Colruyt N : Annual report with sustainability reporting 2022/2023

Annual Report

with sustainability reporting

2022/23

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Halle, 9 June 2023

FINANCIAL YEAR 2022/23

Annual report presented by the Board of Directors to the Ordinary General Meeting of Shareholders

of 27 September 2023 and Independent auditor's report

The Dutch annual report in the European Single Electronic Format (ESEF) is the only official version.

Dit jaarverslag is ook verkrijgbaar in het Nederlands.

Ce rapport annuel est également disponible en français.

Financial year 2022/23 covers the period from 1 April 2022 to 31 March 2023.

This annual report is also available on colruytgroup.com/en/annualreport. Our corporate website also includes all press releases, extra stories and background information.

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Intro

4 Word from the Chairman

6 Who are we?

12 Our strategy

14 Our vision on sustainability

25 Management report

36 Key figures

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Activities

47 Retail

82 Wholesale

88 Foodservice

91 Other activities

103 Group support activities

Corporate governance

119 Governance, supervision and management

123 Sustainable corporate governance

145 Share ownership, Colruyt shares and bonds

Corporate sustainability

154 SDG 2 - Zero hunger

156 SDG 3 - Good health and well-being

160 SDG 6 - Clean water and sanitation

162 SDG 7 - Affordable and clean energy

164 SDG 8 - Decent work and economic growth

168 SDG 12 - Responsible consumption and production

174 SDG 13 - Climate action

180 Our sustainability indicators

191 EU Taxonomy

Financial report

1. Consolidated income statement
2. Consolidated statement of comprehensive income
3. Consolidated statement of financial position
4. Consolidated statement of cash flows
5. Consolidated statement of changes in equity

1. Management responsibility statement
2. Independent auditor's report

222 Notes to the consolidated financial statements

297 Definitions

TABLE OF CONTENTS

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Word from the Chairman

2022/23 was an eventful, challenging financial year, in which we have continued to evolve, based on our belief that we create added value for society today, tomorrow and in the long term.

Over the past thirty years, Colruyt Group has evolved from a family business to a large, diverse group of companies. After years of double-digit growth, we are now experiencing a period of slowdown. This is not uncommon, especially in a context of high inflation that is seriously challenging all retailers and has sharply increased our costs, among other things for energy and employee pay. In retrospect, we are proud that, despite all this, we achieved good revenue growth and consolidated our market share.

Continuing to consolidate our long-term strategy required us to take a number of difficult decisions, which after careful consideration of various scenarios proved to be unavoidable. Thus, we published our decision for Dreamland to structurally join forces with Belgian toy specialist ToyChamp in April. In addition, we announced our intention to restructure Dreamland and Dreambaby, applying the 'Renault Act' collective redundancy scheme to a number of employees, and closing one Dreamland and five Dreambaby stores. We are convinced that these actions can contribute to the continued existence of Dreamland (now together with ToyChamp) and to that of Dreambaby as an integral part of the group. We are working towards this together, in constructive consultation with our trade union partners. We are and remain incredibly grateful and proud of the people who give the best of themselves for these attractive brands in our non-food area.

During the past financial year we also implemented numerous small and large cost saving, optimisation and efficiency measures. The sales, logistics, production and support services focused on

controlling their operational costs and specifically on energy efficiency. Energy prices started falling again from the beginning of 2023, while the joint market share of Colruyt Lowest Prices, Okay and Spar in Belgium increased to 31,0% at the end of the financial year. Partly as a result of this, we were able to slightly adjust in a positive direction our outlook for the full-year results. Ultimately, our revenue for the financial year increased by 7,7%, to over 10,8 billion euros. The net result decreased by one percentage point to 1,9% of revenue.

In the coming financial year, we will maintain our increased focus on efficiency and continue to implement our strategic plan. We are convinced that we will emerge stronger from the current period. We therefore continue to expand our smart ecosystem, with products and services in four areas, where a significant portion of family budgets is spent. In the fields of nutrition

and health, in particular, we have taken major steps through investments, participations and acquisitions. Our Jims fitness chain boosted its muscle by acquiring six high-quality clubs from the Oxygen chain. We also took a shareholding in digital health platform yoboo, strong in personal counselling towards healthier lifestyles. Finally, our Newpharma online pharmacy expanded its storage space to over 20.000 m², with potential for future growth. At the beginning of 2023, we concluded an agreement in principle to acquire 100% of the Degrenne Distribution group, a significant regional player in the French convenience store market. The company perfectly complements our Codifrance wholesale branch and will significantly strengthen our presence in France. Our retail network also continued to grow in Belgium and Luxembourg, with 13 new food stores and 22 renovations, representing 13.400 m² of additional retail space.

INTRO | Word from the Chairman • Who are we? • Our strategy • Our vision on sustainability • Management report • Key figures

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Our Colruyt Lowest Prices format experienced its greatest expansion. With its unique lowest price guarantee, it is clearly more relevant than ever. With food price inflation continuing, Colruyt attracted many new customers from autumn 2022 onwards and increased its market share. We continued

to protect our customers' purses and purchasing power, even during the often challenging annual negotiations with suppliers. We nonetheless succeeded in devising solutions acceptable to all parties, with a view to our lowest price guarantee (which celebrates its 50th anniversary this year) and our long-term supplier relationships.

We have also set a new course in the energy field. Our energy holding company Virya Energy reached an agreement to sell its offshore wind energy platform Parkwind to Japanese energy group JERA Green. The takeover offers Parkwind the potential to develop further as a leading international energy player, based in our country. This was a necessary step in an increasingly competitive offshore industry with substantially larger projects and higher investment risks.

At the beginning of June 2023, we completed the sale of fuel specialist DATS 24 to Virya Energy. In a rapidly greening energy market, the holding company will gain a lot of clout from this pooling of expertise. For our customers, nothing changes: DATS 24 remains part of the Xtra ecosystem.

In the past financial year, we again worked hard on numerous innovation and sustainability initiatives. These include new technologies to speed up checkout flow, while making work more ergonomic for our employees. We have experimented with unmanned vehicles for home delivery from Collect&Go and further digitised our processes and systems.

To help consumers in making more sustainable choices, we are continuing steadily to roll out the Eco-score we launched in 2021. This sustainability label is linked to a unique, low-entry threshold points saving programme that allows customers

to support great ecological initiatives. And we are pleased to report that international manufacturers are also starting to apply the Eco-score to their A-brand products.

Level playing field

As the only 100% Belgian retailer, we continue to invest in logistics and production in our own country. We buy as much as possible from Belgian producers, contribute to the sustainability of agriculture and the anchoring of craftsmanship. In so doing, we create lots of jobs and support entrepreneurship in our country. Through our activities, we also make a significant contribution to the public purse, while our leadership in sustainability and innovation helps put our country on the map.

We therefore want to make a plea here for the continued existence of integrated trading in Belgium. For this, we are calling in the first place for a major reduction of the number of joint employer-employee negotiating committees in the trading area. In this way, a fair and competitive landscape can be created in which integrated and independent stores continue to coexist perfectly, without unfair competition in wages and working conditions. This ultimately benefits both employees and the entire retail sector, from small independents to franchisees to integrated chains.

We continued to invest in our in-house production and in our own agricultural land, which we make available to independent farmers on a long-term basis, with part of it earmarked for innovative, more sustainable crops.

We expect a first harvest of Belgian mussels from our sea farm in summer 2023, for sale in our Cru markets. At the end of 2022, we announced our ambition to make our freight transport completely emission-free by 2035 by switching to battery and hydrogen-electric vehicles. In the meantime, we have already commissioned various electric vehicles, including one 44-tonne truck and five refrigerated trucks.

We feel confirmed in the sustainable course we have been following for a number of years now, including the success

of our very first Green Retail Bond. With it, we easily raised the intended 250 million euros to finance existing and new sustainable projects in the coming years.

In the past financial year, we have taken many steps to ensure the sustainable continued existence of our group. Spring

2023 saw some important internal changes. General manager of Colruyt Lowest Prices Chris Van Wettere went into well- deserved retirement, and a milestone also followed for myself. On 1 July 2023, I handed over the day-to-day management of Colruyt Group to Stefan Goethaert, who has been the new CEO since then. Stefan combines strong international management experience with the required leadership skills and a values- driven vision. Timing and preparation are right: together we came through both the corona crisis and the shock wave of the war in Ukraine. We have taken important structural and organisational decisions and our strategy for the next few years is clear and under implementation. The day-to-day management and future of Colruyt Group are in good hands with Stefan and his executive committee, while I also remain closely involved as Chairman of the Board of Directors.

Finally I want to extend my sincere thanks to all employees, customers and partners who, with their continued trust in Colruyt Group even in difficult times, are today building the future with us.

Jef Colruyt

CEO Colruyt Group

INTRO | Word from the Chairman • Who are we? • Our strategy • Our vision on sustainability • Management report • Key figures

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