in foreign currency has been done using the exchange rate at the end of the reporting period. Accounts payables have a maturity of less than one year. Other payables include drawdown notices issued by the Special Limited Partners in the funds, normally with payment terms of 10 days. At 31 December 2023, the EQT AB Group had remaining commit- ments to invest in multiple EQT funds and fund related vehicles of a total amount of EUR 527.9m (EUR 1,057.2m). The commitments are called over time, normally between one to five years following the com- mitment. INTEREST RATE RISK The EQT AB Group’s interest rate risk, related to fluctuations in market interest rates with potential impact on the EQT AB Group’s net financial income, is limited as the Group’s only long-term interest-bearing debt as of 31 December 2023 are the sustainability-linked bonds with 6- and 10-year fixed coupon rates, subject to ESG-related objectives. Should the EQT AB Group be exposed to interest rate risk, the EQT AB Group Finance Policy allows for use of derivatives to manage the risk. As of 31 December 2023 the EQT AB Group’s interest rate risk mainly relates to interest rates received/paid on cash deposits, which normally do not exceed the National bank rate for the relevant cur- rency. Changes in cash deposits interest rates will affect the Group’s interest income. lf all interest rates on cash deposits would increase by 25 basis points, the EQT AB Group’s annual interest income would increase by EUR 2.8m (EUR 1.6m), assuming the same level of cash deposits as of the balance sheet date. EQT AB Group is not exposed to significant cash flow risk due to changes of market interest rates in its lease liabilities, even if cash- flows are subject to index adjustments for certain contracts. FOREIGN CURRENCY RISK The Group’s foreign currency risk relates to potential changes in exchange rates with impact on the Group’s income statement and/or the value of its assets and liabilities. The Group’s income is primarily denominated in EUR and/or USD and its expenses are primarily denominated in EUR, GBP, SEK and USD. Expenses are also denominated in AUD, BRL, CHF, CNY, CZK, DKK, HKD, INR, JPY, KRW, NOK, PLN and SGD. In most subsidiaries, the income and expenses are denominated in the same currency as the functional currency of the entity and does therefore not create any currency effects in the Group’s income statement. The Group’s pre- sentation currency is EUR. Income and expenses denominated in EUR are therefore not directly affected by changes in exchange rates. However, when income and expenses arise in entities with a func- tional currency other than EUR, the Group’s operating profits will be EQT Annual and Sustainability Report 2022 / Page 78Notes Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Board of directors’ report 52 Consolidated financial statements with notes 56 Parent company financial statements with notes 91 Proposal for the distribution of net income 100 Signatures of the board of directors and the CEO 101 Managing risks 102 Auditor’s report 109 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 80 ===== Classification of financial assets and liabilities in measurement categories Distribution of carrying amounts of financial assets and financial liabilities by measurement categories stipulated by IFRS 9. 31.12.2023, EUR m Fair value through profit or loss Financial assets at amortized cost Financial liabilities at amortized cost Total Financial assets Investments 730.7 0.0 730.7 Other long-term assets 0.0 16.7 16.7 Accounts receivable 0.0 0.0 Other current assets 343.7 343.7 Accrued income 1,039.9 1,039.9 Cash and cash equivalents 1,114.0 1,114.0 Total financial assets 730.7 2,514.3 – 3,245.0 Financial liabilities Interest-bearing liabilities 2,020.8 2,020.8 Accounts payable 12.2 12.2 Other liabilities 72.9 72.9 Accrued expenses 179.3 179.3 Total financial liabilities – – 2,285.1 2,285.1 31.12.2022, EUR m Fair value through profit or loss Financial assets at amortized cost Financial liabilities at amortized cost Total Financial assets Investments 668.4 0.0 668.4 Other long-term assets 20.6 19.8 40.4 Accounts receivable 0.0 0.0 Other current assets 350.4 350.4 Accrued income 964.7 964.7 Cash and cash equivalents 644.9 644.9 Total financial assets 689.0 1,979.8 – 2,668.8 Financial liabilities Interest-bearing liabilities 2,017.4 2,017.4 Accounts payable 15.8 15.8 Other liabilities 59.3 59.3 Accrued expenses 194.3 194.3 Total financial liabilities – – 2,286.7 2,286.7 Note 18 cont. affected by changes in exchange rates in the period between initial recognition of revenue or expense and settlement. The exposure to foreign currency risk is primarily related to the parent company, EQT AB, and the subsidiary EQT Partners AB, both with the functional currency SEK. The currency risk arises as the majority of the income in these entities is denominated in EUR and the expenses are in SEK. In 2023, EUR 349.8m (EUR 283.8m) of income in these two entities (99 percent of total income) were denominated in EUR. In 2023, currency effects of EUR –0.8m (EUR 2.0m) were recognized in the Group’s operating profit. The Group’s exposure to foreign currency risk at the balance sheet date is primarily related to receivables, cash balances and liabilities held in currencies other than the functional currency of the entity. This exposure primarily arises in the parent company, EQT AB and in the subsidiaries, EQT Partners AB and BPEA EQT Holdings AB, due to receivables, cash balances and liabilities in EUR and USD. A strength- ening/weakening of the EUR and USD by 5 percent against SEK at 31 December 2023 would affect the value of those assets, liabilities and the Group’s income statement by approximately EUR +/–112.7m (holding all other factors constant) (EUR+/–94.8m). The sensitivity presented reflect the balances at the balance sheet date. The Group is also exposed to currency risk when translating the balance sheets and income statements of the parent company and the subsidiaries with a functional currency other than EUR into the presentation currency of the Group. The balance sheets are trans- lated using the exchange rate at the balance sheet date and the income statements are translated using the average exchange rate for the period. The translation effect is recognized in other compre- hensive income and accumulated in equity for the Group. The trans- lation effect recognized in other comprehensive income in 2023 was EUR –229.7m (EUR –273.1m). Generally, the exposure to foreign currency risk is not hedged. However, EQT AB Group’s Finance Policy allows forward contracts to be used to buy future needs of foreign currencies in advance. No speculative trading with currencies is allowed according to the EQT AB Group Finance Policy. REVALUATION RISK The EQT AB Group is exposed to revaluation risk in the form of changes in the Net Asset Value (NAV) for financial investments held by the EQT AB Group classified at fair value through profit or loss. The risk of changes in NAV is a natural consequence of the EQT AB Group’s business and the risk is not hedged in any way. The effect of changes in the NAV on the EQT AB Group’s profit or loss is presented below under the heading “Sensitivity analysis of fair values” . EQT Annual and Sustainability Report 2022 / Page 79Notes Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Board of directors’ report 52 Consolidated financial statements with notes 56 Parent company financial statements with notes 91 Proposal for the distribution of net income 100 Signatures of the board of directors and the CEO 101 Managing risks 102 Auditor’s report 109 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 81 ===== EQT AB has issued sustainability-linked bonds (classified as an inter- est-bearing liability in the balance sheet) with fixed coupon rates linked to ESG-related objectives. Fair value as of 31 December 2023 amounted to EUR 1,791.1m (carrying amount EUR 2,000.0m). For EQT AB Group’s other financial assets and liabilities (accounts receivables, other current assets, accrued income, cash, deposits, accounts payables, other liabil- ities and accrued expenses) the carrying amounts are considered rea- sonable approximations of their fair values. This also holds for other long-term assets and interest-bearing liabilities since these carry variable interest and therefore the fair value is not significantly affected by changes in the market interest rates. FAIR VALUE MEASUREMENT Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market partici- pants at the measurement date in the principal, or in its absence, the most advantageous market to which the EQT AB Group has access to at that date. The fair value of a liability reflects its non-performance risk. The EQT AB Group measures fair values using the following fair value hierarchy that reflects the significance of the inputs used in making the measurements: • Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1). • Inputs – other than quoted prices included within level 1 – that are observable for assets or liabilities, either directly (that is, as prices) or indirectly (that is, derived from prices) (level 2). • Inputs for assets or liabilities that are not based on observable market data (that is, unobservable inputs) (level 3). EQT AB Group measure investments in investment programs at fair value in the balance sheet. The fair values for these investments at 31 December 2023 was EUR 730.7m (EUR 668.4m) and is calculated using inputs that are not based on observable market data and are therefore classified as level 3 in the fair value hierarchy. There has not been any transfers between levels in the fair value hierarchy during the periods presented. Part of the purchase price in relation to the sale of business segment Credit was variable and dependent on the size of future funds. Depending on the size of the future funds the variable compen- sation (earn-out) could range between EUR 0 and EUR 50m. EQT AB Group measured the earn-out to fair value in the balance sheet. During 2023 the earn-out has been settled resulting in a payment of EUR 11.2m. LEVEL 3 FAIR VALUES (FINANCIAL INVESTMENTS) The table below shows a reconciliation of level 3 fair values for financial investments. EUR m 2023 2022 Opening balance 668.4 477.9 Net change in fair value 22.5 5.9 Acquisitions – 124.2 Investments 208.3 86.6 Divestments –168.6 –26.2 Closing balance 730.7 668.4 Net change in fair value is included in “Carried interest and investment income” in the income statement as investment income. FAIR VALUE FOR FINANCIAL INVESTMENTS Financial investments disclosed as level 3 financial instruments pri- marily consist of investments in EQT funds. The fair value of EQT AB Group’s financial investments in EQT funds are based on the net asset value after taking all assets and deducting all liabilities and provi- sions, in line with Invest Europe Investor Reporting Guidelines. The valuation processes and techniques described below therefore relates to the most significant processes and techniques for valuing the underlying holdings of the funds. EQT AB Group applies the International Private Equity and Venture Capital Valuation Guidelines (IPEV Guidelines) when determining the fair values for the holdings in the EQT funds. Determining the fair value require subjective assessment with varying degrees of judgment regarding what market participants would use in esti- mating the value of an asset including valuation methodology, pricing assumptions, the current economic and competitive environment and the risks affecting the specific asset. The use of multiple valuation techniques is encouraged. For certain investments, primarily within real estate, the EQT AB Group is making use of external valuation agents. ExternaI valuers within real estate operate under the Royal Institute of Chartered Sur- veyors (RICS) Valuation – Global Standards, which incorporate the International Valuation Standards as published by the International Valuation Standards Council (IVSC). The valuation principles applied by the EQT AB Group are applied consistently from period-to-period, and only changed if deemed necessary to reflect a representative fair value. EQT AB Group applies control processes to ensure that the fair value of the financial assets reported in the consolidated financial statements are in accordance with applicable accounting standards and determined on a reasonable basis. This include ensuring that the valuations are consistent with the IPEV Guidelines, where relevant, and ensure that the valuations are supported by underlying docu- mentation. The following valuation techniques are applied by the EQT AB Group to determine fair values of investments in line with IFRS 13. Valuation based on earnings multiples EQT AB Group applies earnings multiples to determine the fair value for investments with revenues, maintainable profits and/or main- tainable positive cash flows. The earnings multiples applied are derived from multiples from a basket of publicly traded companies (a peer group) and multiples from comparable transactions. For this purpose, the EQT AB Group normally uses the EV/EBITDA multiple. If another earnings multiple is more suitable for a specific investment, it should be used instead, and the reason for doing so should be properly motivated and documented. The multiples for publicly traded companies used by EQT AB Group should be from the date when the valuation is performed. Each indi- vidual company in the peer group is evaluated for every valuation date to determine if the company is appropriate from a financial, geographic and operational standpoint. In addition, assessments are made in order to determine whether there exist any additional companies appropriate to include in the peer group. The multiples for comparable transactions should not be more than 18 months old. In cases where there are no comparable trans- actions at hand it is considered whether relevant to include a basket of comparable transactions from a wider definition of the industry in which the investment operates in. As investments may be realized through trade sale (majority basis) as well as through stock listing (minority basis), all transactions may be considered in the valuation, without applying a minority discount. Earnings figures are adjusted for exceptional or non-recurring items, the impact of discontinued activities and acquisitions and forecast downturns in profits. The valuation process and all changes to the peer group, the comparable transactions and any earnings adjustments are documented and approved by EQT management. Valuation based on discounted cash flows In the absence of significant revenues, profits or positive cash flows, methods such as the earnings multiple are generally inappropriate. The discounted cash flow technique (DCF) is flexible in the sense that it can be applied to any stream of cash flows or earnings. In the context of private equity valuation, this flexibility enables the valu- ation technique to be applied in situations that other techniques may be incapable of addressing. Note 18 cont. EQT Annual and Sustainability Report 2022 / Page 80Notes Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Board of directors’ report 52 Consolidated financial statements with notes 56 Parent company financial statements with notes 91 Proposal for the distribution of net income 100 Signatures of the board of directors and the CEO 101 Managing risks 102 Auditor’s report 109 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 82 ===== Discounted cash flow techniques imply that expected cash flow amounts are discounted to a present value at a rate that represents the time value of money and reflects the risks of the specific instrument. The discount rate is based on current market conditions and the expected return from the investment. Valuation based on quoted prices Investments quoted on an active market are measured at the latest available quoted price for the individual asset on the measurement date. Blockage discounts that reflect the quantity of the investment held or any other discounts are not applied. Unobservable inputs to valuation techniques When measuring fair value, the EQT AB Group uses non-observable market inputs in its valuation techniques. Significant unobservable inputs include: EBITDA multiples (based on budgeted/forward- looking EBITDA and EBITDA multiples of comparable listed com- panies for an equivalent period), credit ratings, discount rates, capi- talization rates, physical and geographic location of assets, price/ book as well as price/earnings ratios and enterprise value/sales multiples. A significant portion of the investments is measured at EBITDA multiples. EBITDA multiples used show wide ranges. SENSITIVITY ANALYSIS OF FAIR VALUES From an EQT AB Group perspective, financial investments are nor- mally measured at fair value applying the adjusted net asset values of the investment programs. A reasonable possible change of 10 percent in the adjusted net asset value would affect the fair value of the investments at 31 December 2023 with EUR 73.1m (EUR 68.8m). The effect would be recognized in the income statement. Although the EQT AB Group believes that its estimates of fair values are appropriate, the use of different methodologies and different unobservable inputs in the underlying investments of the investment programs, could lead to different measurements of fair value. Due to the number of unobservable input factors used in the valuation of the investment programs’ direct investments and their broad range, in particular concerning the earnings multiples, a sensitivity analysis on these underlying unobservable input factors does not result in meaningful outcomes. Note 18 cont. Note 19 Leases AS A LESSEE The EQT AB Group’s leases mainly consist of office premises. The carrying amount of the right-of-use assets for the year can be found in Note 12. The lease liabilities are presented in the balance sheet and a maturity analysis of the lease liabilities is presented in Note 18. Amounts recognized in income statement EUR m 2023 2022 Interest on lease liabilities 3.5 2.8 Depreciation on right-of-use assets 33.7 27.4 37.2 30.2 EQT AB Group recognizes short-term leases and low value leases directly in the income statement. The leasing amounts for short-term leases and low value leases that have been expensed during 2022–2023 is not significant. Amounts recognized in the statement of cash flows EUR m 2023 2022 Total cash outflow for leases 35.1 17.1 Right-of-use asset in the balance sheet EUR m 2023 2022 Additions in the right-of-use asset1) 35.1 41.3 1) Additions in the right-of-use asset consists of both renewals of lease contracts and lease contracts added through acquisitions. Office premises leases EQT AB Group leases office premises for its office space. The leases of office space typically run for a period of 3–10 years. Some leases of office premises contain extension options exercisable by the EQT AB Group up to 6 months before the end of the contract period. Where practicable, the EQT AB Group seeks to include extension options in the leases to provide operational flexibility. The extension options held are exercisable only by the EQT AB Group and not by the lessors. The EQT AB Group assesses at lease commencement whether it is reasonably certain to exercise the extension options. This assessment is based on all relevant facts and circumstances that exist at the com- mencement date. EQT AB Group reassesses whether it is reasonably certain to exercise the options if there is a significant event or signif- icant change in circumstances within its control. Some leases provide for additional rent payments that are based on changes in local price indices. Some also require the EQT AB Group to make payments that relate to the property taxes levied on the lessor and is generally determined annually. EQT Annual and Sustainability Report 2022 / Page 81Notes Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Board of directors’ report 52 Consolidated financial statements with notes 56 Parent company financial statements with notes 91 Proposal for the distribution of net income 100 Signatures of the board of directors and the CEO 101 Managing risks 102 Auditor’s report 109 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 83 ===== Note 20 Cash flow specifications Transactions that do not involve payments EUR m 2023 2022 Acquisition of assets through lease 30.4 27.8 Reconciliation of debts arising from financing activities EUR m Lease liabilities Short-term loan Interest-bearing liabilities1) Total debt arising from financing activities Opening balance 1.1.2023 131.5 – 2,017.4 2,148.9 Cash flows incl interest –35.1 – –43.2 –77.3 Non-cash changes Accrued interest 3.5 – 45.3 49.1 Other 25.6²) – 1.3 25.6 Closing balance 31.12.2023 125.5 – 2,020.8 2,146.4 EUR m Lease liabilities Short-term loan Interest-bearing liabilities1) Total debt arising from financing activities Opening balance 1.1.2022 117.9 – 496.1 614.0 Acquisition 23.9 23.9 Cash flows incl interest –17.1 –23.9 1,480.4 1,439.4 Non-cash changes Accrued interest 2.8 32.4 35.3 Other 27.8²) 8.5 36.3 Closing balance 31.12.2022 131.5 – 2,017.4 2,148.9 1) Interest-bearing liabilities, for further information, see Note 18. 2) Other mainly relates to acquisition of assets through lease. Unutilized credit facilities EUR m 2023 2022 Unutilized credit facilities 1,500.0 1,500.0 On 21 December 2020, EQT signed a five-year EUR 1 billion revolving credit facility (RCF). The RCF is not limited to a specific currency, it can be utilized in both EUR and USD, by both EQT AB and EQT Treasury AB. On 25 April 2022 the RCF was increased to EUR 1.5 billion. Note 22 Events after the reporting period EQT introduced the new Healthcare Growth Strategy, a dedicated healthcare buyout strategy. On 27 February 2024, EQT announced that EQT X had reached its hard cap with fee-generating assets under management of 21.7bn. Note 21 Pledged assets and contingent liabilities EQT AB Group has no pledged assets or contingent liabilities as of 31 December 2023 (none). EQT Annual and Sustainability Report 2023 / Page 82Notes Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Board of directors’ report 52 Consolidated financial statements with notes 56 Parent company financial statements with notes 91 Proposal for the distribution of net income 100 Signatures of the board of directors and the CEO 101 Managing risks 102 Auditor’s report 109 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 84 ===== Transactions with related parties EURm Sales of goods, services and assets Purchases of goods and services Receivables as per 31 Dec Liabilities as per 31 Dec Related parties Board members and senior executives 2023 0.9 0.0 – – Board members and senior executives 2022 0.9 0.1 0.0 – Note 23 Related parties Expenses for salaries, other remuneration and pensions for the EQT AB Group’s senior executive management and the Board of directors in EQT AB are presented in Note 7. Apart from what is stated in Note 7 there are certain transactions that have occurred between the EQT AB Group and its related parties and these are specified in the table below. Description of transactions In April 2019, the Company entered into a consultancy agreement with the Company’s board member Gordon Orr. In accordance with this consultancy agreement, Gordon Orr shall – in parallel to his assignment as a member of the Board of directors – provide consul- tancy services as an EQT Advisor to support EQT’s administration of the EQT Network. Gordon Orr is entitled to an annual fixed retainer of EUR 35,000 for the provision of these consultancy services. The con- sultancy agreement was initially entered into for a fixed period until 30 June 2020 but is automatically prolonged on a yearly basis in accordance with the terms of the agreement. Both EQT AB and the consultant may terminate the consultancy agreement with one month’s notice. The above was also applicable to the previous board member Edith Cooper, however, she declined re-election as a board member in connection to the AGM during 2022. Her consultancy agreement was simultaneously terminated as well, as a result of this she only received EUR 17,500 during 2022 for the period 1 January 2022 – 30 June 2022. In addition to Gordon Orr’s original assignment, he was also involved in a set up for an APAC Investment Advisor Committee during 2022 and received a fee of EUR 60,000 for this purpose. Apart from above, EQT AB Group has invoiced a company controlled by a board member for administrative services during 2023 and 2022. The total amount of these transactions amounted to EUR 0.1m (EUR 0.1m). During 2023, EQT AB Group has paid EUR 764,606 (EUR 825,362), amount converted from SEK, in pension to the chairperson of the board, Conni Jonsson. However, EQT AB Group has historically made contributions to a pension trust so in conjunction with the payment from EQT AB Group to Conni Jonsson, EQT AB Group also invoiced the corresponding amount to the pension trust. Thus, the payments of the pension were during 2023 and 2022 cost neutral for EQT AB Group. There has been no other significant transactions between EQT AB Group and its related parties during the period. EQT Annual and Sustainability Report 2023 / Page 83Notes Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Board of directors’ report 52 Consolidated financial statements with notes 56 Parent company financial statements with notes 91 Proposal for the distribution of net income 100 Signatures of the board of directors and the CEO 101 Managing risks 102 Auditor’s report 109 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 85 ===== Note 24 Subsidiaries Group companies Registered office Percentage held Name Corporate reg. no 31.12.2023 31.12.2022 EQT Partners AB Sweden 556233-7229 100% 100% EQT Partners Spain, S.L.U. Spain B01597822 100% 100% EQT Partners Netherlands B.V. Netherlands 77321227 100% 100% LSP Bioventures Inc. USA 4148549 0% 100% EQT Partners Denmark ApS Denmark 41073381 100% 100% EQT Partners AG Switzerland CHE-113.618.871 100% 100% EQT Partners AS Norway 940532981 100% 100% EQT Partners Australia Pty Ltd Australia 638432318 100% 100% EQT Partners Australia II Pty Ltd Australia 638488623 100% 100% EQT Partners Japan K.K. Japan 0104-01-158103 100% 100% EQT Partners Korea Co., Ltd. South Korea 110111-8167854 100% 100% EQT Partners GmbH Germany HRB 127746 100% 100% EQT Partners Belgium B.V. Belgium 0843.203.083 100% 100% EQT Partners Inc. USA 4401345 100% 100% EQT Partners Oy Finland 1098042-8 100% 100% EQT Partners Singapore Pte. Ltd. Singapore 200906516Z 0% 100% EQT Partners Asia Limited Hong Kong 10199637 100% 100% EQT Partners Shanghai Limited China 310000400514790 100% 100% EQT Partners Limited UK 6590781 100% 100% EQT Partners UK Advisors LLP UK OC338685 100% 100% EQT Partners UK Advisors II LLP UK OC397306 100% 100% EQT Partners S.R.L. Italy 10552820960 100% 100% EQT Partners SAS France 85392898400014 100% 100% EQT Partners Asia Pte. Ltd. Singapore 200004783Z 100% 100% BPEA EQT Australia Pty. Ltd. Australia 631649600 0% 100% BPEA EQT, Inc. USA 5833323 0% 100% EQT Partners India Private Limited India U74140MH2009 PTC216794 100% 100% EQT Partners Capital Limited Hong Kong 2629750 100% 100% EQT Partners Hong Kong Limited Hong Kong 645312 100% 100% BPEA EQT K.K. Japan 0104-01-063874 0% 100% EQT Partners Beijing Limited China 91110105MA01N 0FP32 100% 100% BPEA EQT Limited Beijing Rep Office China 110000400201823 100% 100% BPEA EQT Limited Shanghai WFOE China 91310000MA1FYJ 229F 100% 100% Registered office Percentage held Name Corporate reg. no 31.12.2023 31.12.2022 BPEA EQT Limited Shanghai Rep Office China 310115500100121 100% 100% PT BPEA Private Advisors Indonesia AHU-AH.01.03- 0376884 100% 100% EQT Exeter Advisors Sweden AB Sweden 559296-3507 100% 100% EQT Exeter Advisors Netherlands B.V. Netherlands 83321047 100% 100% EQT Exeter Advisors Spain S.L. Spain B88285325 100% 100% EQT Exeter Advisors France SAS France 819960634 100% 100% EQT Exeter Australia Pty Ltd Australia 659318975 100% 100% EQT Exeter Japan K.K. Japan 0104-01-089160 67% 67% JLML 11 GK Japan 0104-03-021462 100% 100% EQT Exeter Korea Limited South Korea 465-81-00642 75% 75% EQT Exeter Advisors Germany GmbH Germany HRB 101640 100% 100% EQT Exeter Advisors Belgium B.V. Belgium 0781.995.192 100% 100% Exeter Asia Pacific Advisors SGP, LLC USA 4250923 100% 100% EQT Exeter Asia Pacific Advisors Pte. Limited Singapore 202100784Z 100% 100% EQT Exeter China Ventures Limited Hong Kong 71631486 100% 100% EQT Exeter Management advisors (Shanghai) Co Ltd China 91310000 100% 100% EQT Exeter Advisors Austria GmbH Austria FN551349H 100% 100% EQT Exeter Advisors Italy S.r.l. Italy 11641590960 100% 100% EQT Exeter Advisors Poland Sp. z o.o. Poland 0000587835 100% 100% EQT Exeter Advisors UK Limited UK 13306870 100% 100% EQT Exeter Advisors Ireland Limited Ireland 653468 100% 100% EQT Exeter Advisors Czech Republic spol. s r. o. Czech Republic 11889756 100% 100% Exeter UK Advisor, LLP UK OC396135 100% 100% Exeter Europe (UK), Ltd UK 09284690 100% 100% EQT Services (UK) Limited UK 07936651 100% 100% EQT Services Netherlands B.V. Netherlands 851645768 0% 100% EQT Corporate Services Netherlands B.V. Netherlands 74993097 100% 100% EQT Treasury AB Sweden 559227-5647 100% 100% EQT Holdings AB Sweden 559244-1462 100% 100% EQT Lightspeed S.à r.l. Luxembourg B246446 100% 100% EEAKLV Limited South Korea 110114-0295277 100% 100% EQT Exeter China Investments 1 Pte. Ltd. Singapore 202217730H 100% 100% EQT Exeter Supply Chain (Changzhou) Company Limited China 91320411MAB QC28C0W 100% 100% EQT Annual and Sustainability Report 2023 / Page 84Notes Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Board of directors’ report 52 Consolidated financial statements with notes 56 Parent company financial statements with notes 91 Proposal for the distribution of net income 100 Signatures of the board of directors and the CEO 101 Managing risks 102 Auditor’s report 109 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 86 ===== Registered office Percentage held Name Corporate reg. no 31.12.2023 31.12.2022 EQT Holdings III AB Sweden 559289-1864 100% 100% EQT Holdings S.à r.l. Luxembourg B244018 100% 100% EQT Growth (General Partner) S.à r.l. Luxembourg B249692 100% 100% EQT Infrastructure V (General Partner) S.à r.l. Luxembourg B243962 100% 100% EQT IX (General Partner) S.à r.l. Luxembourg B238938 100% 100% EQT IX GP LLC USA 3167396 100% 100% EQT Future (General Partner) S.à r.l. Luxembourg B252846 100% 100% EQT X (General Partner) S.à r.l. Luxembourg B255058 100% 100% EQT Ventures III (General Partner) S.à r.l. Luxembourg B258957 100% 100% EQT Active Core Infrastructure (General Partner) S.à r.l.Luxembourg B260249 100% 100% EQT Infrastructure VI (General Partner) S.à r.l. Luxembourg B265893 100% 100% BPEA EQT Mid-Market Growth GP, S.à r.l. Luxembourg B272128 100% 100% ENXF Holdings (General Partner) S.à r.l. Luxembourg B277211 100% 0% EQT Healthcare Growth (General Partner) S.à r.l. Luxembourg B268189 100% 100% EQT Transition Infrastructure (General Partner) S.à r.l. Luxembourg B275352 100% 0% Exeter Europe GP, LLC USA 5610896 100% 100% Exeter Europe, LP USA 5610898 100% 100% Exeter Europe Value Venture III GP S.à r.l. Luxembourg B216344 100% 100% Exeter Europe Value Venture III Feeder GP S.à r.l. Luxembourg B220583 100% 100% Exeter Europe Industrial Core GP S.à r.l. Luxembourg B238532 100% 100% Exeter Europe Logistics Value Fund IV GP S.à r.l. Luxembourg B249708 100% 100% EPIP MF GP S.à r.l. Luxembourg B223215 100% 100% EPIP MF II GP S.à r.l. Luxembourg B237012 100% 100% EPIP II GP S.à r.l. Luxembourg B245662 100% 100% EGIP GP S.à r.l. Luxembourg B195412 100% 100% EGIP II GP S.à r.l. Luxembourg B191498 100% 100% EQT Exeter China Logistics Fund GP S.à r.l. Luxembourg B256221 100% 100% EQT Exeter ELC II (General Partner) S.à r.l. Luxembourg B266601 100% 100% EQT Exeter Japan 1 GP S.à r.l. Luxembourg B270547 0% 100% EQT Exeter Asia Pacific Logistics Value Fund II GP S.à r.l.Luxembourg B277597 100% 0% EQT Life Sciences Group B.V. Netherlands 863653698 100% 100% LSP Health Economics Fund Management B.V. Netherlands 858137501 100% 100% LSP V Management B.V. Netherlands 854065155 100% 100% LSP HEF 2 Management B.V. Netherlands 858137501 100% 100% LSP 6 Management B.V. Netherlands 858491783 100% 100% LSP Dementia Fund Management B.V. Netherlands 862010469 100% 100% LSP 7 Management B.V. Netherlands 862751007 100% 100% Registered office Percentage held Name Corporate reg. no 31.12.2023 31.12.2022 EQT Health Economics 3 Management B.V. Netherlands 865324281 100% 0% LSP Advisory B.V. Netherlands 819117481 100% 100% EQT Procurement S.à r.l. Luxembourg B201525 100% 100% EQT Exeter Holdings US, Inc. USA 5402675 100% 100% TA XII-B EPG-A Blocker Corp. USA 7134374 0% 100% TA XII-B EPG-B Blocker Corp. USA 7134379 0% 100% TA XII-B EPG-C Blocker Corp. USA 7134384 0% 100% Exeter Property Group, LLC USA 4207665 100% 100% Exeter Big Box AM Platform, LLC USA 5854337 100% 100% Exeter Big Box Asset Manager, LLC USA 5854341 100% 100% Exeter Property Group II, LLC USA 5758542 100% 100% Exeter FeeCo I, LLC USA 6912131 100% 100% EQT Exeter US GP Solutions, LLC USA 7399251 100% 0% Exeter Property Group Advisors, LLC USA 4214673 100% 100% Exeter Big Box Property Manager, LLC USA 5854344 100% 100% Exeter Property Group Advisors II, L.P. USA 5758350 100% 100% Exeter US Advisor, LLC USA 5610899 100% 100% EQT Exeterfeeco Mexico S. de R. L. de C. V. Mexico 2018078689 100% 100% EQT Exeter Brazil Platform, LLC USA 3065333 100% 100% EQT Exeter Brazil Ventures, LLC USA 7961465 100% 100% EQT Exeter Brasil Investimentos Ltda. Brazil 3523622040-2 100% 100% Exeter China Ventures, LLC USA 7713778 100% 100% EQTE Brokerage LLC USA 6939462 100% 100% EQT Netherlands Management B.V. Netherlands 60593733 0% 100% BPEA EQT Holdings AB Sweden 559374-8691 100% 100% BPEA GP III Limited Cayman Islands 137871 100% 100% BPEA Hong Kong Growth Fund GP Limited Hong Kong 3074863 100% 100% BPEA Private Equity GP IV Limited Cayman Islands 192622 100% 100% BPEA Private Equity GP V Limited Cayman Islands 244752 100% 100% BPEA Private Equity GP VI Limited Cayman Islands 288217 100% 100% BPEA Private Equity GP VII Limited Cayman Islands 332034 100% 100% BPEA Private Equity GP VII S.à r.l. Luxembourg B222407 100% 100% BPEA Private Equity GP VIII Limited Cayman Islands 373499 100% 100% BPEA Private Equity GP VIII S.à r.l. Luxembourg B254359 100% 100% BPEA General Partner Limited Cayman Islands 355832 100% 100% BPEA TFO Partnership GP Limited Cayman Islands 317126 100% 100% BPEA Asia Real Estate GP Limited Cayman Islands 268444 100% 100% Note 24 cont. EQT Annual and Sustainability Report 2023 / Page 85Notes Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Board of directors’ report 52 Consolidated financial statements with notes 56 Parent company financial statements with notes 91 Proposal for the distribution of net income 100 Signatures of the board of directors and the CEO 101 Managing risks 102 Auditor’s report 109 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 87 ===== Registered office Percentage held Name Corporate reg. no 31.12.2023 31.12.2022 EQT Management SG Pte. Ltd. Singapore 2021226838H 100% 100% EQT Holdings B.V. Netherlands 54467861 100% 100% EQT Holdings II B.V. Shareclass AS/ASE1) Netherlands 55502903 100% 100% EQT Infrastructure II GP B.V. Netherlands 54468701 100% 100% EQT Holdings III B.V. Shareclass AS1) Netherlands 56497490 100% 100% EQT Mid Market Immigration GP B.V. Netherlands 71283730 100% 100% EQT Mid Market GP B.V. Netherlands 55314295 100% 100% EQT Holdings PVF Coöperatief U.A. Netherlands 71843647 100% 100% EQT Holdings VII B.V. Shareclass AS1) Netherlands 63039818 100% 100% EQT VII (General Partner) LP UK SL019045 100% 100% EQT Holdings Real Estate B.V. Shareclass AS1) Netherlands 63243687 100% 100% EQT Real Estate I (General Partner) LP UK SL020800 100% 100% EQT Holdings Ventures B.V. Shareclass AS1) Netherlands 63191334 100% 100% EQT Ventures (GP) SCS Luxembourg B196905 100% 100% EQT Holdings MMUS B.V. Shareclass AS1) Netherlands 63039729 100% 100% EQT Mid Market US GP B.V. Netherlands 62863223 100% 100% EQT Holdings Mid Market Asia III Coöperatief U.A. Netherlands 72183128 100% 100% EQT Mid Market Asia III GP B.V. Netherlands 64683869 100% 100% EQT Holdings MM Europe B.V. Shareclass AS1) Netherlands 65104153 100% 100% EQT Mid Market Europe GP B.V. Netherlands 64683796 100% 100% EQT Holdings Infrastructure III B.V. Shareclass AS1) Netherlands 66262844 100% 100% EQT Infrastructure III (GP) SCS Luxembourg B207350 100% 100% EQT Holdings VIII Coöperatief U.A. Netherlands 70951098 100% 100% EQT VIII (GP) SCS Luxembourg B215860 100% 100% EQT Holdings Infrastructure IV Coöperatief U.A. Netherlands 72203498 100% 100% EQT Infrastructure IV (GP) SCS Luxembourg B225827 100% 100% EQT Holdings Ventures II Coöperatief U.A. Netherlands 74791478 100% 100% EQT Ventures II (GP) SCS Luxembourg B233027 100% 100% EQT Holdings Real Estate II Coöperatief U.A. Netherlands 72225521 100% 100% EQT Real Estate II (GP) SCS Luxembourg B226491 100% 100% EQT Investment Verwaltungs-GmbH Germany HRB 194327 100% 100% EQT Active Core Infrastructure GmbH & Co. KG Germany HRA 114883 97% 97% EQT Active Core Infrastructure Side Car GmbH & Co. KG Germany HRA 117622 98% 0% EQT Equity Investment GmbH & Co. KG Germany HRA 103524 97% 97% EQT Equity Kiwi Investments GmbH & Co. KG Germany HRA 110788 97% 97% EQT Future GmbH & Co. KG Germany HRA 114368 97% 97% EQT Growth GmbH & Co. KG Germany HRA 114254 97% 97% Note 24 cont. Registered office Percentage held Name Corporate reg. no 31.12.2023 31.12.2022 BPEA Asia Real Estate GP II Limited Cayman Islands 325315 100% 100% BPEA Real Estate GP II S.à r.l. Luxembourg B222040 100% 100% BAKPDC3 Pte. Ltd. Singapore 201708595C 100% 100% EQT Fund Management S.à r.l. Luxembourg B167972 100% 100% EQT Infrastructure II (GP) Limited UK SC416498 100% 100% EQT Mid Market (GP) Limited UK SC436969 100% 100% EQT VII Floss (General Partner) S.à r.l. Luxembourg B219445 0% 100% EQT VII Co-Investment (General Partner) S.à r.l. Luxembourg B217579 100% 100% EQT Co-Investment (GP) S.à r.l. Luxembourg B209598 100% 100% EQT VII International Holdings B.V. Netherlands 69473129 100% 100% EQT VII Luxembourg (General Partner) S.à r.l. Luxembourg B214397 100% 100% EQT VII Netherlands (General Partner) B.V. Netherlands 68608195 100% 100% EQT Real Estate Limited UK SC504628 100% 100% EQT Ventures (General Partner) S.à r.l. Luxembourg B196578 100% 100% EQT Mid Market US (General Partner) Limited UK SC500973 100% 100% EQT Mid Market Asia III (General Partner) Limited UK SC521109 100% 100% EQT Mid Market Europe (General Partner) Limited UK SC521108 100% 100% EQT Infrastructure III (General Partner) S.à r.l. Luxembourg B207225 100% 100% EQT VIII (General Partner) S.à r.l. Luxembourg B215816 100% 100% EQT Management S.à r.l. Luxembourg B145067 100% 100% EQT Luxembourg Management S.à r.l. Luxembourg B217192 100% 100% EQT RA Management S.à r.l. Luxembourg B240358 100% 100% EQT Infrastructure II (General Partner) S.à r.l. Luxembourg B244690 100% 100% EI II GP C.V. Netherlands 78485266 100% 100% EQT Mid Market (General Partner) S.à r.l. Luxembourg B244691 100% 100% EMM GP C.V. Netherlands 78485622 100% 100% EQT Public Value (General Partner) S.à r.l. Luxembourg B225269 100% 100% EQT Mid Market US (General Partner) S.à r.l. Luxembourg B243106 100% 100% EMMUS GP C.V. Netherlands 78484804 100% 100% EQT Mid Market Asia III (General Partner) S.à r.l. Luxembourg B243105 100% 100% EMMASIA III GP C.V. Netherlands 78484316 100% 100% EQT Mid Market Europe (General Partner) S.à r.l. Luxembourg B243128 100% 100% EMMEU GP C.V. Netherlands 78484030 100% 100% EQT Infrastructure IV (General Partner) S.à r.l. Luxembourg B225708 100% 100% EQT Ventures II (General Partner) S.à r.l. Luxembourg B232970 100% 100% EQT Real Estate II (General Partner) S.à r.l. Luxembourg B225704 100% 100% EQT Exeter Services Luxembourg S.à r.l. Luxembourg B229258 100% 100% EQT Annual and Sustainability Report 2023 / Page 86Notes Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Board of directors’ report 52 Consolidated financial statements with notes 56 Parent company financial statements with notes 91 Proposal for the distribution of net income 100 Signatures of the board of directors and the CEO 101 Managing risks 102 Auditor’s report 109 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 88 ===== Registered office Percentage held Name Corporate reg. no 31.12.2023 31.12.2022 EQT Healthcare Growth GmbH & Co. KG Germany HRA 117587 98% 0% EQT Infrastructure III Investment GmbH & Co. KG Germany HRA 106439 97% 97% EQT Infrastructure IV GmbH & Co. KG Germany HRA 109499 97% 97% EQT Infrastructure IV Side Car GmbH & Co. KG Germany HRA 111708 97% 97% EQT Infrastructure V GmbH & Co. KG Germany HRA 112378 97% 97% EQT Infrastructure VI GmbH & Co. KG Germany HRA 116470 98% 98% EQT Infrastructure VI Side Car GmbH & Co. KG Germany HRA 117225 98% 98% EQT Infrastructure VI Soteria Side Car GmbH & Co. KG Germany HRA 117789 98% 0% EQT Investment GmbH & Co. KG Germany HRA 98727 97% 97% EQT Leverage Employee GP GmbH & Co. KG Germany HRA 117586 98% 0% EQT Mid Market Asia III GmbH & Co. KG Germany HRA 106294 97% 97% EQT Mid Market Europe GmbH & Co. KG Germany HRA 105565 97% 97% EQT Mid Market Investment GmbH & Co. KG Germany HRA 96874 97% 97% EQT Mid Market US GmbH & Co. KG Germany HRA 103658 97% 97% EQT Public Value GmbH & Co. KG Germany HRA 109578 97% 97% EQT Ventures II GmbH & Co. KG Germany HRA 110584 97% 97% EQT Ventures Investment GmbH & Co. KG Germany HRA 104817 97% 97% EQT VIII GmbH & Co. KG Germany HRA 107356 97% 97% EQT VIII Side Car GmbH & Co. KG Germany HRA 110252 97% 97% EQT IX GmbH & Co. KG Germany HRA 111687 97% 97% EQT IX Side Car GmbH & Co. KG Germany HRA 113956 97% 97% EQT X GmbH & Co. KG Germany HRA 115219 98% 98% EQT X Side Car GmbH & Co. KG Germany HRA 116468 98% 98% EQT HC Holdings I B.V. Netherlands 58187898 100% 100% EQT HC Holdings II B.V. Netherlands 58188177 100% 100% White Mill Two AG Switzerland CHE-195.379.514 100% 100% 1) The EQT AB Group controls only specified and ring-fenced assets and liabilities within the legal entity (a silo), see Note 2 regarding non-consolidated special entities. Note 24 cont. INTERESTS IN UNCONSOLIDATED STRUCTURED ENTITIES Silos not controlled and accordingly not consolidated by the EQT AB Group consists of investments in EQT funds and carried interest facili- tated through silo entities. The EQT AB Group has economic interests relating to transactions with unconsolidated silos with reference to the Group’s carried interest. The EQT AB Group’s investments relating to carried interests are recognized in the balance sheet as “Financial investments” , measured at fair value and changes in fair value are recognized as Investment income in the income statement. Disclosures of the investments are presented in Note 18. Carried interest is recognized in the income statement. Contract assets relating to carried interest are recognized as “Prepaid expenses and accrued income” and separately disclosed in Note 5. The EQT AB Group’s maximum risk exposure relating to these silos are represented by the amount recognized in the balance sheet. INVESTMENT ENTITY From an IFRS 10 perspective EQT AB Group is considered an investment entity. In accordance with IFRS 10 an investment entity is an entity whose business purpose is to invest funds solely for returns from capital appreciation, investment income or both and evaluate the perfor- mance of its investments on a fair value basis. As an investment entity EQT AB is exempt from consolidating subsidiaries that are invest- ments and measures them at fair value through profit or loss instead. Subsidiaries that serve in a supporting function such as investment services continue to be consolidated in accordance with IFRS 10 and those that are not providing investment services will be recognized at fair value instead of being consolidated. EQT Annual and Sustainability Report 2023 / Page 87Notes Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Board of directors’ report 52 Consolidated financial statements with notes 56 Parent company financial statements with notes 91 Proposal for the distribution of net income 100 Signatures of the board of directors and the CEO 101 Managing risks 102 Auditor’s report 109 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 89 ===== Note 26 Business combination BEAR LOGI As of 27 January 2022 EQT completed the acquisition of Bear Logi. Bear Logi, founded in Tokyo, Japan in 2009, is a value-add logistics investment manager focused on acquisitions, development, con- struction and leasing, with extensive knowledge of the Japanese and Korean logistics markets, with around 25 employees by the time of closing. To date, Bear Logi has invested capital based on single asset funding, and will as part of EQT Exeter create a fund-setup within logistics properties similar to EQT Exeter’s existing structure in the US and Europe. Bear Logi generated approximately USD 1m in revenues during 2021. The transaction did not have a material impact on EQT AB’s financial numbers and did not add any fee-generating assets under management to EQT AB at closing. Total upfront consideration amounted to USD 8.7m with a right to potential earn-out payments if certain revenue and fundraising targets are met. The earn-out payments are conditioned to continued employment at the date of vesting why this from an accounting per- spective will be recorded as personnel expenses over the vesting period of 3–6 years. Total transaction costs amounted to EUR 1.1m whereof EUR 0.0m are included in other operating expenses during 2023. LSP As of 28 February 2022 EQT completed the acquisition of Life Sciences Partners (LSP), a leading European life sciences venture capital firm with, by the time of closing, approximately EUR 2.2bn of fee-gener- ating assets under management (FAUM) and a team of 34 employees. LSP, headquartered in Amsterdam, the Netherlands, was a venture capital firm that invested in innovative companies with strong scientific and clinical rationale across several life sciences strategies. It was founded in 1998 and was one of Europe’s largest and most experienced life sciences investment firms. LSP strengthened EQT’s position as one of the leading and most active private market investors in the healthcare sector. LSP generated approximately EUR 37m in revenues and approximately EUR 24m in EBITDA (excluding carried interest) during 2021. EQT acquired 100 percent of the LSP management company and 20 percent of the right to carried interest in selected LSP funds. In addition, EQT AB are entitled to 35 percent of the carried interest of future funds, which is in line with existing EQT practice. The total consideration was EUR 365.8m, comprising new EQT AB publicly traded shares EUR 228.3m (corresponding to 7,548,384 shares) and cash EUR 112.0m, a liability taken over of EUR 23.9m and potential earn-out of EUR 1.6m. Of the total consideration, EUR 74.2m in shares to management are subject to vesting conditions under a “Leaver put option clause“ , meaning that if the management person becomes a bad leaver, such as voluntary resignation or termination for cause, the person will need to return the unvested shares to EQT for nil consideration. The Leaver put option arrangement have from an accounting perspective been separated from the business combi- nation. The consideration has initially been accounted for as a pre- payment and will be recorded as employee expenses over the vesting period of 2–4 years. The purchase consideration for the business combination was EUR 291.6m. The transaction was subject to customary closing conditions, including antitrust, regulatory and certain fund investor clearances. The fair value of the shares is calculated with reference to the quoted price of the EQT AB shares at the date of acquisition, which was SEK 320.90 per share. Total transaction costs (including M&A insurance) amounted to EUR 5.1m whereof EUR 0.0m are included in other operating expenses during 2023. Total consideration EURm Shares issued, at fair value 228.3 Cash consideration 112.0 Liability taken over 23.9 Fair value of cash based earn-out 1.6 Total consideration 365.8 Employment linked consideration (Shares issued, at fair value) –74.2 Purchase consideration for the business combination 291.6 Note 25 Earnings per share EUR 2023 2022 Earnings per share, before dilution 0.110 0.171 – of which continued operations 0.117 0.171 Earnings per share, after dilution 0.109 0.171 – of which continued operations 0.117 0.171 The calculation of earnings per share has been based on the net income attributable to the shareholders and the weighted average number of shares outstanding. The amounts used in the numerator and denomi- nator are presented below together with some additional information. Net income attributable to ordinary shareholders and outstanding class C shares, basic and diluted EUR m 2023 2022 Net income attributable to shareholders, basic 129.9 176.3 Net income attributable to shareholders, diluted 129.9 176.3 Weighted average number of shares, basic and diluted Number of shares 2023 2022 Weighted average number of shares, basic 1,185,754,323 1,031,955,891 Number of dilutive class C shares 679,983 638,590 Weighted average number of shares, diluted 1,186,434,306 1,032,594,481 EQT Annual and Sustainability Report 2023 / Page 88Notes Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Board of directors’ report 52 Consolidated financial statements with notes 56 Parent company financial statements with notes 91 Proposal for the distribution of net income 100 Signatures of the board of directors and the CEO 101 Managing risks 102 Auditor’s report 109 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 90 ===== ASSETS ACQUIRED AND LIABILITIES ASSUMED The fair values of the identifiable assets and liabilities as at the date of acquisition were: EURm Fair value recognized on acquisition Investor contracts 131.3 Investor relationships 77.4 Trademark and trade name 0.0 Right of use assets 2.7 Tangible fixed assets 0.1 Deferred tax asset 0.0 Receivables 0.9 Other current assets 1.5 Cash and cash equivalents 2.8 Interest bearing liabilities –4.5 Lease liabilities –2.7 Deferred tax liability – Intangibles –53.9 Current liabilities –7.9 The fair values of the identifiable assets and liabilities 147.8 Goodwill 143.8 Purchase consideration for the business combination 291.6 Analysis of cash flows on acquisition EURm Cash consideration (included in cash flows from investing activities) –112.0 Deferred payment (included in cash flows from investing activities) 16.4 Net cash acquired (included in cash flows from investing activities) 2.8 Transaction costs of the acquisition (included in cash flows from operating activities) –5.0 Net cash flow on acquisition –97.8 The earn-out is conditional upon LSP’s Dementia fund reaching a target level of capital raised. There is an additional earn-out which is included in the row Cash consideration, relating to LSP’s LSP 7 fund capital raising, because the fundraising target had been met at the acquisition date. The goodwill mainly comprises assembled work force, the oppor- tunity to attract new investors and the platform to develop future business opportunities and funds. Goodwill is allocated entirely to the segment Private Capital. Goodwill will not be tax deductible. The Group measured the acquired lease liabilities using the present value of the remaining lease payments at the date of acqui- sition. The right-of-use assets were measured at an amount equal to the lease liabilities. During 2022 LSP contributed EUR 40.9m of revenue and EUR 28.0m to profit before tax from continuing operations of the Group. If the combination had taken place at the beginning of 2022, revenue from continuing operations would have been EUR 1,506.2m and profit before tax from continuing operations for the Group would have been EUR 268.8m. RCG As of 10 June 2022, EQT completed the acquisition of Redwood Capital Group (RCG), a residential core plus and value-add investment manager headquartered in Chicago, Illinois, USA. RCG was founded in 2007 and is deeply experienced in all operating areas, including acquisition, asset management, construction management and property management. RCG has successfully executed 79 multifamily investments in high-growth US markets, including 48 realized invest- ments that achieved in excess of 2x equity returns across more than 22,000 units. Investments comprise deal-by-deal joint ventures on behalf of multiple institutional clients, including global fund sponsors, insurance companies and family offices. 22 employees joined EQT Exeter as of closing. The transaction was not deemed to have a material impact on EQT AB’s financial numbers and did not add any fee-generating assets under management (FAUM) to EQT AB at closing. Total upfront cash consideration amounted to USD 34.3m with a right to potential earn-out payments if certain fundraising targets are met. Total transaction costs amounted to EUR 2.3m whereof EUR 0.0m are included in other operating expenses during 2023. BPEA As of 18 October 2022, EQT completed the acquisition of Baring Private Equity Asia (BPEA), a leading private market investment firm in Asia with approximately EUR 22bn of FAUM at the time of closing. Operating since 1997, BPEA has built a platform with deep sec- tor-based expertise and a value-driven active ownership approach. It invests in mid to large-cap companies in Asia, mainly focused on Private Equity, but also Real Estate and more recently Growth. With 10 regional offices, BPEA combines local execution with a Pan-Asian reach, mirroring EQT’s local-with-locals approach. The combination represented a step-change in EQT’s global reach with immediate Pan-Asian presence at scale and with its thematic investment approach, supporting companies from early stage to maturity, EQT will continue to scale and expand its range of strategies across its European, North American, and Asian core markets and deliver for its clients. EQT acquired 100% of the BPEA management company, the BPEA general partner entities which control the BPEA funds, and the right to carried interest in selected existing funds (including 25% in BPEA VI and 35% in BPEA VII). EQT will invest in and be entitled to 35% of the carried interest in all future funds, starting with BPEA VIII, in line with existing EQT practice. The total consideration was EUR 5,052.5m, comprising new EQT AB shares EUR 3,603.0m (corresponding to 191,200,000 shares) and cash EUR 1,449.5m. Of the total consideration, EUR 765.6m in shares to management are subject to vesting conditions under a “Leaver put option clause” , meaning that if the management person becomes a bad leaver, such as voluntary resignation or termination for cause, the person will need to return the unvested shares to EQT for nil consider- ation. The Leaver put option arrangement has from an accounting perspective been separated from the business combination. The con- sideration has initially been accounted for as a prepayment and will be recorded as personnel expenses over the vesting period of 1–4 years. The purchase consideration for the business combination is EUR 4,286.9m. The fair value of the shares is calculated with reference to the quoted price of the EQT shares at the date of acquisition, which was SEK 207.30 per share. Transaction costs (including M&A insurance) of EUR 57,2m whereof EUR 0.0m are included in other operating expenses during 2023. Total consideration EURm Share issued, at fair value 3,603.0 Cash consideration 1,449.5 Total consideration 5,052.5 Employment linked consideration (shares issued, at fair value) –765.6 Purchase consideration for the business combination 4,286.9 Note 26 cont. EQT Annual and Sustainability Report 2023 / Page 89Notes Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Board of directors’ report 52 Consolidated financial statements with notes 56 Parent company financial statements with notes 91 Proposal for the distribution of net income 100 Signatures of the board of directors and the CEO 101 Managing risks 102 Auditor’s report 109 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 91 ===== ASSETS ACQUIRED AND LIABILITIES ASSUMED The fair values of the identifiable assets and liabilities as at the date of acquisition were: EURm Fair value recognized on acquisition Investor contracts 1,854.5 Investor relationships 1,074.9 Trademark and trade name 136.6 Contingent carried interest 512.9 Right of use assets 27.8 Tangible fixed assets 2.9 Financial investments 123.2 Cash and cash equivalents 126.3 Other receivables 65.4 Deposits, prepayments 2.4 Deferred tax liability - Intangibles –390.6 Deferred liabilities –104.4 Lease liabilities, short and long term –27.8 Current liabilities –235.0 The fair values of the identifiable assets and liabilities 3,169.0 Goodwill 1,117.8 Purchase consideration for the business combination 4,286.9 Analysis of cash flows on acquisition EURm Total cash consideration (related to cash flows from investing activities) –1,449.5 Net cash acquired (included in cash flows from investing activities) 126.3 Transaction costs of the acquisition (included in cash flows from operating activities) –56.9 Transaction costs attributable to issuance of shares (included in cash flow from financing activities) –0.1 Net cash flow on acquisition –1,380.2 Trademarks and trade names relate to BPEA. The goodwill mainly comprises assembled work force, the oppor- tunity to attract new investors and the platform to develop future business opportunities and funds. Goodwill is allocated entirely to the segments Private Capital and Real Assets. Goodwill will not be tax deductible. The Group measured the acquired lease liabilities using the present value of the remaining lease payments at the date of acqui- sition. The right-of-use assets were measured at an amount equal to the lease liabilities. If the combination had taken place at the beginning of 2022, revenue from continuing operations would have been EUR 1,800.5m, EBITDA would have been EUR 712.0m and profit before tax from continuing operations for the Group would have been EUR 461.7m. If the combination had taken place at the beginning of 2022, adjusted revenue from continuing operations would have been EUR 1,864.3m, adjusted EBITDA would have been EUR 1,059.9m and profit before tax from continuing operations for the Group would have been EUR 964.5m. Note 26 cont. EQT Annual and Sustainability Report 2023 / Page 90Notes Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Board of directors’ report 52 Consolidated financial statements with notes 56 Parent company financial statements with notes 91 Proposal for the distribution of net income 100 Signatures of the board of directors and the CEO 101 Managing risks 102 Auditor’s report 109 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 92 ===== Parent company income statement 1 January – 31 December SEK m Note 2023 2022 Net sales 2 2,091.8 1,678.9 Other operating income 3 0.0 23.7 Total revenue 2,091.8 1,702.6 Personnel expenses 5 –585.5 –505.7 Other external costs 6, 7 –1,192.7 –1,296.1 Other operating expenses 4 –7.2 – Depreciation and amortization 12, 13 –11.5 –9.5 Operating profit/loss 294.9 –108.6 Profit/loss from financial items Profit/loss from participation in subsidiaries 8 5,097.9 4,021.6 Interest income and similar profit/loss items 9 320.2 350.5 Interest expense and similar profit/loss items 10 –759.7 –2,675.9 Profit/loss after financial items 4,953.3 1,587.7 Group contribution 257.9 1,154.1 Profit/loss before tax 5,211.3 2,741.8 Income taxes 11 115.2 –0.2 Net income 5,326.5 2,741.6 Net income corresponds to total comprehensive income. EQT Annual and Sustainability Report 2023 / Page 91Parent company financial statements Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Board of directors’ report 52 Consolidated financial statements with notes 56 Parent company financial statements with notes 91 Proposal for the distribution of net income 100 Signatures of the board of directors and the CEO 101 Managing risks 102 Auditor’s report 109 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 93 ===== Parent company balance sheet SEK m Note 31.12.2023 31.12.2022 ASSETS Non-current assets Intangible assets Trademarks 12 - – - – Property, plant and equipment Leasehold improvements 13 52.1 54.4 Equipment 13 3.5 4.6 55.6 59.0 Financial assets Participation in subsidiaries 14 89,920.6 83,037.6 Long-term loans, subsidiaries 5,970.4 6,180.6 Other securities held as non-current assets 15 14.3 13.8 Deferred tax assets 11 116.4 - Other long-term receivables 17 4.8 5.4 96,026.5 89,237.4 Total non-current assets 96,082.1 89,296.4 Current assets Current receivables Accounts receivable 7.3 22.8 Receivables from subsidiaries 1,788.3 6,909.8 Current tax assets 58.6 58.1 Other receivables 256.4 392.8 Prepaid expenses and accrued income 18 146.7 106.4 2,257.3 7,489.9 Cash and bank 19 215.1 84.0 Total current assets 2,472.4 7,573.9 TOTAL ASSETS 98,554.5 96,870.3 SEK m Note 31.12.2023 31.12.2022 EQUITY AND LIABILITIES Equity 20 Restricted equity Share capital 125.3 119.4 125.3 119.4 Non-restricted equity Share premium reserve 60,051.5 60,487.8 Profit or loss brought forward –1,901.6 –1,555.5 Net income 5,326.5 2,741.6 63,476.4 61,673.9 Total equity 63,601.7 61,793.3 Non-current liabilities Interest-bearing liabilities 21 22,423.6 22,451.3 Long-term loans, subsidiaries 10,683.1 11,059.0 Total non-current liabilities 33,106.7 33,510.3 Current liabilities Accounts payable 50.1 29.9 Liabilities to subsidiaries 1,178.2 761.0 Tax liabilities – – Other liabilities 170.8 252.0 Accrued expenses and prepaid income 22 447.0 523.8 Total current liabilities 1,846.1 1,566.7 Total liabilities 34,952.8 35,077.0 TOTAL EQUITY AND LIABILITIES 98,554.5 96,870.3 EQT Annual and Sustainability Report 2023 / Page 92Parent company financial statements Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Board of directors’ report 52 Consolidated financial statements with notes 56 Parent company financial statements with notes 91 Proposal for the distribution of net income 100 Signatures of the board of directors and the CEO 101 Managing risks 102 Auditor’s report 109 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 94 ===== Parent company statement of changes in equity Restricted equity Non-restricted equity SEK m Share capital1) Share premium reserve Retained earnings incl. profit for the year Total equity Opening balance at 1.1.2023 119.4 60,487.8 1,186.1 61,793.3 Net income – – 5,326.5 5,326.5 Transactions with owners Dividend – – –3,557.2 –3,557.2 Share issue 6.0 – – 6.0 Cancelling of C shares –0.7 – – –0.7 Bonus issue 0.7 – – 0.7 Equity incentive programs – – 469.5 469.5 Repurchase of own shares /and or participations – –436.4 – –436.4 Total 6.0 –436.4 –3,087.6 –3,518.0 Closing balance at 31.12.2023 125.3 60,051.5 3,424.9 63,601.7 1) The share capital amounts to SEK 125,335,166. Restricted equity Non-restricted equity SEK m Share capital1) Share premium reserve Retained earnings incl. profit for the year Total equity Opening balance at 1.1.2022 99.5 18,451.3 1,359.0 19,909.8 Net income – – 2,741.6 2,741.6 Transactions with owners Dividend – – –3,053.5 –3,053.5 Share issue 19.9 42,036.6 – 42,056.4 Equity incentive programs – – 139.0 139.0 Total 19.9 42,036.6 –2,914.5 39,141.9 Closing balance at 31.12.2022 119.4 60,487.8 1,186.1 61,793.3 1) The share capital amounts to SEK 119,369,201. EQT Annual and Sustainability Report 2023 / Page 93Parent company financial statements Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Board of directors’ report 52 Consolidated financial statements with notes 56 Parent company financial statements with notes 91 Proposal for the distribution of net income 100 Signatures of the board of directors and the CEO 101 Managing risks 102 Auditor’s report 109 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 95 ===== Parent company statement of cash flows SEK m 2023 2022 Cash flows from operating activities Operating profit (EBIT) 294.9 –108.6 Adjustments: Depreciation and amortization 11.5 9.5 Foreign currency exchange differences 7.2 –23.7 Other non-cash adjustments 31.5 10.2 Increase (–) /decrease (+) in account receivables and other receivables 2,543.3 6,506.3 Increase (+) /decrease (–) in account payables and other payables –292.5 –5,662.5 Dividends received 1,983.7 3,843.5 Income taxes paid –1.6 3,8 Net cash from operating activities 4,578.0 4,578.4 Cash flows from investing activities Investment in subsidiaries/Group contributions paid –79.6 –827.1 Investment in subsidiaries – –16,862.9 Divestment of subsidiaries 56.1 0.7 Acquisition of property, plant and equipment –8.1 –8.0 Investment in non current assets –0.4 –4.9 Divestment of non current assets 0.7 0.9 Interest received 37.4 76.7 Final earn-out divestment Credit 131.2 – Net cash from investing activities 137.2 –17,624.8 Cash flows from financing activities Dividends paid –3,557.2 –3,053.5 Proceeds from borrowings – 15,435.8 Interest paid –515.6 –26.5 Purchase of own shares and/or participations –430.4 – Net cash flows from financing activities –4,503.3 12,355.8 Net increase/decrease in cash and cash equivalents 211.9 –690.6 Cash and cash equivalents at the beginning of the period 84.0 80.0 Foreign currency exchange differences on cash and cash equivalents –80.8 694.6 Cash and cash equivalents at the end of the period 215.1 84.0 EQT Annual and Sustainability Report 2023 / Page 94Parent company financial statements Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Board of directors’ report 52 Consolidated financial statements with notes 56 Parent company financial statements with notes 91 Proposal for the distribution of net income 100 Signatures of the board of directors and the CEO 101 Managing risks 102 Auditor’s report 109 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 96 ===== Note 1 Accounting principles GENERAL INFORMATION EQT AB, reg.no 556849-4180, is a Swedish registered limited company domiciled in Stockholm. The registered postal address is Box 16409, 103 27 Stockholm. The visiting address is Regeringsgatan 25, Stockholm. The annual report and consolidated financial statements have been approved for issuance by the Board of directors on 15 March 2024. The consolidated income statement and balance sheet and the Parent company’s income statement and balance sheet will be presented for approval at the annual shareholders’ meeting on 27 May 2024. Amounts are presented in SEKm unless otherwise stated. The accounting policies are unchanged compared with the annual report 2022. STANDARDS ISSUED BUT NOT YET EFFECTIVE Revised standards and interpretations issued by the IASB and the IFRS Interpretations Committee but not yet effective, are expected to have an immaterial impact on the Parent company’s financial statements in the future periods of initial application. DIFFERENCES BETWEEN THE GROUP’S AND THE PARENT COMPANY’S ACCOUNTING PRINCIPLES Classification and presentation The income statement and balance sheet of the Parent company are prepared in accordance with the schedules of the Annual Accounts Act, while the statement of income and other comprehensive income, the statement of changes in equity, and the statement of cash flows are based on IAS 1 Presentation of Financial Statements and IAS 7 Statement of Cash Flows. Discontinued operations Non-current assets held for sale and discontinued operations are not reported separately in EQT AB’s income statement and balance sheet as the company follows Annual Accounts Act’s presentation form for income statement and balance sheet. EQT AB does not apply IFRS 5. Subsidiaries Shares in subsidiaries are recognized at cost. Transaction costs are included in the carrying amount of shares in subsidiaries. In the consoli- dated financial statements, transaction costs attributable to business combinations are recognized directly in the income statement as incurred. Contingent considerations are measured based on the probability that the consideration will be paid. Any changes in the provision/ receivable is added to/reduces the cost of the shares in subsidiaries. In the consolidated financial statements, contingent considerations are mea- sured at fair value and changes in fair value are recognized in the income statement. Investments in certain foreign entities with different types of share classes and with ring-fenced assets and liabilities attributable to each type of class, are treated as separate units, so called silos, within each entity. Only the share classes attributable to silos that are controlled by EQT AB are recognized as shares in subsidiaries. Functional and accounting currency The Parent company does not apply the Group’s principles for deter- mining the functional currency. Instead, the Annual Accounts Act’s rules on accounting currency are applied, which means that the Parent company has SEK as its accounting and reporting currency. Anticipated dividends Anticipated dividends from subsidiaries are recognized in cases where the Parent company alone has the right to decide the size of the div- idend and the Parent company has decided on the size of the dividend before the Parent company has published its financial statements. Tax Unlike the consolidated financial statements, the Parent company rec- ognizes untaxed reserves in the balance sheet without allocating it to equity and deferred tax liability. Similarly, no part of the appropriation is allocated to deferred tax expenses in the Parent company’s income statement. Leases The Parent company does not apply IFRS 16 Leases. Instead, all lease contracts where EQT acts as a lessee, the lease payments are recog- nized as an expense according to the straight-line method over the lease term. Accordingly, no right of use assets nor lease liabilities are recognized in the balance sheet. Research and development In the Parent company, all development costs are recognized as expenses in the income statement as incurred. In the consolidated financial statements, development costs are capitalized when certain criterias are met. Financial instruments The Parent company has, in accordance with RFR 2, chosen not to apply IFRS 9 Financial Instruments for financial instruments, which means that financial non-current assets are measured at cost or amortized cost less any impairment losses and financial current assets are measured according to the lower of cost or market. However, some of the principles in IFRS 9 are applicable – such as impairment losses and credit losses, recognition/derecognition, and the effective interest method for interest income and expenses. The cost of interest-bearing instruments is adjusted for the accrued difference between the amount that was initially paid, after addition/ deduction of transaction costs, and the amount paid on maturity, i.e. the premium and discount respectively. Impairment losses on financial assets measured at amortized cost are recognized in accordance with IFRS 9, in the same manner as the consolidated financial statements. Impairment losses on investments in equity instruments are recog- nized if the fair value is less than the carrying amount. Financial guarantees The Parent company’s issued financial guarantee contracts consist partly of guarantees in favor of subsidiaries. Financial guarantees require the company to reimburse the holder of a debt instrument for losses that it incurs because a specified debtor fails to make payment when it is due in accordance with the terms of the contract. The Parent company applies the allowed exemption to IFRS 9 as permitted by the Swedish Financial Reporting Board (RFR) for financial guarantees. The exemption relates to financial guarantee contracts issued in favor of, among others, subsidiaries. The Parent company recognizes financial guarantee contracts as provisions in the balance sheet when the company has a commitment for which it is probable that a payment will be required to settle the commitment. Shareholders’ contributions Provided shareholders’ contributions are recognized as an increase in the carrying amount of the shares/participation. Repaid shareholders’ contributions are recognized as dividends followed by an impairment test of shares in subsidiaries. Group contributions Both group contributions received and paid are recognized as appropriations. Parent company financial statements with notes EQT Annual and Sustainability Report 2023 / Page 95Parent company financial statements Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Board of directors’ report 52 Consolidated financial statements with notes 56 Parent company financial statements with notes 91 Proposal for the distribution of net income 100 Signatures of the board of directors and the CEO 101 Managing risks 102 Auditor’s report 109 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 97 ===== Note 2 Revenue Revenue derives from contracts to provide services for other companies, mainly subsidiaries. The services relate to management and support functions and are considered to be interrelated and therefore constitute a single performance obligation that is fulfilled over time to the cus- tomer. The transaction price for the services is determined by a method based on the arm’s length principle. Revenue is recognized over time as the assignment is performed based on costs incurred and the fulfillment of the performance obligations. The fee is invoiced on an ongoing basis based on a preliminary cost estimate with a final settlement at year end, payment is due within 10 days from invoicing. Note 3 Other operating income 2023 2022 Foreign currency gains on operating receivables/liabilities – 23.7 – 23.7 Note 4 Other operating expenses 2023 2022 Foreign currency losses on operating receivables/liabilities –7.2 – –7.2 – Note 5 Employees and personnel expenses Average number of employees 2023 whereof women 2022 whereof women Sweden 211 43% 178 41% Disclosures regarding the company’s Board of directors and senior executives are presented in the Group’s Note 7. Salaries, other remunerations and social security expenses, including pension expenses 2023 2022 Salaries and remunerations Social security expenses Salaries and remunerations Social security expenses 357.3 165.9 312.7 146.1 (of which pension expenses) 51.7 50.2 Remunerations to the company’s CEO and other senior executives are presented in the Group’s Note 7. Note 6 Audit fees and expenses 2023 2022 KPMG Audit services 6.7 6.7 Other services 1.7 1.7 8.4 8.4 Audit services refer to the legally required examination of the annual report and the book-keeping, as well as the Board of directors and the CEO’s management and any other audit examinations or agreed-upon procedures determined by contract. This includes their work assignments which rest upon the company’s auditor to conduct, and advising or other support justified by observations in the course of examination or execution of such other work assignments. Note 7 Operating leases Lease contracts where the Company is the lessee 2023 2022 Future minimum lease payments under non-cancellable operating leases Within one year 37.6 59.6 Between one and five years 137.5 231.8 Later than five years 32.0 112.3 207.1 403.7 2023 2022 Lease expenses recognized 38.1 32.3 Office rent is included in future lease expenses. The lease agreement has a lease term of 10 years. Part of the office rent is recharged to the subsid- iaries EQT Partners AB, EQT Exeter Advisors Sweden AB and EQT Treasury AB and is therefore not recognized in the lease expenses during the year. Note 8 Profit/loss from participations in subsidiaries 2023 2022 Capital gain on divested subsidiaries 161.7 – Impairment of shares in subsidiaries –5.5 –353.7 Dividends from subsidiaries 4,941.8 4,375.4 5,097.9 4,021.6 EQT Annual and Sustainability Report 2023 / Page 96Parent company financial statements Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Board of directors’ report 52 Consolidated financial statements with notes 56 Parent company financial statements with notes 91 Proposal for the distribution of net income 100 Signatures of the board of directors and the CEO 101 Managing risks 102 Auditor’s report 109 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 98 ===== Note 9 Interest income and similar profit/loss items 2023 2022 Interest income, subsidiaries 309.5 334.6 Interest income, other 10.5 14.6 Foreign currency gains – – Other 0.3 1.4 320.2 350.5 Note 10 Interest expense and similar profit/loss items 2023 2022 Interest expenses, subsidiaries –151.6 –131.9 Interest expenses, other –534.4 –413.3 Foreign currency losses –73.7 –2,130.7 –759.8 –2,675.9 Note 11 Income taxes 2023 2022 Current tax expense/income 116.4 – Tax attributable to prior years –1.1 –0.2 115.2 –0.2 Reconciliation of effective tax rate 2023 2022 Profit before tax 5,211.3 2,741.8 Tax at Parent company’s statutory rate, 20.6% (20.6%) –1,073.5 –564.8 Non-deductible expenses –79.5 –123.9 Non-taxable income 1,051.4 901.5 Change in non-recognized tax losses 218.0 –212.8 Tax attributable to prior years –1.1 –0.2 Reported effective tax 115.2 –0.2 Note 12 Intangible assets Trademarks Accumulated cost Opening balance 01.01.2023 0.8 Closing balance 31.12.2023 0.8 Accumulated amortization Opening balance 01.01.2023 –0.8 Closing balance 31.12.2023 –0.8 Carrying amount at year-end 31.12.2023 - Accumulated cost Opening balance 01.01.2022 0.8 Closing balance 31.12.2022 0.8 Accumulated amortization Opening balance 01.01.2022 –0.8 Closing balance 31.12.2022 –0.8 Carrying amount at year-end 31.12.2022 – Note 13 Property plant and equipment Leasehold improvements Equipment Total Accumulated cost Opening balance 01.01.2023 90.3 11.9 102.2 Acquisitions 8.2 – 8.2 Closing balance 31.12.2023 98.5 11.9 110.4 Accumulated depreciation Opening balance 01.01.2023 –36.0 –7.2 –43.2 Depreciation –10.4 –1.1 –11.5 Closing balance 31.12.2023 –46.4 –8.3 –54.7 Carrying amount at year-end 31.12.2023 52.1 3.5 55.6 Accumulated cost Opening balance 01.01.2022 82.5 11.8 94.3 Acquisitions 7.8 0.1 7.9 Closing balance 31.12.2022 90.3 11.9 102.2 Accumulated depreciation Opening balance 01.01.2022 –27.6 –6.1 –33.7 Depreciation –8.4 –1.1 –9.5 Closing balance 31.12.2022 –36.0 –7.2 –43.2 Carrying amount at year-end 31.12.2022 54.4 4.6 59.0 Leasehold improvements relate to the headquarter office. Leasehold improvements also include art where depreciation does not take place. EQT Annual and Sustainability Report 2023 / Page 97Parent company financial statements Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Board of directors’ report 52 Consolidated financial statements with notes 56 Parent company financial statements with notes 91 Proposal for the distribution of net income 100 Signatures of the board of directors and the CEO 101 Managing risks 102 Auditor’s report 109 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 99 ===== Specification of Participations in subsidiaries 31.12.2023 31.12.2022 Subsidiary / Corp. reg. no./ Registered office Number of shares Share in %1) Carrying amount Carrying amount EQT Services (UK) Limited. Reg. no. 07936651, London 725 100.0 24.9 24.7 EQT Holdings B.V. Reg. no. 54467861, Amsterdam 1,800,000 100.0 2,290.4 1,551.6 EQT Investment Verwaltungs-GmbH. Reg. no. HRB 194327, Munich 25,000 100.0 17.3 11.4 EQT Infrastructure II (GP) Limited. Reg. no. 416498, Edinburgh 100 100.02) 0.0 0.0 EQT Fund Management S.à r.l. Reg. no. B167.972, Luxembourg 1,627 100.0 310.1 310.1 EQT Mid Market (GP) Limited. Reg. no. 436969, Edinburgh 100 100.02) 5.5 0.0 EQT Management S.à r.l. Reg. no. B 145067, Luxembourg 12,500 100.0 68.0 52.4 EQT Netherlands Management B.V. Reg. no. 60593733, Amsterdam 1 100.0 – 14.3 EQT Services Netherlands B.V. Reg. no. 851645768, Amsterdam 1,800,000 100.0 – 39.9 EQT Partners AB. Reg. no. 556233-7229, Stockholm 5,000 100.0 49,412.4 49,991.2 EQT Mid Market US (General Partner) Ltd. Reg. no. SC500973, Edinburgh 1 100.02) 0.0 0.0 EQT Real Estate Limited. Reg. no. SC504628, Edinburgh 1 100.02) 0.0 0.0 EQT Ventures (General Partner) S.à r.l. Reg. no. B 0196578, Luxembourg 12,500 100.0 0.4 0.2 EQT Infrastructure III (General Partner) S.à r.l. Reg. no. B 207225, Luxembourg 12,500 100.0 0.1 0.1 EQT Co-Investment (GP) S.à r.l. Reg. no. B 209598, Luxembourg 1,200,000 100.0 0.6 0.6 2023 2022 Accumulated cost Opening balance 87,841.8 27,110.1 Acquisitions 0.0 58,919.4 Divestment of subsidiaries –56.1 –0.7 Shareholders’ contributions paid 6,942.2 1,813.0 Closing balance 94,727.9 87,841.8 Accumulated impairments Opening balance –4,804.3 –4,450.6 Impairment –3.4 –353.7 Closing balance –4,807.7 –4,804.3 Carrying amount at year-end 89,920.6 83,037.6 Note 14 Participations in subsidiaries 31.12.2023 31.12.2022 Subsidiary / Corp. reg. no./ Registered office Number of shares Share in %1) Carrying amount Carrying amount EQT Mid Market Asia III (General Partner) Limited. Reg. no. SC521109, Edinburgh 1 100.02) 0.0 0.0 EQT Mid Market Europe (General Partner) Limited. Reg. no. SC521108, Edinburgh 1 100.02) 0.0 0.0 EQT VII International Holdings B.V. Reg. no. 69473129, Amsterdam 12,000 100.0 0.6 0.6 EQT VIII (General Partner) S.à r.l. Reg. no. B 215816, Luxembourg 12,000 100.0 10.1 0.1 EQT VII Co-Investment (General Partner) S.à r.l. Reg. no. B 217579, Luxembourg 12,000 100.0 1.4 0.2 EQT HC I Holdings B.V. Reg. no. 85291747, Amsterdam 308,642 100.0 – – EQT HC II Holdings B.V. Reg. no. 852917387, Amsterdam 308,642 100.0 – – White Mill Two AG. Reg. no. CH-0203035230-6, Wollerau 308,642 100.0 – – EQT Corporate Services Netherlands B.V. Reg. no. 74993097, Amsterdam 1.0 100.0 0.0 – EQT Treasury AB. Reg. no. 559227-5647, Stockholm 6,500 100.0 24,078.9 17,533.1 EQT VII Floss (General Partner) S.à r.l. Reg.no. B219445, Luxembourg 12,000 100.0 – 3.2 EQT Exeter Holdings US, Inc. Reg. no. 5402675, Dover 100 100.0 11,661.4 11,658.5 EQT Exeter Advisors Sweden AB Reg. no. 559296-3507, Stockholm 25,000 100.0 234.3 200.7 EQT Management SG Pte. Ltd. Reg. no. 2021226838H, Singapore 1.0 100.0 0.0 0.0 BPEA EQT Holdings AB. Reg.no. 559374-8691, Stockholm 25,000 100.0 1,753.5 1,589.3 BAKPDC3 Pte.Ltd. Reg.no. 201708595C, Singapore 54,291 100.0 50.6 55.3 89,920.6 83,037.6 1) Referring to the owners’ share of the capital, which is equivalent to the share of the votes for the total amount of shares. 2) The value amounts to 1 GBP each for these companies. Note 15 Other securities held as non-current assets 2023 2022 Accumulated cost Opening balance 13.8 10.9 Additional assets 0.6 3.8 Divestment –0.1 –0.9 Closing balance 14.3 13.8 Carrying amount at year-end 14.3 13.8 Specification of Participations in subsidiaries, cont. EQT Annual and Sustainability Report 2023 / Page 98Parent company financial statements Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Board of directors’ report 52 Consolidated financial statements with notes 56 Parent company financial statements with notes 91 Proposal for the distribution of net income 100 Signatures of the board of directors and the CEO 101 Managing risks 102 Auditor’s report 109 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 100 ===== Note 16 Financial instruments and risk management FINANCIAL RISKS AND FINANCIAL RISK MANAGEMENT The description of financial risks and financial risk management for the Group – Note 18 Financial Instruments and Financial Risks, is in all material aspects also applicable for the Parent company. FINANCIAL ASSETS AND FINANCIAL LIABILITIES The table below presents the Parent company’s financial assets and liabilities. 2023 2022 Financial assets Long-term loans, subsidiaries 5,970.4 6,180.6 Other securities held as non-current assets 14.3 13.8 Other non-current receivables 4.8 5.4 Accounts receivables 7.3 22.8 Receivables from subsidiaries 1,788.3 6,909.8 Other receivables 256.4 392.8 Cash and bank 215.1 84.0 Total financial assets 8,256.6 13,609.2 Financial liabilities Interest-bearing liabilities 22,423.6 22,451.3 Long-term loans, subsidiaries 10,683.1 11,059.0 Accounts payable 50.1 29.9 Liabilities to subsidiaries 1,178.2 761.0 Other liabilities 170.8 252.0 Accrued expenses 272.9 394.5 Total financial liabilities 34,778.6 34,947.7 All financial assets are recognized at amortized cost. For short-term financial assets and liabilities (accounts receivables, receivables and liabilities from group companies, other receivables and liabilities, accrued income and expenses, cash and bank, and accounts payable) the carrying amounts are considered to be reasonable approximations of their fair value. For a description and disclosures about the fair value of other securities held as non-current assets, see the Group’s Note 18. Note 17 Other long-term receivables 2023 2022 Accumulated cost Opening balance 5.4 5.4 Additional receivables – – Divestment of receivables –0.6 - Carrying amount at the year-end 4.8 5.4 Note 18 Prepaid expenses and accrued income 2023 2022 Insurance 25.0 34.6 Pensions 1.3 1.4 Licenses 69.7 44.9 Other 50.6 25.4 146.7 106.4 Note 19 Revolving credit facility In December 2020, EQT signed a five-year EUR 1 billion revolving credit facility (RCF). On 25 April 2022 the RCF was increased to EUR 1.5 billion. The RCF increases the financial flexibility of EQT and is used for corporate purposes, supporting the EQT AB Group’s growth initia- tives and long-term strategy. The RCF is not limited to a specific cur- rency, it can be utilized in both EUR and USD, by both EQT AB and EQT Treasury AB. As of 31 December 2023, the RCF was unused. The RCF also incorporates a pricing mechanism linked to ESG-related objec- tives, lowering the interest rates if targets are met, and increasing them if targets are not achieved. It is thus in line with EQT’s overall approach of integrating sustainability throughout its activities, both on EQT AB Group level and within funds advised by EQT. Note 20 Number of shares and quota value For further information regarding Number of shares and quota value, see the Group’s Note 14 Equity. Note 21 Interest bearing liabilities For further information regarding Interest bearing liabilities, see the Group’s Note 15 Interest bearing liabilities. Note 22 Accrued expenses and prepaid income 2023 2022 Accrued personnel expenses 174.1 129.3 Accrued consultancy fees 196.1 335.1 Other accrued expenses 76.7 59.4 447.0 523.8 Note 23 Pledged assets and contingent liabilities As of 31 December 2023 the Parent company does not have any general guarantee commitments (SEK 0.0), pledged assets or contingent liabilities. Note 24 Related parties Related parties Year Sales of services Purchases of services Other Receiv- ables Liabilities Subsidiaries 2023 2,090.1 214.3 5,099.6 7,758.7 11,861.2 Subsidiaries 2022 1,626.3 – 4,578.0 13,090.4 11,820.1 Note 25 Events after the reporting period For disclosures regarding events after the reporting period, see the Group’s Note 22. EQT Annual and Sustainability Report 2023 / Page 99Parent company financial statements Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Board of directors’ report 52 Consolidated financial statements with notes 56 Parent company financial statements with notes 91 Proposal for the distribution of net income 100 Signatures of the board of directors and the CEO 101 Managing risks 102 Auditor’s report 109 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 101 ===== PROPOSAL FOR THE DISTRIBUTION OF NET INCOME Standing at the disposal (in SEK) of the annual shareholders’ meeting, in accordance with the balance sheet of EQT AB: Share premium reserve 60,051,499,466 Profit brought forward –1,901,595,962 Net income 5,326,508,088 Total 63,476,411,592 The Board proposes that, following approval of the balance sheet of EQT AB for the financial year 2023, the annual shareholders’ meeting should distribute the earnings as follows: Dividend to shareholders: SEK 3.60 per share 4,265,364,9281) Retained earnings 59,211,046,664 Total 63,476,411,592 1) Based on the number of outstanding shares at 31December 2023. The amount of the dividend may change up until each record date. It is the Board’s opinion that the proposed dividend is justifiable taking into consideration the demands that the nature, scope and risks of EQT’s operations place on the size of EQT AB’s and EQT AB Group’s equity, and EQT AB’s and EQT AB Group’s consolidation needs, liquidity and financial position in general. EQT Annual and Sustainability Report 2023 / Page 100Parent company financial statements Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Board of directors’ report 52 Consolidated financial statements with notes 56 Parent company financial statements with notes 91 Proposal for the distribution of net income 100 Signatures of the board of directors and the CEO 101 Managing risks 102 Auditor’s report 109 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 102 ===== EQT AB Corp. id 556849-4180 The board and CEO assure that the Annual Report has been prepared in accordance with generally accepted accounting principles in Sweden and the consolidated accounts have been prepared in accordance with International Accounting Standards, stated in the regulation of the European Parliament and the Council of Ministers (EG) no 1606/2002 of 19 July 2002, concerning the application of international accounting standards. The Annual Report and the consolidated accounts give a true and fair view of the parent company as well as of the EQT AB Group’s position and result. The Board of directors’ report for the parent company and the EQT AB Group gives a true and fair view of the parent company’s and Group’s business development, position and result. It also describes the major risks and uncertainty factors facing the parent company and Group companies. Stockholm 15 March 2024 Conni Jonsson Christian Sinding Chairperson CEO Brooks Entwistle Diony Lebot Gordon Orr Johan Forsell Marcus Wallenberg Margo Cook The Annual Report and the consolidated accounts have been approved for publication by the Board of directors and the Chief Executive Officer on 15 March 2024. The consolidated income statement and balance sheet and the parent company’s income statement and balance sheet will be presented for adoption by the AGM on 27 May 2024. Our audit report has been submitted KPMG AB Håkan Olsson Reising Authorized public accountant EQT Annual and Sustainability Report 2023 / Page 101Signatures of the board of directors and the CEO Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Board of directors’ report 52 Consolidated financial statements with notes 56 Parent company financial statements with notes 91 Proposal for the distribution of net income 100 Signatures of the board of directors and the CEO 101 Managing risks 102 Auditor’s report 109 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 103 ===== Managing risks EQT faces a variety of risks and uncertainties, which could materially affect its operations, reputation, financial position and/or earnings. Effective oversight and management of risks is an integral part of EQT’s ability to deliver on its strategic objectives. EQT’s ability to generate superior risk-adjusted returns for its funds’ investors requires a full understanding of investment risks and opportunities as well as a disciplined approach to manage those throughout the investment and ownership phases. EQT’s risk appetite is reviewed by the Risk Com- mittee1) and covers the principal risks that the Group is facing. At least twice a year the risk team reviews the list and ranking of risks using a likelihood and impact framework and decides whether any new risks should be incorporated into the Group risk map. These include risks that would threaten the company’s performance or reputation as well as those with a higher likelihood and greater impact on strategic objectives. The Risk Committee reviews and validates any changes of risk ratings. Risks with higher ratings are prioritized through extensive monitoring and thematic reviews. In addition, the risk team continuously monitor and assesses emerging risks and its potential impact on EQT’s strategic objectives. Risk type EQT’s principal risks External risks Uncertain macro environment Operational & financial disruptions related to adverse events Strategic risks Weak fund performance Inability to meet fundraising targets Challenges in attracting, retaining and managing talent Dilution of culture and values Sustainability risks Operational & Compliance risks Failure to adequately scale the operating platform Regulatory & compliance risks Financial risks Market, credit and liquidity risks Emerging risks Increasing shift towards a multipolar world Threats posed by emerging technology EQT Annual and Sustainability Report 2023 / Page 102Managing risks Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Board of directors’ report 52 Consolidated financial statements with notes 56 Parent company financial statements with notes 91 Proposal for the distribution of net income 100 Signatures of the board of directors and the CEO 101 Managing risks 102 Auditor’s report 109 Sustainability notes 113 Corporate governance 144 Additional information 158 1) A committee of senior managers responsible for discussing risk matters and reviewing EQT’s risk management framework on behalf of the Executive Committee. ===== SIDA 104 ===== EXTERNAL RISKS Uncertain macro environment Risk appetite: High Risk overview Potential impact: • Valuation uncertainties resulting in slower investment and exit pace. • Reduced earnings growth, interest coverage and/or covenant risk in portfolio companies. • Tightened financing conditions for new deals. • IPO markets dislocation limiting potential exit routes, leading to longer holding periods. • Carried interest postponed or not achieved. • Extended fundraising timelines. 2023 & outlook The uncertain macro environment with rising interest rates and geopolitical conflicts led to a slowdown in the number of transactions during 2023. With consumer strength deteriorating, corporate margins becoming constrained and geopolitical risks remaining elevated, the uncertain macro environment is expected to continue in 2024. Despite the expectation of rate cuts starting in 2024, the risk remains of persistent inflation forcing central banks to maintain interest rates “higher for longer” which could impact highly leveraged companies. In this environment EQT remains selective and measured when deploying its capital to ensure the differentiated performance track record remains strong. With more than €50bn of dry powder available and a strong pipeline of deal opportu- nities EQT is well-positioned to take advantage of investment opportunities. Within real estate, EQT Exeter is also impacted by the uncertain macro environment. However, as a result of significant amount of exits in the past few years combined with strong fundraising efforts for the flagship funds and a diversified portfolio, EQT Exeter is well-positioned to navigate the complex environment and capitalize on opportu- nities. Risk management & mitigation EQT’s thematic investment approach is based on investing in companies with strong market positions in resilient sectors benefiting from long-term secular trends, thus being less correlated with the economic cycle. EQT has a disciplined approach to leverage and very strong relationships with banks and private credit funds, through its dedicated Global Capital Markets team, which helps the funds’ ability to obtain favorable debt financing, with the majority of the financing being covenant-lite. The EQT governance model enables EQT to work closely with portfolio companies and support them during more challenging times. Throughout the year, EQT has proactively worked with its portfolio companies to manage the maturity profile across the portfolio to mitigate any refi- nancing risk. At the portfolio company debt level, interest rate risk is managed through the use of fixed-rate financing or hedging. Further, the Capital Markets team regularly conducts sensitivity analysis on the cash flows of the EQT’s portfolio companies to proactively manage liquidity. EXTERNAL RISKS Operational & financial disruptions related to adverse events Risk appetite: Moderate Risk overview Potential impact: • May impact EQT’s reputation. • Large financial costs for EQT. • Unforeseen financial consequences for underlying investments. 2023 & outlook Geopolitical risk has increased in both scale and complexity over the past years and is expected to remain at an elevated level throughout 2024. Given EQT’s global presence, further escalations could negatively impact EQT or its portfolio com- panies´operations, earnings or personnel directly or indirectly. In response to this development, EQT continues to review the adequacy and resilience of its technology infrastructure as the business grows. Risk management & mitigation EQT has a strong balance sheet and liquidity position, which makes the Group highly resilient in times of crisis. Its robust incident and crisis management process ensures all relevant parties are quickly mobilized. In response to the heightened geopolitical risk, EQT has been engaging with specialist security risk consulting firms to further strengthen its crisis management capabilities. The EQT governance model enables EQT to work closely with portfolio companies and support them during times of crisis. Within its own operations, EQT continuously defines and imple- ments the best cyber solutions for its environment and runs a threat detection and incident response program. It also provides periodic cyber security training to all employees and con- ducts phishing tests to increase awareness of the risks associated with phishing emails. EQT Annual and Sustainability Report 2023 / Page 103Managing risks Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Board of directors’ report 52 Consolidated financial statements with notes 56 Parent company financial statements with notes 91 Proposal for the distribution of net income 100 Signatures of the board of directors and the CEO 101 Managing risks 102 Auditor’s report 109 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 105 ===== STRATEGIC RISKS Weak fund performance Risk appetite: Low Risk overview Potential impact: • Reduced carried interest and investment income received by EQT. • Reduced ability to raise future funds. • May damage EQT’s brand, reputation and long-term prospects. 2023 & outlook EQT continued to implement future-proofing measures in its funds’ portfolio companies and has worked actively to prepare its portfolio companies for different macro scenarios. EQT funds are in a good position to benefit from a relatively young portfolio invested with a thematic investment approach, with investments based on long-term secular trends with strong pricing power and less correlated with the economic cycle. Despite pockets of underperformance, the valuations across all key funds have been resilient in 2023, due to strong underlying operational performance, and double-digit revenue and EBITDA growth. Given the challenging macro environment, value creation is expected to take longer, leading to longer holding periods which may negatively impact IRRs. Within real estate, EQT Exeter’s diversification of the portfolio and strong rental rate growth creates resiliency in a challenging macroeconomic envi- ronment. EQT Exeter’s vertically integrated oper- ating infrastructure continues the theme of an active ownership model and allows for nimble responses to rapidly changing market conditions. Risk management & mitigation As part of EQT’s active ownership model, the EQT Playbook is a key driver of EQT funds’ per- formance, driving growth through digitalization, sustainability and operational excellence. Strong governance rights ensure EQT’s ability to support the execution of the business plan in the portfolio company. The portfolio companies’ performance is monitored on an ongoing basis. The Portfolio Performance Review (“PPR”) tracks the progress of each investment, identifying opportunities and warning signs early on and advising on the next steps. In addition, size limits per investment ensure that each fund is not materially affected by the underperformance of a single investment. Finally, the Global Investment Forum (“GIF”) reviews overall performance and exposures across all the EQT funds, to ensure consistency in the business lines’ investment approach and drive performance in a disciplined manner. EQT Exeter has decelerated the pace of new acquisitions and property development and instead focus on preserving and closely moni- toring liquidity while reassessing strategies for certain aspects of its portfolio to best position the funds for long-term success. STRATEGIC RISKS Inability to meet fundraising targets Risk appetite: Low Risk overview Potential impact: • Reduced revenues due to lower AUM and management fees, and over time, realized carry. • Loss of market share. • Potential fee pressure may result in lower management fees even when fundraising targets are met. 2023 & outlook The fundraising environment continued to face headwinds in 2023 with global fundraising volumes down more than 25% from peak levels in 2021. The macroeconomic backdrop in certain developed markets and a slowdown in exits is leading to extended fundraising timelines, where newer firms and strategies are facing particular challenges. Given EQT’s strong track record, fund- raising has progressed well for EQT’s established strategies whilst newer strategies are taking longer to raise. In 2024, EQT will continue fundraising for its next flagship fund within its business segment Real Assets and its new funds EQT Nexus and EQT Exeter Real Estate Income Trust (“EQRT”), aimed for the private wealth market. An emerging risk which EQT continues to monitor is the ongoing development of US state anti-ESG legislation which may potentially restrict certain US investors from investing with EQT if they view EQT’s funds or practices to be in contradiction of such legislation. Risk management & mitigation Fund performance is a key driver for EQT’s ability to meet fundraising targets and is the main risk mitigation. EQT’s track record is consistently strong over time with a proven record of returning cash to investors, as evidenced by strong DPI (“distribution to paid-in capital”) across the key funds. While EQT does not control external macro- economic factors, EQT’s project-based fund- raising processes and performance culture help minimize the risk of not meeting fundraising targets. EQT has further strengthened its diverse product offering with the combination of BPEA. With the combination, EQT now has a client base of almost 1200 clients globally with no client rep- resenting more than five percent of committed capital. To ensure adequate resources are allocated to fundraising projects, the Capital Raising team maintains ongoing dialogues with the business lines and updates the fundraising plans accord- ingly. EQT Annual and Sustainability Report 2023 / Page 104Managing risks Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Board of directors’ report 52 Consolidated financial statements with notes 56 Parent company financial statements with notes 91 Proposal for the distribution of net income 100 Signatures of the board of directors and the CEO 101 Managing risks 102 Auditor’s report 109 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 106 ===== STRATEGIC RISKS Challenges in attracting, retaining and managing talent Risk appetite: Moderate Risk overview Potential impact: • Insufficient resources to meet strategic objectives. • Loss of talent, affecting the success of investment and fundraising activities. 2023 & outlook Attracting and nurturing a diverse, world-class EQT team and network is crucial for performance and long-term success. In recent years, EQT has grown both organically and through the combination of EQT Exeter and BPEA. As a result, several people- related processes have been harmonized across the organization. For many years, EQT has focused on increasing the ratio of women and have improved gender balance in boards and management, in both EQT and across portfolio companies. While significant progress has been made in this area, this continues to be an important focus area for EQT. Risk management & mitigation The ability to attract, retain and develop talent is supported by several measures, including a well-defined recruitment process, a competitive and long-term approach to compensation, and a focus on development opportunities through the performance development process, men- toring and the EQT Academy. The EQT Academy is an important tool in providing training for each career stage and function. By investing in its culture and promoting the EQT values to all employees – current, recruited and acquired – the cultural foundation is solid. EQT has introduced a new global ambition which aims for no more than 60% of team members in the board, C-suite, and top earners to share the same gender, cultural background, or socio-economic origin, enhancing diversity, equity and inclusion across leadership. This ini- tiative, which aims to create high-performing teams through reduced homogeneity and increased diversity of thought, will be imple- mented across EQT’s business lines and the portfolio companies, taking into account geographical, cultural and business contexts. STRATEGIC RISKS Dilution of culture and values Risk appetite: Moderate Risk overview Potential impact: • Loss of talent. • May impact staff retention. • Impact on fund performance and long-term strategy. 2023 & outlook People are at the core of EQT’s long-term success and purpose to make a positive impact. With the considerable growth in the number of employees and the geographic footprint over the last three years, maintaining its culture and values is imper- ative for EQT’s continued success. During the year, the way EQT’s values are described have been refreshed to reflect the global organization while remaining true to their meaning, intent and impact. Risk management & mitigation EQT has focused on ensuring its values apply globally, with a local flavor, and embedding them into the strategic focus, people man- age ment practices and development programs. By consistently applying the same set of values across the world, EQT reinforces its culture, protects the ability to perform and retains EQT’s heritage. Employee introduction to the culture and cor- porate values are embedded into the integration process. Employee retention initiatives, training and corporate events are continuously sup- ported. The EQT Academy and the EQT Foundation are important tools for nurturing EQT’s culture and values. The EQT Foundation also acts as a guardian of EQT’s values through its long-term ownership and governance model and the EQT Academy provides training for each career stage and function. EQT Annual and Sustainability Report 2023 / Page 105Managing risks Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Board of directors’ report 52 Consolidated financial statements with notes 56 Parent company financial statements with notes 91 Proposal for the distribution of net income 100 Signatures of the board of directors and the CEO 101 Managing risks 102 Auditor’s report 109 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 107 ===== OPERATIONAL & COMPLIANCE RISKS Failure to adequately scale the operating platform Risk appetite: Moderate Risk overview Potential impact: • Operational failures, which could lead to a deteri- oration of EQT’s reputation, breaches of investor agreements and compliance-related sanctions. • Higher costs of doing business for EQT. • Loss of talent, affecting the success of EQT’s platform. 2023 & outlook In pursuing its growth ambitions, EQT must con- stantly adapt its operational processes to improve the efficiency and scalability of its operating platform. As part of its day-to-day operations, EQT pro- cesses large amounts of transactions and data, making it vulnerable to errors or delays in areas where processes are not fit for purpose. The integration process of recent acquisitions increases the operational risk in the short term. However, as the integration progresses, large efficiency gains are expected where EQT can scale its footprint and enhance the client experience further. EQT sees long-term growth potential in the client segment of private wealth. Products aimed at the private wealth segment, such as EQT Nexus and EQT Exeter Real Estate Income Trust (“EQRT”) further increase the complexity of operations and will require enhanced skills and efficiencies of EQT’s operations. Risk management & mitigation All functions within EQT, particularly the Fund Operations team and Central Functions’ Spe- cialist teams, are responsible for developing and maintaining robust policies & procedures to ensure the quality, resiliency, and scalability of EQT’s operations. The internal control framework is reviewed annually to identify and remedy control issues. In addition, during the year, EQT launched numerous strategic initia- tives to improve the efficiency and scalability of critical business processes. This is expected to continue in 2024. To mitigate the associated risks with new products aimed toward the private wealth client segment, EQT has prepared its operations and hired new team members to support the new initiatives. STRATEGIC RISKS Sustainability risks Risk appetite: Low Risk overview Potential impact: • Reduced investment performance or realization potential, impacting fund returns if material sus- tainability risks and opportunities are not acted on. • Failure to identify thematic (e.g. climate-related or health and wellbeing) investment and fund- raising opportunities could hurt EQT’s market share, in the long run. • Failure to execute on the sustainability agenda or commitments made to investors may damage EQT’s brand, reputation and long-term prospects, including EQT’s ability to raise future funds. • Failure to meet an increasingly complex sustain- ability-related regulatory landscape may result in compliance-related fines, leading to increased operational costs and/or reputational damage. 2023 & outlook EQT has during the year continued its sustainable transformation journey, aimed at strengthening its ability to deliver superior risk-adjusted returns to its clients, while contributing to addressing some of the world’s most pressing challenges. To support the organization in this area, the governance model has recently been updated, with the introduction of a Sustainability Committee in 2022. The internal sustainability organization has sustainability specialists across all business lines as well as embedded within other functions. A focus on upskilling has taken place during the year with several training modules released within e.g. net zero, climate risks in real estate, and diversity, equity and inclusion. EQT’s science-based targets (“SBT”) com- mitment has continued to be a core initiative to accelerate climate transition. Effective execution and risk monitoring is critical to successfully deliv- ering on these goals. As sustainability-related requirements, regula- tions and public scrutiny continue to increase, EQT must constantly adapt its processes to improve the efficiency and scalability of its oper- ating platform whilst reducing the risk of errors to ensure compliance with applicable rules and regulations. Recent work with the Sustainable Finance Disclosure Regulation (“SFDR”) and Corporate Sustainability Reporting Directive (“CSRD”) has put an increasing focus on sustainability risks, internal controls and governance for sustain- ability. Risk management & mitigation As a responsible investor, sustainability and ESG considerations are integral to EQT funds’ investment and value creation process. Sustain- ability risks are evaluated early in the investment process when conducting due diligence on target investments, where sustainability aspects are a key input in the investment decision process. During the year, EQT has worked to integrate its new sustainability risk approach in the investment and ownership process. This has also been complemented with risk assessments within specific strategies, sectors and emerging topics to continuously increase awareness, and develop and improve internal processes. EQT continuously monitors the sustainable practices and performance of the EQT funds’ investments, and escalate issues if needed. Sus- tainability metrics are gathered through regular monitoring and reporting activities. Media screening combined with EQT’s internal incident reporting process are also used to monitor risk exposures, in terms of sustainability-related reputational incidents. EQT Annual and Sustainability Report 2023 / Page 106Managing risks Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Board of directors’ report 52 Consolidated financial statements with notes 56 Parent company financial statements with notes 91 Proposal for the distribution of net income 100 Signatures of the board of directors and the CEO 101 Managing risks 102 Auditor’s report 109 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 108 ===== OPERATIONAL & COMPLIANCE RISKS Regulatory & compliance risks Risk appetite: Low Risk overview Potential impact: • Failure to meet new regulatory requirements may result in compliance-related sanctions and damage EQT’s brand, reputation and long-term prospects. • Increased costs as a result of rise in regulatory burden for EQT. • Cost of doing business in certain jurisdictions becomes prohibitive due to increased regulatory burden and/or uncertainties. • Increased complexities in investment and value- creation process due to regulatory uncertainty and limitations imposed reduce the attractiveness of certain investment opportunities. 2023 & outlook As the private markets industry continues to grow and is becoming increasingly more accessible for non-institutional clients, EQT expects to navigate an evolving regulatory landscape in which regulators increase their focus on the industry, with a particular focus on investor protection and transparency. The introduction of products aimed towards the private wealth market, such as EQT Nexus and EQT Exeter Real Estate Income Trust (“EQRT”) further increases EQT’s regulatory exposure. Large regulatory initia- tives could increase the regulatory burden and operational costs for EQT if not handled efficiently. Furthermore, an increasing global focus on tax requirements with continued uncertainty on how taxation of carried interest is treated may lead to increased costs for EQT. In addition, the intro- duction of the global minimum tax framework (“Pillar Two”) sets forth a common approach for a global minimum tax rate. The EQT AB Group is in scope of the rules and expects to be impacted by new local tax legislations. See more information in the Board of directors’ report. Risk management & mitigation EQT has made significant hiring efforts over the last few years to bolster its Central Functions’ Specialist teams globally to support the organi- zation in navigating an increasingly complex regulatory landscape. EQT has implemented a Regulatory Watch Model to ensure that new regulatory initiatives and trends are identified and assessed promptly to secure business objectives and continuous compliance. EQT has robust documented guidelines, pro- cesses and controls for managing taxes throughout the EQT platform, with a purpose to ensure that all material tax risks are identified and mitigated through tax risk identification processes. FINANCIAL RISKS Market, credit and liquidity risks Risk appetite: Moderate Risk overview Potential impact: • Reduced earnings, if market fluctuations impact interest rates, currency exchange rates or the valuation of EQT AB Group’s investments. • Credit losses, in the event of a failure of a counterparty. 2023 & outlook To further increase EQT’s financial flexibility and support EQT’s growth initiatives and long-term strategy, EQT has over the past few years increased its sustainability-linked Revolving Credit Facility and issued a number of sustainabili- ty-linked bonds. EQT’s interest rate risk is limited as the sustainability-linked bonds have fixed coupons, subject to sustainability-related objectives. Risk management & mitigation The EQT AB Group uses risk mitigation tools, such as minimum credit ratings, cash fore- casting and liquidity facilities. See more information under Note 18. The Treasury team monitors and reports on those risk exposures periodically. EQT Annual and Sustainability Report 2023 / Page 107Managing risks Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Board of directors’ report 52 Consolidated financial statements with notes 56 Parent company financial statements with notes 91 Proposal for the distribution of net income 100 Signatures of the board of directors and the CEO 101 Managing risks 102 Auditor’s report 109 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 109 ===== EMERGING RISKS Increasing shift towards a multipolar world Risk overview Potential impact: • Increased complexities in investment and value-creation process, eroding EQT funds’ investment returns at the time of exit. • Certain sectors and geographies, where EQT funds have invested, become less attractive, leading to long-term drift in the investment strategy, which if not managed, could make EQT less competitive in raising funds over the long term. • Restrictions on certain deals in strategic sectors and geographies may reduce exit options for the EQT funds. • Increasing operational complexities in meeting investor preferences in relation to investments in certain countries or regions. • May affect EQT’s ability to attract capital from investors in certain countries or regions in the long-run. In the face of ongoing trade wars, increasing geo- political tensions and supply chain disruptions, the shift towards a fragmented world economy is accel- erating. The rise of middle power nations adds further layers of complexity and unpredictability to the geopolitical landscape as these nations have their own set of interests and alliances. This could lead to a world where cross-border business models face increasing challenges, including increased reg- ulatory and foreign direct investment scrutiny and lower profit margins. The intensifying restrictions on trade and investments between the United States and China underscores the complexity of conducting deals in certain countries for EQT. With the expansion in Asia through the combi- nation with BPEA, EQT’s exposure to this emerging risk has increased. Risk management & mitigation The spreading of risks across strategies and assets is a key mitigation to manage this emerging risk. Overall performance and expo- sures are monitored by the Global Investment Forum (“GIF”) on a regular basis. In addition, EQT’s local-with-local approach, supported by 600+ high-profile advisors within the EQT Network will help EQT funds’ portfolio com- panies adjust their strategies to such challenges. Furthermore, all proposed investments go through a thorough due diligence and approval process during which all key aspects and out- looks of the transactions, company and industry are discussed. In response to the increasingly complex geo- political landscape, EQT has been engaging with security risk specialists to further strengthen is crisis management capabilities and threat intel- ligence. Finally, the emergence of a multipolar world also presents new opportunities leading to suc- cessful investments, thereby reducing the impact of investments that have failed to adapt their business model. EMERGING RISKS Threats posed by emerging technologies Risk overview Potential impact: • Loss of sensitive financial, personal or propri- etary data leading to damage of EQT’s brand. • Financial costs as a result of breach response and legal fees. • Operational disruptions impacting EQT’s ability to run its day-to-day operations. • Increasing regulatory requirements may lead to more time from security teams on compliance matters and increased cost of breaches. The emergence of AI and quantum computing tech- nologies in cybersecurity presents a double-edged sword, enhancing EQT’s detection and response capabilities while also introducing new risks, including the potential for threat actors to execute sophisticated attacks. This progression represents an emerging risk to existing cryptographic stan- dards, necessitating the development of quantum- resistant security frameworks. Moreover, the ongoing exploitation of supply chains, exacerbated by the increased reliance on vendor services and cloud technologies, expands the potential areas of vulnerability for EQT. As a firm dealing with numerous partners and third-party providers, rig- orous due diligence and monitoring of supply chain security is required to mitigate this emerging risk. Furthermore, the increasingly complex geopolitical landscape adds an element of unpredictability, potentially impacting EQT directly or indirectly. Risk management & mitigation EQT continuously defines and implements the best cyber solutions for its environment and runs a threat detection and incident response program. It also provides periodic cyber security training to all employees and conducts phishing tests to increase awareness of the risks asso- ciated with phishing emails. Through its threat intelligence process, new trends are continu- ously monitored and reported on to the Infor- mation Security Steering Committee on a quar- terly basis, with summaries being reported to the Group Risk function, the Audit Committee and the Board. The Information Security Steering Committee is composed of members of the Executive Committee. In 2022, a board member was appointed to oversee the information security strategy and to meet with EQT’s CISO a minimum of two times per year. EQT Annual and Sustainability Report 2023 / Page 108Managing risks Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Board of directors’ report 52 Consolidated financial statements with notes 56 Parent company financial statements with notes 91 Proposal for the distribution of net income 100 Signatures of the board of directors and the CEO 101 Managing risks 102 Auditor’s report 109 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 110 ===== Auditor’s report To the general meeting of the shareholders of EQT AB, corp. id 556849-4180 REPORT ON THE ANNUAL ACCOUNTS AND CONSOLIDATED ACCOUNTS Opinions We have audited the annual accounts and consolidated accounts of EQT AB for the year 2023. The annual accounts and consolidated accounts of the company are included on pages 50-108 in this doc- ument. In our opinion, the annual accounts have been prepared in accor- dance with the Annual Accounts Act, and present fairly, in all material respects, the financial position of the parent company as of 31 December 2023 and its financial performance and cash flow for the year then ended in accordance with the Annual Accounts Act. The consolidated accounts have been prepared in accordance with the Annual Accounts Act and present fairly, in all material respects, the financial position of the group as of 31 December 2023 and their financial performance and cash flow for the year then ended in accordance with IFRS Accounting Standards, as adopted by the EU, and the Annual Accounts Act. The statutory administration report is consistent with the other parts of the annual accounts and consolidated accounts. We therefore recommend that the general meeting of shareholders adopts the income statement and balance sheet for the parent company and the group. Our opinions in this report on the the annual accounts and consoli- dated accounts are consistent with the content of the additional report that has been submitted to the parent company’s audit committee in accordance with the Audit Regulation (537/2014) Article 11. Basis for Opinions We conducted our audit in accordance with International Standards on Auditing (ISA) and generally accepted auditing standards in Sweden. Our responsibilities under those standards are further described in the Auditor’s Responsibilities section. We are independent of the parent company and the group in accordance with professional ethics for accountants in Sweden and have otherwise fulfilled our ethical respon- sibilities in accordance with these requirements.This includes that, based on the best of our knowledge and belief, no prohibited services referred to in the Audit Regulation (537/2014) Article 5.1 have been pro- vided to the audited company or, where applicable, its parent company or its controlled companies within the EU. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinions. Key Audit Matters Key audit matters of the audit are those matters that, in our professional judgment, were of most significance in our audit of the annual accounts and consolidated accounts of the current period. These matters were addressed in the context of our audit of, and in forming our opinion thereon, the annual accounts and consolidated accounts as a whole, but we do not provide a separate opinion on these matters. Carried interest See disclosure 5 and accounting principles on page 61 in the annual account and consolidated accounts for detailed information and description of the matter. Description of key audit matter Response in the audit As of 31 December 2023 the group reported carried interest of EUR 96 million. Carried interest is a share of profits that EQT AB Group receives through its holdings in the Special Limited Partners as variable consideration fully dependent on the performance of the relevant fund and the devel- opment of the funds underlying investments. EQT AB Group is entitled to an agreed share of accumulated profits exceeding agreed thresholds over the expected life of each individual fund. Management of the EQT AB Group makes assumptions and uses estimates to determine whether or not revenue should be recognized including the timing and measurement of revenue from carried interest. Revenue should only be recognized to the extent it is highly probable that revenue would not result in significant revenue reversal of accumulated revenue recognized on final settlement of the fund. The reversal risk is managed through adjustments of current unrealized fund values by imposing discounts. The discounts applied depend on specific segment risks and the expected average remaining holding period of each fund. Our audit procedures included, but were not limited to: • We have reviewed the company’s model for calculation of carried interest and obtained an understanding of the valuation process and key controls in this process, • We have assessed the development of the funds underlying investments and the discounts to conclude whether these were performed in accordance with the prescribed method, • We tested that the methodology and consistency applied in the valuation of the portfolio companies is in accordance with the International Private Equity and Venture Capital Valuation Guidelines, • We assessed the relevance of multiples used against market multiples from relevant transactions or market data, • We have involved an internal valuation- and accounting specialists to assess the current unrealized fund values by imposing discounts and also to evaluate the accuracy of the disclosures of carried interest in the annual accounts and consolidates accounts. EQT Annual and Sustainability Report 2023 / Page 109Auditor’s report Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Board of directors’ report 52 Consolidated financial statements with notes 56 Parent company financial statements with notes 91 Proposal for the distribution of net income 100 Signatures of the board of directors and the CEO 101 Managing risks 102 Auditor’s report 109 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 111 ===== Other information than the annual accounts and consolidated accounts This document also contains other information than the annual accounts and consolidated accounts and is found on pages 1–49, 113–142 and 158-169.The other information comprises also of the remuneration report which we obtained prior to the date of this auditor’s report. The Board of Directors and the Managing Director are responsible for this other information. Our opinion on the annual accounts and consolidated accounts does not cover this other information and we do not express any form of assurance conclusion regarding this other information. In connection with our audit of the annual accounts and consolidated accounts, our responsibility is to read the information identified above and consider whether the information is materially inconsistent with the annual accounts and consolidated accounts. In this procedure we also take into account our knowledge otherwise obtained in the audit and assess whether the information otherwise appears to be materially misstated. If we, based on the work performed concerning this information, con- clude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of the board of directors and the Managing Director The Board of Directors and the Managing Director are responsible for the preparation of the annual accounts and consolidated accounts and that they give a fair presentation in accordance with the Annual Accounts Act and, concerning the consolidated accounts, in accordance with IFRS Accounting Standards as adopted by the EU. The Board of Directors and the Managing Director are also responsible for such internal control as they determine is necessary to enable the preparation of annual accounts and consolidated accounts that are free from material misstatement, whether due to fraud or error. In preparing the annual accounts and consolidated accounts The Board of Directors and the Managing Director are responsible for the assessment of the company’s and the group’s ability to continue as a going concern. They disclose, as applicable, matters related to going concern and using the going concern basis of accounting. The going concern basis of accounting is however not applied if the Board of Directors and the Managing Director intend to liquidate the company, to cease operations, or has no realistic alternative but to do so. The Audit Committee shall, without prejudice to the Board of Direc- tor’s responsibilities and tasks in general, among other things oversee the company’s financial reporting process. Auditor’s responsibility Our objectives are to obtain reasonable assurance about whether the annual accounts and consolidated accounts as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs and generally accepted auditing standards in Sweden will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these annual accounts and consolidated accounts. As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also: • Identify and assess the risks of material misstatement of the annual accounts and consolidated accounts, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinions. The risk of not detecting a material mis- statement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • Obtain an understanding of the company’s internal control relevant to our audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control. • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Board of Directors and the Managing Director. • Conclude on the appropriateness of the Board of Directors’ and the Managing Director’s, use of the going concern basis of accounting in preparing the annual accounts and consolidated accounts. We also draw a conclusion, based on the audit evidence obtained, as to whether any material uncertainty exists related to events or condi- tions that may cast significant doubt on the company’s and the group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the annual accounts and consolidated accounts or, if such disclosures are inadequate, to modify our opinion about the annual accounts and consolidated accounts. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause a company and a group to cease to continue as a going concern. • Evaluate the overall presentation, structure and content of the annual accounts and consolidated accounts, including the disclosures, and whether the annual accounts and consolidated accounts represent the underlying transactions and events in a manner that achieves fair presentation. • Obtain sufficient and appropriate audit evidence regarding the financial information of the entities or business activities within the group to express an opinion on the consolidated accounts. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our opinions. We must inform the Board of Directors of, among other matters, the planned scope and timing of the audit. We must also inform of significant audit findings during our audit, including any significant deficiencies in internal control that we identified. We must also provide the Board of Directors with a statement that we have complied with relevant ethical requirements regarding indepen- dence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, measures that have been taken to eliminate the threats or related safeguards. From the matters communicated with the Board of Directors, we determine those matters that were of most significance in the audit of the annual accounts and consolidated accounts, including the most important assessed risks for material misstatement, and are therefore the key audit matters. We describe these matters in the auditor’s report unless law or regulation precludes disclosure about the matter. EQT Annual and Sustainability Report 2023 / Page 110Auditor’s report Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Board of directors’ report 52 Consolidated financial statements with notes 56 Parent company financial statements with notes 91 Proposal for the distribution of net income 100 Signatures of the board of directors and the CEO 101 Managing risks 102 Auditor’s report 109 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 112 ===== REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS Auditor’s audit of the administration and the proposed appropriations of profit or loss Opinions In addition to our audit of the annual accounts and consolidated accounts, we have also audited the administration of the Board of Directors and the Managing Director of EQT AB for the year 2023 and the proposed appropriations of the company’s profit or loss. We recommend to the general meeting of shareholders that the profit be appropriated in accordance with the proposal in the statutory administration report and that the members of the Board of Directors and the Managing Director be discharged from liability for the financial year. Basis for Opinions We conducted the audit in accordance with generally accepted auditing standards in Sweden. Our responsibilities under those standards are further described in the Auditor’s Responsibilities section. We are inde- pendent of the parent company and the group in accordance with pro- fessional ethics for accountants in Sweden and have otherwise fulfilled our ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinions. Responsibilities of the board of directors and the Managing Director The Board of Directors is responsible for the proposal for appropriations of the company’s profit or loss. At the proposal of a dividend, this includes an assessment of whether the dividend is justifiable considering the requirements which the company’s and the group’s type of opera- tions, size and risks place on the size of the parent company’s and the group’s equity, consolidation requirements, liquidity and position in general. The Board of Directors is responsible for the company’s organization and the administration of the company’s affairs. This includes among other things continuous assessment of the company’s and the group’s financial situation and ensuring that the company’s organization is designed so that the accounting, management of assets and the com- pany’s financial affairs otherwise are controlled in a reassuring manner. The Managing Director shall manage the ongoing administration according to the Board of Directors’ guidelines and instructions and among other matters take measures that are necessary to fulfill the company’s accounting in accordance with law and handle the man- agement of assets in a reassuring manner. Auditor’s responsibility Our objective concerning the audit of the administration, and thereby our opinion about discharge from liability, is to obtain audit evidence to assess with a reasonable degree of assurance whether any member of the Board of Directors or the Managing Director in any material respect: • has undertaken any action or been guilty of any omission which can give rise to liability to the company, or • in any other way has acted in contravention of the Companies Act, the Annual Accounts Act or the Articles of Association. Our objective concerning the audit of the proposed appropriations of the company’s profit or loss, and thereby our opinion about this, is to assess with reasonable degree of assurance whether the proposal is in accor- dance with the Companies Act. Reasonable assurance is a high level of assurance, but is not a guar- antee that an audit conducted in accordance with generally accepted auditing standards in Sweden will always detect actions or omissions that can give rise to liability to the company, or that the proposed appro- priations of the company’s profit or loss are not in accordance with the Companies Act. As part of an audit in accordance with generally accepted auditing stan- dards in Sweden, we exercise professional judgment and maintain pro- fessional scepticism throughout the audit. The examination of the administration and the proposed appropriations of the company’s profit or loss is based primarily on the audit of the accounts. Additional audit procedures performed are based on our professional judgment with starting point in risk and materiality. This means that we focus the exam- ination on such actions, areas and relationships that are material for the operations and where deviations and violations would have particular importance for the company’s situation. We examine and test decisions undertaken, support for decisions, actions taken and other circum- stances that are relevant to our opinion concerning discharge from liability. As a basis for our opinion on the Board of Directors’ proposed appropriations of the company’s profit or loss we examined the Board of Directors’ reasoned statement and a selection of supporting evidence in order to be able to assess whether the proposal is in accordance with the Companies Act. THE AUDITOR’S EXAMINATION OF THE ESEF REPORT Opinion In addition to our audit of the annual accounts and consolidated accounts, we have also examined that the Board of Directors and the Managing Director have prepared the annual accounts and consoli- dated accounts in a format that enables uniform electronic reporting (the Esef report) pursuant to Chapter 16, Section 4(a) of the Swedish Securities Market Act (2007:528) for EQT AB for year 2023. Our examination and our opinion relate only to the statutory requirements. In our opinion, the Esef report has been prepared in a format that, in all material respects, enables uniform electronic reporting. EQT Annual and Sustainability Report 2023 / Page 111Auditor’s report Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Board of directors’ report 52 Consolidated financial statements with notes 56 Parent company financial statements with notes 91 Proposal for the distribution of net income 100 Signatures of the board of directors and the CEO 101 Managing risks 102 Auditor’s report 109 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 113 ===== Stockholm 15 March 2024 KPMG AB Håkan Olsson Reising Authorized Public Accountant Basis for opinion We have performed the examination in accordance with FAR’s recom- mendation RevR 18 Examination of the Esef report. Our responsibility under this recommendation is described in more detail in the Auditors’ responsibility section. We are independent of EQT AB in accordance with professional ethics for accountants in Sweden and have otherwise ful- filled our ethical responsibilities in accordance with these requirements. We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Responsibilities of the board of directors and the Managing Director The Board of Directors and the Managing Director are responsible for the preparation of the Esef report in accordance with the Chapter 16, Section 4(a) of the Swedish Securities Market Act (2007:528), and for such internal control that the Board of Directors and the Managing Director determine is necessary to prepare the Esef report without material misstatements, whether due to fraud or error. Auditor’s responsibility Our responsibility is to obtain reasonable assurance whether the Esef report is in all material respects prepared in a format that meets the requirements of Chapter 16, Section 4(a) of the Swedish Securities Market Act (2007:528), based on the procedures performed. RevR 18 requires us to plan and execute procedures to achieve rea- sonable assurance that the Esef report is prepared in a format that meets these requirements. Reasonable assurance is a high level of assurance, but it is not a guarantee that an engagement carried out according to RevR 18 and generally accepted auditing standards in Sweden will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the Esef report. The audit firm applies International Standard on Quality Management 1, which requires the firm to design, implement and operate a system of quality management including policies or procedures regarding com- pliance with ethical requirements, professional standards and applicable legal and regulatory requirements. The examination involves obtaining evidence, through various proce- dures, that the Esef report has been prepared in a format that enables uniform electronic reporting of the annual accounts and consolidated accounts. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement in the report, whether due to fraud or error. In carrying out this risk assessment, and in order to design procedures that are appropriate in the circum- stances, the auditor considers those elements of internal control that are relevant to the preparation of the Esef report by the Board of Directors and the Managing Director, but not for the purpose of expressing an opinion on the effectiveness of those internal controls. The examination also includes an evaluation of the appropriateness and reasonableness of the assumptions made by the Board of Directors and the Managing Director. The procedures mainly include a validation that the Esef report has been prepared in a valid XHTML format and a reconciliation of the Esef report with the audited annual accounts and consolidated accounts. Furthermore, the procedures also include an assessment of whether the consolidated statement of financial performance, financial position, changes in equity, cash flow and disclosures in the Esef report have been marked with iXBRL in accordance with what follows from the Esef regulation. KPMG AB, Box 382, 101 27, Stockholm, was appointed auditor of EQT AB by the general meeting of the shareholders on the 30 May 2023. KPMG AB or auditors operating at KPMG AB have been the company’s auditor since 2012. EQT Annual and Sustainability Report 2023 / Page 112Auditor’s report Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Board of directors’ report 52 Consolidated financial statements with notes 56 Parent company financial statements with notes 91 Proposal for the distribution of net income 100 Signatures of the board of directors and the CEO 101 Managing risks 102 Auditor’s report 109 Sustainability notes 113 Corporate governance 144 Additional information 158 ===== SIDA 114 ===== 09 Sustainability notes 114 Sustainability notes 139 GRI content index 143 Auditor’s Limited Assurance Report EQT Ventures III The Exploration Company EQT Ventures co-led The Exploration Company's EUR 40 million Series A funding round. The Exploration Company is a leading European space company on a mission to make space exploration affordable, sustainable, and open. The company is building a sustainable, reusable space capsule called Nyx that can be used by private and public operators to fly cargo into space, resupply space stations, and in time, transport humans. Funds raised by new and existing investors will be used to commercialize the maiden full-scale space capsule, finalize and launch the second capsule demonstrator, as well as expand the team. ===== SIDA 115 ===== Sustainability notes Contents Framework and scope ........................................................................................114 Stakeholder engagement and materiality analysis Stakeholder engagement .................................................................................115 Materiality analysis ...............................................................................................116 Invest Investment and value creation process .............................................117 Transform Regenerative processes .....................................................................................119 Decarbonization .................................................................................................119 Renewable energy ............................................................................................122 Circularity .....................................................................................................................122 Biodiversity and nature .....................................................................................122 Climate risks and adaptation .....................................................................122 Equitable business .................................................................................................125 Employee engagement, health and wellbeing ...............................125 Diversity, equity and inclusion .................................................................126 Human rights including labor rights ........................................................126 Accountable leadership ....................................................................................129 Sustainability governance ...............................................................................129 Business ethics ..........................................................................................................130 Sustainability-linked incentives ..................................................................133 Lead Learning, partnerships and advocacy ...................................................134 Reporting and transparency .........................................................................134 EU Taxonomy statement ..................................................................................136 GRI content index ..................................................................................................139 Auditor’s Limited Assurance Report ...................................................... 143 Framework and scope The content and topic boundaries related to EQT’s sustainability reporting are based on EQT’s material- ity analysis, which was updated during 2022 and includes an assessment of material impacts according to the GRI 2021 standards. During 2023 a double materiality assessment was initiated to prepare for the Corporate Sustainability Reporting Directive (CSRD), see more information in the section under ‘Materiality Analysis’. EQT continues to be a supporter of the World Economic Forum (WEF) and reports the overall content from the WEF stakeholder capitalism metrics in this report, although not including an index. For each material topic, relevant GRI disclosures are assessed and reported on. In cases where EQT currently cannot report on a relevant GRI disclosure, the reason for omissions is presented and/or an EQT-specific disclosure is reported on. Deviations or comments are found in the GRI content index. Harmo- nization for ceratin data and processes is a continuous process, given the combination with EQT Exeter and EQT Private Capital Asia. The direct scope of EQT’s sustainability reporting is EQT AB Group. Indirect impacts from EQT’s investment advisory activities and EQT funds were assessed as part of the materiality analysis and depending on the topic these are also reported, such as part of the sec- tion around Investment and value creation process, and within the areas of Decarbonization, Renewable energy and Diversity. Information also available regarding EQT funds. EQT Annual and Sustainability Report 2023 / Page 114Sustainability notes Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Sustainability notes 113 Sustainability notes 114 GRI content index 139 Auditor’s Limited Assurance Report 143 Corporate governance 144 Additional information 158 ===== SIDA 116 ===== Stakeholder engagement and materiality analysis STAKEHOLDER ENGAGEMENT EQT’s key stakeholders consist of individuals or functions impacted by EQT’s operations or, on the other hand, impact EQT. EQT is a stakeholder-centric organization that deeply val- ues transparent dialogues and discussions with stakeholders as these help EQT to be close to market developments, assess and address stakeholder needs, and find opportunities for collaboration. Examples of key stakeholder groups include: • Employees, current and potential, and Advisors from the EQT Network • Clients to the EQT funds, current and potential • Shareholders and public market analysts • EQT funds’ portfolio companies and assets’ tenants • Debt providers The table below shows examples of sustainability-related top- ics covered as part of ongoing stakeholder dialogues. Sustain- ability topics often form an integrated part of EQT’s general interactions with stakeholders but can also be the principal reason for a conversation. Apart from what is presented in the table, other key stakeholders that EQT frequently engages with include: Future employees, owners and buyers, entrepreneurs, advisors and other business partners, industry associations, politicians and opinion builders, regulatory bodies, academia, unions, research analysts and ESG rating agencies. Key stakeholders, and sustainability-related topics discussed Examples of topics discussed Employees • Opportunities to develop as employees and professionals • Ability to contribute to the society – in line with EQT's purpose • Culture and values • Diversity, equity and inclusion EQT Network • Values and business ethics • Corporate governance • Sustainable transfor - mation EQT funds’ clients • Sustainability as a lever for value creation and performance • Comparability and con - sistency in sustainability data, KPIs, reporting and disclosures • Regulatory and policy developments as well as compliance towards it, such as the Sustain- able Finance Disclosure Regulation (SFDR) EQT AB shareholders • Sustainability as a lever for value creation and performance • Exposure to sus- tainability risks and opportunities • Corporate governance • Sustainability-related disclosure EQT fund’s portfolio companies • Support and ideas on how to improve perfor- mance in terms of sus- tainable solutions and practices • EU’s sustainable finance framework EQT funds’ assets’ tenants • Sustainability improve - ments • Decarbonization and energy efficiency • Data collection and assurance • Health & wellbeing amenities Debt providers • Risks and opportunities connected to environ - mental and societal challenges • KPI performance • Data integrity, assurance EQT Annual and Sustainability Report 2023 / Page 115Sustainability notes Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Sustainability notes 113 Sustainability notes 114 GRI content index 139 Auditor’s Limited Assurance Report 143 Corporate governance 144 Additional information 158 ===== SIDA 117 ===== MATERIALITY ANALYSIS As part of an internal process to further unfold its purpose and set new, long-term sustainability ambitions, EQT’s materiality analysis was updated during 2022. This process included dis- cussions and workshops with senior leaders of EQT, as well as workshops with employees representing mixed seniority levels and functions to broaden perspectives further. In addition, external stakeholders such as consultancy support and subject matter experts were invited to provide input and challenge the discussions and outcomes. The discussions centered around three main areas: EQT as an investor, EQT as an owner, and EQT as part of the financial system. EQT’s philosophy of impact and future-proofing ultimately resulted in the three focus pillars where EQT aims to: • Invest to create shared value through intentional sourcing, sustainability diligence, and ensuring enhanced returns for all stakeholders • Transform itself and its investments to be sustainable through accountable leadership, equitable business practices and regenerative processes • Lead to drive change in the industry by collaboration & partnership, sharing insights and learnings, advocating for change and driving innovation The process started as a bottom up exercise to identify key areas linked to EQT’s business model and purpose and set out the direction for 2030. Through the internal workshops and sparring sessions, a long-list of key topics was created. These were then grouped, prioritized and challenged by internal as well as external stakeholders and experts to define areas of material value creation. To ensure an initial application of the double materiality perspective, the assessment was joined by an evaluation of EQT’s ability to deliver superior, risk-adjusted returns to clients. The topics have been prioritized for reporting based on their significance. The time perspective considered • Investment and value creation process • Learning, partnerships and advocacy • Reporting and transparency Invest Transform Lead Material topics Grouping and simplification of topics have been done for the purpose of presenting the outcome of the materiality analysis. Regenerative processes • Decarbonization • Renewable energy • Circularity • Biodiversity and nature • Climate risks and adaptation Equitable business • Employee development, health and well-being • Diversity, equity and inclusion • Human rights including labor rights Accountable leadership • Sustainability governance • Business ethics • Sustainability-linked incentives current status but also a forward-looking perspective up until 2030. When assessing impact, EQT has followed the recom- mendation of the GRI Standards 2021. Corporate Sustainability Reporting Directive (CSRD) During 2023, EQT started the process of incorporating the key sustainability matters and approach as defined by the Corpo - rate Sustainability Reporting Directive and further elaborated by the European Sustainability Reporting Standards (ESRS), into its materiality analysis. The final result and reporting according to the ESRS will be presented in accordance with the timeline set for the directive. EQT Annual and Sustainability Report 2023 / Page 116Sustainability notes Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Sustainability notes 113 Sustainability notes 114 GRI content index 139 Auditor’s Limited Assurance Report 143 Corporate governance 144 Additional information 158 ===== SIDA 118 ===== With a long-term ambition to future-proof investments and make them more valuable and resilient in the long-term, EQT aims to improve operational sustainability and grow sustain- able revenue streams, setting companies up for success during and after its ownership period. By doing so, EQT can assess risks and contribute to addressing some of the world’s most pressing challenges and thereby strengthen its ability to deliver superior risk-adjusted returns to its clients. INVESTMENT AND VALUE CREATION PROCESS EQT has an enduring commitment to responsible investment and ownership principles and became a signatory of the UN-supported Principles for Responsible Investment (UN PRI) initiative in December 2010. EQT’s responsible investment and ownership approach endeavors to align with global conven- tions and principles, emerging standards and frameworks for sustainability, and comply with current and upcoming regula- tions, as applicable and appropriate to each EQT fund. As a responsible investor, sustainability and sustainability con - siderations are an integral part of EQT’s investment and value creation process. This extends from thematic sourcing and conducting sustainability due diligence, to accelerating value creation with an aim to future-proof investments and deliver positive impact across the EQT funds’ portfolio. EQT aims to promote sustainable business solutions and practices in the investments that the EQT funds own or have an interest in through its focused approach to sustainable principles. EQT’s Responsible Investment and Ownership Policy (RI&O Policy) further describes EQT’s commitment to sustainability and its firm-wide sustainability approach to integrating mate - rial sustainability topics throughout its investment and value creation process. In certain cases, business lines/asset classes maintain their own individual RI&O guidelines, such as the EQT Exeter ESG Investment Policy, which are aligned with the over- arching policy but reflect the specific factors applicable to their respective investment strategies. EQT’s impact-led strat- egies uses the RI&O policy alongside its additional impact management framework that guides impact underwriting, performance management and outcomes measurement. Read more The EQT RI&O Policy EQT Playbook EQT’s thematic investing approach focuses on both deploying capital towards innovative solutions that address societal and environmental challenges and transforming companies and assets through their operations as well as products and services. EQT seeks to avoid investing in cases where the products, services or prac- tices cause environmental or social harm and there is no transition pathway to mitigation. In addition, EQT has estab- lished a negative screening excluding direct investments in specific industries. EQT takes into consideration material sustainability risk and value creation levers, in assessing investment opportu- nities through its due diligence process. Sector-specific exposures are consid- ered when determining material sus- tainability factors. 1) The outcome of the sustainability analysis is presented to the managers and/or general partners of the various EQT Funds and considered in review of the investment opportunity. EQT is committed to improving the sus- tainability performance and disclosure practices for the EQT funds’ investments. EQT’s has a two-fold approach to integrating sustainability during the hold- ing period, with downside risk protection as well as supporting value creation opportunities to create a differentiation within their respective markets. EQT actively engages with the EQT funds’ portfolio companies throughout the ownership period. With transparency being one of EQT’s core values, material sustainability aspects typically form part of the vendor due diligence report, initial public offer- ing prospectus or other relevant divest- ment process documentation where deemed relevant. EQT funds’ approach across the different investment lifecycle stages ExitValue creation Due diligenceSourcing Invest 1) Material sustainability factors are defined as those factors that EQT determines to have, or have the potential to have, a material impact on an investment’s ability to create, preserve or erode economic value, including as related to environmental and social value, for that organization and its stakeholders. EQT Annual and Sustainability Report 2023 / Page 117Sustainability notes Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Sustainability notes 113 Sustainability notes 114 GRI content index 139 Auditor’s Limited Assurance Report 143 Corporate governance 144 Additional information 158 ===== SIDA 119 ===== EQT funds’ sustainability data reporting In addition to the RI&O policy and associated guidelines, EQT articulates sustainability expectations and ESG-data requirements through a modular set-up of value creation KPIs. Depending on which investment strategy the investment belongs to, a specific set of metrics and KPIs will apply. The metrics and KPIs cover regulatory frameworks and requirements, such as the Principal Adverse Impacts (PAI- indicators) stemming from the Sustainable Finance Disclosure Regulation (SFDR), as well as other strategic priorities for EQT. Relevant sustainability information and ESG data is reported to EQT funds’ clients through the fund reports. In addition, EQT discloses data on metrics covered in the ESG Data Convergence Initiative (EDCI) for selected and applicable funds. Key data from the EQT funds’ investments are also inte- grated as part of this Annual & Sustainability Report, for exam- ple in ‘Towards our targets’ and selected ‘Sustainability notes‘. The main source of information for EQT funds’ data points is the annual sustainability data collection process that the port - folio companies are asked to complete in the beginning of the succeeding year. As the Annual follow-up process closes during Q1 2024, some reported figures are lagging in this report and covers the 2022 status. Sustainable Finance Disclosure Regulation The EU Sustainable Finance Disclosure Regulation requires disclosure of sustain - abilty-related information in relation to financial products as well as transparency with regard to the integration of sustainability risk. EQT’s ambition for its main funds in scope of SFDR is to either promote environmental and/or social characteristics (article 8 funds) or have sustainable investments as its objective (article 9). The majority of EQT’s Key funds in scope are classified as Article 8 funds. To date, EQT also has one fund classified as an Article 9 fund, EQT Future. EQT considers principal adverse impacts (PAI) for selected funds and on the manager level (EQT Funds Management S.à r.l). More information on SFDR can be found on EQT’s website, where also the PAI statement can be found. Detailed product information is available for investors on the EQT investor portal. SFDR classification – Key funds Fund Launch SFDR classification EQT VII 2015 Art.8 EQT VIII 2018 Art.8 EQT IX 2020 Art.8 EQT X 2022 Art.8 Infrastructure III 2017 Art.8 Infrastructure IV 2019 Art.8 Infrastructure V 2020 Art.8 Infrastructure VI 2022 Art.8 BPEA VII 2019 – BPEA VIII 2022 Art.8 EQT Annual and Sustainability Report 2023 / Page 118Sustainability notes Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Sustainability notes 113 Sustainability notes 114 GRI content index 139 Auditor’s Limited Assurance Report 143 Corporate governance 144 Additional information 158 ===== SIDA 120 ===== Transform – Regenerative processes Through its long-term ambition of establishing regenerative processes, EQT aims to adapt to climate change, decarbonize its business and value chain, respect and restore nature, and develop circular business models. EQT’s current actions range from investing in climate and environmental solutions, to driv- ing decarbonization in its own operations and in the EQT funds portfolio companies, as well as collaboratively exploring industry standards for emerging topics such as biodiversity. DECARBONIZATION EQT’s climate impact from its own operations mainly relates to emissions from business travel and energy consumption in offices, which EQT is working to reduce. EQT also has a signifi- cant opportunity to reduce emissions through the EQT funds’ investments, both from investing in and accelerating c limate solutions, and through guidance to reduce carbon emissions in EQT funds’ portfolio companies and assets. Science-based targets (SBTs) EQT has formalized its green house gas (GHG) emission reduc- tion targets in line with the 1.5°C pathway described in the Paris Agreement. The targets encompass both EQT’s own operations as well as the EQT funds’ investments and are formally approved by the science-based targets initiative (SBTi). EQT further aims to support the EQT funds’ portfolio com- panies to be on track to achieve 1.5°C aligned decarbonization plans by 2040, in line with the new EQT net zero guidelines. Implementing the SBTs continues to be a central part of EQT’s active ownership strategy and climate-related value creation across EQT funds’ investments. Read more EQT Playbook EQT’s science-based targets Looking ahead to 2030, with 2019 as a base year, EQT is committing to: 1 Reducing EQT AB’s Scope 1 and 2 emissions from office energy consumption by 50 percent. 2 Reducing EQT AB’s Scope 3 emissions from business travel by 30 percent. 3 Ensuring 40 percent of EQT funds’ private and listed equity portfolios companies 1) by EUR invested capital will have set science-based targets by 2025 and 100 percent by 2030, 10 years faster than required by SBTi. 4 Reducing indirect emissions in the EQT Real Estate I and II funds by 55 percent per square meter floor area. 1) Excluding EQT Ventures due to their investments being smaller than set thresholds as per SBTi’s latest guidelines for venture capital. The mergers with EQT Exeter and EQT Private Capital Asia are both considered material within SBTi’s methodology and hence, the GHG emissions from these entities’ operations are reported separately as an inclusion will require rebaselining and target recalculation in line with the SBTi criteria. EQT expects to include the GHG emissions from EQT Exeter’s and EQT Private Capital Asia’s operations and their respective funds in its SBTs by end of 2024. EQT Annual and Sustainability Report 2023 / Page 119Sustainability notes Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Sustainability notes 113 Sustainability notes 114 GRI content index 139 Auditor’s Limited Assurance Report 143 Corporate governance 144 Additional information 158 ===== SIDA 121 ===== GHG emissions from own operations The Scope 1 and Scope 2 emissions from office energy consumption has increased during 2023, mainly relating to energy mix and increase in number of offices due to recent mergers and ren- ovation. Read more of initiatives during the year under section Renewable energy. The gross Scope 3 emissions from Business travel have increased during 2023. Business travel emissions intensity per FTE remained at 14 tons CO2e/average FTE in 2023 (16 tons CO2e/ average FTE for EQT’s current SBT scope), com- pared to the baseline in 2019 with 21 tons CO2e/ average FTE. EQT acknowledges that additional efforts are needed to achieve stepwise progress towards the 2030 target, and continues to drive initiatives to support reduction of Scope 3 emis- sions. For example, EQT initiated in 2023 a task force on identifying initiatives to reduce emissions from business travel while supporting business performance and personal wellbeing. The work has engaged stakeholders across business lines and geographies and looked into initiatives to improve guidelines, internal tracking systems, awareness and knowledge among employees, and improve meeting and event planning. In addition to supporting decarbonization, EQT continues to invest into high-quality carbon removal offsets for its unavoidable GHG emis- sions to support the scaling of critical carbon technology innovation. EQT AB Group greenhouse gas emissions Greenhouse gas (GHG) emissions by source and scope (metric tons CO₂e) GHG emissions by source and scope 2023 20221) 2021 Scope 1 & 2 – Office energy consumption 433 358 269 Scope 1 36 94 88 Natural gas 36 94 88 Scope 2 (market-based) 2) 397 264 180 Electricity 0 3 1 District heating and cooling 397 261 179 Scope 3 – Business travel 23,907 17,831 6,092 Air travel 20,990 15,343 5,462 Ground travel 1,870 1,722 359 Hotels 1,046 765 157 Total (Scope 1, 2 & 3) 24,340 18,189 6,361 Intensity tons CO 2e / average FTE 14 14 7 Intensity tons CO 2e / mEUR revenue 11 12 4 1) EQT Private Capital Asia included only since date of acquisition (October 18th, 2022). 2) Scope 2 location-based energy consumption amounted to 1,194 tons CO2e emissions in 2023. EQT AB Groups’ science-based target scope (metric tons CO₂e)1) GHG emissions – SBT tracking 1) 2023 2022 2021 2020 2019 baseline 2030 SBTs Scope 1 & 2 – Office energy consumption 387 339 253 288 406 203 Scope 3 – Business travel 17,386 15,392 5,142 3,490 12,593 8,815 1) Excludes EQT Exeter and EQT Private Capital Asia as not currently included in baseline and target. Under the Operational Control Approach, EQT AB Group’s emissions apply the three scopes as defined by the GHG Protocol: Direct (Scope 1) GHG emissions Emissions from combustion of natural gas for office heat. Indirect energy (Scope 2) GHG emissions Emissions from the generation of purchased electricity and district heating and cooling for leased offices. Other indirect (Scope 3) GHG emissions Business travel is included in Scope 3 non-investment categories. GHG emissions reporting methodology-EQT AB Group EQT calculates and reports GHG emissions in accordance with the GHG Protocol Corporate Standard. Activity data includes, but is not limited to, purchase records, reports, and internal tracking controls. Where data has been unavailable – estimates have been made. Global warming potentials (GWPs) for EQT’s inventory are taken from the Intergovernmental Panel on Climate Change (IPCC) IPCC Fifth Assessment Report (AR5) using 100-year values. For direct emissions (Scope 1), fuel-specific emission factors for CO2, CH4, N2O are used for all sites worldwide using the DEFRA emission factor dataset. Databases used for Scope 2 emissions (dual reporting) include IEA (2023), Re-Diss, and DEFRA (2022). DEFRA (2022) is also the primary source for emission factors regarding scope 3 calculation and reporting. All GHG emissions are calculated in metric tons of pollutant and converted to metric tons of CO2 equivalents (or “CO2e”) using the global warming potentials of AR5. The results in the tables may not add up precisely to the totals due to rounding. 1 Reducing EQT AB’s Scope 1 and Scope 2 emissions by 50 percent 0 125 250 375 500 2030 target 202320222019 baseline 0.00 0.25 0.50 0.75 1.00 406 387 339 203 Metric tons CO2e Absolute CO2e emissions CO2e emissions/average FTE 2 Reducing EQT AB’s Scope 3 emissions from business travel by 30 percent 0 5,000 10,000 15,000 20,000 2030 target 202320222019 baseline Lorem ipsum 0 8 16 24 32 15,392 17,386 8,815 Metric tons CO2e 12,593 Absolute CO2e emissions CO2e emissions/average FTE Note: figures above excl. EQT Exeter’s and EQT Private Capital Asia’s operations as these are not currently included in the SBT baseline and targets. Emissions incl. EQT Exeter and EQT Private Capital Asia are shown in section EQT AB Greenhouse gas emissions. EQT Annual and Sustainability Report 2023 / Page 120Sustainability notes Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Sustainability notes 113 Sustainability notes 114 GRI content index 139 Auditor’s Limited Assurance Report 143 Corporate governance 144 Additional information 158 ===== SIDA 122 ===== EQT funds’ greenhouse gas emissions (Scope 3 – investments) Portfolio companies’ GHG emissions by scope (metric tons CO 2e) 2022 Scope 1 Scope 2 (market- based) Scope 1 & 2 Scope 3 Total GHG emissions Total (absolutes) 9,399,764 707,439 10,107,203 43,848,241 GHG emissions based on funds’ economic owner - ship (FY 2022 data) 1) Scope 1 Scope 2 Scope 1 & 2 Scope 3 CO2e /mEUR invested 4) EQT VII 7,389 13,425 20,814 312,801 7 EQT VIII 20,532 21,031 41,564 2,871,752 6 EQT IX 62,856 14,596 77,451 7,238,003 6 EQT X 235 512 748 861,669 0 Infrastructure III 31,356 22,685 54,041 395,511 41 Infrastructure IV 80,207 18,628 98,835 1,262,354 15 Infrastructure V 5,446,310 28,983 5,475,293 2,626,737 590 Infrastructure VI 3) – – – – – BPEA VII 15,815 71,633 87,448 502,432 27 BPEA VIII 1,530 21,174 22,705 187,705 15 Other2) 16,114 6,853 22,967 325,040 9 Total 5,682,344 219,520 5,901,864 16,584,004 121 1) Based on portfolio companies where data is available. Covering around 93% of invested capital per 31 December 2022. 2) Other includes: EQT Mid Market, EQT Mid Market Asia III, EQT Mid Market Europe, EQT Public Value, and EQT Future. 3) Data not available. 4) Scope 1 & 2 metric tons/mEUR invested. GHG emissions reporting methodology – EQT funds GHG emissions for EQT funds’ portfolio companies are calculated and reported in accordance with the GHG Protocol. For the EQT funds’ investments, EQT is reporting total and weighted GHG emissions based on the EQT funds’ economic ownerships in each portfolio company. Note that the EQT funds’ sustainability data presented here is collected and calculated on a best effort basis, using a combination of third party data and data gathered directly from investments. While EQT cannot guarantee the completeness of the data presented, sustainability data in general is expected to improve in quality as standardization develops. GHG emissions from EQT funds’ investments As active investors and owner, EQT funds have a possibility and responsibility to accelerate the mitigation of climate change at a larger scale. The SBTs are a central part of EQT’s active own- ership strategy and climate-related value cre - ation drivers across investments. 2023 continued to show good progress towards the portfolio coverage target in EQT’s SBTs. Since the launch of the global engagement program in 2021, around 70 companies have engaged in the effort to set their own science- based targets, representing the full spectrum of EQT’s thematic focus sectors and geographies. The global engagement model has centered around clear responsibility and accountability with the company management teams, sup- ported by EQT’s own sustainability professionals and leading third party service providers. Read more EQT Playbook For EQT Real Estate, Scope 1 & 2 GHG emissions represent landlord procured energy and Scope 3 emissions are from tenant procured energy. The focus during 2023 has been to collaboratively work together with the SBTi to help refine their methodology for real estate in a private equity context to ensure EQT’s SBTs, also including EQT Exeter, are both achievable and ambitious. Given the 2019 baseline has changed since the SBTi tar- get validation, this will be reflected as part of the planned target rebaselining as EQT Exeter assets are included. 3 Ensuring 100 percent of EQT funds’ private and listed equity portfolios by EUR invested capital to have set SBTs by 2030. SBT commitments and submissions 28 Validated SBTs (#) 32 Portfolio coverage % 1) 44% 1) % invested equity, according to SBTi’s guidelines for private equity firms. Portfolio coverage % as defined in EQT’s Sustainability-linked bond (issued in 2022) amounts to 49%. 4 Reducing indirect emissions in the EQT Real Estate I and II funds by 55 percent per square meter floor area from a 2019 baseline by 2030. EQT Real Estate funds GHG emissions intensity 1) 2022 kgCO2e/sqm 2019 baseline kgCO2e/sqm EQT Real Estate I 41 41 EQT Real Estate II 19 7 Total 27 20 1) Scope 1, 2, and 3 GHG emissions were reported using country-based carbon conversion factors. Only the floor areas of operational assets reporting data have been included; developments have been excluded. Increasing data availability and updates in the calculation method for 2022 affects the comparability to 2019 baseline. EQT Annual and Sustainability Report 2023 / Page 121Sustainability notes Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Sustainability notes 113 Sustainability notes 114 GRI content index 139 Auditor’s Limited Assurance Report 143 Corporate governance 144 Additional information 158 ===== SIDA 123 ===== RENEWABLE ENERGY EQT aims to transition to renewable energy sources to reduce GHG emissions, lower energy costs and contribute to its science- based targets achievements. The direct impact of EQT’s own operations are related to energy usage in offices and the sourcing of renewable electricity. EQT’s indirect impact is through the EQT funds’ investments, both in terms of invest- ing in solutions to develop and provide renewable energy, as well as supporting portfolio companies and assets to decrease its energy consumption and increase the share of renewable energy. EQT AB encourages its offices to use renewable sources of electricity. When this is not possible, EQT purchases Energy Attribute Certificates (EACs) on an annual basis. In the process of identifying new offices, energy credentials are also consid- ered. The EQT Global Workplace team has initiated a quarterly process to track, record, and report office utilities. This effort encompasses monitoring the percentage of energy sourced from renewable sources. Furthermore, EQT is in the process of creating playbooks for leasing, operations, and fitouts based on current best practices and expert advice. These playbooks will provide the operational team with best practice guidelines and specific KPIs to strive for. This will establish a clear and measurable pathway toward reducing EQT’s direct environ- mental impact. EQT AB Group office energy consumption Energy consumption (MWh) 2023 20221) 2021 Electricity 3,582 2,306 1,599 District heating 1,470 699 587 District cooling 740 786 441 Natural gas 197 524 483 Total consumption 5,990 4,315 3,110 Intensity kWh per sqm 157 122 135 1) Only including EQT Private Capital Asia from date of acquisition Oct 18th. Share of renewable electricity Electricity consumption (MWh) 2023 2022 2021 Electricity from renewable sources 3,582 2,299 1,596 Renewable electricity share 100% ~100% ~100% EQT funds’ renewable electricity tendering 1) 2023 2022 2021 No. of portfolio companies participating in the renewable electricity tender 36 41 34 Total volume of renewable electricity secured (MWh) 324,062 307,856 349,103 1) The metrics above cover EQT funds’ portfolio companies within EQT Private Equity, EQT Future, EQT Infrastructure and BPEA VII and VIII, i.e. the investment strategies where EQT funds typically have control or co-control. Electricity data based on funds’ economic ownerhsip (FY 2022 data)1) Fund Total electricity (MWh) Renewable electricity % Renewable EQT VII 31,199 9,177 29% EQT VIII 73,586 31,624 43% EQT IX 188,985 148,341 78% EQT X 1,154 1,094 95% Infrastructure III 556,424 232,720 42% Infrastructure IV 713,944 423,119 59% Infrastructure V 277,164 207,279 75% Infrastructure VI 3) - - - BPEA VII 91,399 5,960 7% BPEA VIII 28,714 7 0% Other2) 19,183 10,277 54% Total 1,981,750 1,069,598 54% 1) Data covers around 87% of invested capital in the applicable funds per 31 December 2022. 2) Other includes: EQT Mid Market, EQT Mid Market Asia III, EQT Mid Market Europe, EQT Public Value, and EQT Future. 3) Data not available. CIRCULARITY Moving towards more circular processes and business models will have significant benefits such as improving security of raw material supply, increasing competitiveness and stimulating innovation. EQT’s primary impact in this area is indirect, where EQT supports the EQT funds’ investments as applicable to, for example, limiting consumption of scarce and non-renewable natural resources, limiting waste and promoting circular initia- tives and business models. In EQT’s own operations the impact is limited to the resource and waste management of the EQT offices, see more information in the ‘Renewable Energy’ section above. Internal tracking and efforts to reduce consumption are con- ducted to the extent possible, with focus on larger offices and/ or if there are regional issues. For example, looking at areas with high or extremely high baseline water stress according to World Resource Institute’s Aqueduct water risk atlas tool, there are around 14 EQT offices that are located in these areas (examples being: Beijing, Madrid and Los Angeles.) The con- sumption in these offices is limited to regular office consumption. BIODIVERSITY & NATURE Biodiversity is critical to the resilience of nature and the natural system’s ability to provide the essentials for life and human beings. Respecting and restoring nature and minimizing the loss of biodiversity is a long-term ambition for EQT. EQT’s offices are primarily located in urban, densely devel- oped areas. As such, EQT does not currently measure its impact on land use for its own operations. The impact through EQT funds’ investment relates to invest- ment themes and the case-by case assessment in terms of material aspects considered in due diligence. During 2023, EQT continued to explore the topic of biodiversity, while monitoring the TNFD’s final recommendations. As a part of that work, EQT conducted a high-level heatmap of nature issues across EQT core sectors and further seeks to accelerate this work going forward. CLIMATE RISKS AND ADAPTATION Climate change will affect companies through extreme weather events as well as changes to the political, regulatory and technological landscape. By striving to build climate resil- ience across the platform, EQT can ensure long-term viability. EQT’s climate change impact is most material within the portfolios of EQT funds. Hence an important element is to assess climate risks in the sourcing and due diligence phases, as well as to manage and mitigate this during ownership with focus on ensuring that investments are future-proofed for both EQT and future owners. It is also linked to the transition risks and opportunities such as changes in laws, regulations and reporting requirements, where EQT is closely monitoring the changes and updates of the sustainability landscape to ensure pro activity and alignment. EQT Annual and Sustainability Report 2023 / Page 122Sustainability notes Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Sustainability notes 113 Sustainability notes 114 GRI content index 139 Auditor’s Limited Assurance Report 143 Corporate governance 144 Additional information 158 ===== SIDA 124 ===== TCFD reporting EQT works to continuously implement and progress on the recommendations from the Task Force on Climate-related Financial Disclosures (TCFD), an initiative which EQT formally endorsed in 2022. Climate-related risks are embedded in the overall governance, both at the EQT AB and EQT funds’ level. Following the combination of EQT Exeter and EQT Private Capital Asia, EQT are continuing to work towards aligning the climate risk assessment approach. Governance EQT AB’s Board has the ultimate responsibility for the strategic development of EQT’s sustainability performance including sustainability and climate risks. The assessment, management and oversight of sustainability risks and opportunities are tak- ing place at several levels in the company. This includes the Investment Advisory Teams, the Fund Manager of EQT funds, the Group Risk function and the Executive Committee at EQT AB. The Group Risk function is responsible for assessing risk man- agement processes and reporting relevant risks to the Risk Committee and the Audit Committee. A review of enterprise risks including applicable investment risk exposures is done at least annually within the Risk Committee and subsequently presented to the Executive Committee, Audit Committee and the Board. Within the EQT funds, the Investment Advisory Teams, the board of the Fund Manager of the EQT funds, together with the Risk Management Function of the Fund Manager, are responsi- ble for assessing and managing applicable sustainability risks and opportunities. This is done during the due diligence pro- cess as well as part of the portfolio performance reviews, con- ducted during ownership. Aggregate exposures, trends and the effectiveness of sustainability risk management processes are discussed between the Fund Manager’s Risk Management Function and Group Risk. At Group level, the Group Risk func- tion also reviews internal processes and ownership to ensure risks, including sustainability risks, are adequately managed and followed up on. In addition, the sustainability management team is also consulted with sustainability risk-related consider- ations on a regular basis. Strategy In line with its Statement of Purpose, EQT formulates its strat- egy in a way that ensures that it remains successful and rele- vant for stakeholders and society for the long-term. Whether it sustainability risks and opportunities at the pre-acquisition stage and systematically includes sustainability improvements into value creation plans. Science-based targets (SBTs) and support- ing a transition to renewable electricity are examples of how EQT believes it can future-proof investments. Over the past couple of years, EQT’s thematic investment approach has also been show- cased in several investments where electrification and reduction of green house gas emissions are key components of value cre- ation plans, for additional examples, see EQT Playbook Operations As EQT’s SBTs include ambitious greenhouse gas emissions reduction targets for EQT’s own offices and business travel, working towards reaching the targets would not only reduce the carbon footprint for all EQT offices but it will also help EQT future-proof its own operations and manage its costs and resources more efficiently. Climate-related risks Physical and transition risks Physical climate risks such as risks arising due to extreme weather events and rising mean temperatures, and transition climate risks such as risks arising due to policy changes, changing customer behaviors and changing technology, aris - ing at EQT funds’ investments’ level could, if realized, impact EQT Group’s revenues in different ways. First, it would nega- tively affect the revenues, costs and ultimately the valuation of those investments, which could result in lower investment income and carried interest for the Group. A high exposure to climate-related risks in EQT funds might also have an impact is through the launch of impact-driven strategies, sustainably transforming investments and/or launching firm-wide initia - tives, such as SBTs to drive systematic improvements, EQT continues to embed sustainability as an integral part of its fundraising activities and operating model. EQT considers climate-related risks and opportunities in the strategy work for the Group. For concrete examples of ambi- tions and initiative, see EQT Playbook Below are examples of identified climate-related opportuni- ties and risks, spanning from short-term to mid/long-term as the time horizon expands from EQT funds’ investment and own- ership period (typically around 3–6 years, longer for long-hold funds), to future owners’ perspective (another 3–6 years). Climate-related opportunities Strategies & products Similar to EQT, investors in general are increasingly turning their attention to funds investing in companies and assets that have sophisticated principles and processes around sustain - ability, to mitigate risks and capture opportunities. This trend offers an opportunity for EQT to tailor its product offering to meet an increasing client demand for more sustainable prod- ucts (and more sustainable underlying investments). Value creation Sustainability is increasingly considered by private market firms as key drivers of investment success. Understanding both the bigger picture and specific investment opportunities and risks related to sustainability is becoming key to delivering sustainable value creation. EQT reviews potential investment targets for This chart is a simplified illustration showing sustainability risks governance Board of the Fund Manager Sustainability function EQT AB Board Audit Committee EQT Executive Committee Risk Committee Investment Committees Group Risk Risk Management at Fund Manager level Investment Advisory Teams EQT Annual and Sustainability Report 2023 / Page 123Sustainability notes Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Sustainability notes 113 Sustainability notes 114 GRI content index 139 Auditor’s Limited Assurance Report 143 Corporate governance 144 Additional information 158 ===== SIDA 125 ===== on EQT’s ability to raise future funds, which in turn would lead to lower management fees. EQT is not heavily reliant on physical assets and operations to conduct its activities and has robust business continuity plans and remote working arrangements to prevent potential climate-related disruptions. As such, EQT’s direct exposure to physical climate risk is considered low, and something that also was assessed as part of a physical risk assessment conducted during 2022 for EQT’s largest offices. However, the EQT Group is exposed to transition risks coming from new environmental and sustainability-related regulatory requirements in the financial sector. Non-compliance with these rules could lead to additional costs but could also damage its reputation with existing and prospective investors. Reputational risks If EQT would not be successful in executing its climate agenda within EQT funds’ investments and at EQT Group level, it could hurt its reputation towards clients and the general public. Such risk could arise if EQT does not take proper actions to towards its SBTs or if it is exposed to companies, sectors, or real assets, having a detrimental impact on the climate. risks may impact the investment selection and may also lead to the abandonment of an investment opportunity. Management of sustainability risks during the ownership period During the ownership period, the monitoring of material sus- tainability risks is part of the regular risk monitoring process. Through its active ownership approach, EQT engages with EQT funds’ investments to improve their environmental perfor- mance and hence prepare them for market conditions where climate impact and transparency are increasingly valued. Investments are regularly assessed across a set of sustainabil- ity dimensions and KPIs, including greenhouse gas emissions. In addition, risk exposures in terms of sustainability-related reputational incidents are monitored on an on-going basis. The formalized SBTs are a further commitment to decreasing the exposure of the investments to climate risk, mainly transi- tion risk. Read more Towards our targets EQT strives to constantly improve the sustainability risk management and monitoring process. During 2023, the busi- ness lines have each further improved the processes of identifi- cation and assessment of material sustainability risks at the due diligence stage, in order to support informed investment decision making, as well as sustainability risk mitigation during the ownership period. Metrics and targets EQT has publicly reported on its greenhouse gas emissions from its own operations since 2015. Recognizing that EQT’s main impact on the climate is indirect, through the EQT funds, EQT is engaging actively with portfolio companies and invest- ments around this topic and requests greenhouse gas emission data on an annual basis. EQT’s main climate-related targets are its SBTs as well as a long-term commitment to accelerate portfolio companies’ tran- sition to renewable electricity. Read more about current status Decarbonization and Renewable energy Within the EQT AB sustainability-linked bonds as well as the sustainability-linked finance facilities for certain funds, there are incentives linked to improved sustainability-performance in relation to these targets. EQT is continuously striving to enhance its processes and disclosures within sustainability, including climate risks. Fundraising risks EQT’s failure to identify climate-related investment opportuni - ties and client preferences towards sustainable products could hurt EQT’s market share in the long run. Risk Management The management of portfolio risks and enterprise risks is con- ducted at different levels within the Group, as described in the Governance section above. Given the impact is largest in an EQT funds portfolio perspective, additional detail on the risk management within the EQT funds is provided below. Integration of sustainability risks EQT includes sustainability risks, including climate-related risks at fund-level, as part of its risk management process in majority owned investments. Sustainability risks can either be consid- ered as a set of risks on their own or have an impact on other risks and contribute significantly to these risks, such as market risks, liquidity risks or reputational risks. Identification and assessment of sustainability risks Prior to any investment decision, the relevant investment advi- sory teams will identify the material risks, including sustainability risks, associated with each proposed investment. As part of this due diligence process, the target company or asset’s exposure to, management of, and performance on sustainability-related issues and as applicable climate-related risks and mitigation measures are assessed and analyzed. This assessment forms part of the overall investment proposal. Identified sustainability Real Estate update on climate risks All assets which EQT Exeter directly manages are cur- rently undergoing physical climate risk assessments. Through this approach, EQT Exeter are establishing the methods to incorporate risk assessment into due dili- gence, identify properties at acute risk, report aggre- gate risk metrics, and track progress of adaptation and resilience measures. Further, internal training have been conducted during 2023 to educate investment and due diligence teams on physical climate risks. Infrastructure update on climate risks EQT Infrastructure has during 2023 been supported by the external provider in conducting TCFD-aligned sce- nario analysis. This involved a pre-screening to identify and prioritize portfolio companies that may benefit from further assessment via ranking of climate risk scores generated via analysis of key sectors and geo graphies of risk based on current climate conditions. Portfolio companies considered at a potentially higher risk were selected for company-specific analysis to determine the relative exposure of EQT to a portfolio company’s cli- mate risk. EQT Infrastructure’s portfolio is considered a low risk based on exposure to changing intensity and/or frequency of physical climate events. EQT has also enlisted external support to conduct transition-focused scenario analysis, and delivered a series of upskilling workshops focused on TCFD and scenario analysis. EQT Annual and Sustainability Report 2023 / Page 124Sustainability notes Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Sustainability notes 113 Sustainability notes 114 GRI content index 139 Auditor’s Limited Assurance Report 143 Corporate governance 144 Additional information 158 ===== SIDA 126 ===== It is the people who realize EQT’s purpose to make a positive impact. EQT aims to ensure equal rights and opportunities across all aspects of the business, internally as well as in the value chain. Attracting and nurturing a diverse, world-class EQT team and network is crucial for performance and long- term success. In recent years, EQT has grown not only organi- cally but also through two major acquisitions. Following EQT’s recent combinations with Exeter and EQT Private Capital Asia, several people-related processes have been harmonized across the organization, a process that will continue during 2024. EMPLOYEE DEVELOPMENT, HEALTH AND WELLBEING Employee engagement is fundamental to physical and mental wellbeing and a key driver for performance and continuous development. EQT’s direct impact on employee engagement relates to its own operations, to its culture and values, to its workplaces, and ability to develop and motivate its workforce. EQT follows up on engagement and wellbeing using regular surveys where employees respond anonymously. The insights gained through these surveys help define strategic priorities and enable managers to make better people-related decisions as well as tracking trends. Employee engagement (score 1–10)1) 2023 2022 2021 Women 8.0 8.2 8.1 Men 8.1 8.4 8.1 Total 8.0 8.3 8.1 1) Aggregate response rate 75%. From 2023 all employees are included, 2022 and earlier EQT Private Capital Asia and EQT Exeter are not included. EQT encourages open conversations about mental well-being at work and takes a preventative and personalized approach to mental health through the ‘My Mental Wealth’ initiative, a digital coaching platform and online training to nurture mental well-being and build mental resilience. Additionally EQT has entered into a partnership with Myndup, a global mental health provider who offer support across the entire mental health spectrum. To ensure a balanced work environment, EQT provides flexible work schedules and monetary support for home office equipment and for physical activities. EQT’s global workplace health and safety guideline is designed to meet international as well as local workplace safety standards. It captures work-related risks and activities that take place in the EQT offices. During 2023, a majority of the EQT offices have been risk assessed by trained local health and safety officers. A workplace hazard reporting tool was launched in 2023 and all work-related accidents or incidents are now being reported on this new platform. Once a work- place incident or accident has been reported, this will be inves- tigated by the Local Health and Safety Officer and the report will be submitted to the Head of Workplace Management. Personal development, feedback and performance A key component of EQT’s people strategy is supporting employees to realize their potential. To develop and improve individual performance, both structured 360-degree feedback and everyday direct feedback is used. Employees, in EQT and in some of the recently merged operations, are offered regular performance and career development reviews. Going for- ward, performance management processes and tools will be aligned throughout EQT. Employee development is supported through on-the-job training with seniors training juniors, buddy systems, and with proactive role moves to provide learning opportunities. EQT is a performance driven organization focused on long- term value creation. Team and individual performance are important, therefore EQT rewards both. All staff are encour- aged to take ownership and contribute to EQT’s success and are rewarded for innovative ideas and collaboration. EQT offers competitive, fair and equal compensation, reviewed annually against a range of benchmarks. Benefits are funda- mentally global, but also based on geography and in line with local practice. Long-term incentives and investment opportu- nities include an annual share incentive plan, carried interest and co-investment schemes. Higher performance is rewarded with higher compensation through variable pay. Training The EQT Academy is an in-house training capability delivering training for each career stage and function – from general onboarding programs to career progression and personal development programs, read more in People In 2023, the average training hours were approximately 13 hours/FTE and included training activities within the EQT Academy platform, compliance and sustainability- specific training. Note that the below does not capture various external trainings or on-the-job training and development activities, such as mentoring or conferences. Training 2023 20221) 20211) Average training hours per FTE 13 23 20 Average educational cost per FTE 1,584 2,217 3,336 1) Figures do not include EQT Exeter or EQT Private Capital Asia. Transform – Equitable business EQT Annual and Sustainability Report 2023 / Page 125Sustainability notes Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Sustainability notes 113 Sustainability notes 114 GRI content index 139 Auditor’s Limited Assurance Report 143 Corporate governance 144 Additional information 158 ===== SIDA 127 ===== DIVERSITY, EQUITY AND INCLUSION By embracing individual differences, EQT helps challenge pre - vailing perspectives. Inclusive leadership, processes and ways of working are key to creating a safe and collaborative envi- ronment. Diversity, equity and inclusion (DE&I) are aspects considered in all business operations, from the recruitment and onboarding of new team members to the development, com- pensation and recognition of employees. During 2023, EQT has introduced a new global ambition to apply a broader lens on diversity, equity and inclusion, informing how high-performing teams are composed, homogeneity reduced and diversity of thought increased. Going forward, EQT will take a more sys- tematic approach to creating broader, diverse representation across our leadership teams. EQT is reframing and broadening the focus by setting an ambition of a maximum of 60% of team members of the same gender, cultural background, and socio-economic origin in the Board, C-Suite and top earners. This global ambition will be implemented across EQT’s busi- ness lines and the portfolio companies, taking into account geographical, cultural and business contexts. EQT’s commitment to DE&I is formalized in policies and guidelines such as the EQT Code of Ethics and the EQT Diversity & No-Harassment Guideline. EQT has an established reporting process around these issues, which is open for the organization if there is a concern that needs to be followed-up. Concerns can be addressed directly to line managers and HR or anony- mously through EQT’s employee engagement tool and the whistleblowing system. EQT addresses all perceived inappro - priate behaviors and works proactively with training to increase knowledge and awareness among all employees. DE&I initiatives in the organization and beyond EQT WIN is an employee-driven initiative founded in 2017 with the purpose of attracting more women to the company, increasing retention of female employees, implementing action points to ensure equal opportunities for all, and driving initia- tives that ensure more equal and inclusive workplaces. To ensure EQT is a flexible and inclusive workplace for par- ents, EQT offers support and benefits packages designed to enable parents to combine career and family. This includes retained salary during part of the parental leave, time-off in excess of what is a legally required minimum for both primary and secondary caregiver, parental leave planning toolkit and coaching, an allowance for childcare related services, flexible work hours and the possibility to reduce working time. The har- monization of employee benefits across the organization will continue in the coming year. Safeguarding work-life balance and ensuring time for family remain key priorities for EQT. EQT’s commitment to DE&I does not only concern its own organization. EQT aims to inspire change in the broader finan- cial industry. When staffing teams working with EQT, advisors providing professional services are encouraged to have a maximum 60% of the same gender as part of the team set up, with focus on the senior levels and promote a diverse represen- tation of other characteristics to ensure a higher degree of diversity in teams working together. EQT further collaborates with organizations such as Out Investors (an LGBTQ+ network, with the mission to make the direct investing industry more inclusive) and Level20 (an orga- nization with a vision of improving gender diversity in the pri- vate equity industry). In addition, EQT engages with student organizations, gives lectures at universities, and offers intern - ship programs – often with a DEI angle – to inspire a broader stakeholder group to join the private markets industry. HUMAN RIGHTS INCLUDING LABOR RIGHTS Human rights are an important means of protection for indi- viduals. EQT works to support and respect human rights and ensure compliance with Universal Declaration of Human Rights (UDHR) and International Labor Organization (ILO) labor stan- dards. EQT is a formal signatory of the United Nations Global Compact and supports and aligns with their ten principles, which includes Human and Labor Rights. The membership increases EQT’s transparency through the Annual Communica- tion on Progress and allow employees to access the UNGC learning platform. EQT’s direct human rights risks are mainly connected to its employees with regards to DE&I and a healthy, safe and dis- crimination- and harassment-free workplace. EQT’s commit- ment around these areas are formalized in policies including the EQT Code of Ethics, the EQT Diversity & No-Harassment Guideline and the EQT Global Health and Safety Guideline (see details above). EQT follows market practice in the different countries where it operates, for benefits offered and work security practices. EQT’s employees have the right and opportunity to be union- ized. EQT supports the ILO core conventions and its principles, among them the freedom of association and right to collective bargaining. In France, Italy and Spain, EQT has entered into collective bargaining agreements, covering 4% percent of the total workforce. EQT seeks to align its practices and that of its suppliers and business partners with the expectations set out in the UN Guid- ing Principles on Business and Human Rights (UNGP) and the OECD Guidelines for Multinational Enterprises, further being outlined in the EQT Business Partner Code of Conduct. EQT’s main impact and risk in this area is however most important through the EQT funds’ and their portfolio compa- nies or assets. EQT therefore aims to promote sound ethical standards within EQT funds’ portfolio companies. EQT’s sus- tainability standards, as described in the Responsible Invest - ment & Ownership Policy, include human and labor rights aspects. As an additional precaution, EQT funds’ portfolio companies are regularly screened using an external screening tool to monitor ESG incidents in the portfolio which uses the UNGC principles as a way to identify incidents relating to e.g., human rights. EQT performs regular AML and KYC checks on clients. EQT AB Group employee data In principle, all employees are employed on a permanent basis and work full-time. Part-time is usually connected to parental leave and not an employment contract. A majority of activities performed are done by EQT employees. EQT reports full-time equivalent employees with two measures, FTE+ also includes FTEs and on-site consultants. For some of the metrics, the data is based on headcount. On-site consultants help EQT maintain operational continuity during extended absences, e.g., parental leaves or temporary reassignments. They can fill roles until permanent hires are made and, in certain cases, provide expertise that may be difficult to access otherwise or that is not needed long-term. EQT Annual and Sustainability Report 2023 / Page 126Sustainability notes Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Sustainability notes 113 Sustainability notes 114 GRI content index 139 Auditor’s Limited Assurance Report 143 Corporate governance 144 Additional information 158 ===== SIDA 128 ===== Employee count 2023 2022 2021 Employees (FTE+), numbers 1,838 1,790 1,160 Employees (FTE), numbers 1,777 1,669 1,059 Employees (Headcount), numbers 1,829 1,731 1,102 Temporary employees (FTE) 1% 1% 1% Employee distribution (FTE) Employees by category, gender and region 2023 2022 2021 Total, end of reporting period 1,777 1,669 1,059 By category Investment Advisory Professionals 468 461 292 All other professionals 1) 1,310 1,208 767 By gender Women 44% 43% 42% Men 56% 57% 58% By region Americas 411 373 273 Asia-Pacific 324 323 74 Nordics 412 390 304 Rest of Europe 630 583 410 1) All other professionals includes: Real estate advisory professionals and supporting specialists. Governance forums, share women and men 2023 2022 2021 Board 7 8 8 Women 29% 38% 50% Men 71% 62% 50% Senior Executives 1) 12 14 8 Women 33% 27% 13% Men 67% 73% 87% Partners 125 124 77 Women 14% 15% 14% Men 86% 85% 86% 1) Senior executives are defined as members of EQT Executive Committee as per December 31, 2023. Employees by gender, age and seniority 2023 2022 2021 Investment Advisory Professionals 477 475 300 Women 31% 29% 25% Men 69% 71% 75% Under 30 years 27% 38% 29% 30–50 years 65% 54% 66% Over 50 years 8% 8% 5% Partner 1) , total number 105 103 68 Women 13% 14% 12% Men 87% 86% 88% Managing Director and Director, total number 155 141 87 Women 24% 20% 11% Men 76% 80% 89% Vice President and Associate, total number 217 231 145 Women 44% 42% 39% Men 56% 58% 61% All other professionals 2) 1,352 1,256 802 Women 50% 49% 51% Men 50% 51% 49% Under 30 years 21% 28% 23% 30–50 years 66% 61% 67% Over 50 years 13% 11% 10% All other professionals of which STEM 3) 98 79 43 Women 22% 23% 19% Men 78% 77% 81% Employee distribution table above is based on headcount. 1) Refers to Partners within the investment advisory organization only. 2) All other professionals includes: Real estate advisory professionals and supporting specialists. 3) STEM stands for science, technology, engineering and mathematics workers, here classified as EQT Tech and Motherbrain. New hires and turnover Employee hires (headcount) 2023 2022 2021 Total number 328 486 313 By gender Women 165 50% 233 48% 172 55% Men 163 50% 253 52% 141 45% By region Americas 84 26% 99 20% 47 15% Asia-Pacific 56 17% 50 10% 22 7% Nordics 70 21% 135 28% 106 34% Rest of Europe 118 36% 202 42% 138 44% By age group Under 30 years 141 43% 221 45% 144 46% 30–50 years 160 49% 247 51% 163 52% Over 50 years 27 8% 18 4% 6 2% By category and gender Investment Advisory Professionals, total number and share of new hires 63 19% 95 20% 60 19% Women 19 30% 46 48% 27 45% Men 44 70% 49 52% 33 55% All other professionals, total number and share of new hires1) 265 81% 391 80% 253 81% Women 146 55% 187 48% 145 57% Men 119 45% 204 52% 108 43% 1) All other professionals includes: Real estate advisory professionals and supporting specialists. EQT Annual and Sustainability Report 2023 / Page 127Sustainability notes Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Sustainability notes 113 Sustainability notes 114 GRI content index 139 Auditor’s Limited Assurance Report 143 Corporate governance 144 Additional information 158 ===== SIDA 129 ===== Employee turnover (headcount) 2023 20221) 20211) Turnover, total number and % 243 14% 132 10% 141 13% Voluntary employee turnover 2) 135 8% n.a n.a n.a n.a By gender Women 111 46% 80 61% 62 44% Men 132 54% 52 39% 79 56% By region Americas 46 19% 30 23% 41 29% Asia-Pacific 58 24% 13 10% 10 7% Nordics 54 22% 28 21% 44 31% Rest of Europe 85 35% 61 46% 45 32% By age group Under 30 years 70 29% 32 24% 38 27% 30–50 years 146 60% 87 66% 92 65% Over 50 years 27 11% 13 10% 13 9% By category Investment Advisory Professionals 60 25% 22 17% 24 17% All other professionals 3) 183 75% 110 83% 117 83% 1) Excluding EQT Private Capital Asia. 2) Refers to employees who left EQT (resignation and retirement). 3) All other professionals includes: Real estate advisory professionals and supporting specialists. CEO pay ratio CEO to FTE1) 2023 20222) 20213) CEO pay ratio 4.0 3.1 2.6 1) Highest paid individual is not the CEO. 2) CEO total cash compensation to median FTE total cash compensation. Excluding EQT Private Capital Asia. 3) CEO total cash compensation to median FTE total cash compensation. Excluding EQT Private Capital Asia & EQT Exeter. Gender pay gap Men to women1) 2023 2022 2021 Total 45% 39% 56% Investment Advisory Professionals 34% 31% 34% All other professionals 2) 37% 30% 44%3) 1) Unadjusted gender pay gap in line with PAI indicator, i.e., calculated as the difference between average gross cash compensation of men vs. women as a percentage of average gross cash compensation of male employees (average FTEs). 2) All other professionals includes: Real estate advisory professionals and supporting specialists. 3) Excluding EQT Exeter. Note that EQT applies local salary grids for roles where there are many staff in similar positions. This protects a bias-free and merit-based equal pay program. In the same country and at the same seniority level there are no material pay differences between genders. Gender distribution among top 20% earners 2023 Women 22% Men 78% Parental leave Number of weeks1) 2023 2022 2021 Parental leave total number of weeks 1,914 1,609 1,112 Women share of total 72% 71% 64% Men share of total 28% 29% 36% 1) 2022 excludes EQT Private Capital Asia. 2021 excludes EQT Exeter. Sickness absence Reported sick leave 1) 2023 2022 2021 Total sick leave as % of hours worked 0.4 0.1 0.1 Women share of total 84% 94% 82% Men share of total 16% 6% 18% 1) 2022 excludes EQT Private Capital Asia. 2021 excludes EQT Exeter. Note that there has been no fatality as a result of work-related injury. EQT funds’ board and management diversity As different perspectives are key for better decision- making and performance, EQT strives to have the best possible board compositions and aims for gender balanced boards in the EQT funds’ portfolio companies. To further drive action and accountability towards this ambition, interim targets have been included in ESG-linked credit facilities for funds as well as the EQT AB sustainability-linked bonds. Going forward, EQT’s new global ambition will be implemented across EQT’s business lines and the portfolio companies, taking into account geographical, cultural and business contexts. Board gender diversity across EQT funds’ portfolio companies, breakdown per key fund Board gender diversity (average share) Independent board members appointed by EQT All Board members Chairpersons Women Men Women Men Women Men EQT VII 46% 54% 27% 73% 22% 78% EQT VIII 43% 57% 27% 73% 0% 100% EQT IX 45% 55% 23% 77% 19% 81% EQT X 30% 70% 22% 78% 0% 100% Infrastructure III 36% 64% 26% 74% 20% 80% Infrastructure IV 33% 67% 23% 77% 18% 82% Infrastructure V 34% 66% 26% 74% 0% 100% Infrastructure VI 40% 60% 29% 71% 33% 67% BPEA VII 20% 80% 19% 81% 7% 93% BPEA VIII 27% 73% 10% 90% 20% 80% Note: The metrics cover EQT funds’ portfolio companies within EQT Private Equity, EQT Future, EQT Infrastructure and BPEA VII-VIII, i.e. the investment strategies where EQT funds typically have control or co-control. The measure of independent board members excludes EQT’s own Investment Advisory Professionals as well as board members the EQT funds do not have appointment rights over. Women Men Women Men All board members % 0 25 50 75 100 202320222021 76 74 24 26 78 22 Women Men Chairpersons % 0 25 50 75 100 202320222021 11 12 89 88 14 86 Independent board members appointed by EQT % 0 25 50 75 100 202320222021 31 37 69 63 34 66 Gender diversity across EQT funds’ portfolio companies EQT Annual and Sustainability Report 2023 / Page 128Sustainability notes Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Sustainability notes 113 Sustainability notes 114 GRI content index 139 Auditor’s Limited Assurance Report 143 Corporate governance 144 Additional information 158 ===== SIDA 130 ===== EQT aims to ensure clear accountability and transparency for the EQT funds’ investments as well as its corporate operations in order to drive real impact and long-lasting transformation. Read more about EQT’s work with the EQT funds’ investment to ensure accountability in Towards our targets SUSTAINABILITY GOVERNANCE EQT AB’s board of directors is ultimately responsible for the strategic development of EQT’s sustainability performance. In 2023, the EQT AB Board approved a two years sustainability strategy and objectives for EQT, further strengthening the board’s involvement in EQT’s sustainability agenda. Sustainability is linked into EQT’s governance and desion- making through the Sustainability Committee. The Sustainabil - ity Committee convenes on a quarterly basis, and provides a way for EQT to formalize the ongoing discourse between the EQT Executive Committee and the board. Collectively, these mechanisms enable EQT to strengthen the sustainability mandate of the board, and to future-proof the firm in line with forthcoming sustainability trends. Regular updates on the Sustainability agenda are provided by the Chairperson of the Sustainability Committee during the EQT AB Board’s meetings. The members of the Sustainability Committee in 2023 are: • Gordon Orr – Chairperson of the Committee, board member of EQT AB • Margo Cook – Committee member, board member of EQT AB • Diony Lebot – Committee member, board member of EQT AB To drive the overall integration and implementation, EQT has a dedicated group sustainability team led by the Global Head of Sustainable Transformation, who is part of the EQT Execu- tive Committee. To set the sustainability strategy and opera- tionalize commitments, there is a Sustainability Management Team (SMT), consisting of the Global Head of Sustainable Transformation, the Head(s) of Sustainability of all business lines, as well as sustainability leads in other key functions. The SMT meets on a regular basis to discuss firm-wide, strategic sustainability projects and risk management, as well as ensures coordination and aligned planning and communica - tion across the platform. Further, to ensure firmwide engage- ment, acceleration and integration of the sustainability agenda, EQT has two sounding boards in place, with partici- pants appointed by the Executive Committee: the Bridge Forum and NextGen Sounding Board. In 2023, the governance around sustainability strategy; impacts, risks and opportunities, and reporting have been further formalized in the Rules of Procedures. EQT is continu- ously working on strengthening the sustainability competen - cies of the board and a new structure for sustainability training and interactive sessions for the board has been developed and the first annual training was held in March 2023. The board is updated around the sustainability report- ing. The resumes of the EQT AB board members are found in the Corporate Governance Report, containing education, background as well as current and previous assignments that indicate competencies. Sustainability management and governance Business Line Sustainability EQT Foundation • Sustainability Incubator • Impact investing • Sustainability steering Group Sustainability • Firmwide strategy and standards • Client partnerships • Sustainability data & reporting • Corporate sustainability EQT AB Board EQT Executive Committee Network of Sustainability Ambassadors Investment advisory professionals supporting the integration of sustainability in investment and ownership Private Capital Sustainability Committee Global Head of Sustainable Transformation Real Assets • Business line specific strategy across assets, investments and funds • Implementation of firmwide standards • Sustainability and Impact data collection and monitoring Transform – Accountable leadership EQT Annual and Sustainability Report 2023 / Page 129Sustainability notes Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Sustainability notes 113 Sustainability notes 114 GRI content index 139 Auditor’s Limited Assurance Report 143 Corporate governance 144 Additional information 158 ===== SIDA 131 ===== BUSINESS ETHICS Business ethics is a prerequisite for EQT’s license to operate. EQT’s Code of Ethics (the “Code”) describes the values, ethical principles and standards of the EQT way of conducting busi- ness. In particular, the Code emphasizes EQT’s enduring com- mitment to sound business practices, zero tolerance for bribery and corruption, commitment to preventing money laundering and terrorist financing, and handling of conflicts of interest. The Code is intended to guide both EQT as a firm and its employees in performing tasks and their decision making and demon- strates the standards by which EQT measures itself. Aside from following the Code and other policies, EQT complies with all applicable laws and regulations in the countries wherever EQT conducts business. The Code is communicated to all new employees and tem- porary staff when starting at EQT. On an annual basis, all employees and temporary staff are reminded about the Code and other central rules as a part of the annual certifications process and compliance training. EQT has a global compliance monitoring programme in place. It is a risk-based programme which strives to be global where possible and local where needed for regulatory reasons. In cases of deficiencies, compliance provides guidance on how to rectify and minimize the risk. Compliance also helps out with raising awareness and helping EQT to navigate the compliance landscape. EQT has local compliance officers in place to cover its regulated entities. The officers are responsible for the local business and report to the Global Head of Risk, Regulatory & Compliance as well as to the local board on a periodical basis. The Global Head of Risk, Regulatory & Compliance leads the compliance team and reports to the CFO on a regular basis and has a reporting line to the CEO and the Board. Reporting to the Board takes place at least annually or as required, and includes reporting on any findings during the year and rectification actions proposed. Possible usiness conduct breaches are also reported to the Audit Committee on a quarterly basis. EQT policies and guidelines EQT’s governing documents are set up in three levels; • policies that are on principle level and approved by the Board (including the Code) • guidelines that specify the principles and; • instructions/procedures that details the ways of acting. The policies interpret the principles stated in the EQT Code of Ethics. In addition, EQT also has local policies and other governing documents as required for EQT’s regulated entities. EQT’s group policies can be found on the EQT website. EQT’s direct sustainability activities are governed by the Code. EQT’s indirect sustainability activities in the form of responsible investment and ownership are governed by the EQT Responsible Investment & Ownership (RI&O) Policy. The policies apply to all employees and all entities in the organiza- tion and are communicated to all new hires upon joining EQT as well as being communicated to all employees on an annual basis as part of the annual certification process. During 2023, EQT has adopted a Business Partner Code of Conduct to further enhance its sustainability commitment. By establishing a set of requirements and expectations on busi- ness partners, EQT intends to inspire to drive change in EQT’s supply chain by encouraging business partners to strive towards the same ambitions as EQT. EQT Group Policies • EQT Code of Ethics • EQT Conflict of Interest Policy • EQT Finance Policy • EQT Governance Policy • Information and Trading Policy • Information Security and Data Privacy Policy • EQT Responsible Investment & Ownership Policy EQT Group Guidelines associated with EQT’s business ethics • EQT Anti-Bribery & Corruption Guidelines (including Gifts and Entertainment and Political Contribution) • EQT Global Workplace Health and Safety Guidelines • EQT Anti-Money Laundering and Counter-Terrorist Financing Guidelines • EQT Conflict of Interest Guidelines • EQT Diversity & No-Harassment Guidelines • EQT Outside Business Activity Guidelines • EQT Personal Trading Guidelines • EQT Business Continuity Plan • EQT Information Guidelines • EQT Business Partner Code of Conduct Anti-bribery & corruption and Anti-money laundering As stated in the Code, EQT does not tolerate any form of cor- ruption and is committed to fighting corruption in all its forms. EQT is also fully committed to preventing money-laundering and terrorist financing, and complies with all applicable regu- lations in these areas wherever it conducts business or has business relationships. In order to achieve these objectives, EQT has governing documents, procedures and monitoring activities in place. The framework is global within EQT, and the compliance activities are conducted by a group wide internal network of compliance managers in charge within EQT’s global compliance matrix to ensure local expertise and global scaling. EQT Annual and Sustainability Report 2023 / Page 130Sustainability notes Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Sustainability notes 113 Sustainability notes 114 GRI content index 139 Auditor’s Limited Assurance Report 143 Corporate governance 144 Additional information 158 ===== SIDA 132 ===== EQT has Anti-Bribery and Corruption Guidelines, specifying the principles under the Code. These guidelines also include sections about gifts and entertainment, political contributions, prohibition of facilitation payments, defined as a small unoffi - cial payment or benefit made to secure or expedite the perfor- mance of a routine or necessary government action to which the payer has legal or other entitlement. EQT’s Anti-Money Laundering program consists of policies and procedures designed to prevent and detect money laun- dering and related activities. Part of that program is a set-up to perform KYC (know your customer) on fund clients, EQT funds’ portfolio companies and EQT entities. EQT reviews its Anti-Money Laundering (AML) and Countering of Financial Crime and Terrorist Financing (CTF) strategies, goals and objectives on an ongoing basis. EQT is committed to combating financial crime and imple- menting appropriate controls to mitigate the risk that invest- ments are in breach of the AML/CTF Laws, namely for the pur- poses of money laundering, terrorism financing, bribery and fraud events. All EQT employees must complete initial training on EQT Business Ethics, Anti-Bribery & Corruption and Anti-Money Laundering when starting at EQT to ensure they are aware of the risks, requirements and consequences of non-compliance. EQT conducts an annual ethics training focusing on topics related to EQTs business ethics practice including Anti-Bribery & Corruption and Anti-Money Laundering. The training is man- datory for all employees including members of the EQT Execu- tive Committee, consultants and temporary staff. Some regions and countries receive training more often, face-to-face and/or in greater depth in line with local regulatory requirements. In some jurisdictions mandatory training is also provided by exter- nal specialized firms or by our local compliance officers spe- cialized in these areas to further comply with regulatory requirements. Confirmed incidents of corruption and actions taken 2023 During the reporting period, there were no confirmed incidents of corruption or material breaches of business ethics, and no employees were dismissed or disciplined for corruption. Confirmed incidents of Money Laundering and actions taken 2023 During the reporting period, there were no confirmed incidents of money laundering or material breaches of business ethics. Conflicts of interest EQT is committed to identifying, preventing, managing and monitoring actual and potential conflicts of interest that can arise in the course of the management of EQT funds and as part of the ordinary course of business for members of the EQT AB Group. EQT has a Group Conflict of Interest Policy in place as well as underlying documents to govern more specific situations. These include for example an Instruction regarding Allocation of Investments and Related Matters, Cross-Fund Transactions and Related Matters, Conflict of Interest Instruction of EQT AB Balance Sheet Investments and governing documents intended to mitigate conflict of interests between EQT and its employees such as the Personal Trading Guidelines and the Outside Busi- ness Activities Guidelines. The regulated entities within EQT may have additional Conflicts of Interest policies as well. The Global Head of Risk, Regulatory & Compliance together with the local compliance officer is responsible for implement- ing systems to identify actual and potential material conflicts of interest by and among the EQT funds, and between the EQT funds and the EQT AB Group. EQT also has a Conflict of Interest Committee. EQT further maintains a global conflict of interest register and each fund has its own investor committee where matters of conflict of interest may be raised. Confirmed incidents of conflict of interests and actions taken 2023 During the reporting period there were no confirmed breaches of the EQT Conflict of interest policy for EQT group. Information security EQT AB Group’s mission-critical infrastructure is cloud-based, and critical vendors comply with the highest security standards in each area (ISO27001, SOC2). EQT’s information security program is shaped by insights from international standards, including ISO27001, NIST, and Cobit 2019, tailored to meet EQT’s unique requirements, char- acteristics, and approach to risk management. All EQT staff are subject to an employee awareness program to continu- ously strengthen the security culture and achieve a high level of resilience to cyber-attacks. The awareness program includes mandatory new-joiner training, an annual awareness course and regular phishing tests (three in 2023). EQT has in place an Information security steering committee composing of selected of members of the Executive Committee. The steer- ing committee recieves reports from CISO on a quarterly basis with summaries being reported to the Group risk function, the Audit committee and the Board. EQT follows a mandatory software procurement process, including information security aspects, applicable for any significant software or application being introduced to the EQT environment. EQT has in place a framework for IT General Controls (ITGC), against which all business critical applications are audited on a biannual basis. EQT Annual and Sustainability Report 2023 / Page 131Sustainability notes Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Sustainability notes 113 Sustainability notes 114 GRI content index 139 Auditor’s Limited Assurance Report 143 Corporate governance 144 Additional information 158 ===== SIDA 133 ===== Data Privacy EQT is committed to protecting the personal data of its employees, investors and contacts and using it in an appropri- ate manner aligned with the rights afforded to individuals by data protection legislation. EQT has established and maintained an adequate record of processing activities, data privacy policy and guidelines, enhanced its agreement review process with third parties and established adequate data privacy incident response process. Data and customer privacy is paramount for EQT, and the ways of working include a collaboration between internal functions and the Virtual Data Protection Office. The working group reports to the Data Protection Steering Committee, which determines the strategy and the plan and identifies the risk appetite. The Data Protection Steering Committee consists of representatives from the Executive committee, Risk, Regula- tory & Compliance, Corporate Legal and IT Security. The data privacy team is also subject to external reviews when deemed necessary. All EQT employees must complete an annual information security training to ensure they are aware of the risks, require- ments and consequences of non-compliance in regards to data privacy management and information security. Substantiated complaints concerning breaches of customer privacy and losses of customer data 2023 During the reporting period, no substantiated complaints regarding breaches of customer privacy and losses of customer data were identified. Responsible marketing Marketing of alternative investment funds, such as EQT funds, are generally subject to certain legal and regulatory restric- tions in all key jurisdictions, the specifics of which vary by jurisdiction and investor type. EQT has a global, well-diversified fund investor base con- sisting of institutional and other sophisticated investors. Any marketing of interests in an EQT fund will generally take place on a private placement basis to pre-targeted investors, and with proper consideration to the specific requirements that are relevant to a certain jurisdiction and/or fund investor. EQT is subject to relevant restrictions on public disclosures relating to funds in fundraising. As of 2023, EQT has a fund which enables public offering of interests in this fund. EQT is therefore subject to additional marketing and communication considerations in relation to this fund which EQT adheres to. Incidents of non-compliance concerning marketing communications 2023 During the reporting period, no instances of non-compliance with regulations or voluntary codes concerning marketing activities resulting in fines or non-monetary sanctions from competent authorities were identified. Whistleblowing EQT fosters an open and honest culture where all employees are encouraged to speak their mind and communicate if they have any concern regarding potential risk to themselves, their colleagues, EQT’s business or reputation, or to any other stake- holder. Consequently, EQT expects everyone to raise concerns regarding suspected unethical behaviors, misconducts and non-compliance with laws, regulations and policies. To this end, EQT encourages employees to contact their manager or the Global Head of Risk, Regulatory & Compliance to seek advice or report concerns about unethical and lawful behavior and/or organizational integrity. In addition, EQT has made available an anonymous whistle- blowing channel both internally on the intranet and externally on its website. All cases reported, may it be through the whistle blowing channel or otherwise, are addressed by a Case Handling Team and the Head of the Audit Committee (and therefore indirectly the Board) is informed about all cases. The cases are also reported on an aggregated level to the Audit Committee. Under no circumstances is retaliation against whistleblowers tolerated and a robust management of these cases have been set in place to ensure legal protection for the whistleblowers. The whistleblowing channel has been used during the year and all cases have been handled and reported in accordance with internal processes. No case has been deemed critical for EQT’s business. Finally, EQT has established and implemented effective and appropriate procedures for a reasonable and prompt handling of complaints received from fund investors. EQT Annual and Sustainability Report 2023 / Page 132Sustainability notes Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Sustainability notes 113 Sustainability notes 114 GRI content index 139 Auditor’s Limited Assurance Report 143 Corporate governance 144 Additional information 158 ===== SIDA 134 ===== EUR 500 million sustainability-linked bond issued in 2021 Key Performance Indicators (KPIs) Sustainability Performance Target (SPT) Target date Status 2023 KPI 1: SBTi approved greenhouse gas emission reduction targets SPT 1: Science-based targets approved 31 December 2023 Fulfilled in 2021 KPI 2a: Percentage of women Investment Advisory Professionals SPT 2a: 28% 31 December 2026 30.6% KPI 2b: Percentage of independent women board members appointed at EQT funds’ portfolio companies SPT 2b: 36% 31 December 2026 37% EUR 1,500 million sustainability-linked bonds issued in 2022 Key Performance Indicators (KPIs) Sustainability Performance Target (SPT) Target date Status 2023 KPI 1: Portfolio coverage %1) SPT 1: 40% 31 December 2025 49% 1) Eligible EQT funds’ private and listed equity portfolio companies by EUR invested capital to have set SBTs approved by the SBTi. Eligible companies where the EQT fund holds at least 25% of fully diluted shares and at least 24 months have passed since the date of acquisition. Excluding EQT Private Capital Asia. SUSTAINABILITY-LINKED INCENTIVES The incorporation of relevant sustainability KPIs into incentive schemes, such as remuneration policies, supports a sound sus - tainability strategy. Via incentives for financing, the sustain - ability objectives can further be highlighted and support the overall sustainability ambitions. Sustainability-linked incentives for employees EQT has a clear remuneration philosophy (including for variable cash), which also governs the remuneration to the Executive Committee and links compensation to EQT AB Group’s business strategy, sustainability, long-term interests and long-term value growth for its shareholders. Given EQT’s philosophy around sustainability and how this is ingrained in its purpose, sustainability criteria are also integrated in other parts of the evaluation. For details, please refer to the remu- neration policy in the board of directors’ report. On a team level, EQT links variable pay to sustainability using sustainability-related target achievement as a basis for bonus pool size decision for teams. In 2023, the variable cash component was linked to a qualitative assessment and, partly, quantitative climate-related targets, specified separately for different functions. In 2023, sustainability-linked incentives was included in the EQT AB share program based on a qualitative assessment of this year’s sustainability performance. Sustainability-linked financing Following successful establishments of ESG-linked credit facili - ties for EQT funds, EQT AB has issued sustainability-linked financings for EQT AB Group, in the format of an ESG-linked revolving credit facility (2020) and sustainability-linked bonds (2021 and 2022). Reporting towards the Sustainability Perfor- mance Targets in the EQT AB Group sustainability-linked bonds are provided below. For more information on the KPIs and definitions, please refer to EQT’s Sustainability-linked financing frameworks on the EQT website. EQT Annual and Sustainability Report 2023 / Page 133Sustainability notes Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Sustainability notes 113 Sustainability notes 114 GRI content index 139 Auditor’s Limited Assurance Report 143 Corporate governance 144 Additional information 158 ===== SIDA 135 ===== Lead Partnerships with a diversity of perspectives enables the development of new solutions to sustainability problems. EQT aims to lead change in the industry and beyond by sharing insights from learnings, advocating for change and driving innovation. LEARNING, PARTNERSHIPS AND ADVOCACY Leveraging the power of innovation and partnerships is a way for EQT to gain new insights and perspectives as well as to con- tribute to create change in its industry. Advocating for change and driving sustainable innovation can also impact EQT inter- nally through increased engagement and collaboration from employees that further fuels the sustainability ambitions. EQT established in 2023 a client collaboration platform to enable it to drive sustainable transformation at scale- EQT thinQ Client Academy. Read more about EQT’s collaboration with clients in Private Markets Collaboration and partnerships To promote sustainability in the ecosystem, EQT continues to be an active participant in industry associations, working groups and initiatives. Recent topics of focus have been: • Climate & Biodiversity • Diversity, Equity and Inclusions (DE&I) and Human Rights • Industry initiatives for impact investing • ESG Data, disclosures and regulation EQT is a signatory/supporter of: • UN Principles of Responsible Investment • UN Global Compact • Science-based targets initiative • Task Force on Climate-Related Financial Disclosures • Operating Principles for Impact Management • Initiative Climat International • Glasgow Financial Alliance for net zero • World Economic Forum Stakeholder Capitalism Metrics • Global ESG Benchmark for Real Assets EQT is a member of: • Investor’s Council of the Global Impact Investing Network • ESG Data Convergence Initiative • FCLTGlobal • World Economic Forum CEO Climate Alliance • Impact Capital Managers • ILPA Diversity in Action • 2X Global • Private Equity SMI Task Force • Invest Europe • BSR • UK Green Building Council • INREV • ULI Greenprint Center for Building Performance • VenturesESG • European Biotech Social Pact Please visit EQT’s website and EQT Foundation for more infor- mation on current partnerships aiming to support the wider society including local communities, and to inspire change in the broader industry. Direct economic value generated and distributed 50+37+13+E Direct economic value generated (revenues), EUR 2,122m Economic value distributed, EUR 1,568m Economic value retained, EUR 544m Economic value distributed by category 69+18+13+E Employees, EUR 1 088m Suppliers, EUR 288m Payments to governments, EUR 193m REPORTING AND TRANSPARENCY Continued development and tracking of metrics for key sus- tainability objectives is a prerequisite for EQT to drive systemic and sustainable change but also to account for social and envi- ronmental performance, value the contribution to society and establish credibility with stakeholders. To promote sustainabil - ity data transparency and comparability, EQT has engaged in various initiatives such as the ESG Data Convergence Initiative (EDCI), an initiative to generate useful, performance-based and comparable ESG data for the private equity industry. Economic value for society EQT generates direct economic value for society through its business activities. In 2023, EQT AB Group distributed a total of EUR 1,568m between employees, suppliers and governments, whereas EUR 544m was retained or distributed to owners. Eco- nomic value generated and distributed for authorities is pre- sented in accordance with EQT’s financial reporting. See charts on the next page for further breakdown of the period’s tax costs. Please see also section Financial statements for EQT’s financial reporting and generated revenue. EQT Annual and Sustainability Report 2023 / Page 134Sustainability notes Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Sustainability notes 113 Sustainability notes 114 GRI content index 139 Auditor’s Limited Assurance Report 143 Corporate governance 144 Additional information 158 ===== SIDA 136 ===== Approach to Taxes The EQT tax strategy, applicable to EQT AB Group, is aligned with EQT’s business strategy. EQT’s tax affairs shall be man- aged in light of EQT’s commercial objectives and long-term sustainable behavior. EQT recognizes that tax is at the core of its corporate responsibility and plays an important part in continuing to deliver exceptional value to the society as a whole and making a positive impact. By paying taxes companies contribute to societies in which they operate. EQT aims to take decisions regarding tax in compliance with applicable tax laws, tax treaties and relevant international guidance. EQT’s fiduciary duty vis-à-vis its shareholders extends to managing its tax affairs in a responsible and sustainable way. Hence, EQT strives to protect its brand and reputation and does not engage in unacceptable tax practices that can erode our stakeholder trust and, in the long-term, our license to operate. EQT has robust documented guidelines, processes and controls for managing taxes throughout the EQT platform, with a purpose to ensure that all material tax risks are identified and mitigated. Tax & Structuring is responsible for ensuring that tax risk management is part of the internal control systems and that there are escalation protocols in place for material tax issues. All material tax risks and areas of uncertainty shall be escalated to Tax & Structuring. All material transactions or events where the potential tax effects are uncertain are con- sidered in the light of a tax technical analysis, financial materi- ality, accounting and regulatory disclosure requirements, operational risk, reputational risk and compatibility with the goal of creating long-term, sustainable value. Significant tax risks and other tax matters of strategic importance shall be reported by Tax & Structuring to key decision-making bodies. The key principles according to which tax affairs within EQT shall be managed are set out in the Finance Policy. The Finance Policy is adopted by the EQT AB Board and reviewed annually. The EQT AB Group Tax Guidelines supports the key tax princi- ples set out in the Finance Policy and outlines how tax is man- aged at EQT on a day-to-day basis. The Tax Guidelines are adopted and reviewed on an annual basis by the EQT Opera- tions Committee, by delegation from the CEO and owned by the Global Head of Tax & Structuring who is responsible for ensuring that these principles are understood, consistently implemented and maintained and developed. The Finance Policy and the Tax Guidelines are available on the EQT website. EQT strives to deal with tax authorities in a respectful and professional way in all countries it operates in order to ensure EQT’s tax affairs are reported accurately. EQT seeks to pro- actively achieve certainty when appropriate and to resolve tax disputes efficiently and effectively, without recourse to litigation wherever possible. EQT expects everyone to raise concerns regarding sus- pected unethical behaviors, misconducts and non-compliance with laws, regulations and policies in relation to tax matters, and in accordance with EQT’s regular reporting and whis- tleblowing process, that also applies to tax related matters. EQT is a member of the Swedish Private Equity & Venture Capital Association, the industry association for the private equity industry in Sweden. One part of this association’s work is to act as a consultation body in legislative processes around tax, but also to advocate in public for reasonable tax treatment of the private equity industry. The EQT funds are established and maintained in a manner that meets operational efficiency, long-term sustainable requirements and commercial considerations for the EQT funds’ investors. EQT expects all investors in the EQT funds to be taxed on the returns and gains from the EQT funds in accor- dance with the tax legislation in the jurisdiction in which the fund investors reside. Reported taxes by type 60+12+28+E Corporate income tax, EUR 115m Non-recoverable VAT, EUR 24m Social security, EUR 54m Reported taxes by region 75+14+11+E Europe, EUR 144m APAC, EUR 27m Americas, EUR 21m Reported corporate income tax by region 64+23+13+E Europe, EUR 74m APAC, EUR 26m Americas, EUR 15m EQT Annual and Sustainability Report 2023 / Page 135Sustainability notes Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Sustainability notes 113 Sustainability notes 114 GRI content index 139 Auditor’s Limited Assurance Report 143 Corporate governance 144 Additional information 158 ===== SIDA 137 ===== Proportion of turnover from products or services associated with Taxonomy-aligned economic activities Financial year 2023 2023 Substantial contribution criteria DNSH criteria (“Does Not Significantly Harm”) Economic Activities Code(s) Turnover Proportion of turnover Climate Change Mitigation Climate Change Adaptation Water Pollution Circular Economy Biodiversity Climate Change Mitigation Climate Change Adaptation Water Pollution Circular Economy Biodiversity Minimum Safeguards Proportion of Taxonomy- aligned (A.1.) or -eligible (A.2.) turnover, year 2022 Category enabling activity Category transitional activity EUR m % Y; N; N/ EL Y; N; N/ EL Y; N; N/ EL Y; N; N/ EL Y; N; N/ EL Y; N; N/ EL Y/N Y/N Y/N Y/N Y/N Y/N Y/N % E T A. TAXONOMY-ELIGIBLE ACTIVITIES A.1. Environmentally sustainable activities (Taxonomy- aligned) - Turnover of environmentally sustainable activities (Taxonomy-aligned) (A.1) Of which enabling Of which transitional A.2 Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) EL; N/EL EL; N/EL EL; N/EL EL; N/EL EL; N/EL EL; N/EL - Turnover of Taxonomy- eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) (A.2) A. Turnover of Taxonomy-eligible activities (A.1+A.2) B. TAXONOMY NON-ELIGIBLE ACTIVITIES Turnover of Taxonomy- non-eligible activities 2,084 100% TOTAL 2,084 100% EU TAXONOMY STATEMENT The EU Taxonomy aims to provide a common understanding of economic activities that make a substantial contribution to the EU’s environmental goals. As EQT AB Group follows under NFRD (non-financial reporting directive), EQT is obliged to report its share of taxonomy-eligible and taxonomy-aligned activities covering financial year 2023. EQT AB has reviewed the economic activities that are cur- rently covered in the EU Taxonomy together with a third party expert and concluded that there is little to none of EQT AB’s activities that can be assessed as taxonomy-eligible based on the definitions set out. The specific activities covered within the EU Taxonomy’s financial and insurance sector currently only includes insurance activities. Note that an economic activity can contribute to more than one environmental goal. To avoid risk of double counting, EQT has made assessments where contribution only is attributable to one environmental goal per economic activity. Turnover EQT AB Group’s revenues relate to management fees, carried interest and investment income. While sustainability is an inte- grated service in EQT’s operating model, a share of Taxonomy- eligible activities cannot be directly derived from management fees. Carried interest and investment income relates to invest- ments in EQT funds and are hence pure financial. Thus the share of eligible turnover is zero. Please refer to the Consoli- dated Income Statement and Note 5 Revenue for further details. EQT Annual and Sustainability Report 2023 / Page 136Sustainability notes Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Sustainability notes 113 Sustainability notes 114 GRI content index 139 Auditor’s Limited Assurance Report 143 Corporate governance 144 Additional information 158 ===== SIDA 138 ===== Proportion of CapEx from products or services associated with Taxonomy-aligned economic activities – disclosure covering year 2023 Financial year 2023 2023 Substantial contribution criteria DNSH criteria (“Does Not Significantly Harm”) Economic Activities Code(s) CapEx Proportion of CapEx, year 2023 Climate Change Mitigation Climate Change Adaptation Water Pollution Circular Economy Biodiversity Climate Change Mitigation Climate Change Adaptation Water Pollution Circular Economy Biodiversity Minimum Safeguards Proportion of Taxonomy- aligned (A.1.) or -eligible (A.2.) CapEx, year 2022 Category enabling activity Category transitional activity EUR m % Y; N; N/ EL Y; N; N/ EL Y; N; N/ EL Y; N; N/ EL Y; N; N/ EL Y; N; N/ EL Y/N Y/N Y/N Y/N Y/N Y/N Y/N % E T A. TAXONOMY-ELIGIBLE ACTIVITIES A.1. Environmentally sustainable activities (Taxonomy- aligned) Acquisition and ownership of building CCM 7.7 7.6 13.0% Y N/EL N/EL N/EL N/EL N/EL - Y - - - - Y 0.0% - - CapEx of environmentally sustainable activities (Taxonomy-aligned) (A.1) 7.6 13.0% 13.0% 0.0% 0.0% 0.0% 0.0% 0.0% - Y - - - - Y 0.0% Of which enabling - - - - - - - - - - - - - - - - E Of which transitional - - - - - - - - - - - T A.2 Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) EL; N/EL EL; N/EL EL; N/EL EL; N/EL EL; N/EL EL; N/EL Acquisition and ownership of building CCM 7.7 47.2 81.3% EL N/EL N/EL N/EL N/EL N/EL 1.7% CapEx of Taxonomy- eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) (A.2) 47.2 81.3% 81.3% - - - - - 1.7% A. CapEx of Taxonomy-eligible activities (A.1+A.2) 54.7 94.3% 94,3% - - - - - 1.8% B. TAXONOMY NON-ELIGIBLE ACTIVITIES CapEx of Taxonomy- non-eligible activities 3.3 5.7% TOTAL 58.0 100.0% Capex EQT AB Group’s Capex as defined by the EU Taxonomy consists of intangible assets related to business combinations, equip - ment and office leases, either for new offices or newly admit- ted contracts as well as leasehold improvements. The amounts related to intangible assets related to business combinations and equipment are found in the Consolidated financial state- ments as Additions in Note 11 and Note 12, respectively, and lease-related amounts are not reported separately, but are part of Right-of-use assets and Additions in Note 12. Purchases of output from Taxonomy-eligible economic activities of sup- pliers has been reported as eligible Capex regardless of EQT having a target activity that is eligible, hence all capex related to office leases and the leasehold improvements have also this year been reported as eligible. To define whether the amounts are considered aligned according to Taxonomy criteria, EQT has requested information from its landlords whether the office buildings which EQT leases are meeting 1) the substantial contribution criteria and 2) if the landlords are meeting the DNSH-criteria (do no significant harm criteria) as well as the minimum safeguards. The request was only sent out to land- lords in the EU, as it is an EU-based regulation, accounting for around 40% of the eligible Capex. Still, some European land- lords could not officially respond to the request and the associ- ated capex were by default considered as not aligned. EQT Annual and Sustainability Report 2023 / Page 137Sustainability notes Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Sustainability notes 113 Sustainability notes 114 GRI content index 139 Auditor’s Limited Assurance Report 143 Corporate governance 144 Additional information 158 ===== SIDA 139 ===== Proportion of OpEx from products or services associated with Taxonomy-aligned economic activities – disclosure covering year 2023 Financial year 2023 2023 Substantial contribution criteria DNSH criteria (“Does Not Significantly Harm”) Economic Activities Code OpEx Proportion of OpEx, year N Climate Change Mitigation Climate Change Adaptation Water Pollution Circular Economy Biodiversity Climate Change Mitigation Climate Change Adaptation Water Pollution Circular Economy Biodiversity Minimum Safeguards Proportion of Taxonomy- aligned (A.1.) or -eligible (A.2.) OpEx, year 2022 Category enabling activity Category transitional activity EUR m % Y; N; N/ EL Y; N; N/ EL Y; N; N/ EL Y; N; N/ EL Y; N; N/ EL Y; N; N/ EL Y/N Y/N Y/N Y/N Y/N Y/N Y/N % E T A. TAXONOMY-ELIGIBLE ACTIVITIES A.1. Environmentally sustainable activities (Taxonomy- aligned) - CapEx of environmentally sustainable activities (Taxonomy-aligned) (A.1) Of which enabling Of which transitional A.2 Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) - EL; N/EL EL; N/EL EL; N/EL EL; N/EL EL; N/EL EL; N/EL OpEx of Taxonomy- eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) (A.2) A. OpEx of Taxonomy-eligible activities (A.1+A.2) B. TAXONOMY NON-ELIGIBLE ACTIVITIES OpEx of Taxonomy- non-eligible activities - TOTAL - Nuclear and fossil gas related activities Nuclear energy related activities 1. The undertaking carries out, funds or has exposures to research, development, demonstration and deployment of innovative electricity generation facilities that produce energy from nuclear processes with minimal waste from the fuel cycle. NO 2. The undertaking carries out, funds or has exposures to construction and safe operation of new nuclear installations to produce electricity or process heat, including for the purposes of district heating or industrial processes such as hydrogen production, as well as their safety upgrades, using best available technologies. NO 3. The undertaking carries out, funds or has exposures to safe operation of existing nuclear installations that produce electricity or process heat, including for the purposes of district heating or industrial processes such as hydrogen production from nuclear energy, as well as their safety upgrades. NO Fossil gas related activities 4. The undertaking carries out, funds or has exposures to construction or operation of electricity generation facilities that produce electricity using fossil gaseous fuels. NO 5. The undertaking carries out, funds or has exposures to construction, refurbishment, and operation of combined heat/cool and power generation facilities using fossil gaseous fuels. NO 6. The undertaking carries out, funds or has exposures to construction, refurbishment and operation of heat generation facilities that produce heat/cool using fossil gaseous fuels. NO Opex EQT AB Groups does not take up any R&D costs and as offices are leased the only potential Opex relates to maintaining and repairing e.g. technology hardware, which is negligible. EQT’s exposure to nuclear and fossil gas related activities From the financial year 2023, non-financial companies are required to report their exposure to activities related to nuclear power and fossil gas as part of the taxonomy reporting. EQT has made an assessment where it is concluded that EQT does not have any exposure to activities related to nuclear power and fossil gas. EQT Annual and Sustainability Report 2023 / Page 138Sustainability notes Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Sustainability notes 113 Sustainability notes 114 GRI content index 139 Auditor’s Limited Assurance Report 143 Corporate governance 144 Additional information 158 ===== SIDA 140 ===== GRI content index Statement of use: EQT AB has reported in accordance with the GRI Standards for the period 2023-01-01 – 2023-12-31 GRI 1 used: GRI 1: Foundation 2021 Applicable GRI Sector Standard(s): None of the published sector standards apply to EQT. GRI Standard/other source Disclosure Page Omission Additional comments General disclosures GRI 2: General Disclosures 2021 2-1 Organizational details 2, 5, 95 2-2 Entities included in the organization’s sustainability reporting 60, 84-87, 139 The entities included in the Sustainability Report are the same as for the Financial reporting, described in page 60 and 84-87. 2-3 Reporting period, frequency and contact point 139 EQT produces and publishes a financial report and a sustainability report on an annual basis (1 Janu - ary 2023 to 31 December 2023). Contact person: Julia Wikmark. Date of publish: 18 March 2024. 2-4 Restatements of information 139 There have been no restatments of information. 2-5 External assurance 143 External assurance of the sustainability report is provided by a third party. 2-6 Activities, value chain and other business relationships 5 -7, 28 2-7 Employees 126-127 2-8 Workers who are not employees 126 2-9 Governance structure and composition 127, 129, 152-155 2-10 Nomination and selection of the highest governance body 150, 156 2-11 Chair of the highest governance body 148 2-12 Role of the highest governance body in overseeing the management of impacts 129, 156 2-13 Delegation of responsibility for managing impacts 129, 156 2-14 Role of the highest governance body in sustainability reporting 129, 156 2-15 Conflicts of interest 130-131, 152-155, 159-161 2-16 Communication of critical concerns 132, 139 EQT does not report on 2-16 b. 2-17 Collective knowledge of the highest governance body 129 2-18 Evaluation of the performance of the highest governance body 129, 150, 156 2-19 Remuneration policies 53-54, 67-69,147, 150-151, 156 2-20 Process to determine remuneration 53-54, 67-69,147, 150-151, 157 2-21 Annual total compensation ratio 128 2-22 Statement on sustainable development strategy 9-11 2-23 Policy commitments 126, 130 2-24 Embedding policy commitments 130-133 EQT Annual and Sustainability Report 2023 / Page 139Sustainability notes Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Sustainability notes 113 Sustainability notes 114 GRI content index 139 Auditor’s Limited Assurance Report 143 Corporate governance 144 Additional information 158 ===== SIDA 141 ===== GRI Standard/other source Disclosure Page Omission Additional comments GRI 2: General Disclosures 2021 2-25 Processes to remediate negative impacts 119, 129-133 2-26 Mechanisms for seeking advice and raising concerns 132 2-27 Compliance with laws and regulations 131-132 2-28 Membership associations 134 2-29 Approach to stakeholder engagement 115 2-30 Collective bargaining agreements 126 Material topics GRI 3: Material Topics 2021 3-1 Process to determine material topics 115-116 3-2 List of material topics 115 Investment and value creation process GRI 3: Material Topics 2021 3-3 Management of material topics 117-118 EQT specific Sustainability as a tool for value creation 40 Sustainability governance & Business ethics GRI 3: Material Topics 2021 3-3 Management of material topics 129-136 GRI 201: Economic Performance 2016 201-1 Direct economic value generated and distributed 134 GRI 205: Anti-corruption 2016 205-2 Communication and training about anti-corruption policies and procedures 130-132 205-3- Total number of confirmed corruption cases 131 GRI 207: Tax 2019 207-1 Approach to tax 135 207-2 Tax governance, control, and risk management 135 207-3 Stakeholder engagement and management of concerns related to tax 135 GRI 417: Marketing and Labeling 2016 417-3 Incidents of non-compliance concerning marketing communications 132 GRI 418: Customer Privacy 2016 418-1 Substantiated complaints concerning breaches of customer privacy and losses of customer data 132 Renewable energy GRI 3: Material Topics 2021 3-3 Management of material topics 122 GRI 302: Energy 2016 302-1 Energy consumption within the organization 122 302-3 Energy intensity 122 Circularity GRI 3: Material Topics 2021 3-3 Management of material topics 122 303-5 Water consumption n.a Omission: EQT cannot comply with the topic specific disclosures in GRI 303-5 Water consumption. The reason for omission is that information is unavailable/ incomplete, in accordance with GRI-1, Requirement 6. EQT is investigating how its work and management approach of circularity will take shape, with the main impact being through the EQT funds’ port - folio companies. 306-3 Waste generated n.a Omission: EQT cannot comply with the topic specific disclosures in GRI 306-3 Waste generated.The reason for omission is that information is unavailable/incomplete, in accor- dance with GRI-1, Requirement 6. EQT is investigating how its work and management approach of circularity will take shape, with the main impact being through the EQT funds’ port - folio companies. EQT Annual and Sustainability Report 2023 / Page 140Sustainability notes Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Sustainability notes 113 Sustainability notes 114 GRI content index 139 Auditor’s Limited Assurance Report 143 Corporate governance 144 Additional information 158 ===== SIDA 142 ===== GRI Standard/other source Disclosure Page Omission Additional comments Biodiversity and nature GRI 3: Material Topics 2021 3-3 Management of material topics 122 GRI 304: Biodiversity 2016 304-1 Operational sites owned, leased, managed in, or adjacent to, protected areas and areas of high biodiversity value outside protected areas n.a Omission: EQT cannot comply with the topic specific disclosures in GRI 304: Biodiversity. The rea- son for omission is that informa- tion is unavailable/incomplete, in accordance with GRI-1, Requirement 6. EQT is investigating how its work and manage- ment approach of biodiversity will take shape. Decarbonization & Climate adaptation GRI 3: Material Topics 2021 3-3 Management of material topics 122-123 GRI 305: Emissions 2016 305-1 Direct (Scope 1) GHG emissions 120-121 305-2 Energy indirect (Scope 2) GHG emissions 120-121 305-3 Other indirect (Scope 3) GHG emissions 120-121 305-4 GHG emissions intensity 120-121 Employee development, health and well-being GRI 3: Material Topics 2021 3-3 Management of material topics 14, 46-48, 125-126 GRI 401: Employment 2016 401-1 New employee hires and employee turnover 127-128 401-3 Parental leave 128 EQT reports number of weeks of parental leave by gender but does not yet report 401-3c-e. GRI 403: Occupational Health and Safety 2018 403-1 Occupational health and safety management system 125-126 403-2 Hazard identification, risk assessment, and incident investigation 125 403-3 Occupational health services 125-128 403-4 Worker participation, consultation, and communication on occupational health and safety 125-128 403-5 Worker training on occupational health and safety 125-126, 130 403-6 Promotion of worker health 125-131 403-7 Prevention and mitigation of occupational health and safety impacts directly linked by business relationships 125-132 EQT does not currently have a formal process for preventing or mitigating significant negative occupational health and safety impacts that are directly linked to its products or services. 403-10 Work-related ill health 128 Omission: EQT cannot comply with the topic specific disclosures in GRI 403-10 Work-related ill health. The reason for omission is that information is unavailable/ incomplete, in accordance with GRI-1, Requrement 6 EQT reports sickness absence. GRI 404: Training and Education 2016 404-1 Average hours of training per year per employee 125 404-3 Percentage of employees receiving regular performance and career development reviews 125 The structured 360-degree feedback secures that all employees are offered regular performance and career development reviews. EQT Annual and Sustainability Report 2023 / Page 141Sustainability notes Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Sustainability notes 113 Sustainability notes 114 GRI content index 139 Auditor’s Limited Assurance Report 143 Corporate governance 144 Additional information 158 ===== SIDA 143 ===== GRI Standard/other source Disclosure Page Omission Additional comments Diversity, equity and inclusion GRI 3: Material Topics 2021 3-3 Management of material topics 126, 128 GRI 405: Diversity and Equal Opportunity 2016 405-1 Diversity of governance bodies and employees 127 Ref. Corporate governance report. 405-2 Ratio of basic salary and remuneration of women to men 128 Omission: EQT does not measure ratios of standard entry-level wages. EQT has reported the Unadjusted gender pay gap in line with PAI indicator, i.e., calcu- lated as the difference between avergae gross cash compensa - tion of male vs. female employ- ees as a percentage of average gross cash compensation of male employees (average FTEs). Human rights incl. labour rights GRI 3: Material Topics 2021 3-3 Management of material topics 126-127 Collective bargaining agreements 2-30 Collective bargaining agreements 126 Sustainability-linked incentives GRI 3: Material Topics 2021 3-3 Management of material topics 133 EQT specific Sustainability-linked financings 67, 133 Reporting and transparency GRI 3: Material Topics 2021 3-3 Management of material topics 134 EQT specific Annual sustainability reporting n.a EQT’s annual and sustainability report is the basis for transparent reporting and disclosures, where EQT strives to disclose imperfect learnings and results, including areas such as: Tax, Business Ethics, Cases of breaches and data from EQT funds’ portfolio companies. Learning, partnerships and advocacy GRI 3: Material Topics 2021 3-3 Management of material topics 134 GRI 2- General disclosures GRI 2-28 Memberships associations 134 EQT Annual and Sustainability Report 2023 / Page 142Sustainability notes Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Sustainability notes 113 Sustainability notes 114 GRI content index 139 Auditor’s Limited Assurance Report 143 Corporate governance 144 Additional information 158 ===== SIDA 144 ===== Auditor’s Limited Assurance Report on EQT AB’s Sustainability Report and statement regarding the Statutory Sustainability Report NTRODUCTION We have been engaged by the Board of Directors of EQT AB (publ) to undertake a limited assurance engagement of EQT AB’s Sustainability Report for the year 2023. The company has defined the scopes of the Sustainability Report and the Statu- tory Sustainability Report on page 1 in this document. RESPONSIBILITIES OF THE BOARD OF DIRECTORS AND THE MANAGING DIRECTOR The Board of Directors and the managing director are respon- sible for the preparation of the Sustainability Report including the Statutory Sustainability Report in accordance with appli - cable criteria and the Annual Accounts Act respectively. The criteria are defined on page 1 in the Sustainability Report and are part of the Sustainability Reporting Guidelines published by GRI (The Global Reporting Initiative), that are applicable to the Sustainability Report, as well as the accounting and calcu- lation principles that EQT AB has developed. This responsibility also includes the internal control relevant to the preparation of Sustainability Report that is free from material misstatements, whether due to fraud or error. AUDITOR’S RESPONSIBILITY Our responsibility is to express a conclusion on the Sustainabil- ity Report based on the limited assurance procedures we have performed and to express an opinion regarding the Statutory Sustainability Report. Our assignment is limited to the histori - cal information that is presented and does not cover future-oriented information. We conducted our limited assurance engagement in accor- dance with ISAE 3000 Assurance engagements other than audits or reviews of historical financial information (revised). A limited assurance engagement consists of making inquiries, primarily of persons responsible for the preparation of the Sustainability Report and applying analytical and other lim - ited assurance procedures. Our examination regarding the Statutory Sustainability Report has been conducted in accor - dance with FAR’s accounting standard RevR12 The auditor’s opinion regarding the Statutory Sustainability Report. A lim - ited assurance engagement and an examination according to RevR 12 is different and substantially less in scope than an audit conducted in accordance with International Standards on Auditing and generally accepted auditing standards in Sweden. The firm applies ISQM 1 (International Standard on Quality Management 1), which requires the firm to design, implement and operate a system of quality management including poli- cies or procedures regarding compliance with ethical require- ments, professional standards and applicable legal and regulatory requirements. We are independent of EQT AB in accordance with professional ethics for accountants in Sweden and have otherwise fulfilled our ethical responsibilities in accordance with these requirements. The limited assurance procedures performed and the examination according to RevR 12 do not enable us to obtain assurance that we would become aware of all significant mat- ters that might be identified in an audit. The conclusion based on a limited assurance engagement and an examination according to RevR 12 does not provide the same level of assurance as a conclusion based on an audit. Our procedures are based on the criteria defined by the Board of Directors and the managing director as described above. We consider these criteria suitable for the preparation of the Sustainability Report. We believe that the evidence obtained is sufficient and appropriate to provide a basis for our conclusions below. CONCLUSIONS Based on the limited assurance procedures performed, nothing has come to our attention that causes us to believe that the Sustainability Report is not prepared, in all material respects, in accordance with the criteria defined by the Board of Direc- tors and the managing director. A Statutory Sustainability Report has been prepared. Stockholm, 15 March 2024 KPMG AB Håkan Olsson Reising Karin Sivertsson Authorized Public Accountant Expert Member of FAR To EQT AB (publ), corp. id 556849-4180 EQT Annual and Sustainability Report 2023 / Page 143Sustainability notes Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Sustainability notes 113 Sustainability notes 114 GRI content index 139 Auditor’s Limited Assurance Report 143 Corporate governance 144 Additional information 158 ===== SIDA 145 ===== 10 Corporate governance 145 Corporate governance report 145 Statement of Purpose Active Core Infrastructure Radius Global EQT Active Core Infrastructure announced its first invest- ment, acquiring Radius Global Infrastructure with Public Pension Investment Board (PSP), for an enterprise value of approximately $3.0 billion. Radius owns and acquires critical digital infrastructure, including ground, tower, rooftop, and cell sites, in over 20 countries across North and South America, Europe, and Australia. EQT believes Radius will benefit from long-term tail- winds supported by growing demand for data. EQT will support the Company’s expansion efforts by leveraging its global scale and experience with digital infrastructure assets to expand Radius’ portfolio and enter new markets. ===== SIDA 146 ===== Corporate governance report Corporate governance practices refer to the decision-making systems through which owners, directly or indirectly, govern a company. Good corporate governance is not only important for EQT AB’s organization, it is also inte- grated in EQT’s business model as it is part of the core of EQT’s value creation strategy when advising and future- proofing the portfolio companies of the EQT funds. EQT AB is a Swedish limited liability company governed by the Swedish Companies Act. As a listed company on Nasdaq Stockholm, EQT AB further adheres to the Swedish Code of Corpo- rate Governance (the “Code”). The Code is published on www.corporate- governanceboard.se, where a descrip - tion of the Swedish Corporate Gover- nance model can be found. This Corporate Governance Report is submitted in accordance with the Swedish Annual Accounts Act and the Code. It explains how EQT AB has con- ducted its corporate governance activi- ties during the financial year 2023. EQT AB did not breach or deviate from the Nasdaq Stockholm Rule Book for Issuers, the Code or good stock market practice during the financial year 2023. The Corporate Governance Report has been reviewed by EQT AB’s auditor, as presented on page 157. EQT is a purpose-driven global investment organization focused on active ownership strategies, while responsibly investing in, own - ing and developing companies and real assets. As established in EQT’s articles of association, EQT shall strive to conduct its business in a way that future-proofs companies and has a posi- tive impact with everything we do. EQT has an enduring commitment to re- sponsible investment and has since inception had a multi-stakeholder approach, with the original concept from EQT’s founding in 1994 of being “more than capital”. This concept still embodies the fundamental mindset that de- fines EQT and our active ownership approach. With an entrepreneurial spirit and passion for future-proofing companies, EQT continues to further incorporate the long-term ownership philosophy of the Swedish Wallenberg family. Today, EQT is a differentiated global invest- ment organization with a near three-decade history of responsibly investing in, owning and developing companies and real assets. With a Nordic heritage and a global mindset com- bined with well-grounded values and a deeply rooted culture, EQT funds have a track record of consistent and attractive returns across ge- ographies, sectors and strategies. We do this by making a real difference. The sales CAGR under EQT’s ownership has been 17% for Pri- vate Capital EU & NA, 13% for Private Capital Asia, and 12% for EQT Infrastructure. The EBITDA CAGR amounts to 19%, 18%, and 16%, respectively 1). As EQT has grown, our philosophy has been further ingrained into the EQT way of doing business. By taking an active role and working closely with management and boards, EQT supports its investments with hands-on gover- nance and expertise, leveraged from both within the EQT platform and the global net- work of EQT Advisors. Providing both capital and competence constitutes the essence of EQT’s active ownership approach and is diffi- cult to replicate. It allows us not only to invest but also to be part of the solution and make a positive impact that prevails during and after EQT funds’ ownership period, all while creating attractive returns for EQT funds’ investors. Shouldering the role as an active owner is not done overnight. It requires trust from mul- tiple stakeholders and such trust is earned over time. At EQT, we have always been dependent on our license to operate to continue carrying out our mission. This has meant a continuous quest to gain and preserve confidence from a broad set of stakeholders such as portfolio companies’ employees and customers, fund investors, unions, the media, and politicians – and since the public listing, also EQT AB’s shareholders. Going forward, we will develop EQT and our investments to prosper and be sustainable. We do this by promoting regenerative processes and equitable business practices and by en- suring that leadership is held accountable. We believe this will ensure that EQT stays successful and relevant for its investors and society as a whole for the long term. Conni Jonsson Founder and Chairperson Christian Sinding CEO and Managing Partner Margo Cook Board Member Brooks Entwistle Board Member Johan Forssell Board Member Diony Lebot Board Member Gordon Orr Board Member Marcus Wallenberg Deputy Chairperson Statement of Purpose Purpose – why we exist: “To future-proof companies and make a positive impact” Mission – what we do and how: “With the best talent and network around the world, EQT uses a thematic investment strategy and distinctive value creation approach to future-proof companies, creating superior returns to EQT’s investors and making a positive impact with everything we do” Vision – what we strive for: “To be the most reputable investor and owner” 1) Average sales and EBITDA between entry and exit of realized portfolio companies, as per December 31, 2023. For EQT Private Capital EU&NA: Refers to realized assets within EQT Mid Market strategy and EQT V-VIII. For EQT Infrastructure: Refers to realized assets within EQT Infrastructure I-III. For BPEA Fund VI-VIII: Weighted sales and EBITDA CAGR between entry and exit of realized portfolio companies, as per December 31, 2023. EQT Annual and Sustainability Report 2023 / Page 145Corporate governance report Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Sustainability notes 113 Corporate governance 144 Corporate governance report 145 Statement of Purpose 145 Additional information 158 ===== SIDA 147 ===== AUTHORIZATIONS At the Annual Shareholders’ Meeting held on 30 May 2023, the following authorizations were granted to the Board. An authorization to, during the period until the Annual Shareholders’ Meeting 2024, on one or more occasions, resolve upon issuances of new shares and/or warrants to be paid in cash, by way of set-off and/or in kind. Shares and/or warrants may be issued without preferential rights for the shareholders of EQT AB. The number of shares and/or war- rants issued may not correspond to a dilution of more than 10 percent of the total number of shares as of the first exercise of the authorization, after full exercise of the authorization. The purpose of the authorization is to provide flexibility for acqui- sitions of companies, businesses or parts thereof, as well as to increase financial flexibility for EQT and broaden the share- holder base. Any issue of new shares resolved upon pursuant to the authorization shall be made at market terms and condi- tions, taking into account the transaction as a whole. Warrants may be issued free of charge. An authorization to, during the period until the Annual Shareholders’ Meeting 2024, on as many occasions as it deems appropriate, make purchases of the company’s ordi- nary shares. The number of shares purchased must at no time result in the company’s holding exceeding 10 percent of all the shares in the company. The purchases are to be made on Nas- daq Stockholm or in accordance with an offer to acquire shares directed to all shareholders of the same share class or through a combination of these two alternatives. Acquisition of shares on Nasdaq Stockholm shall be made at a price per share within the price interval applicable at the time of acqui- sition. Acquisitions of shares by way of offers to acquire shares directed to all the company’s shareholders of the same share class shall be made at an acquisition price which is no more than 15 percent above the prevailing market price and no less than SEK 0. The purposes of the authorization are to enable the Board to adjust the company’s capital structure, enable acquisitions of companies and business operations where payment is made with own shares, deliver shares to Board members as Board fee as well as mitigate the dilution impact from the company’s incentive programs and acquisitions made by EQT. Two authorizations to, during the period until the Annual Shareholders’ Meeting 2024, on one or more occasions, increase EQT AB’s share capital by issuing class C2 shares. With deviation from the shareholders’ pre-emption rights, a participating bank was entitled to subscribe for the new class C2 shares at a subscription price corresponding to the quota value of the shares. The purpose of the authorizations and the reason for the deviation from the shareholders’ pre-emption rights in connection with the issue of class C2 shares were to ensure delivery of ordinary shares under the EQT Share Pro- gram and the EQT Option Program, respectively. The authori- zation within the framework of the EQT Share Program com- prised the issuance of a maximum of 11,861,275 class C2 shares and the authorization within the framework of the EQT Option Program comprised the issuance of a maximum of 47,445,101 class C2 shares, or the higher number of shares required to fulfill the company’s commitment under the EQT Share Pro- gram and the EQT Option Program, respectively. The number of shares that could be issued could thus be subject to recalcu- lation in accordance with market practice, inter alia in case of a bonus issue, new issue of shares, conversion of convertible instruments, share split or reverse share split and in certain other cases. The authorizations have been fully utilized. Two authorizations to, during the period until the Annual Shareholders’ Meeting 2024, on one or more occasions, repur- chase its own class C2 shares. The repurchases could only be effectuated through an offer directed to all holders of class C2 shares and shall comprise all outstanding class C2 shares. Repurchases shall be effectuated at a purchase price corre- sponding to the quota value. Payment for the repurchased class C2 shares were to be made in cash. The purpose of the repurchase authorizations was to ensure delivery of ordinary shares under the EQT Share Program and the EQT Option Program, respectively, and the class C2 shares was therefore reclassified to ordinary shares after the repurchase. The num- ber of class C2 shares that could be repurchased were subject to recalculation in accordance with market practice, inter alia in case of a bonus issue, new issue of shares, conversion of con- vertible instruments, share split or reverse share split and in certain other cases. The authorizations have been fully utilized. SHAREHOLDERS’ MEETINGS AND THE ANNUAL SHAREHOLDERS’ MEETING 2024 According to EQT AB’s articles of association, shareholders’ meetings are convened by publication of the convening notice in the Swedish National Gazette (Sw. Post- och Inrikes Tidningar) and on EQT’s website. At the time of the notice convening a shareholders’ meeting, information regarding the notice shall be published in the Swedish daily newspaper Dagens Industri. Shareholders who wish to participate in a shareholders’ meeting of EQT AB must be included in the shareholders’ regis- ter maintained by Euroclear Sweden AB (“Euroclear”) on the day falling six banking days prior to the meeting and notify EQT AB of their participation no later than on the date stipulated in the notice convening the shareholders’ meeting. Shareholders may attend the shareholders’ meetings in person or by proxy and may be accompanied by a maximum of two assistants. Typically, it is possible for a shareholder to register for the shareholders’ meeting in several different ways as indicated in the notice of the shareholders’ meeting. A shareholder may vote for all shares in EQT AB owned or represented by the shareholder, without restrictions on the number of votes. The Annual Shareholders’ Meeting 2024 (the “AGM 2024”) of EQT AB will take place on 27 May 2024 at 14:00 CEST. All documents related to the AGM 2024 will be published on EQT’s website. SHARES At year-end 2023, EQT AB had 55,362 shareholders according to the shareholders’ register maintained by Euroclear. The only shareholders representing more than one tenth of the shares and votes in EQT AB were Investor Investments Holding Aktiebolag, an indirect subsidiary of Investor Aktiebolag, with 13.99 percent of the capital and 14.0 percent of the votes and Bark Partners AB, an entity owned by Conni Jonsson, Thomas von Koch, Harry Klagsbrun and Per Franzén, with 11.0 percent of the capital and 11.01 percent of the votes. At the Annual Shareholders’ Meeting held on 30 May 2023, the Board was authorized to repurchase EQT AB ordinary shares and to issue C2 shares for subsequent reclassification to ordinary shares. On 14 July 2023, the Board resolved on a repurchase program by virtue of the authorization granted by the Annual Share- EQT Annual and Sustainability Report 2023 / Page 146Corporate governance report Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Sustainability notes 113 Corporate governance 144 Corporate governance report 145 Statement of Purpose 145 Additional information 158 ===== SIDA 148 ===== holders’ Meeting held on 30 May 2023 and 1,800,000 ordinary shares were repurchased during the course of the repurchase program which ended on 25 August 2023. On 19 December 2023, the Board resolved to (i) issue 59,306,376 class C2 shares, (ii) repurchase all class C2 shares and (iii) reclassify all 59,306,376 class C2 shares into ordinary shares. For more information about the EQT AB share and its largest sharehold- ers, see page 160. Information on EQT AB’s shareholder structure is also available on EQT’s website. NOMINATION COMMITTEE Under the Code, all companies whose shares are listed on a regulated market in Sweden must have a nomination commit- tee to prepare proposals regarding certain appointments by the shareholders’ meeting. The main task of the nomination committee is to propose candidates for election to the Board, including the chairperson of the Board, and, where applicable, propose auditors for election to the shareholders’ meeting. When nominating persons for election to the Board, the nomi- nation committee shall determine whether in its view the per- sons nominated for election are considered independent of EQT AB, its senior management and the major shareholders in EQT AB. In addition, the nomination committee shall propose a candidate for election as chairperson of the Annual Share- holders’ Meeting. The nomination committee shall also submit proposals concerning the remuneration of the chairperson of the Board, the other Board members and the auditors. The nomination committee of EQT AB shall be appointed in accordance with the principles for appointment of the nomina- tion committee. Set forth below are the principles for appoint- ment of the nomination committee, adopted by the Annual Shareholders’ Meeting 2023. 1. The nomination committee shall comprise one member appointed by each of the four largest shareholders, based on ownership in the Company on the last banking day of August the year before the annual shareholders’ meeting, and the Chairperson of the Board. If any shareholder renounces its right to appoint a member to the nomination committee, such right shall transfer to the shareholder who is the next largest shareholder in the Company. 2. If none of the four largest shareholders is (a) a Member in EQT Foundation’s Member Committee (“EQT Member”) or (b) EQT Foundation, the fourth largest shareholder’s right shall instead vest in EQT Foundation. Thus, an EQT Member or EQT Foundation shall always be allowed to appoint a member of the nomination committee. If EQT Foundation renounces such right, the right shall transfer to the fourth largest shareholder pursuant to section 1. 3. The member appointed by the largest shareholder shall be appointed Chairperson of the nomination committee, unless the nomination committee unanimously appoints someone else. The Chairperson of the nomination committee shall not be a Board member of the Company. 4. If a shareholder (pursuant to section 1 or section 2) that has appointed a member to the nomination committee is no longer one of the shareholders who is given such right, at any point in time up to three months before the annual shareholders’ meeting: • the member appointed by such shareholder shall resign; and • the shareholder who is the next largest shareholder in the Company (that has not appointed a member) or EQT Foundation (pursuant to section 2) shall have the right to appoint one member to the nomination committee. Unless specific reasons suggest otherwise, the existing compo - sition of the nomination committee shall, however, remain unchanged if such change in the ownership in the Company is only marginal or occurs during the three-month period prior to the annual shareholders’ meeting. If a shareholder/EQT Foun- dation otherwise should have the right to appoint a member due to a material change in the ownership of the Company at any time during the three-months period prior to the annual shareholders’ meeting, such shareholder/EQT Foundation shall, in any event, have the right to take part in the work of the nomination committee and participate in its meetings. 5. If a member resigns from the nomination committee before his or her work is completed, the shareholder (pursuant to section 1 or section 2) who has appointed such member shall appoint a new member, unless section 4 is applicable. 6. A shareholder (pursuant to section 1 or section 2) who has appointed a member to the nomination committee shall have the right to dismiss such member and appoint a new member. 7. Changes to the composition of the nomination committee shall be disclosed publicly as soon as possible. 8. The nomination committee’s appointment ends when the next nomination committee has been appointed. 9. If needed, the Company shall reimburse reasonable costs which the nomination committee deems necessary in order for the nomination committee to fulfill its assignment. 10. These instructions shall apply until further notice. The composition of the nomination committee meets the requirements concerning the independence of the nomination committee. All AGM documents related to the nomination committee will be published on EQT’s website. Nomination committee for the AGM 2024 Members Appointed by % of the votes per 31 December 2023 Jacob Wallenberg (Chairperson) Investor AB 14.0 Harry Klagsbrun Bark Partners AB 11.0 Cynthia Lee Jean Eric Salata 9.5 Anders Oscarsson AMF Pension & Funds 0.9 Conni Jonsson Chairperson of the Board 0.11) 1) In total, Conni Jonsson holds 47,383,981 shares representing 3.8 percent of the votes and shares, whereof 794,072 shares representing 0.1 percent of the votes and shares are held through Qarlbo Associates SA, and the remainder of the shares are held through Bark Partners AB. AUDITOR EQT AB’s auditor shall review EQT AB’s annual report and accounting, as well as the management of the Board and the CEO. Following each financial year, the auditor shall submit an audit report and a consolidated audit report to the Annual Shareholders’ Meeting. Pursuant to EQT AB’s articles of association, EQT AB shall have no less than one and no more than two auditors with no more than two deputy auditors. Since 2011, EQT AB’s auditor is KPMG AB. For details on remuneration to the auditors, see Note 8. EQT Annual and Sustainability Report 2023 / Page 147Corporate governance report Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Sustainability notes 113 Corporate governance 144 Corporate governance report 145 Statement of Purpose 145 Additional information 158 ===== SIDA 149 ===== The Board 1) Shareholding as per 29 December 2023. Updated shareholding can be found on eqtgroup.com. 2) Conni Jonsson was the sole board member of EQT AB from 13 January 2012 until 26 August 2013, when he was elected Chairperson of the board. CONNI JONSSON Born 1960. Chairperson of the board since January 20122). Founder of EQT. Education: Bachelor of Science with majors in Economic Analysis and Accounting & Finance from Linköping University. Studies at the Management Development Program, Harvard Business School. Other current assignments: Chairperson of the Board of EQT Foundation and Qarlbo AB. Board member of Bark Partners AB, Elins Lund AB, Pophouse Entertainment Group AB, Qarlbo Natural Asset Company AB, Silver Life AB, Goldonder AB and Qarlbo Energy AB. Previous assignments: Chairperson of the Board of EQT Partnership Associa - tion. Chairperson of the Board and Board member of EQT Partners Aktiebolag and Qarlbo Partners AB. Shareholding in EQT AB 1): 47,383,981 ordinary shares (indirectly). Independent of EQT AB and executive management: No. Independent of major shareholders: No. MARCUS WALLENBERG Born 1956. Deputy Chairperson since June 2021. Education: Bachelor of Science, Foreign Service, Georgetown University, Washington D.C USA. Other current assignments: Chairperson of the Board of SEB, Saab, FAM, Patricia Industries and Wallenberg Investments. Deputy Chair - person of Investor and the Knut and Alice Wallenberg Foundation. Board member of AstraZeneca. Chair of The Royal Academy of Engineering Sciences. Previous assignments: Chairperson of Electrolux, International Chamber of Commerce and LKAB. President and CEO of Investor. Board member of Stora Enso and Temasek Holding. Shareholding in EQT AB 1): 25,000 shares (indirectly) Independent of EQT AB and executive management: Yes. Independent of major shareholders: No. MARGO COOK Born 1964. Board member since June 2021. Education: Executive MBA, Columbia Business School, Bache - lor’s, Finance, University of Rhode Island. Chartered Financial Analyst (CFA). Other current assignments: Chairperson of the Board of University of Rhode Island Board of Trustees. Independent Chairperson of MerQube. Co-chairperson of the Board of Bridge - water Associates. Vice Chairperson of the Board of All Stars Project Inc. Advisory Board member of Velocity and Legalist. Previous assignments: Advisory Board member of TIFIN and President of Nuveen Advisory Services. Shareholding in EQT AB 1): – Independent of EQT AB and executive management: Yes. Independent of major shareholders: Yes. BROOKS ENTWISTLE Born 1967. Board member since June 2022. Education: Master of Business Administration, Harvard Business School, A.B., History, Dartmouth College. Other current assignments: Managing Director at Ripple and Senior Vice President of Global Customer Success. Board member of Aspen Institute, EmancipAction, The John Sloan Dickey Center for International Understanding at Dartmouth College and Young Life. Previous assignments: CEO Goldman Sachs India and Chairman Goldman Sachs SouthEast Asia. Board member of Global Synergy Acquisition Corp. and Chief Business Officer International at Uber. Shareholding in EQT AB 1): – Independent of EQT AB and executive management: Yes. Independent of major shareholders: Yes. EQT Annual and Sustainability Report 2023 / Page 148Corporate governance report Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Sustainability notes 113 Corporate governance 144 Corporate governance report 145 Statement of Purpose 145 Additional information 158 ===== SIDA 150 ===== The Board, continued JOHAN FORSSELL Born 1971. Board member since August 2015. Education: Master of Science in Economics and Business Admin - istration from Stockholm School of Economics. Other current assignments: CEO and board member of Investor AB. Board mem- ber of Atlas Copco AB, Epiroc AB, Wärtsilä Oyj Abp, Patricia Industries, and Confederation of Swedish Enterprise. Member of The Royal Swedish Academy of Engineering Sciences (IVA). Previous assignments: Board member of Stockholm School of Economics and SAAB Aktiebolag. Shareholding in EQT AB 1): 3,000 shares Independent of EQT AB and executive management: Yes. Independent of major shareholders: No. GORDON ORR Born 1962. Board member since October 2018. Education: Master in Engineering from Oxford University. MBA, Baker Scholar, Harvard Business School. Other current assignments: Chairperson of the Board of Westchel Ltd. Board member of China Britain Business Council, Lenovo Group Ltd, Meituan Ltd, Swire Pacific Ltd, and Fidelity China Special Situations PLC. Previous assignments: Board member of Sondrel Ltd, BioProducts Laboratory Ltd and PCH Ltd. Shareholding in EQT AB 1): 31,530 ordinary shares (directly). Independent of EQT AB and executive management: Yes. Independent of major shareholders: Yes. DIONY LEBOT Born 1962. Board member since June 2020. Education: Masters in Finance and taxation from University Pantheon Sorbonne. Other current assignments: Board member of Alpha Bank and Ayvens Previous assignments: Deputy Chief Executive Office of Societe Generale, in charge of ESG policies, the group’s financial services (ALD & SGEF) and Insurance activities of the Group Shareholding in EQT AB 1): – Independent of EQT AB and executive management: Yes. Independent of major shareholders : Yes. 1) Shareholding as per 29 December 2023. Updated shareholding can be found on eqtgroup.com. EQT Annual and Sustainability Report 2023 / Page 149Corporate governance report Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Sustainability notes 113 Corporate governance 144 Corporate governance report 145 Statement of Purpose 145 Additional information 158 ===== SIDA 151 ===== According to EQT AB’s articles of association, the Board mem- bers elected by the shareholders’ meeting shall be no less than three and no more than ten without any deputy members. Since the Annual Shareholders’ Meeting held on 30 May 2023, the Board has consisted of seven members and no deputy members. Seven of the eight members elected at the Annual Shareholders’ Meeting 2022 were re-elected at the Annual Shareholders’ Meeting 2023, Nicola Kimm declined re-election. The composition of EQT AB’s Board meets the Code’s requirements concerning independence. In the nomination committee’s work for the AGM 2024, the nomination committee will apply rule 4.1 of the Code as diversity policy in its nomina- tion work with the aim to achieve a well-functioning composi- tion of the Board when it comes to diversity and breadth, as regards inter alia gender, nationality, age and industry experience. Evaluation of the Board and the CEO The Board applies written rules of procedure, which are revised annually and adopted by the inaugural Board meeting each year. On an annual basis, the Chairperson of the Board initiates an evaluation of the performance of the Board. The objective of the evaluation is to provide insight into the Board members’ view about the performance of the Board and iden- tify measures that could make the work of the Board more effective. A secondary objective is to form an overview of the areas the Board believes should be afforded greater scope and where additional expertise might be needed within the Board. All Board members participated in the 2023 evaluation. In addition, each Board member completed a survey as part of the evaluation and the Chairperson of the Board held individ- ual conversations with each Board member to discuss the results of the survey to gain a better understanding of the Board’s work during the year. As part of the annual evaluation process, the Chairperson reports the results to the nomination committee. The Board continuously evaluates the performance Attendance at board meetings and board remuneration in 2023 Attendance record, board and Committee meetings 2023 Remuneration resolved by the annual shareholders’ meeting 2023 (EURk) Member Board meetings 1) AudCo meetings RemCo meetings SustCo meetings Board fee Audit committee Remuneration committee Sustainability committee Total3) Conni Jonsson (Chairperson) 11/11 4/4 1/1 2/2 295.80 202) – – 315.8 Marcus Wallenberg (Deputy Chairperson) 11/11 – 4/4 – 134.64 – 20 – 154.64 Margo Cook 9/11 – 4/4 4/4 134.64 – 40 20 194.64 Brooks Entwistle 10/11 – 3/3 – 134.64 – 20 – 154.64 Johan Forssell 9/11 4/4 – – 134.64 20 – – 154.64 Nicola Kimm 4/5 – – 2/2 – – – – – Diony Lebot 11/11 4/4 – 2/2 134.64 40 – 20 194.64 Gordon Orr 11/11 3/3 – 3/3 134.64 – – 40 174.64 Total3) 1,103.64 80 80 80 1,343,64 1) The record shows the attendance in relation to how many meetings each Board member or committee member was elected Board member or appointed committee member, as applicable. 2) Conni Jonsson left the audit committee in January 2024. Remuneration will be adjusted accordingly. 3) The column “Total” does not include other remuneration received, please see Note 23. of the CEO by monitoring the development of the business in relation to the established objectives. A formal performance review is carried out once a year. Work of the Board in 2023 During 2023, the Board held 11 Board meetings. The Board members’ are expected to attend board meetings and the attendance during 2023 is shown in the table below. The Head of Business Development, has been the secretary of Board meetings. Prior to each meeting, the Board members were provided with written information on the matters that were to be discussed. Furthermore, there have been Board meetings where the Board members have had the opportunity to discuss matters without representatives of EQT AB’s management being present. The main focus areas for the Board’s work during 2023 have been on EQT’s strategic priorities, including the sustainability agenda and future-proofing performance, while navigating through a year of uncertainty. Committee work is an important task performed by the Board. For a description of the work conducted by the commit- tees during 2023, see the summary below. In addition to participating in meetings of the audit commit- tee, EQT AB’s auditor also attended a Board meeting during which Board members had the opportunity to pose questions to the auditor without representatives of EQT AB’s manage- ment being present. Board committees In order to increase the efficiency of its work and enable a more detailed analysis of certain issues, the Board has formed an audit committee, a remuneration committee and a sustain- ability committee. The members of the committees are nor- mally appointed at the inaugural Board meeting and the com- mittees’ duties and decision-making authorities are regulated in annually approved committee instructions. The primary objective of the committees is to provide preparatory and administrative support to the Board. The matters considered at committee meetings are recorded in minutes and reported at the following Board meeting. Representatives from EQT AB’s central functions typically participate in committee meetings. Diony Lebot (Chairperson), Johan Forssell and Conni Jons- son were appointed as members of the audit committee at the EQT Annual and Sustainability Report 2023 / Page 150Corporate governance report Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Sustainability notes 113 Corporate governance 144 Corporate governance report 145 Statement of Purpose 145 Additional information 158 ===== SIDA 152 ===== inaugural Board meeting following the Annual Shareholders’ Meeting 2023. Conni Jonsson resigned as a member of the audit committee in January 2024. The audit committee shall perform the tasks set out in applicable EU rules, the Swedish Companies Act and, to the extent appropriate, the Code. The audit committee shall monitor EQT’s financial and sustainabil- ity reporting and the efficiency of EQT’s internal controls and risk management as well as keep itself informed regarding the audit of the Annual Report and EQT’s accounts and the review of the semi-annual report and preparation of the quarterly statements. The audit committee shall also review and monitor the impartiality and independence of the auditor. Margo Cook (Chairperson), Brooks Entwistle and Marcus Wallenberg were appointed as members of the remuneration committee at the inaugural Board meeting following the Annual Shareholders’ Meeting 2023. The purpose and aim of the remuneration committee is to address remuneration matters and ensure a comprehensive and well prepared and supervised remuneration model for the EQT AB Group’s employees. The remuneration committee shall prepare the Board’s decisions on principles for remuneration, including sustainability considerations, and other terms of employment for the executive management and monitor and evaluate the current remuneration structures and levels. Gordon Orr (Chairperson), Margo Cook and Diony Lebot were appointed as members of the sustainability committee at the inaugural Board meeting following the Annual Shareholders’ Meeting 2023. The sustainability committee provides a plat- form for debate on EQT’s sustainability agenda between the Board and executive management, uniquely positioning the firm to deliver positive impact and long-term performance for its clients. The committee convenes on a quarterly basis and shall act as a sounding board to the Board on EQT’s sustain- ability strategy, ambition level and objectives, review the performance and progress as well as discuss emerging topics within the sustainability area. Remuneration to the Board Board fees, including fees to the Chairperson of the Board, are resolved by the shareholders’ meeting. The shareholders’ meeting has also resolved that the Board fees shall be paid in shares in EQT AB. Detailed information about remuneration, pensions and other benefits for the Board is set out in Note 7 and on EQT’s website. The Board members are not entitled to any benefits following termination of their assignments as members of the Board. To the extent a Board member con- ducts work for EQT, in addition to the Board work, consulting fees and other compensation for such work may be paid. EQT Annual and Sustainability Report 2023 / Page 151Corporate governance report Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Sustainability notes 113 Corporate governance 144 Corporate governance report 145 Statement of Purpose 145 Additional information 158 ===== SIDA 153 ===== The Executive Committee CHRISTIAN SINDING Born 1972. CEO and Managing Partner since January 2019. Deputy Managing Partner 2015–2019. Employed by EQT since 1998. Education: Bachelor of Science in Commerce with Distinction, University of Virginia. Other current assignments: Board member of EQT Foundation, Baggins AG and Vidsjaa AS. Previous assignments: Board member of Cimbria A/S, Findus AB, Flexlink AB, Gambro AB, ISS AB, Plantasjen AS, Vaasan & Vaasan Oy, VTI Technologies, XXL ASA and EQT Partnership Association. Experience: Joined EQT Partners from AEA Investors Inc., a leading U.S. based private equity firm. Previously, Christian was a financial analyst with Bowles Hollowell Conner & Co. Christian has worked in the Stockholm-, Munich- and Copen- hagen offices of EQT Partners and opened the Oslo office in 2007. Christian was Head of Equity between 2011–2018. Shareholding in EQT AB 1): 28,120,000 ordinary shares (indirectly). LENNART BLECHER Born 1955. Deputy Managing Partner since August 2013. Head of Real Assets Advisory Team since January 2015. Employed by EQT since 2007. Education: Master of Laws, Lund University. Academy of American and International Law, University of Dallas. Other current assignments: Board member of White Mill AG, Nordkap Holding AG, Volito Aktiebolag, Volito Fastigheter Aktiebolag and Volito Industri Aktiebolag. Previous assignments: – Experience: Managing Director and Senior Banker in the investment bank of Unicredit/ HypoVereinsbank, Munich. Managing Director at GE Commercial Finance, London. Various positions in the ABB Group, Zurich, such as General Counsel for the ABB Financial Services Group, President and Business Area Manager for ABB Structured Finance and ABB Equity Ventures. Shareholding in EQT AB 1): 29,203,556 ordinary shares (directly and indirectly). SUZANNE DONOHOE Born 1970. Chief Commercial Officer and Global Head of EQT-Ext (CXO). Employed by EQT since 2023. Education: B.A. in Government magna cum laude from Georgetown University. M.B.A. from the Wharton School at University of Pennsylvania. Other current assignments: Board Member of EQT Partners Inc.Vice Chair of the Board and Member of the Executive Committee as well as Chair of the Finance Committee for Georgetown University’s Board. Suzanne also serves as a Vice Chair of Georgetown’s Wall Street Alliance which creates endowed scholarships for Georgetown University students. Previous assignments: Board member of Global Atlantic Financial Group, KKR Capital Markets and PAAMCO Prisma Holdings. Chairman, trustee and president of the Board of trustees of KKR Income Opportunities Fund. Experience: Before joining EQT, Suzanne was a Partner at KKR & Co from 2009–2022. In that capacity, she founded and led the Global Client & Partner Group for over eleven years and then served as the firm’s Global Head of Strategic Growth. Suzanne’s experience prior to KKR included an extensive career at Goldman Sachs where she served from 1992-2009. During this period, she worked in both the Investment Banking and Investment Management Divisions and worked in both New York and in London. She became a Partner in 2000. Further, Suzanne has been involved in various philanthropic work, including serving as Board Member for the New York State chapter of the Nature Conservancy and also serving on the Board of Fertile Hope, a charity which focused on delivering fertility resources to cancer patients. Shareholding in EQT AB 1): 56,250 ordinary shares. 1) Shareholding as per 29 December 2023. Updated shareholding can be found on eqtgroup.com. EQT Annual and Sustainability Report 2023 / Page 152Corporate governance report Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Sustainability notes 113 Corporate governance 144 Corporate governance report 145 Statement of Purpose 145 Additional information 158 ===== SIDA 154 ===== WARD FITZGERALD Born 1963. Partner and Head of EQT Exeter since April 2021. Education: MBA from Harvard Business School and BA in Business Administration from the University of Notre Dame. Other current assignments: Board member of Jefferson Hospital, The Ehlers Danlos Society, The Papal Foundation, The National Centre for Padre Pio, I AM Mercy Foundation (a/k/a I AM the Vine Foundation), the Business Advisory Council and Catholic Lead- ership Institute (CLI). Chairperson of the Institute of Real Estate at the Uni- versity of Notre Dame Partner. Partner and member of the management in Our Lady’s Retreat Home LLC, 1480 Eaves Spring Investment LLC, EPG Equity Holdings LLC, EPG Equity Parent LLC, Everlasting Summer Ltd, NexeterP LLC, NexeterPR LLC, NexeterS LLC and Real Estate Services International LLC. He serves on the Advisory Council at Jefferson University Hospital Neurology Institute and its Raphael Center for Neurorestoration, and supports Project Home and its Inn of Amazing Mercy. Previous assignments: CEO of Exeter Property Group. Board member of the Handmaids of the Sacred Heart, Fields Design and Development Committee Notre Dame Academy in Villanova, Real Estate Board for the Archdiocese of Philadel - phia and the Board of Trustees for LaSalle College High School. Experience: Prior to Exeter, Ward began as a senior management team member with Rouse/Liberty Property Trust, a $7B publicly traded office and industrial REIT, which he helped take public in 1994. Ward has held the position of Chief Exec- utive Officer and Senior Managing Principal of Exeter Property Group since the founding of the firms in 2006. Shareholding in EQT AB 1): 17,402,730 ordinary shares. The Executive Committee, continued PER FRANZÉN Born 1976. Deputy Managing Partner since January 2022. Head of Private Capital since June 2021. Employed by EQT since 2007. Education: M.Sc in Economics and Business Administration from the Stockholm School of Economics with exchange studies at the University of St Gallen in Switzerland. Other current assignments: Chairperson of the Board of Browne Invest AB and Browne Invest 2 AB. Board member of Anticimex Group AB, Bark Partners AB, Independent Vetcare Limited, Lago Invest AB and Lago Holding AB. Previous assignments: Board member of Academedia, Duni, Securitas Direct, SSP, Automic, Evidensia, IFS and Eton. Experience: Per has worked in the Stockholm and Munich offices at EQT Partners and has been involved in a number of investments including IFS, Automic, SSP, Acade- Media, Securitas Direct, IVC, Anticimex, Eton, Duni, Karo Pharma and Piab. Shareholding in EQT AB 1): 27,596,291 ordinary shares (indirectly). CHRISTINA DREWS Born 1970. COO since 2022. Employed by EQT since 2022. Education: MA from Cambridge University. Other current assignments: – Previous assignments: COO of Helios Investment Partners LLP. Global CAO of Investment Banking Division. EMEA CFO and COO of Investment Banking Division. Experience: Global CAO for the Investment Banking Division (IBD), COO and CFO for IBD in EMEA. COO and on the Executive Committee of Helios Investment Partners LLP, with oversight for the firm’s strategy development and implementation. Shareholding in EQT AB 1): 4,119 class C shares. 1) Shareholding as per 29 December 2023. Updated shareholding can be found on eqtgroup.com. EQT Annual and Sustainability Report 2023 / Page 153Corporate governance report Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Sustainability notes 113 Corporate governance 144 Corporate governance report 145 Statement of Purpose 145 Additional information 158 ===== SIDA 155 ===== The Executive Committee, continued KIM HENRIKSSON Born 1968. CFO since October 2018. Education: Master of Science in Economics from Hanken School of Economics. Other current assignments: – Previous assignments: – Experience: Kim started his career at Morgan Stanley in 1994 and left the Nordic M&A team as a Managing Director in 2008. Between 2010 and 2015 Kim held the position as CFO at Munksjö and subsequently, he was a Partner and Corporate Finance Advisor at Access Partners. Shareholding in EQT AB 1): 242,475 ordinary shares (directly) and 17,555 class C shares. BAHARE HAGHSHENAS Born 1979. Global Head of Sustainable Transformation. Education: BS. Social Science from Mid-University in Sweden and a mini MBA from University of Chicago Booth School of Business in the UK. Other current assignments: - Previous assignments: Partner at Deloitte and Monitor Deloitte Nordic. Experience: Before joining EQT, Bahare worked at Deloitte Consulting for 10 years, with focus on Sustainability strategy and innovation as Partner and Executive Director of Acacia, Deloitte’s Sustainability Innovation Hub. She has expe- rience in the field of strategy, innovation and sustainability and has worked within purpose led ventures for 5 years as well as working in multi-stakeholder environments such as Red Cross and humanitarian sector, both as elected president and volunteer for 15 years. Shareholding in EQT AB 1): 5,190 class C shares. RICARDO REYES Born 1974. Global Head of Communications and External Affairs. Employed by EQT since 2022. Education: Bachelor of Arts from Rice University. Other current assignments: Co-founder and advisor to Moveable Feast. Previous assignments: – Experience: Ricardo Reyes brings significant experience from his roles positioning Tesla, YouTube and most recently Dyson, where he was the Chief Communications Officer. In addition to his work in Silicon Valley, Reyes started his career in Washington DC, working at the White House and on policy initiatives. Shareholding in EQT AB 1): 1,961 class C shares. 1) Shareholding as per 29 December 2023. Updated shareholding can be found on eqtgroup.com. EQT Annual and Sustainability Report 2023 / Page 154Corporate governance report Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Sustainability notes 113 Corporate governance 144 Corporate governance report 145 Statement of Purpose 145 Additional information 158 ===== SIDA 156 ===== ANNA WAHLSTRÖM Born 1976. Chief People Officer since October 2017. Employed by EQT since 2013. Education: Master of Social Science and Human Resources with a major in Sociology from Uppsala University. Other current assignments: Board member of Inannut AB. Previous assignments: – Experience: Before joining EQT, Anna was CEO at Propell, a recruitment agency that she founded in 2004 together with Investor and Novare. Prior to that, she worked as an HR consultant for Investor’s HR firm Novare for four years. Earlier in her career Anna worked with project management and HR at StepStone. Shareholding in EQT AB 1): 433,335 ordinary shares (directly) and 4,391 class C shares. The Executive Committee, continued GUSTAV SEGERBERG Born 1983. Head of Business Development since 2018. Employed by EQT since 2016. Education: M.Sc. in Economics and Business Administration from the Stockholm School of Economics. Other current assignments: – Previous assignments: – Experience: Gustav started his career at SEB in the Investment Banking team, lastly as a Vice President. At EQT, he started in the Client Relations and Capital Raising Advisory Team. Shareholding in EQT AB 1): 18,047 ordinary shares and 24,939 class C shares. JEAN ERIC SALATA Born 1965. Head of EQT Private Capital Asia and Chairperson of EQT Asia. Employed by EQT since 2022. Education: Bachelor of Science in Finance and Economics from the Wharton School of the University of Pennsylvania. Other current assignments: Trustee of Salata Family Foundation. Trustee of the Carnegie Hall. Previous assignments: Founding Partner and CEO of BPEA. Experience: Jean Eric Salata was the Founding Partner and Chief Executive of BPEA. Jean has overseen all investment and divestment decisions made at BPEA, as well as its strategic direction, since he founded the Firm in 1997. Jean has previously worked as a management consultant with Bain & Company based in Hong Kong, Sydney and Boston, and has also worked as a Director of the Asian private equity investment arm of AIG. Shareholding in EQT AB 1): 115,906,128 ordinary shares (indirectly). 1) Shareholding as per 29 December 2023. Updated shareholding can be found on eqtgroup.com. EQT Annual and Sustainability Report 2023 / Page 155Corporate governance report Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Sustainability notes 113 Corporate governance 144 Corporate governance report 145 Statement of Purpose 145 Additional information 158 ===== SIDA 157 ===== The CEO is appointed by and subordinated to the Board and is responsible for the operative management of EQT AB and to coordinate EQT’s operations. The measures to be taken by the CEO and what measures that should be referred to the Board are set out in the CEO’s instructions. The CEO shall monitor and ensure that the items to be addressed by the Board are pre- sented to the Board in accordance with applicable legislation. At every ordinary Board meeting, the CEO shall report on the execution of resolutions previously passed by the Board as well as on more important decisions made by the CEO. According to the instructions for the financial reporting, the CEO is responsible for the financial reporting in EQT AB and consequently must ensure that the Board receives adequate information for the Board to be able to evaluate EQT AB’s financial condition continuously, including results, liquidity and credit status. Furthermore, the CEO must continuously keep the Board informed of developments in EQT’s operations, important busi- ness events, as well as environmental, social and governance issues and risks and all other events, circumstances or condi- tions which can be assumed to be of significance to EQT AB’s shareholders. EQT AB’s executive management, the Executive Committee, consisted of twelve members as of 31 December 2023. In addi- tion to the CEO/ Managing Partner (Christian Sinding), the Executive Committee comprised, as of 31 December 2023, the CFO (Kim Henriksson), the COO (Christina Drews), the Chief People Officer (Anna Wahlström), the Head of Private Capital and Deputy Managing Partner (Per Franzén), the Head of EQT Private Capital Asia and Chairperson of EQT Asia (Jean Eric Salata), the Head of Real Assets’ Advisory Teams and Deputy Managing Partner (Lennart Blecher), the Partner and Head of EQT Exeter (Ward Fitzgerald), the Global Head of Sustainable Transformation (Bahare Haghshenas), the Head of Business Development (Gustav Segerberg), Global Head of Communi - cations and External Affairs (Ricardo Reyes) as well as the Chief Commercial Officer and Global Head of EQT-Ext (Suzanne Donohoe). The Executive Committee meets on a regular basis, and the matters considered at the meetings are recorded in minutes. In 2023, the Executive Committee’s work has mainly been focused on developing a full potential plan setting out strategic ambitions and priorities for EQT until 2033, the integration of BPEA and Exeter, where BPEA is now fully integrated in EQT, and on private wealth which remains a key strategic area, marked by the launch of EQTs first fund target- ing individual investors in Europe and Asia in June 2023. The remuneration for the CEO is determined by the Board. Remu- neration for other members of the executive management is determined by the CEO and approved by the remuneration committee, following which the Board is informed. The latest adopted guidelines for remuneration to executive manage - ment are described in Note 7. The remuneration report will be presented to the AGM 2024 in accordance with the Swedish Companies Act and the Remuneration Rules issued by the Swedish Securities Market Self-Regulation Committee and will be published on EQT’s website. CONTROL FUNCTIONS EQT has an independent Global Risk, Regulatory and Compli- ance function, consisting of Regulatory & Compliance, Group Risk and Portfolio Risk. The Risk, Regulatory and Compliance function reports to the CFO on a day-to-day basis and to the Executive Committee and the Board on at least an annual basis or on an ad-hoc basis.The risk management function is responsible for coordinating the internal reviews and reporting of significant risks and the effectiveness of the EQT AB Group’s internal controls. Material incidents are reported to the audit committee on a quarterly basis. The Regulatory & Compliance function supports the EQT AB Group’s compliance with laws and regulations by implement- ing regulatory frameworks, monitoring compliance and train - ing employees. Internal Control Framework The EQT AB Group’s internal control framework is governed by the Swedish Companies Act and the Code. The internal control process is effectuated by the Board, the audit committee, the CEO, the executive management and other employees. The internal control process is intended to provide reasonable assurances that the EQT AB Group’s objectives are met with respect to efficient operations, reliable reporting and compli - ance with applicable laws and regulations. With respect to financial reporting, internal controls are intended to provide reasonable assurances regarding the reliability of external financial reporting as well as to ensure that external financial reporting is prepared in accordance with applicable laws and regulations, applicable accounting standards and other requirements for EQT AB as a company listed on a regulated market. The process for the EQT AB Group’s internal control is based on the Committee of Sponsoring Organizations of the Tread- way Commission’s guidelines on internal control (COSO). The process includes control environment, risk assessment, control activities, information as well as communication and monitor- ing. The control environment establishes the character and provides the discipline and structure for the other four integral components of internal control. The Board of EQT AB evaluates the need for a separate internal audit function on a yearly basis. EQT AB has not had a separate internal audit function as the regular internal assess - ments of internal controls was deemed to be sufficient as an oversight function. Control environment The internal control environment is built upon corporate values, which ensure the organization’s commitment to integrity and holding individuals accountable for their responsibilities. The Board is responsible for performing independent oversight of the development and execution of the EQT AB Group’s internal control framework. The audit committee is responsible for the quality and supervision of the EQT AB Group’s internal controls and risk management. A key aspect of the internal control environment is the organizational structure of the EQT AB Group, including its reporting lines, authorities and allocation of responsibilities established by the executive management. To ensure that EQT’s values, ways of working and regulatory requirements are applied throughout the entire organization, the EQT AB Group has developed a number of policies, guide- lines and instructions, including i.a. the Conflicts of Interest Policy, the Finance Policy, the Information Security and Data EQT Annual and Sustainability Report 2023 / Page 156Corporate governance report Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Sustainability notes 113 Corporate governance 144 Corporate governance report 145 Statement of Purpose 145 Additional information 158 ===== SIDA 158 ===== Privacy Policy, the Information and Trading Policy and the Responsible Investment & Ownership Policy with supporting documents. The process for managing these policies and allo- cating ownership and accountability is set out in the Gover- nance Policy and the Governance Guidelines. In addition to Group policies, the EQT AB Group has a Code of Ethics with mandatory principles regarding management and employee behavior. RISK ASSESSMENT The EQT AB Group identifies, assesses and manages risks based on the EQT AB Group’s purpose, vision, mission and goals. Risk assessments are conducted continuously by way of interviews and internal reports. Conclusions drawn from con - ducted risk assessments are presented to key representatives of the EQT AB Group and used to conduct a group wide risk analysis of key strategic, operational, legal and financial risks, including environmental, social and governance risks. The Risk Committee reviews and discusses the risk framework and risk assessments on behalf of the Executive Committee. A summary of the EQT AB Group risk analysis is documented in a risk map and presented to the audit committee and the Board annually. Using the EQT AB Group’s risk analysis, the audit committee determines which of the identified risks should be prioritized by the risk management function for the following year, suggests improvements and follows up on previously identified areas of improvement. Control activities Control activities mitigate the risks identified and ensure accu- rate and reliable financial and sustainability reporting. Risks are mapped out for all key business processes and internal controls designed and implemented to cover these risks. On a periodic basis, the risk management function ensures that EQT’s new initiatives and processes are captured by the inter- nal and control framework. The EQT AB Group’s risk function uses an audit & risk soft- ware to coordinate the self-assessments of internal controls, document issues, put in place remediation plans and track progress on those. Information and communication Within the EQT AB Group, information and communication regarding risks and internal controls contribute to ensuring that the right business decisions are made. Key policies and guidelines are communicated to employees, e.g. by ensuring that those are published and accessible through the intranet or on the shared drive. EQT recognizes that certain policies are also of interest to external stakeholders and as such publish these on EQT’s website. Internal controls awareness sessions are conducted with the persons responsible for each process, who then ensure those controls are understood and performed by relevant staff. Monitoring A self-assessment of the effectiveness of internal controls for each business process is performed annually. The Global Risk, Regulatory and Compliance function oversees the self-assess- ment process and reports findings and proposed next steps to the CFO, the audit committee and the Board.. In addition, independent reviews are conducted by the risk management function using a risk-based approach. ENGAGEMENT AND RESPONSIBILITY It is the board of directors who is responsible for the corpo- rate governance statement for the year 2023 on pages 144–157 and that it has been prepared in accordance with the Annual Accounts Act. THE SCOPE OF THE AUDIT Our examination has been conducted in accordance with FAR’s auditing standard RevR 16 The auditor’s examination of the corporate governance statement. This means that our examination of the corporate governance statement is different and substantially less in scope than an audit conducted in accordance with International Standards on Auditing and generally accepted auditing standards in Sweden. We believe that the examination has provided us with sufficient basis for our opinions. OPINIONS A corporate governance statement has been prepared. Disclosures in accordance with chapter 6 section 6 the second paragraph points 2-6 the Annual Accounts Act and chapter 7 section 31 the second paragraph the same law are consistent with the annual accounts and the consoli- dated accounts and are in accordance with the Annual Accounts Act. Stockholm 15 March 2024 KPMG AB Håkan Olsson Reising Authorized Public Accountant Auditor’s report on the corporate governance statement To the general meeting of the shareholders in EQT AB, corporate identity number 556849-4180 EQT Annual and Sustainability Report 2023 / Page 157Corporate governance report Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Sustainability notes 113 Corporate governance 144 Corporate governance report 145 Statement of Purpose 145 Additional information 158 ===== SIDA 159 ===== 11 Additional information 159 The EQT AB share 162 Additional fund information for selected funds 164 Additional fund performance information 165 APM 168 Definitions 169 AGM-information EQT Future BLOOM Fresh International In August 2023, EQT Future closed the acquisition of SNFL and IFG and merged the companies into a new UK-based entity, Bloom Fresh International. Today, BLOOM is a global leader in fruit innovation, using natural and non-GMO new breeding practices to help create a healthier, tastier, and more sustainable future for growers and consumers worldwide. It is one of the largest fruit breeding companies in the world, currently focused on creating more resistant, productive and adaptable varieties of grapes, cherries and raisins. BLOOM has over 1,000 customers across over 20 countries, with more than 100 patented fruit varieties. ===== SIDA 160 ===== The EQT AB share Share performance and trading Since its listing on Nasdaq Stockholm on 24 September 2019 and up to the last day of trading on 29 December 2023, the EQT AB share (ticker: EQT) delivered a shareholder return of 344%. Nasdaq Stockholm PI exhibited a return of 59% over the same period. On the last day of trading on 29 December 2023, the share price closed at SEK 285, compared to the first trade on 2 January 2023 of SEK 225, equivalent to a share price increase of 27%. As of 29 December 2023, there were 1,184,823,591 outstanding shares in EQT. EQT currently holds 61,106,376 ordinary shares in treasury. Including shares held in treasury by EQT, there were 1,244,700,306 ordinary shares and 1,229,661 non-listed class C shares. During 2023, 274 million EQT shares were traded on Nasdaq Stockholm, corresponding to a traded value of SEK 61.7 billion over the period. The traded volume on all venues com- bined amounted to 530 million shares, corre- sponding to a value of SEK 119.6 billion. On average, 2.1 million EQT shares were traded daily. The turnover ratio for ordinary EQT AB shares amounted to 17.7% in 2023. Ordinary share information and tickers EQT Nasdaq Stockholm EQT SS Equity Bloomberg EQTAB.ST Reuters 8700 Industry Classification Benchmark (ICB) SE0012853455 ISIN code Share performance Adj. EPS, basic (SEK)1) 0.634 EPS, basic (SEK)1) 0.171 Year open (SEK) 224.6 Year close (SEK) 285.0 Year low (SEK)2) 192.1 Year high (SEK)2) 286.1 Beta 1.719 Annualized volatility (%) 42.3 Turnover ratio (%)3) 17.7 Average daily volume 2,111,483 Quota value (SEK) 0.10 No. of shares outstanding4) 1,184,823,591 Market capitalization5) (SEK million) 337,675 1) The adjusted metrics are alternative performance metrics for the EQT AB Group. For a full reconciliation please refer to Alternative Performance Measures (APM). 2) In terms of closing price. 3) Measures share liquidity by setting the turnover value in relation to average market capitalization for the period. 4) In addition, EQT currently holds 61,106,376 ordinary shares in treasury, which are not entitled to dividend or votes at shareholders’ meetings. 5) Based on the total number of outstanding ordinary shares and class C shares as of 29 December 2023. Share price and trading EQT2) OMX Stockholm PI2) Number of shares traded per month, million 1) As of 29 December 2023. 2) Normalized, factor 100. 3) Partners’ sale of shares during October 2023 included. Source: Bloomberg Finance L.P. Ordinary shares in EQT AB were listed on Nasdaq Stockholm on 24 Sep- tember 2019 with an offering price at SEK 67.0. The total return, share price performance including reinvested dividends, for the ordinary EQT AB share in 2023 was 29%. The corresponding return since IPO was 344%.1) Sweden, 52% Chile, 10% United States, 8% Germany, 5% Norway, 5% Hong Kong, 3% Other, 17% Trading per venue, 2023 (%) 53+30+12+5+E Shareholder distribution by owner type, as of 31 December 2023 (% of capital) 25+11+1+63+E Geographical shareholder distribution, as of 31 December 2023 (% of capital) 52+10+8+5+5+3+17+E Cboe Global Markets, 53% Nasdaq, 30% LSE Group, 12% Other, 5% Swedish institutions, 25% Foreign institutions, 11% Swedish retail, 1%6) Other, 63% Source: Monitor Source: Monitor Number of shares, million 0 25 50 75 100 125 DecNovOct 3)SepAugJulyJuneMayAprMarFebJan 0 10 20 30 40 50 6) Retail defined as shareholders owning less than 10,000 shares. EQT Annual and Sustainability Report 2023 / Page 159The share Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Sustainability notes 113 Corporate governance 144 Additional information 158 The EQT AB share 159 Additional fund information for selected funds 162 Additional fund performance information 164 Alternative performance measures (APM) 165 Definitions 168 AGM-information 169 ===== SIDA 161 ===== As of 29 December 2023 Ordinary shares Class C shares2) Total Number of issued shares 1,244,700,306 1,229,661 1,245,929,967 Number of EQT AB shares owned by EQT AB1) 61,106,376 0 61,106,376 Number of outstanding shares 1,183,593,930 1,229,661 1,184,823,591 1) EQT AB shares owned by EQT AB are not entitled to dividends or carry votes at shareholders’ meetings. 2) Carry one tenth (1/10) of a vote. Shares owned by EQT AB carry no votes. Share capital development Share capital (SEK) Time Event Change in number of ordinary shares Change in number of class C shares Number of ordinary shares after the transaction Number of class C shares after the transaction Change Total 2019-09-24 New Share Issue in connection with the Offering 86,634,900 – 952,983,900 – 8,663,490 95,298,390 2019-11-14 Issue and Repur- chase of class C shares for the EQT Share program – 8,663,490 952,983,900 8,663,490 866,349 96,164,739 2021-04-08 Share Issue1) 33,296,240 – 986,280,140 8,663,490 3,329,624 99,494,363 2022-01-03 Share Issue2) 7,548,384 – 993,828,524 8,663,490 754,838.40 100,249,201.40 2022-10-19 Share issue3) 191,200,000 – 1,185,028,524 8,663,490 19,120,000 119,369,201.40 2023-03-31 The conversion of class C shares to ordinary shares 365,406 – 365,406 1,185,393,930 8,298,084 – 119,369,201.40 2023-06-21 Cancellation of class C shares and bonus issue4) – –7,068,423 1,185,393,930 1,229,661 – 119,369,201.40 2023-12-20 Issue and repurchase of class C2 shares and conversion of all class C2 shares to ordinary shares for the EQT Share and Option programs 59,306,376 – 1,244,700,306 1,229,661 5,965,964.94 125,335,166.34 1) Paid in kind which was recorded in the company’s balance sheet to SEK 6,785,107,787.20, corresponding to SEK 203.78 per share. The purpose of the share issue in kind was to ensure delivery of shares in accordance with the obligations set forth in the purchase agreements relating to the combination with Exeter Property Group. 2) Paid by way of set-off of claim amounting to approximately SEK 3,489,345,219.41, corresponding to a subscription price of approximately SEK 462.26 per share. The purpose of the set-off share issue was to ensure delivery of shares in accordance with the obligations set forth in the purchase agreement relating to the combination with LSP. 3) Paid in kind which was recorded in the company’s balance sheet to SEK 38,450,320,000, corresponding to SEK 201.10 per share. The purpose of the share issue in kind was to ensure delivery of shares in accordance with the obligations set forth in the purchase agreement relating to the acquisition of Baring Private Equity Asia. 4) Through the cancellation, the share capitel was decreased by SEK 706,842.30, and through the simultaneous bonus issue, the share capital was restored and overall unchanged. Top 25 largest shareholders in EQT Shareholder Number of ordinary shares Number of class C shares Share capital (%) Votes (%) Investor1) 174,288,016 14.0% 14.0% Bark Partners AB2) 137,003,313 11.0% 11.0% Jean Eric Salata3) 117,597,297 9.4% 9.4% Lennart Blecher 29,203,556 2.3% 2.3% Christian Sinding4) 28,120,000 2.3% 2.3% Marcus Brennecke 26,653,246 2.1% 2.1% Caspar Callerström 26,500,000 2.1% 2.1% Fredrik Åtting 24,818,559 2.0% 2.0% Norges Bank 23,272,900 1.9% 1.9% Wallenberg Investments 22,766,801 1.8% 1.8% Andreas Huber 21,703,034 1.7% 1.7% Morten Hummelmose5) 20,110,627 1.6% 1.6% Jan Ståhlberg 19,777,656 1.6% 1.6% Stefan Glevén 19,777,642 1.6% 1.6% BlackRock 17,360,906 1.4% 1.4% Edward Fitzgerald With Family 17,402,730 1.4% 1.4% Swedbank Robur Fonder 15,896,234 1.3% 1.3% Vanguard 15,542,337 1.2% 1.2% Kristiaan Nieuwenburg 14,000,000 1.1% 1.1% Anders Misund6) 13,888,890 1.1% 1.1% Alecta Tjänstepension 14,310,799 1.1% 1.1% Government Of Singapore (GIC) 12,682,934 1.0% 1.0% Handelsbanken Fonder 12,292,171 1.0% 1.0% AMF Pension & Fonder 11,714,664 0.9% 0.9% Paul De Rome 11,095,812 0.9% 0.9% Total top 25 847,780,124 68.0% 68.1% Number of EQT AB shares owned by EQT AB7) 61,106,376 4.9% 4.9% Others 335,813,806 1,229,661 27.1% 27.0% Number of issued shares 1,244,700,306 1,229,661 100.0% 100.0% 1) Investor AB holds shares indirectly. 2) Indirectly controlled by Conni Jonsson, Thomas Von Koch, Harry Klagsbrun and Per Franzén. 3) Jean Eric Salata indirectly controls the shares. 4) Christian Sinding holds shares indirectly. 5) Morten Hummelmose holds shares indirectly. 6) Anders Misund holds shares indirectly. 7) EQT AB shares owned by EQT AB are not entitled to dividends or carry votes at shareholders’ meetings. Based on monitor and adjusted for share issue as per 20 December 2023. EQT Annual and Sustainability Report 2023 / Page 160The share Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Sustainability notes 113 Corporate governance 144 Additional information 158 The EQT AB share 159 Additional fund information for selected funds 162 Additional fund performance information 164 Alternative performance measures (APM) 165 Definitions 168 AGM-information 169 ===== SIDA 162 ===== Dividend policy and distribution of company funds The dividend policy of EQT is to “generate a steadily increasing annual dividend per share” . The policy is adopted by the Board of EQT. The Board proposes a dividend of SEK 3.60 per share in respect of the fiscal year of 2023, payable in 2024. The dividend will be paid in two install- ments, SEK 1.80 in June 2024 and SEK 1.80 in December 2024. Holders of ordinary shares and class C shares are equally entitled to dividend. The dividend will be based on the number of shares outstanding as of each record date. Voting rights Each ordinary share in EQT entitles the holder to one vote at the share- holders’ meetings and one class C share entitles the holder to one tenth vote at shareholders’ meetings. Each shareholder holds voting rights equal to the number of shares held by the shareholder in the company. Shareholder contact: OLOF SVENSSON Head of Shareholder Relations Phone +46 72 989 09 15 shareholderrelations@eqtpartners.com Shareholding distribution Holding Number of shareholders Number of ordinary shares Number class C of shares Capital (%) Votes (%) 1–500 50,749 4,209,308 0 0.34 0.34 501–1,000 2,259 1,761,147 0 0.14 0.14 1,001–5,000 1,718 3,603, 704 0 0.29 0.29 5,001–10,000 180 1,317,595 0 0.11 0.11 10,001–15,000 58 713,445 0 0.06 0.06 15,001–20,000 41 724,367 0 0.06 0.06 20,001– 357 1,232,288,740 1,229,661 99.00 99.00 Total 55,362 1,244,700,306 1,229,661 100.0 100.0 Source: Euroclear Sweden Ownership structure As of 29 December 2023, EQT AB had 55,362 shareholders according to Euroclear Sweden. At the end of 2023, approximately 25 percent of the shares were held by Swedish institutions, 11 percent by foreign institutions and 1 percent were held by Swedish retail investors. As of 29 December 2023, the 25 largest shareholders held 68.0 percent of the capital and 68.1 percent of the votes in EQT AB. On 29 December 2023, Investor AB, through Investor Investments Holding AB was the largest shareholder in EQT AB, both in terms of capital and votes. Share capital As of 29 December 2023, the share capital of EQT AB amounts to SEK 125,335,166 distributed over 1,245,929,967 shares, including the 1,229,661 class C shares. EQT Annual and Sustainability Report 2023 / Page 161The share Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Sustainability notes 113 Corporate governance 144 Additional information 158 The EQT AB share 159 Additional fund information for selected funds 162 Additional fund performance information 164 Alternative performance measures (APM) 165 Definitions 168 AGM-information 169 ===== SIDA 163 ===== Additional fund information for selected funds EQT Ventures Fund Vintage Committed capital FAUM Status EQT Ventures 2016 EUR 0.5bn EUR 0.4bn Developing EQT Ventures II 2019 EUR 0.6bn EUR 0.5bn Developing EQT Ventures III 2022 EUR 1.1bn EUR1.1bn Investing EQT Life Sciences Fund Vintage Committed capital FAUM Status LSP HEF 2012 EUR 0.1bn EUR 0.1bn Developing LSP 5 2014 EUR 0.2bn EUR 0.2bn Developing LSP 6 2018 EUR 0.6bn EUR 0.6bn Developing LSP HEF 2 2018 EUR 0.3bn EUR 0.3bn Investing LSP Dementia 2021 EUR 0.3bn EUR 0.3bn Investing LSP 7 2021 EUR 1.0bn EUR 1.0bn Investing EQT Growth Fund Vintage Committed capital FAUM Status EQT Growth 2021 EUR 2.3bn EUR 2.3bn Investing EQT Public Value Fund Vintage Committed capital FAUM Status EQT Public Value 2018 - EUR 0.5bn Open-ended EQT Private Equity Fund Vintage Committed capital FAUM Status EQT VII 2015 EUR 6.9bn EUR 3.1bn Developing EQT VIII 2018 EUR 10.9bn EUR 7.7bn Developing EQT IX 2020 EUR 15.6bn EUR 14.1bn Developing EQT X 2022 EUR 20.1bn EUR 20.1bn Investing EQT Mid Market 2013 EUR 1.1bn EUR 0.0bn Developing EQT Mid Market Asia III 2016 EUR 0.7bn EUR 0.5bn Developing EQT Mid Market Europe 2016 EUR 1.6bn EUR 0.8bn Developing EQT Future Fund Vintage Committed capital FAUM Status EQT Future 2021 EUR 2.6bn EUR 2.3bn Investing Private Capital Asia Fund Vintage Committed capital FAUM Status BPEA Fund VI 2014 EUR 3.6bn EUR 1.5bn Developing BPEA Fund VII 2018 EUR 5.7bn EUR 4.3bn Developing BPEA Fund VIII 2021 EUR 9.7bn EUR 9.5bn Investing Hong Kong Growth Fund 2022 EUR 0.5bn EUR 0.5bn Investing BPEA Mid Market Growth 2022 EUR 0.5bn EUR 0.1bn Investing The below figuers are as of 31 December 2023 EQT Annual and Sustainability Report 2023 / Page 162Additional fund information Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Sustainability notes 113 Corporate governance 144 Additional information 158 The EQT AB share 159 Additional fund information for selected funds 162 Additional fund performance information 164 Alternative performance measures (APM) 165 Definitions 168 AGM-information 169 ===== SIDA 164 ===== EQT Exeter Fund Vintage Committed capital FAUM Status BPEA Real Estate Fund I 2013 EUR 0.3bn EUR 0.2bn Developing Exeter Core Industrial Club Fund II, L.P. 2016 EUR 0.5bn EUR 0.5bn Developing EQT Real Estate I 2016 EUR 0.4bn EUR 0.2bn Developing BPEA Real Estate Fund II 2017 EUR 0.9bn EUR 0.9bn Developing Exeter Office Value Fund I 2018 EUR 0.1bn EUR 0.1bn Developing Exeter Europe Multi-Family I S.C.Sp. 2018 EUR 0.0bn EUR 0.0bn Developing Exeter Industrial Core Fund III, L.P. 2019 EUR 1.2bn EUR 1.2bn Developing Exeter Europe Multi-Family II S.C.Sp. 2019 EUR 0.0bn EUR 0.0bn Developing EQT Real Estate II 2019 EUR 1.1bn EUR 1.0bn Investing Exeter Industrial Value Fund V, L.P. 2020 EUR 1.8bn EUR 1.8bn Developing Exeter Europe Industrial Core Fund S.C.Sp. 2020 EUR 1.0bn EUR 1.0bn Developing EQT Exeter Industrial Core-Plus Fund IV 2021 EUR 2.9bn EUR 0.3bn Investing Exeter Office Value Fund II, L.P. 2021 EUR 0.7bn EUR 0.7bn Investing Exeter Europe Logistics Value Fund IV S.C.Sp. 2021 EUR 2.2bn EUR 2.1bn Investing China Fund I 2021 EUR 0.1bn EUR 0.0bn Investing Exeter Europe Logistics Value Fund IV S.C.Sp. 2021 EUR 2.2bn EUR 2.1bn Investing EQT Exeter Industrial Value Fund VI 2022 EUR 4.4bn EUR 4.4bn Investing EQT Infrastructure Fund Vintage Committed capital FAUM Status EQT Infrastructure II 2012 EUR 1.9bn EUR 0.3bn Developing EQT Infrastructure III 2016 EUR 4.0bn EUR 1.3bn Developing EQT Infrastructure IV 2018 EUR 9.1bn EUR 7.1bn Developing EQT Infrastructure V 2020 EUR 15.7bn EUR 12.8bn Developing EQT Infrastructure VI 2023 EUR 13.7bn EUR 13.7bn Investing The below figures are as of 31 December 2023 EQT Annual and Sustainability Report 2023 / Page 163Additional fund information Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Sustainability notes 113 Corporate governance 144 Additional information 158 The EQT AB share 159 Additional fund information for selected funds 162 Additional fund performance information 164 Alternative performance measures (APM) 165 Definitions 168 AGM-information 169 ===== SIDA 165 ===== Private Capital Asia EQT Private Equity 1) 1995 2004 2006 2011 2021Start date Realized Developing Investing I IV V VI IXFund 65% 1998 II 16% 19% 11% 16% 8% 2022 X N/ANet IRR 5.3x 3.1x 2.8x 2.5x 2.6x 1.1x 2.0x 2001 III 15% 2.1x 1.6x 3.5x 2015 VII 21% 2.2x 3.4x 1.9x 2018 VIII 23% 1.3x 1.8x 1.3x 1.1x 1) Note that EQT I, EQT II, EQT III, EQT IV and EQT V are not managed by the EQT AB Group. EQT VI is not managed or operated by the EQT AB Group, however, it is included due to the change of entitlement for revenue from EQT VI. Realized Gross MOIC Unrealized Gross MOIC Realized Gross MOIC Unrealized Gross MOIC 2005 2014 2018 2022Start date Realized Developing Investing III VI VII VIIIFund 54% 2007 IV 9% 14% 24% 16%Net IRR 3.2x 2.2x 2.2x 2.0x 1.3x 2011 V 9% 1.9x 2.3x 2.5x1) 2.1x 2.5x 1.9x 1.3x Performance across EQT’s business segment Private Capital since inception 1) BPEA VII has conducted several recapitalizations which are completed on a 1:1 basis in terms of realized value and realized cost. The blended MOIC is 2.5x for Fund VII’s fully and partially realized assets. EQT Exeter 2007 2014 2014 2015Start date Realized US Value I US Value III EU Value I EU Value IIFund 11% 2011 US Value II 30% 29% 33% 27%Net IRR 2.1x 2.4x 1.6x 2.6x 3.7x 2.8x 2.5x 2.7x 2012 US Core I 22% 2017 US Value IV 30% 2018 EU Value III 49% EQT Infrastructure 1) 1) EQT Infrastructure I is not managed by the EQT AB Group. Realized Gross MOIC Unrealized Gross MOIC Total Gross MOIC Performance across EQT’s business segment Real Assets since inception Realized Developing Investing 2.5x 2.1x 2.7x 1.7x 1.0x 1.4x 2.4x 0.6x 2.7x 1.7x 1.4x 1.0x1.3x2.4x 2016 2018Start date III IVFund 2008 I 17% 22% 11% 2020 V 12% 2022 VI N/ANet IRR 2013 II 17% Additional fund performance information EQT Annual and Sustainability Report 2023 / Page 164Additional fund information Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Sustainability notes 113 Corporate governance 144 Additional information 158 The EQT AB share 159 Additional fund information for selected funds 162 Additional fund performance information 164 Alternative performance measures (APM) 165 Definitions 168 AGM-information 169 ===== SIDA 166 ===== To increase the understanding of the development of the operations and the financial position of EQT AB Group, EQT presents some alternative per- formance measures in addition to financial mea- sures defined by IFRS. EQT believes these mea- sures provide a better understanding of the trends of the financial performance and that such mea- sures, which are not calculated in accordance with IFRS are useful information to investors com- bined with other measures that are calculated in accordance with IFRS. These alternative perfor- mance measures should not be considered in iso- lation or as a substitute to performance measures derived in accordance with IFRS. In addition, such measures, as defined by EQT, may not be com- parable to other similarly titled measures used by other companies. Definition Reason for use Adjusted total revenue Total revenue adjusted for fair value step-up on acquired contractual right to carried interest. For revenue adjustments related to the accounting treatment of change of entitlement to revenue, see Note 4. Total revenue adjusted for fair value step-up on acquired contractual right to carried interest, implying that (i) revenue recognition from the date of the acquisition will be consistent with the valuation principles used for previously owned right to carried interest entitlements and (ii) closer correlation between recognized revenues from carried interest and investment income and expected cash to be received. Gross segment result Total revenue adjusted for fair value step-up on acquired contractual rights to carried interest less directly incurred expenses by business segment. For revenue adjustments related to the accounting treatment of change of entitlement to revenue, see Note 4. Gross segment result provides an overview of the direct contribution of each business segment. Gross segment margin Gross segment result divided by Adjusted total revenues by business segment. Gross segment margin provides an overview of the profitability by each business segment. EBITDA EBIT excluding depreciation and amortization of property plant and equipment and intangible assets and amortization of acquisition related intangible assets. EBITDA provides an overview of the profitability of the operations. EBITDA margin, % EBITDA divided by Total revenue. EBITDA margin is a useful measure for showing the profitability of the operations relative to total revenue generated by the Group during the period. Alternative performance measures (APM) EQT Annual and Sustainability Report 2023 / Page 165Alternative performance measures Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Sustainability notes 113 Corporate governance 144 Additional information 158 The EQT AB share 159 Additional fund information for selected funds 162 Additional fund performance information 164 Alternative performance measures (APM) 165 Definitions 168 AGM-information 169 ===== SIDA 167 ===== Definition Reason for use Adjusted net income Net income adjusted for items affecting compara- bility and revenue adjustments. Items affecting comparability means items that are reported separately due to their character and amount, see Note 4. Revenue adjustments related to the accounting treatment of change of entitlement to revenue, see Note 4. Adjusted net income is a useful measure for showing the profitability generated by the Group as this measure is adjusted for items affecting comparability between periods. Adjusted earnings per share Adjusted net income in relation to average number of shares. Adjusted earnings per share is a useful measure for showing the profitability per share generated by the Group as this measure is adjusted for items affecting comparability between periods. Financial net cash / net debt Cash, cash equivalents and short-term loan receivable less interest-bearing liabilities (current and non current). Financial net cash / (net debt) is used to assess the Group’s financial position in terms of the possibility to make strategic investments, payment of dividend and fulfillment of financial commitments. Definition Reason for use Adjusted EBITDA EBITDA adjusted for items affecting comparability and revenue adjustments. Items affecting comparability means items that are reported separately due to their character and amount. For a specification of items affecting com parability, see Note 4. For revenue adjustments related to the accounting treatment of change of entitlement to revenue, see Note 4. Adjusted EBITDA is a useful measure for showing profit- ability of the operations and increases the comparability between periods. Adjusted EBITDA margin, % Adjusted EBITDA divided by Adjusted total revenue. Adjusted EBITDA margin is a useful measure for showing the profitability of the operations and increases the comparability between periods, relative to total revenue generated by the Group during the period. Fee-related EBITDA Adjusted EBITDA less adjusted carried interest and investment income. Fee-related EBITDA is a useful measure that presents the recurring fee-related profitability. Fee-related EBITDA margin, % Fee-related EBITDA divided by management fees. Fee-related EBITDA margin is a useful measure that presents the recurring fee-related profitability, relative to management fees generated by the Group during the period. Adjusted EBT excluding carried interest and investment income Fee-related EBITDA less depreciation and amorti- zation and net financial income and expenses. Adjusted EBT excluding carried interest and investment income is a useful measure in establishing a like-for-like measurable adjusted Effective Tax Rate (ETR) over time. EQT Annual and Sustainability Report 2023 / Page 166Alternative performance measures Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Sustainability notes 113 Corporate governance 144 Additional information 158 The EQT AB share 159 Additional fund information for selected funds 162 Additional fund performance information 164 Alternative performance measures (APM) 165 Definitions 168 AGM-information 169 ===== SIDA 168 ===== Adjusted total revenue EUR m 2023 2022 Total revenue 2,084.4 1,497.3 Revenue adjustments 46.4 39.2 Adjusted total revenue 2,130.8 1,536.5 Adjusted EBITDA / Adjusted net income 2023 2022 Net income 139.2 176.2 Income taxes 100.2 86.9 Net financial income and expenses 35.5 45.6 Operating profit (EBIT) 274.9 308.7 Amortization of acquisition related intangible assets 364.1 153.6 Depreciation and amortization 54.1 43.8 EBITDA 693.1 506.1 Revenue adjustments 46.4 39.2 Items affecting comparability 486.9 284.2 Adjusted EBITDA 1,226.4 829.5 Less adjusted carried interest and investment income –164.8 –208.0 Adjusted fee-related EBITDA 1,061.6 621.4 Depreciation and amortization –54.1 –43.8 Net financial income and expenses –35.5 –45.6 Adjusted EBT excluding adjusted carried interest and investment income 972.1 532.0 Adjusted carried interest and investment income 164.8 208.0 Income taxes –117.4 –85.8 Adjusted net income for the period from continuing operations 1,019.4 654.2 Adjusted earnings per share, basic 2023 2022 Adjusted net income, EUR m 1,019.4 654.2 Average number of shares, basic 1,185,754,323 1,031,955,891 Adjusted earnings per share, basic, EUR 0.860 0.634 Adjusted earnings per share, diluted 2023 2022 Adjusted net income, EUR m 1,019.4 654.2 Average number of shares, diluted 1,186,434,306 1,032,594,481 Adjusted earnings per share, diluted, EUR 0.859 0.634 Financial net cash / (Net debt) EUR m 2023 2022 Cash and cash equivalents 1,114.0 644.9 Interest-bearing liabilities – non-current1) -2,000.0 –2,000.0 Financial net cash / (Net debt) -886.0 –1,355.1 1) Nominal amount. EQT Annual and Sustainability Report 2023 / Page 167Alternative performance measures Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Sustainability notes 113 Corporate governance 144 Additional information 158 The EQT AB share 159 Additional fund information for selected funds 162 Additional fund performance information 164 Alternative performance measures (APM) 165 Definitions 168 AGM-information 169 ===== SIDA 169 ===== Definitions Active funds Funds currently investing or with not yet realized investments. Committed capital The total amounts that fund investors agree to make available to a fund during a specified time period. Commitment period / Investment period First phase of a fund lifecycle after fundraising, in which most of a fund’s committed capital is invested into portfolio companies. Management fees are normally based on committed capital during this period. Current Gross MOIC (Multiple of Invested Capital) A fund’s Gross MOIC based on the current total value and invested capital. Effective management fee rate Weighted average management fee rate for all EQT funds contributing to AUM in a specific period. EQT Where used on its own, is an umbrella term and may refer interchangeably to the EQT AB Group, SEP Holdings Group and/or EQT funds, as the context requires. EQT AB Group or the Group EQT AB and/or any one or more of its direct or indirect subsidiaries (for the avoidance of doubt excluding the EQT funds and their portfolio companies). Exits Cost amount of realized investments (realized cost) from an EQT fund. Expected Gross MOIC A fund’s expected Gross MOIC at termination, when a fund is fully realized, based on the estimated total value and invested capital upon realization. FAUM Fee-generating Assets Under Management (“FAUM”) represents the total assets and commitments from fund investors based on which the EQT AB Group is entitled to receive management fees Final close The date determined for each fund upon which admissions to the fund by investors are last accepted by the fund manager. FTE The number of full-time equivalent personnel on EQT AB Group’s payroll. FTE+ The number of full-time equivalent personnel and contracted personnel working for EQT AB Group. Fund size Total committed capital for a specific fund. Gross inflows New commitments through fundraising activities or increased investments in funds charging fees on net invested capital. Gross fund exits Value of realized investments (realized value) from an EQT fund. Refers to signed realizations in a given period. Gross MOIC Total value of investments divided by total invested capital. Invested capital Committed capital that fund investors have invested in a fund. Investment level / % Invested Measures the share of a fund’s total commitments that has been utilized. Calculated as the sum of (i) closed and/or signed investments, including announced public offers, (ii) any earn-outs and/or purchase price adjustments and (iii) less any expected syndication, as a % of a fund’s com- mitted capital. Investments Signed investments by an EQT fund. Key funds Funds with commitments that represent more than 5% of total commitments in active funds, respectively, as well as EQT Infrastructure II. Net invested capital Invested capital not yet realized (remaining cost). Management fees are generally based on net invested capital after the commitment period / investment period. Post-commitment period / Divestment period Phase of a fund lifecycle after the commitment period, in which most of a fund’s investments are realized. Management fees are normally based on the net invested capital during the period. Private Capital Business segment comprised of business lines EQT Ventures, EQT Life Sciences, EQT Growth, EQT Healthcare Growth. EQT Private Equity, Private Capital Asia, EQT Public Value and EQT Future. Real Assets Business segment comprised of business lines EQT Value-Add Infrastructure, EQT Active Core Infrastructure and EQT Exeter. Realized value / (Realized cost) Value (cost) of an investment, or parts of an investment, that at the time has been realized. Remaining value / (Remaining cost) Value (cost) of an investment, or parts of an investment, currently owned by the EQT funds. Start date A fund’s start date is the earlier of the first investment or the date when management fees are charged from fund investors. Step-down Step-downs in AUM generally resulting from the end of the investment period in an existing fund or when a subsequent fund starts to invest. Fees in a specific fund will normally be charged on net invested capital post step-down. Target Gross MOIC Measure used in fundraising of an EQT fund as a fund’s target level of investment return based on Gross MOIC. Total AUM Total Assets Under Management (“Total AUM”) represents the sum of (i) FAUM, (ii) value appre- ciation (depreciation) of investments in funds on which FAUM is calculated upon, (iii) fair market value of non-fee-generating co-investments as well as (iv) committed but undrawn capital from fund investors on which EQT AB Group is not currently entitled to receive management fees but that, following investment, would be fee generating. EQT Annual and Sustainability Report 2023 / Page 168Definitions Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Sustainability notes 113 Corporate governance 144 Additional information 158 The EQT AB share 159 Additional fund information for selected funds 162 Additional fund performance information 164 Alternative performance measures (APM) 165 Definitions 168 AGM-information 169 ===== SIDA 170 ===== EQT AB’s Annual Shareholders’ Meeting 2024 will be held on Monday, 27 May 2024. The notice convening the Annual Share- holders’ Meeting and the other documents will be held available on EQT’s website, www.eqtgroup.com. AGM-information Financial calendar 2024 18 April Quarterly Announcement January–March 2024 27 May Annual Shareholders’ Meeting 2024 18 July Half-year Report 2024 17 October Quarterly Announcement July–September 2024 AGM-information EQT Annual and Sustainability Report 2023 / Page 169 Contents Download print optimized PDF Introduction to EQT 3 Reflections on 2023 and beyond 8 Private markets and EQT 15 Strategy 22 EQT AB – the listed entity and revenue model 27 EQT Playbook 31 People 45 Financial statements 50 Sustainability notes 113 Corporate governance 144 Additional information 158 The EQT AB share 159 Additional fund information for selected funds 162 Additional fund performance information 164 Alternative performance measures (APM) 165 Definitions 168 AGM-information 169 ===== SIDA 171 ===== PRODUCTION: EQT IN COOPERATION WITH SAFIR EQT AB (PUBL.) © EQT AB 2023 REGISTRATED OFFICE IN STOCKHOLM, SWEDEN REGISTRATION NUMBER: 556849-4180 eqtgroup.com FOLLOW US ON