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The annual report is presented in accordance with the Danish Financial Statements Act. In our opinion, the consolidated financial statements and the parent financial statements give a true and fair view of the Group's and the Parent's financial position at 31.12.2025 and of the results of their operations and the consolidated cash flows for the financial year 01.01.2025 - 31.12.2025. We believe that the management commentary contains a fair review of the affairs and conditions referred to therein. We recommend the annual report for adoption at the Annual General Meeting. Ebeltoft, Anders Byriel CEO Mette Rønn Bendix Product Director Lars Monrad-Gylling Chairman Anders Byriel Mette Rønn Bendix Claire Midwood Christian Madsbjerg To the shareholder of Kvadrat A/S Opinion We have audited the consolidated financial statements and the parent financial statements of Kvadrat A/S for the financial year 01.01.2025 - 31.12.2025, which comprise the income statement, balance sheet, statement of changes in equity and notes, including a summary of significant accounting policies, for the Group as well as the Parent, and the consolidated cash flow statement. The consolidated financial statements and the parent financial statements are prepared in accordance with the Danish Financial Statements Act. In our opinion, the consolidated financial statements and the parent financial statements give a true and fair view of the Group's and the Parent's financial position at 31.12.2025 and of the results of their operations and the consolidated cash flows for the financial year 01.01.2025 - 31.12.2025 in accordance with the Danish Financial Statements Act. Basis for opinion We conducted our audit in accordance with International Standards on Auditing (ISAs) and additional requirements applicable in Denmark. Our responsibilities under those standards and requirements are further described in the "Auditor’s responsibilities for the audit of the consolidated financial statements and the parent financial statements" section of this auditor’s report. We are independent of the Group in accordance with the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants (IESBA Code) and the additional ethical requirements applicable in Denmark, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Management's responsibilities for the consolidated financial statements and the parent financial statements Management is responsible for the preparation of consolidated financial statements and parent financial statements that give a true and fair view in accordance with the Danish Financial Statements Act, and for such internal control as Management determines is necessary to enable the preparation of consolidated financial statements and parent financial statements that are free from material misstatement, whether due to fraud or error. In preparing the consolidated financial statements and the parent financial statements, Management is responsible for assessing the Group's and the Entity’s ability to continue as a going concern, for disclosing, as applicable, matters related to going concern, and for using the going concern basis of accounting in preparing the consolidated financial statements and the parent financial statements unless Management either intends to liquidate the Entity or to cease operations, or has no realistic alternative but to do so. Auditor's responsibilities for the audit of the consolidated financial statements and the parent financial statements Our objectives are to obtain reasonable assurance about whether the consolidated financial statements and the parent financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs and the additional requirements applicable in Denmark 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 consolidated financial statements and parent financial statements. As part of an audit conducted in accordance with ISAs and the additional requirements applicable in Denmark, we exercise professional judgement and maintain professional scepticism throughout the audit. We also: - Identify and assess the risks of material misstatement of the consolidated financial statements and the parent financial statements, 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 opinion. The risk of not detecting a material misstatement 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 internal control relevant to the 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 Group's and the Entity’s internal control. - Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by Management. - Conclude on the appropriateness of Management’s use of the going concern basis of accounting in preparing the consolidated financial statements and the parent financial statements, and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's and the Entity’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 consolidated financial statements and the parent financial statements or, if such disclosures are inadequate, to modify our opinion. 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 the Group and the Entity to cease to continue as a going concern. - Evaluate the overall presentation, structure and content of the consolidated financial statements and the parent financial statements, including the disclosures in the notes, and whether the consolidated financial statements and the parent financial statements represent the underlying transactions and events in a manner that gives a true and fair view. - Plan and perform the group audit to obtain sufficient appropriate audit evidence regarding the financial information of the entities or business units within the group as a basis for forming an opinion on the consolidated financial statements and the parent financial statements. We are responsible for the direction, supervision and review of the audit work performed for purposes of the group audit. We remain solely responsible for our audit opinion. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. Statement on the management commentary Management is responsible for the management commentary. Our opinion on the consolidated financial statements and the parent financial statements does not cover the management commentary, and we do not express any form of assurance conclusion thereon. In connection with our audit of the consolidated financial statements and the parent financial statements, our responsibility is to read the management commentary and, in doing so, consider whether the management commentary is materially inconsistent with the consolidated financial statements and the parent financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. Moreover, it is our responsibility to consider whether the management commentary provides the information required by relevant law and regulations. Based on the work we have performed, we conclude that the management commentary is in accordance with the consolidated financial statements and the parent financial statements and has been prepared in accordance with the requirements in the relevant law and regulations. We did not identify any material misstatement of the management commentary. Aarhus, Deloitte Statsautoriseret Revisionspartnerselskab 33963556 Michael Bach State Authorised Public Accountant mne19691 Jens Lauridsen State Authorised Public Accountant mne34323 Financial highlights 2025 2024 2023 2022 2021 Key figures DKK'000 DKK'000 DKK'000 DKK'000 DKK'000 Revenue 1,783,168 1,644,726 1,757,765 1,868,163 1,596,057 Gross profit/loss 783,119 697,335 679,158 661,063 604,923 Operating profit/loss 112,796 72,648 (11,521) 35,417 44,415 Net financials (57,619) (58,707) (56,356) (11,464) (16,868) Profit/loss for the year 20,961 10,913 (74,801) 16,576 27,190 Profit for the year excl. minority interests 13,231 4,280 (74,173) 20,285 18,909 Balance sheet total 1,321,097 1,287,368 1,329,699 1,549,524 1,527,213 Investments in property, plant and equipment 18,232 6,977 39,246 43,494 152,026 Equity 335,935 333,942 327,076 411,644 433,386 Equity excl. minority interests 306,242 311,450 306,480 378,604 396,927 Average number of employees 927 967 1,022 1,057 986 Ratios Gross margin (%) 43,92 42.40 38.64 35.39 37.90 Return on equity (%) 4,28 1.39 (21.65) 5.23 4.97 Equity ratio (%) 23,18 24,19 23,05 24.43 25.99 Financial highlights are defined and calculated in accordance with the current version of "Recommendations & Ratios" issued by the CFA Society Denmark. 𝐆𝐫𝐨𝐬𝐬 𝐩𝐫𝐨𝐟𝐢𝐭(𝐥𝐨𝐬𝐬) 𝐱 𝟏𝟎𝟎Gross margin (%): 𝐑𝐞𝐯𝐞𝐧𝐮𝐞𝐏𝐫𝐨𝐟𝐢𝐭(𝐥𝐨𝐬𝐬)𝐟𝐨𝐫 𝐭𝐡𝐞 𝐲𝐞𝐚𝐫 𝐞𝐱𝐜𝐥.𝐦𝐢𝐧𝐨𝐫𝐢𝐭𝐲 𝐢𝐧𝐭𝐞𝐫𝐞𝐬𝐭𝐬 𝐱 𝟏𝟎𝟎Return on equity (%): 𝐀𝐯𝐞𝐫𝐚𝐠𝐞 𝐞𝐪𝐮𝐢𝐭𝐲 𝐞𝐱𝐜𝐥. 𝐦𝐢𝐧𝐨𝐫𝐢𝐭𝐲 𝐢𝐧𝐭𝐞𝐫𝐞𝐬𝐭𝐬𝐄𝐪𝐮𝐢𝐭𝐲 𝐞𝐱𝐜𝐥.𝐦𝐢𝐧𝐨𝐫𝐢𝐭𝐲 𝐢𝐧𝐭𝐞𝐫𝐞𝐬𝐭𝐬 𝐱 𝟏𝟎𝟎Equity ratio (%): 𝐁𝐚𝐥𝐚𝐧𝐜𝐞 𝐬𝐡𝐞𝐞𝐭 𝐭𝐨𝐭𝐚𝐥Development in activities and finances The revenue for the Group for 2025 amounted to DKK 1.783m compared to DKK 1.645m in 2024. Operating profit/loss amounted to DKK 113m compared to DKK 73m in 2024 and profit before tax amounted to DKK 32m compared to DKK 14m in 2024. The revenue for the Parent company for 2025 amounted to DKK 740m compared to DKK 721m in 2024. Operating profit/loss amounted to DKK 5m compared to DKK -1m in 2024 and profit before tax amounted to DKK -11m compared to DKK -9m in 2024. The result for both the Group and the Parent company has in FY 2025 been significantly affected primarily by the following circumstances: Market Places The marketplaces in which we operate continue to be challenged in both activity levels and short-term outlooks; however, we managed to adapt and keep a solid growth in a competitive market resulting in an increase in consolidated revenue of DKK 138m or 8% growth compared to 2024. Growth in North America The last years Kvadrat has been building, developing, and improving the direct sale of Kvadrat products to the North American markets. This has required a significant number of resources and investments to make profitable. However, end of 2025 this strategic project finally ended above our expectations, and we expect growth to continue and profitability to improve even more next year. Supporting the sustainability agenda A challenge in 2025 has been to make our upcycles end-of-life textile business more profitable. It is a high priority of Kvadrat Group to support the sustainable agenda. A restructuring and several different initiatives have therefore been taken to support and protect the future of our production setup, which required extraordinary costs of DKK 23m in 2025. Optimizing our organisation and internal processes In 2025 we continued to optimize and adjust our organization and processes towards increased competitiveness. Improving our competitiveness has resulted in an increase in operating profit margin with DKK 40m compared to 2024. Cost of capital The net financial costs in 2025 amounted to 58m DKK resulting in a small decrease from 2024 to 2025 of 1m DKK. The cost of capital to serve the net interest-bearing debts of the Group consisting primarily of short-term credit facilities, long-term credit facilities, liabilities as well as mortgage debts has decreased significantly. However, exchange rate costs have increased in 2025 caused of especially a dollar weakness. The total net financial costs therefore end stabile in 2025 compared to 2024. Profit/loss for the year in relation to expected developments The development in Group and Parent company revenue and profits must be compared to the primarily positive expectations for 2025 in the annual report for Kvadrat A/S for 2024. The Executive Board and Board of Directors consider the results for 2025 to be satisfactory with an 8% growth in revenue and DKK 40m increase in operating profit or 55% compared to 2024. The higher-than-expected operating profit is driven by better realized margins and cost savings. Risici Neither the Group nor the Parent Company are exposed to any major risks apart from those generally occurring in our line of business. Credit risks The Group is not exposed to major risk from a single customer or business partner. Credit risks are considered immaterial because in accordance with the Group’s credit process, all customers and other business partners are subject to our ongoing credit assessments, and the majority of the costumers is coved by credit insurance. Financial risks As a result of its operations, investments and financing activities, the Group is exposed to financial risks, including interest rate and foreign exchange risks. These risks are subject to ongoing monitoring. Currency risk The Group’s activities involve transactions in multiple currencies and are therefore exposed to fluctuations in exchange rates. The primary exposure relates to USD, which is subject to volatility. Currency exposure is monitored on an ongoing basis. Due to Denmark’s fixed exchange rate policy against the EUR, the foreign exchange risk related to EUR is considered limited. Interest rate risk The Group’s net interest-bearing debt is primarily denominated in DKK. A significant portion of mortgage and bank debt carries variable interest rates. The Group follows agreed repayment schedules with the Group's banks. Interest rate developments are monitored in ongoing dialogue with the Group’s banks. Outlook We continue expecting a general uncertainty in the markets, we operate. We will keep focus on our optimisation work and expect to see 5-8% revenue growth and 15% operating profit growth in 2026 compared to 2025. Knowledge resources We continue to work systematically in developing all employees in the organization to be able to best execute our Group strategy. Through our two annual Performance & Learning Conversations between all employees and their direct manager, we ensure that we are aligned on what learnings need to be applied on an individual-, team- and company-level. We have more than 150 managers across our production-, sales-, and development companies as well as our headquarters in Ebeltoft. We have continued our work with our senior management team as well as a larger group of managers with our people partner set up, where we internally support managers in people and performance-related topics. Instead of delegating leadership development to external consultants, we train and support our managers from our People Development team and utilize their knowledge of context and more direct availability. In 2025, we continue insourcing most training activities of our managers facilitated by our People Development department in collaboration with relevant external experts. This creates strong social and professional ties across the organization when leaders from different parts of the company are trained and educated together. We continue to work on the quality of our leadership and work more proactively and formalized with our people and organizational reviews. We have our own New Manager Academy and a High Potential Academy for our employees that we believe could assume more responsibility in a specialist or manager role going forward. 66 high potentials have participated, and this has generated 20 new managers, and 24 specialists taking on bigger roles. Finally, we are proceeding to build the necessary competencies through our Kvadrat Academy which serves as a training forum for all our employees. In our employee surveys, the employees are interviewed about their general satisfaction and specific matters related to their everyday working life. In 2025, we improved our overall employee satisfaction across key areas, including satisfaction and motivation, loyalty, learning and development, and perceptions of diversity and inclusion. Notably, the overall satisfaction went up to 74 in 2025 from 69 in 2024. Our strategic direction in Kvadrat The aspiration at Kvadrat is to “push the boundaries of high-quality textiles through design and innovation.” This is rooted in the identity of Kvadrat as a dynamic, forward-looking design company that continuously seeks to expand the boundaries of aesthetics and sustainable textile design globally. Kvadrat collaborates with architects to shape spaces, with designers and furniture manufacturers to craft furniture, and encourages consumers to bring personality and identity into their homes through tactility and colour. Success at Kvadrat is defined by four KPIs: employee temperature, customer pulse, brand reputation, and financial health. These KPIs represent the ultimate objectives for both short- and long-term success; therefore, all activities must strive to maximize value across these dimensions. The four KPIs are included in the global incentive program of Kvadrat. The Group strategy covers a two-year period (2025–2026), with the ambition of further strengthening our competitiveness and improving profitability. This will be delivered through three strategic priorities: Extreme focus We will drive growth within our core categories through a structured focus on segments. Transformation We will strengthen our organization and overall business performance through end-to-end collaboration, a global supply chain, further digitalization, and continued investment in learning and development. We are Kvadrat We will continue to strengthen our company culture and values. At Kvadrat, we remain committed to pushing the boundaries of high-quality textiles through design and innovation, reinforcing a shared identity across the organization. Environmental performance Kvadrat is a member of the Science Based Target initiative and aims to reach net zero greenhouse gas emissions by 2040. On this journey we build upon our long-term commitment to quality design, work with our production units and partners to reduce our impact on resources and the environment and continuously aim to innovate materials, our products and business models to rethink the way we operate in this world. Communicating our impact transparently to our clients through quality data is key. Therefore, we launched our first Environmental Product Declarations (EPD) in 2023 and in 2025 we offered our clients 11 Environmental Product Declarations (EPDs) for 128 of our textile products. More detailed information regarding our overall sustainability performance and targets can be found in our sustainability report (see link below). Research and development activities The development of our products happens in close collaboration between external affiliated designers and our internal product development teams. The costs related to research activities are expensed in the income statement. The costs related to development activities are either expensed in the income statement or capitalized in the balance sheet depending on the viability and economic return of the specific development project and whether the criteria for recognition in the balance sheet have been fulfilled. Events after the balance sheet date No events have occurred after the balance sheet date to this date, which would influence the evaluation of this annual report. Primary activities Kvadrat is a global leader in textile innovation and design. We develop, produce and sell contemporary high-quality textiles and textile-related products for architects, designers and private consumers to specify in public spaces and domestic interiors. Statutory report on corporate social responsibility Our attitudes and initiatives regarding environmental issues, social responsibility and gender equality in management are described in our sustainability report under "ESG Statement" which can be found on our website at: https://www.kvadrat.dk/en/about/sustainability-applied/sustainability-report Our sustainability report outlines policies, performance and objectives for Kvadrat as a company and Group. It addresses the requirements outlined by the Danish Financial Statements Act § 99a on the reporting of corporate social responsibility (CSR). We strive for full compliance with the Corporate Sustainability Reporting Directive (CSRD) and, thereby, the European Sustainability Reporting Standards (ESRS). Short-, medium- and long-term time horizons applied in the ESG Statement secure Kvadrat pursues short term benefits while accounting for long-term impacts, risks and opportunities. Where reasonable, we complement the ESRS disclosure requirements with performance measurements of the Global Reporting Initiative (GRI) standards and guiding frameworks such as the Greenhouse Gas Protocol. Kvadrat is a member of the UN Global Compact and submits its communication on progress (COP) annually, detailing information about our activities and developments according to the Ten Principles of the UN Global Compact and the 17 UN Sustainable Development Goals (SDGs). The report is structured into three main sections – General information, Environment, Social, Governance. Statutory report on the underrepresented gender Supreme management body 20252024 2023 2022 2021 Total number of members56 5 6 5 Underrepresented gender (%)40.0033.0040.0033.0020.00 Target figures (%)40.0040.0040.0040.0040.00 Within our highest management level (Kvadrat A/S board), we follow the recommendations of the Danish Business Authority to pursue a 40/60% distribution of either men or women. This ±10% allowance compared to a 50/50 distribution ensures higher levels of flexibility in response to the labour market. During 2025 there has been no change of composition in our Kvadrat A/S Board, however, in January 2026 a change led to 7 % points increase in the representation of women in our A/S board, from 33% (2024) to 40% (2025). Our short- and long-term goal is stay at least on a 40/60% gender distribution. Other management levels 2025 2024 20232022 2021 Total number of members3534302830 Underrepresented gender (%)46.0047.0040.0043.0050.00 Target figures (%)40.0040.0040.0040.0040.00 Other management levels in Kvadrat A/S include two levels: (1) Kvadrat´s executive management, and (2) management within A/S with personnel responsibilities and with direct reporting to Kvadrat´s executive management. Statutory report on data ethics policy Kvadrat has since 2021 had a data ethics policy, in alignment with section 99d of the Danish Financial Statements Act. Our data ethics policy sets a moral framework for collecting, processing, and protecting personal and nonpersonal data at Kvadrat. Our data ethics policy builds upon four principles: transparency, integrity, privacy, and inclusion. Our policy is about protecting people and defining a balance between the vast possibilities of the digital world and the ethical framework in which Kvadrat can navigate. The policy provides transparency around Kvadrat’s ethical views, compliance, and governance regarding the collection and processing of data that we are responsible for. During 2025, we updated Kvadrat´s guidelines for artificial intelligence (AI) and IT security policy to address emerging ethical challenges posed by new technologies. In 2026, we aim to further strengthen governance through enhanced processes and clear ownership of the selection and use of such technologies. https://www.kvadrat.dk/en/legal 1783168000 1644726000 -2592000 -596000 14165000 3985000 731723000 666515000 285083000 285457000 783119000 697335000 607148000 556124000 63175000 68559000 0 4000 112796000 72648000 -23474000 -355000 14240000 726000 71859000 59433000 31703000 13586000 10742000 2673000 20961000 10913000 48770000 62783000 3364000 3519000 42918000 77259000 998000 1115000 96050000 144676000 170472000 176131000 7720000 9231000 53574000 53151000 47291000 55498000 279057000 294011000 49340000 48991000 0 17835000 9554000 10583000 58894000 77409000 434001000 516096000 6241000 4407000 447041000 385972000 0 1224000 453282000 391603000 254922000 225784000 4205000 4308000 1328000 684000 6250000 3157000 66265000 55064000 15204000 9711000 0 380000 21995000 15191000 370169000 314279000 63645000 65390000 887096000 771272000 1321097000 1287368000 100000000 100000000 -4472000 -3782000 9358000 8077000 0 2779000 201356000 204376000 306242000 311450000 29693000 22492000 335935000 333942000 2543000 2412000 7829000 17359000 10372000 19771000 21864000 24742000 27065000 56192000 7025000 7577000 13941000 13856000 69895000 102367000 33867000 31685000 523231000 500223000 50150000 53851000 107199000 100988000 1276000 2499000 42549000 33265000 7318000 0 138606000 107697000 699000 1080000 904895000 831288000 974790000 933655000 1321097000 1287368000 100000000 -3782000 8077000 2779000 204376000 311450000 22492000 333942000 0 0 0 0 -964000 -964000 0 -964000 0 0 0 0 0 0 4890000 4890000 0 690000 0 2616000 0 3306000 0 3306000 0 0 1642000 0 0 1642000 0 1642000 0 0 0 0 -15450000 -15450000 4361000 -11089000 0 0 361000 0 0 361000 0 361000 0 0 0 -6056000 6056000 0 0 0 0 0 0 29367000 -29367000 0 0 0 0 0 0 -23474000 36705000 13231000 7730000 20961000 100000000 -4472000 9358000 0 201356000 306242000 29693000 335935000 Operating profit/loss Operating profit/loss 112796000 72648000 63175000 68324000 -38507000 -2838000 -1867000 6338000 135597000 144472000 14240000 726000 71859000 59433000 13753000 18291000 -11921000 -1617000 52304000 65857000 3896000 10716000 18232000 6977000 588000 1885000 1029000 1110000 -20511000 -14698000 -31793000 -51159000 30290000 43692000 4890000 3365000 Other cash flows from financing activities Other cash flows from financing activities 1642000 178000 -33538000 -46879000 -1745000 4280000 65390000 61110000 63645000 65390000 1 Revenue 2025 2024 DKK'000 DKK'000 Other EU countries 1,187,467 1,161,888 Other countries 595,701 482,838 1,783,168 1,644,726 The Group’s business is divided into business segments and geographical markets The Group’s primary segment comprises development and sale of design textiles and textile-related products. Secondary business areas are irrelevant. Referring to S. 96 of the Danish Financial Statements Act, Management does not want to provide additional information on the geographical distribution of revenue since a detailed distribution of revenue by geographical market will be highly detrimental to the Group’s competitive situation. 1 Revenue 2025 2024 DKK'000 DKK'000 Other EU countries 597,176 600,068 Other countries 142,805 121,081 739,981 721,149 The Company’s business is divided into business segments and geographical markets. The Company’s primary segment comprises development and sale of design textiles and textile-related products. Secondary business areas are irrelevant. Referring to S. 96 of the Danish Financial Statements Act, Management does not want to provide additional information on the geographical distribution of revenue since a detailed distribution of revenue by geographical market will be highly detrimental to the Company's competitive situation. 2 Other operating income Compensation 149 0 Salary reimbursement 3,101 3,058 Public grants 381 606 Other income 10,534 321 14,165 3,985 2 Other operating income Salary reimbursement 2,598 2,375 Other income 122 626 Group service agreements 26,988 23,654 29,708 26,655 3 Fees to the auditor appointed by the Annual General Meeting Statutory audit services 1,491 1,403 Other assurance engagements 0 215 Tax services 228 187 Other services 1,449 1,639 3,168 3,444 4 Staff costs Wages and salaries 525,532 475,468 Pension costs 37,901 40,700 Other social security costs 43,715 39,956 607,148 556,124 3 Staff costs Wages and salaries 152,662 142,424 Pension costs 10,629 10,795 Other social security costs 2,252 2,479 165,543 155,698 927 967 Remuneration of management Executive Board 8,907 6,947 Board of Directors 1,629 917 10,536 7,864 Remuneration of management Executive Board 8,907 6,947 Board of Directors 1,629 917 10,536 7,864 5 Depreciation, amortization and impairment losses 2025 2024 DKK'000 DKK'000 Amortisation of intangible assets 30,387 34,184 Depreciation on property, plant and equipment 32,788 34,375 63,175 68,559 4 Depreciation, amortization and impairment losses Amortisation of intangible assets 14,036 17,995 Depreciation on property, plant and equipment 9,869 10,955 23,905 28,950 6 Tax on profit/loss for the year Current tax 21,451 18,004 Change in deferred tax (10,709) (15,331) 10,742 2,673 7 Tax on profit/loss for the year Current tax 400 269 Change in deferred tax (15,449) (13,545) (15,049) (13,276) 13231000 4280000 7730000 6633000 8 Intangible assets Completed Development development Acquired projects in projects trademarks Goodwill progress DKK'000 DKK'000 DKK'000 DKK'000 Cost beginning of year 137,341 18,830 189,658 1,115 Exchange rate adjustment 12 3 133 0 Transfers 1,115 0 (567) (1,115) Additions 2,152 746 0 998 Disposals (1,440) 0 (32,747) 0 Cost end of year 139,180 19,579 156,477 998 Amortisation and impairment losses beginning of the year (74,558) (15,311) (112,399) 0 Exchange rate of adjustment (7) 0 151 0 Amortisation for the year (15,845) (904) (13,638) 0 Reversal regarding disposals 0 0 12,327 0 Amortisation and impairment losses end of year (90,410) (16,215) (113,559) 0 Carrying amount end of year 48,770 3,364 42,918 998 9 Development projects The completed development projects and development projects in progress primarily consists of a new ERP system as well as a digital trading platform as part of a substantial digital strategic plan onwards. Management expects a significant potential from the optimization and digitalization of the business, as future cash flows will ensure repayment of investments in the development projects, and Management does not see any indication of impairment to exist. 9 Intangible assets Completed Development development Acquired projects in projects trademarks progress DKK'000 DKK'000 DKK'000 Cost beginning of year 122,000 27,479 0 Additions 0 0 996 Disposals (1,440) 0 0 Cost end of year 120,560 27,479 996 Amortisation and impairment losses beginning of the year (68,902) (14,499) 0 Amortisation for the year (11,288) (2,748) 0 Amortisation and impairment losses end of year (80,190) (17,247) 0 Carrying amount end of year 40,370 10,232 996 10 Development projects The completed development projects primarily consists of a new ERP-system as well as a digital trading platform as part of a substantial digital strategic plan onwards. Management expects a significant potential from the optimization and digitalization of the business, as future cash flows will ensure repayment of investments in the development projects, and Management does not see any indication of impairment to exist. 10 Property, plant and equipment Other fixtures and fittings, Land and Plant and tools and Leasehold Buildings Machinery equipment Improvements DKK'000 DKK'000 DKK'000 DKK'000 Cost beginning of year 232,324 13,294 202,565 135,029 Exchange rate adjustment 43 0 (213) (6,537) Additions 0 729 14,846 2,657 Disposals (405) (449) (6,770) (1,852) Cost end of year 231,962 13,574 210,428 129,297 Amortisation and impairment losses beginning of the year (56,193) (4,063) (149,414) (79,531) Exchange rate of adjustment 3 0 0 6,933 Amortisation for the year (5,667) (2,063) (13,798) (11,260) Reversal regarding disposals 367 272 6,358 1,852 Amortisation and impairment losses end of year (61,490) (5,854) (156,854) (82,006) Carrying amount end of year 170,472 7,720 53,574 47,291 Recognised assets not owned by entity 0 0 2,520 0 11 Property, plant and equipment Other fixtures and fittings, Land and Plant and tools and Leasehold Buildings Machinery equipment Improvements DKK'000 DKK'000 DKK'000 DKK'000 Cost beginning of year 187,651 4,117 89,568 14,292 Additions 0 153 0 0 Disposals 0 0 (79) 0 Cost end of year 187,651 4,270 89,489 14,292 Amortisation and impairment losses beginning of the year (47,897) (1,263) (67,113) (13,652) Amortisation for the year (3,734) (432) (5,063) (640) Reversal regarding disposals 0 0 79 0 Amortisation and impairment losses end of year (51,631) (1,695) (72,097) (14,292) Carrying amount end of year 136,020 2,575 17,392 0 Recognised assets not owned by entity 0 0 2,520 0 11 Financial assets Receivables Investments from in associates associates Deposits DKK'000 DKK'000 DKK'000 Cost beginning of year 46,212 17,835 10,583 Additions 32,495 0 0 Disposals 0 (17,835) (1,029) Cost end of year 78,707 0 9,554 Revaluations beginning of year 2,779 0 0 Exchange rate adjustments (2,616) 0 0 Amortisation of goodwill (371) 0 0 Share of profit/loss for the year (6,433) 0 0 Adjustment of intra-group profits (3,557) 0 0 Dividend (6,056) 0 0 Other adjustments (13,113) 0 0 Revaluations end of year (29,367) 0 0 Carrying amount end of year 49,340 0 9,554 Associates Registered in Ownership, % Wooltex UK Ltd. England 46,00 3 Days of Design ApS Denmark 20,00 Innvik AS Norway 30,00 Convert A/S Denmark 48,67 12 Financial assets Investments in group Investments enterprises in associates Deposits DKK'000 DKK'000 DKK'000 Cost beginning of year 305,096 46,211 997 Transfers (27,391) 0 0 Additions 1,726 32,493 67 Disposals (10,336) 0 0 Cost end of year 269,095 78,704 1,064 Revaluations beginning of year 22,341 7,734 0 Exchange rate adjustments (452) (2,854) 0 Transfers 12,000 0 0 Amortisation of goodwill (4,907) (371) 0 Share of profit/loss for the year 57,213 (5,186) 0 Adjustment of intra-group profits 1,519 (3,557) 0 Dividend (27,126) (6,056) 0 Investments with negative equity value depreciated over receivables 414 0 0 Investments with negative equity value transferred to provisions 2,925 0 0 Other adjustments 239 (13,113) Reversals regarding disposals (497) 0 0 Revaluations end of year 63,669 (23,403) 0 Carrying amount end of year 332,764 55,301 1,064 Investments in group enterprises comprise unamortised goodwill of DKK 12,5m at 31.12.2025. A specification of investments in subsidiaries is evident from the notes to the consolidated financial statements. Investments in Associates Registered in Ownership, % Wooltex UK Ltd. England 46,00 3 Days of Design ApS Denmark 20,00 Innvik AS Norway 30,00 Kvadrat Maharam Pty. Ltd. Australia 50,00 Convert A/S Denmark 48,67 12 Contract work in progress 2025 2024 DKK'000 DKK'000 Contract work in progress 22,293 22,293 Progress billings (18,088) (17,985) 4,205 4,308 13 Deferred tax 2025 2024 DKK'000 DKK'000 Intangible assets (6,962) (10,087) Property, plant and equipment 804 (982) Inventories 5,038 5,768 Receivables (1,211) (1,180) Provisions 931 457 Liabilities other than provisions 3,126 2,849 Tax losses carried forward 61,996 55,827 63,722 52,652 Changes during the year Beginning of year 52,652 37,360 Recognised in the income statement 10,709 15,331 Recognised directly in equity 361 (39) End of year 63,722 52,652 Deferred tax has been recognized in the balance sheet as follows: Deferred tax assets 66,265 55,064 Deferred tax liabilities (2,543) (2,412) 63,722 52,652 Deferred tax assets Deferred tax assets consist primarily of timing differences on depreciation of fixed assets as well as tax loss carryforwards from foreign subsidiaries and the Parent company, which are expected to use the losses within 1-5 years as a result of future positive operations. Deferred tax assets Deferred tax assets consist primarily of timing differences on depreciation of fixed assets as well as tax-loss carry forwards, which the company expects to use within 1-5 years as a result of future positive operations. 14 Prepayments Prepayments comprise incurred costs relating to subsequent financial years. Prepayments are measured at cost. 14 Prepayments Prepayments comprise incurred costs relating to subsequent financial years. Prepayments are measured at cost. 15 Constributed capital Nominal value Number DKK'000 The shares are not divided into classes 1,000 100,000 1,000 100,000 16 Other provisions Other provisions comprise primarily costs from other contractual obligations expected to be incurred by the Group. 17 Other payables (non current) 2025 2024 DKK’000 DKK'000 Holiday pay obligation 13,941 13,856 13,941 13,856 19 Other payables (current) 2025 2024 DKK’000 DKK'000 VAT and duties 4,730 6,557 Wages and salaries, personal income taxes, social security costs, etc. payable 20,637 18,349 Holiday pay obligation 23,084 20,977 Derivative financial instruments 3,881 5,353 Other costs payable 86,274 56,461 138,606 107,697 Derivative financial instruments are described in note 24 16 Other payables (non-current) 2025 2024 DKK’000 DKK’000 Holiday pay obligation 13,941 13,856 13,941 13,856 18 Other payables (current) 2025 2024 DKK’000 DKK'000 Wages and salaries, personal income taxes, social security costs, etc. payable 14,911 3,715 Holiday pay obligation 6,514 7,100 Derivative financial instruments 3,881 5,353 Other costs payable 11,325 3,434 36,631 19,602 Derivative financial instruments are described in note 19. 18 Non-current liabilities other than provisions Due after Outstanding Due within Due within more than after 5 12 months 12 months 12 months years 2025 2024 2025 2025 DKK'000 DKK'000 DKK'000 DKK'000 Mortgage debt 2,861 2,930 21,864 12,824 Bank loans 28,560 26,745 27,065 0 Lease liabilities 2,446 2,010 7,025 0 Other Payables 0 0 13,941 13,941 33,867 31,685 69,895 26,765 17 Non-current liabilities other than provisions Due after Due within Due within more than Outstanding 12 months 12 months 12 months after 5 years 2025 2024 2025 2025 DKK'000 DKK'000 DKK'000 DKK'000 Mortgage debt 2,861 2,930 21,864 12,824 Bank loans 24,457 21,456 27,065 0 Lease liabilities 2,446 2,010 2,112 0 Other Payables 0 0 13,941 13,941 29,764 26,396 64,982 26,765 20 Deferred income Deferred income includes grants for DKK 1,9m related to development projects in progress, of which DKK 1,2m has been recognized in line with the depreciation of the associated development project. Deferred income is recognized as other income in the income statement and in note 2. 21 Changes in working capital 2025 2024 DKK’000 DKK'000 Increase/decrease in inventories (61,679) 22,944 Increase/decrease in receivables (44,425) (4,406) Increase/decrease in trade payables etc. 67,597 (21,376) (38,507) (2,838) 22 Derivative financial instruments The Company have no hedged currencies at the balance date 31 December 2025. Other payables include the negative fair value of an interest rate swap of DKK 3,9m. The interest swap was made to hedge a fixed interest rate on the Company's floating-rate mortgage loan. The interest swap has a principal amount of DKK 20,0m and ensures a fixed interest rate of 4,82% in the remaining term of 13 years. 23 Other unrecognized commitments Total liabilities under lease rental or agreements until maturity 227,642 200,440 24 Assets charged and collateral Mortgage debt is secured by way of mortgage on properties. The carrying amount of mortgaged buildings is DKK 136m. recognised under land and buildings. A owners mortgage of DKK 8m in properties has been pledged as security for outstanding balances with banks. The Company has pledged its assets with a corporate mortgage as security for outstanding balances with banks. The nominal amount of the corporate mortgage is DKK 200m. The corporate mortgage includes acquired trademarks, plants and machinery, other fixtures and fittings, tools and equipment, inventories and trade receivables. The carrying amount of acquired trademarks is DKK 10,2m. The carrying amount of plants and machinery is DKK 2,6m. The carrying amount of other fixtures and fittings, tools and equipment (leased not included) is DKK 14,9m. The carrying amount of inventories is DKK 284,3m. The carrying amount of trade receivables is DKK 20,2m. 25 Transactions with related parties The annual report only discloses transactions with related parties that have not been completed on market terms. No such transactions have been completed during the financial year. 26 Group relations Name and registered office of the Parent preparing consolidated financial statements for the largest group: Kvadrat Holding A/S, CVR-nr. 15 12 00 02, Ebeltoft, Denmark. Name and registered office of the Parent preparing consolidated financial statements for the smallest group: Kvadrat Holding A/S, CVR-nr. 15 12 00 02, Ebeltoft, Denmark. 27 Pro-rata consolidated companies Registered in Ownership, % Kvadrat Maharam Pty. Ltd. Australia 50,00 28 Subsidiaries Registrered in Ownership % Febrik BV Netherlands 83.90 Kvadrat Weaving BV Netherlands 99.94 Kinnasand GmbH Germany 100.00 Kvadrat AB Sweden 100.00 Kvadrat AG Switzerland 97.00 Kvadrat Asia Investment Ltd. Hong Kong 50.50 Kvadrat China Co. Ltd. China 50.50 Kvadrat Singapore Pte. Ltd. Singapore 50.50 Kvadrat Austria GmbH Austria 97.00 Kvadrat BV Netherlands 95.00 Kvadrat Finland Oy Finland 100.00 Kvadrat GmbH Germany 98.00 Kvadrat Iberia S.L. Spain 95.00 Kvadrat Inc. USA 100.00 Kvadrat Japan Co. Ltd. Japan 80.00 Kvadrat Korea Co. Ltd. South Korea 100.00 Kvadrat Ltd. UK 100.00 Kvadrat Middle East FZCO UAE 100.00 Kvadrat Norge AS Norway 100.00 Kvadrat SA France 95.00 Kvadrat Acoustics A/S Denmark 79.00 Fabric Systems Ltd. UK 79.00 Kvadrat Acoustics Inc. USA 79.00 Kvadrat Soft Cells Hong Kong Ltd. Hong Kong 79.00 Kvadrat Acoustics Sp. Z.o.o. Poland 79.00 Kvadrat Acoustics Pty. Ltd. Australia 79.00 Kvadrat SpA Italy 100.00 Personal Design SrL Italy 100.00 Kvadrat REALLY ApS Denmark 100.00 Sahco GmbH Germany 100.00 Kvadrat Czech Republic s.r.o. Czech Republic 100.00 Kvadrat Shade Holding BV Netherlands 100.00 Kvadrat Shade Services BV Netherlands 100.00 Kvadrat High Performance Textiles BV Netherlands 100.00 Kvadrat Shade Assembly BV Netherlands 100.00 Kvadrat Shade Properties BV Netherlands 100.00 Verosol Australia Pty Ltd. Australia 80.00 Verosol Ibérica SAU Spain 100.00 Tecnologia de Control Solar Mexicana, SA de CV Mexico 100.00 Tecnologia de Control Solar Mexicana de Servicios, SA de CV Mexico 100.00 VW Solarflex SA de CV Mexico 100.00 Magniberg Design AB Sweden 69.78 Kvadrat Middle East Textiles LLC UAE 100.00 Hemp Bio ApS Denmark 70,00 Kvadrat Pty. Ltd. Australia 95,00 19 Derivative financial instruments The Company has no hedges currencies at the balance sheet date 31 December 2025. Other payables include the negative fair value of an interest rate swap of DKK 3,9m. The interest rate swap was made to hedge a fixed interest rate on the Company’s floating-rate mortgage loan. The interest swap has a principal amount of DKK 20m and ensures a fixed interest rate of 4,82% in the remaining term of 13 years. 739981000 721149000 29708000 26655000 463757000 458157000 110389000 106232000 195543000 183415000 165543000 155698000 23905000 28950000 694000 0 5401000 -1233000 53191000 31046000 -22227000 1596000 12685000 3824000 59732000 44226000 -10682000 -8993000 -15049000 -13276000 4367000 4283000 40370000 53098000 10232000 12980000 996000 0 51598000 66078000 136020000 139754000 2575000 2854000 17392000 22455000 0 640000 155987000 165703000 332764000 327437000 55301000 53945000 0 17835000 1064000 997000 389129000 400214000 596714000 631995000 1066000 994000 281328000 222049000 1896000 1224000 284290000 224267000 20215000 25284000 83147000 93533000 4932000 3144000 47143000 32231000 4881000 3901000 12913000 8657000 173231000 166750000 3026000 2455000 460547000 393472000 1057261000 1025467000 100000000 100000000 9358000 8077000 40266000 30075000 32265000 41414000 116464000 131837000 298353000 311403000 13162000 10274000 13162000 10274000 21864000 24742000 27065000 51591000 2112000 4440000 13941000 13856000 64982000 94629000 29764000 26396000 421841000 371532000 1116000 1869000 64754000 53884000 86885000 101708000 39773000 34170000 36631000 19602000 680764000 609161000 745746000 703790000 1057261000 1025467000 100000000 8077000 30075000 41414000 131837000 311403000 0 0 -3306000 0 0 -3306000 0 1642000 0 0 0 1642000 0 0 14841000 0 -30233000 -15392000 0 361000 0 0 361000 0 0 -27126000 27126000 0 0 0 -6056000 0 6056000 0 0 0 0 -9149000 9149000 0 0 0 31838000 0 -27471000 4367000 100000000 9358000 40266000 32265000 116464000 298353000 194 200 5 Other financial income 2025 2024 DKK'000 DKK'000 Financial income from group enterprises 1,197 1,786 Other financial income 11,488 2,038 12,685 3,824 6 Other financial expenses Other financial expenses 59,732 44,226 59,732 44,226 4367000 4283000 13 Deferred tax 2025 2024 DKK’000 DKK’000 Intangible assets (6,039) (9,443) Property, plant and equipment 718 (1,037) Inventories 4,947 4,663 Provisions 0 35 Liabilities other than provisions 660 660 Tax losses carried forward 46,857 37,353 47,143 32,231 Changes during the year Beginning of year 32,231 19,527 Recognised in the income statement 15,449 13,545 Recognised directly in equity (361) (39) Tax losses used by group enterprises (176) (802) End of year 47,143 32,231 15 Provisions for investments in group enterprises Provisions for investments in group enterprises is a result of investment in group enterprises with negative equity. 20 Other unrecognized commitments 2025 2024 Unrecognized rental and lease commitments DKK’000 DKK'000 Total liabilities under rental or lease agreements until maturity 13,811 9,871 21 Contingent liabilities 2025 2024 DKK’000 DKK'000 Recourse and non-recourse guarantee commitments 467,803 457,336 Contingent liabilities to group enterprises 467,803 457,336 Recourse and non-recourse guarantee commitments 0 7,733 Contingent liabilities to associates 0 7,733 The Company has provided a guarantee for the bank debt of subsidiaries and Kvadrat Holding A/S. The secured bank debt amounts to DKK 468m at 31.12.2025, which consists of the subsidiaries drawing on the credit facilities at their bank. The Company participates in a group cash pool arrangement. Under the terms of this arrangement, the Company is liable with other participating group companies for the total net balance with the credit institution. As of the balance sheet date, the group’s total withdrawal on the cash pool facility amounted to DKK 157m. The Company has provided performance guarantees for DKK 34,9m at 31.12.2025. The Company participates in a Danish joint taxation arrangement with Kvadrat Holding A/S serving as the administration company. According to the joint taxation provisions of the Danish Corporation Tax Act, the Entity is therefore liable for income taxes etc. for the jointly taxed companies and for obligations, if any, relating to the withholding of tax on interest, royalties and dividends for the jointly taxed companies. The jointly taxed entities' total known net liability under the joint taxation arrangement is disclosed in the administration company's financial statements. 22 Assets charged and collateral Mortgage debt is secured by way of mortgage on properties. The carrying amount of mortgaged buildings is DKK 136m. recognised under land and buildings. A owners mortgage of DKK 8m in properties has been pledged as security for outstanding balances with banks. The Company has pledged its assets with a corporate mortgage as security for outstanding balances with banks. The nominal amount of the corporate mortgage is DKK 200m. The corporate mortgage includes acquired trademarks, plants and machinery, other fixtures and fittings, tools and equipment, inventories and trade receivables. The carrying amount of acquired trademarks is DKK 10,2m. The carrying amount of plants and machinery is DKK 2,6m. The carrying amount of other fixtures and fittings, tools and equipment (leased not included) is DKK 14,9m. The carrying amount of inventories is DKK 284,3m. The carrying amount of trade receivables is DKK 20,2m. 23 Related parties with controlling interest The parent Kvadrat Holding A/S, Central Business Reg. No: 15 12 00 02, Ebeltoft holds all shares in the Company and thus has a controlling interest in the Company. 24 Transactions with related parties The annual report only disclose transactions with related parties that have not been completed on market terms. No such transactions have been completed during the financial year. true Recognition and measurement Assets are recognised in the balance sheet when it is probable as a result of a prior event that future economic benefits will flow to the Entity, and the value of the asset can be measured reliably. Liabilities are recognised in the balance sheet when the Entity has a legal or constructive obligation as a result of a prior event, and it is probable that future economic benefits will flow out of the Entity, and the value of the liability can be measured reliably. On initial recognition, assets and liabilities are measured at cost. Measurement subsequent to initial recognition is effected as described below for each financial statement item. Anticipated risks and losses that arise before the time of presentation of the annual report and that confirm or invalidate affairs and conditions existing at the balance sheet date are considered at recognition and measurement. Income is recognised in the income statement when earned, whereas costs are recognised by the amounts attributable to this financial year. Consolidated financial statements The consolidated financial statements comprise the Parent and the group enterprises (subsidiaries) that are controlled by the Parent. Control is achieved by the Parent, either directly or indirectly, holding more than 50% of the voting rights or in any other way possibly or actually exercising controlling influence. Enterprises in which the Group, directly or indirectly, holds between 20% and 50% of the voting rights and exercises significant, but not controlling influence, are regarded as associates. Basis of consolidation The consolidated financial statements are prepared on the basis of the financial statements of the Parent and its subsidiaries. The consolidated financial statements are prepared by combining uniform items. On consolidation, intra-group income and expenses, intra-group accounts and dividends as well as profits and losses on transactions between the consolidated enterprises are eliminated. The financial statements used for consolidation have been prepared applying the Group’s accounting policies. Subsidiaries’ financial statement items are recognised in full in the consolidated financial statements. Minority interests’ proportionate share of profit or loss is presented as a separate item in Management’s proposal for distribution of profit or loss, and their share of subsidiaries’ net assets is presented as a separate item in group equity. Investments in subsidiaries are offset at the pro rata share of such subsidiaries’ net assets at the takeover date, with net assets having been calculated at fair value. Business combinations Newly acquired or newly established enterprises are recognised in the consolidated financial statements from the time of acquiring or establishing such enterprises. Divested or wound-up enterprises are recognised in the consolidated income statement up to the time of their divestment or winding-up. The purchase method is applied at the acquisition of new enterprises, under which identifiable assets and liabilities of these enterprises are measured at fair value at the acquisition date. Provisions for costs of restructuring of the enterprise acquired are only made in so far as such restructuring was decided by the enterprise acquired prior to acquisition. Allowance is made for the tax effect of restatements. Positive differences in amount (goodwill) between cost of the acquired share and fair value of the assets and liabilities taken over are recognised under intangible assets, and they are amortised systematically over the income statement based on an individual assessment of their useful life. If the useful life cannot be estimated reliably, it is fixed at 10 years. Useful life is reassessed annually. Negative balances (negative goodwill) are recognised as income in the income statement. Profit or loss from divestment of enterprises Profits or losses from divestment or winding-up of subsidiaries are calculated as the difference between selling price or settlement price and the carrying amount of the net assets at the time of divestment or winding-up, inclusive of non-amortised goodwill and estimated divestment or winding-up expenses. Foreign currency translation On initial recognition, foreign currency transactions are translated applying the exchange rate at the transaction date. Receivables, payables and other monetary items denominated in foreign currencies that have not been settled at the balance sheet date are translated using the exchange rate at the balance sheet date. Exchange differences that arise between the rate at the transaction date and the rate in effect at the payment date, or the rate at the balance sheet date are recognised in the income statement as financial income or financial expenses. Property, plant and equipment, intangible assets, inventories and other non-monetary assets that have been purchased in foreign currencies are translated using historical rates. When recognising foreign subsidiaries and associates that are independent entities, the income statements are translated at average exchange rates for the months that do not significantly deviate from the rates at the transaction date. Balance sheet items are translated using the exchange rates at the balance sheet date. Goodwill is considered belonging to the independent foreign entity and is translated using the exchange rate at the balance sheet date. Exchange differences arising out of the translation of foreign subsidiaries’ equity at the beginning of the year at the balance sheet date exchange rates as well as out of the translation of income statements from average rates to the exchange rates at the balance sheet date are recognised directly in equity. Exchange adjustments of outstanding accounts with independent foreign subsidiaries which are considered part of the total investment in the subsidiary in question are classified directly as equity. Derivative financial instruments On initial recognition in the balance sheet, derivative financial instruments are measured at cost and subsequently at fair value. Derivative financial instruments are recognised under other receivables or other payables. Changes in the fair value of derivative financial instruments classified as and complying with the requirements for hedging the fair value of a recognised asset or a recognised liability are recorded in the income statement together with changes in the value of the hedged asset or the hedged liability. Changes in the fair value of derivative financial instruments classified as and complying with the requirements for hedging future transactions are recognised directly in equity. When the hedged transactions are realised, the accumulated changes are recognised as part of cost of the relevant financial statement items. For derivative financial instruments that do not comply with the requirements for being treated as hedging instruments, changes in fair value are recognised currently in the income statement as financial income or financial expenses. Public grants Public grants are recognised when a final commitment has been received from the grantor and it is probable that the conditions of the grant will be fulfilled. Grants are recognised as income in the income statement as earned. Grants awarded for acquisition of assets are recognised as deferred income in the balance sheet, which is taken to income on a straight-line basis over the useful life of the asset. Income statement Revenue Revenue from the sale of manufactured goods and goods for resale is recognised in the income statement when delivery is made and risk has passed to the buyer. Revenue is recognised net of VAT, duties and sales discounts and is measured at fair value of the consideration fixed. Contract work in progress is included in revenue based on the stage of completion so that revenue corresponds to the selling price of the work performed in the financial year (the percentage-of-completion method). Own work capitalised Own work capitalised comprises #staff costs and other costs incurred in the financial year and recognised in cost for proprietary intangible assets and property, plant and equipment. Other operating income Other operating income comprises income of a secondary nature as viewed in relation to the Entity’s primary activities, including profit from the sale of intangible assets and property, plant and equipment, and salary refunds. Cost of sales Cost of sales comprises goods consumed in the financial year measured at cost, adjusted for normal inventory write-downs. Other external expenses Other external expenses include expenses relating to the Entity’s ordinary activities, including expenses for premises, stationery and office supplies, marketing costs, etc. This item also includes write-downs of receivables recognised in current assets. Staff costs Staff costs comprise salaries and wages as well as social security contributions, pension contributions, etc. for entity staff Depreciation, amortisation and impairment losses Depreciation, amortisation and impairment losses relating to property, plant and equipment and intangible assets comprise depreciation, amortisation and impairment losses for the financial year, as well as revenue recognition of grants recieved related to the intangible fixed assets and gains and losses from the sale of intangible assets as well as property, plant and equipment. Other operating expenses Other operating expenses comprise expenses of secondary nature as viewed in relation to the Entity’s primary activities, including loss from the sale of intangible assets and property, plant and equipment. Income from investments in group enterprises Income from investments in group enterprises comprises the pro rata share of the individual enterprises’ profit/loss after full elimination of intra-group profits or losses. Income from investments in associates Income from investments in associates comprises the pro rata share of the individual associates’ profit/loss after pro rata elimination of intra-group profits or losses. Other financial income Other financial income comprises dividends etc. received on other investments, interest income, including interest income on receivables from group enterprises, net capital or exchange gains on securities, payables and transactions in foreign currencies, amortisation of financial assets as well as tax relief under the Danish Tax Prepayment Scheme etc. Other financial expenses Other financial expenses comprise interest expenses, including interest expenses on payables to group enterprises, net capital or exchange losses on securities, payables and transactions in foreign currencies, amortisation of financial liabilities as well as tax surcharge under the Danish Tax Prepayment Scheme etc. Tax on profit/loss for the year Tax for the year, which consists of current tax for the year and changes in deferred tax, is recognised in the income statement by the portion attributable to the profit for the year and recognised directly in equity by the portion attributable to entries directly in equity. The Parent is jointly taxed with all of its Danish group enterprises. The current Danish income tax is allocated among the jointly taxed entities proportionally to their taxable income (full allocation with a refund concerning tax losses). Balance sheet Goodwill Goodwill is the positive difference between cost and fair value of assets and liabilities arising from acquisitions. Goodwill is amortised straight-line over its estimated useful life, which is fixed based on the experience gained by Management for each business area. For amounts of goodwill, useful life has been determined based on an assessment of whether the enterprises are strategically acquired enterprises with a strong market position and a long-term earnings profile and whether the amount of goodwill includes intangible resources of a temporary nature that cannot be separated and recognised as separate assets. Useful lives are reassessed annually. The amortisation periods used are 10 years. Goodwill is written down to the lower of recoverable amount and carrying amount. Intellectual property rights etc. Intellectual property rights etc. comprise development projects completed and in progress with related intellectual property rights and acquired intellectual property rights. Development projects on clearly defined and identifiable products and processes, for which the technical rate of utilisation, adequate resources and a potential future market or development opportunity in the enterprise can be established, and where the intention is to manufacture, market or apply the product or process in question, are recognised as intangible assets. Other development costs are recognised as costs in the income statement as incurred. When recognising development projects as intangible assets, an amount equaling the costs incurred less deferred tax is taken to equity under Reserve for development costs that is reduced as the development projects are amortised and written down. The cost of development projects comprises costs such as salaries, external costs and amortisation that are directly and indirectly attributable to the development projects. Indirect production costs in the form of indirectly attributable staff costs and amortisation of intangible assets and depreciation on property, plant and equipment used in the development process are recognised in cost based on time spent on each project. Completed development projects are amortised on a straight-line basis using their estimated useful lives which are determined based on a specific assessment of each development project. If the useful life cannot be estimated reliably, it is fixed at 10 years. For development projects protected by intellectual property rights, the maximum amortisation period is the remaining duration of the relevant rights. Intellectual property rights acquired are measured at cost less accumulated amortisation. Patents are amortised over their remaining duration, and licenses are amortised over the term of the agreement. Intellectual property rights etc. are written down to the lower of recoverable amount and carrying amount. Property, plant and equipment Land and buildings as well as other fixtures and fittings, tools and equipment are measured at cost less accumulated depreciation and impairment losses. Land is not depreciated. Cost comprises the acquisition price, costs directly attributable to the acquisition and preparation costs of the asset until the time when it is ready to be put into operation. For assets held under finance leases, cost is the lower of the asset’s fair value and present value of future lease payments. The basis of depreciation is cost less estimated residual value after the end of useful life. Straight-line depreciation is made on the basis of the following estimated useful lives of the assets: Useful life Buildings 30-40 years Plant and machinery 3-5 years Other fixtures and fittings, tools and equipment 3-5 years Leasehold improvements Contract period For leasehold improvements and assets subject to finance leases, the depreciation period cannot exceed the contract period. Estimated useful lives and residual values are reassessed annually. Items of property, plant and equipment are written down to the lower of recoverable amount and carrying amount. Investments in group enterprisesIn the parent financial statements, investments in group enterprises are recognised and measured according to the equity method. This means that investments are measured at the pro rata share of the enterprises' equity value plus unamortised goodwill and plus or minus unrealised intra-group profits and losses. Refer to the above section on business combinations for more details about the accounting policies used on acquisitions of investments in group enterprises. Group enterprises with negative equity value are measured at DKK 0. Any receivables from these enterprises are written down to net realisable value based on a specific assessment. If the Parent has a legal or constructive obligation to cover the liabilities of the relevant enterprise, and it is probable that such obligation will involve a loss, a provision is recognised that is measured at present value of the costs necessary to settle the obligations at the balance sheet date. Upon distribution of profit or loss, net revaluation of investments in group enterprises is transferred to reserve for net revaluation according to the equity method in equity. Goodwill is the positive difference between cost and fair value of assets and liabilities arising from acquisitions. Goodwill is amortised straight-line over its estimated useful life, which is fixed based on the experience gained by Management for each business area. For amounts of goodwill, useful life has been determined based on an assessment of whether the enterprises are strategically acquired enterprises with a strong market position and a long-term earnings profile and whether the amount of goodwill includes intangible resources of a temporary nature that cannot be separated and recognised as separate assets. Useful lives are reassessed annually. The amortisation periods used are 10 years. Investments in group enterprises are written down to the lower of recoverable amount and carrying amount. Investments in associatesInvestments in associates are recognised and measured according to the equity method. This means that investments are measured at the pro rata share of the enterprises' equity values plus unamortised goodwill and plus or minus unrealised pro rata intra-group profits and losses. Refer to the above section on business combinations for more details about the accounting policies used on acquisitions of investments in associates. Associates with negative equity value are measured at DKK 0. Any receivables from these enterprises are written down to net realisable value based on a specific assessment. If the Parent has a legal or constructive obligation to cover the liabilities of the relevant associate, and it is probable that such obligation will involve a loss, a provision is recognised that is measured at present value of the costs necessary to settle the obligations at the balance sheet date. Upon distribution of profit or loss, net revaluation of investments in associates is transferred to Reserve for net revaluation according to the equity method under equity. Goodwill is the positive difference between cost and fair value of assets and liabilities arising from acquisitions. Goodwill is amortised straight-line over its estimated useful life, which is fixed based on the experience gained by Management for each business area. For amounts of goodwill, useful life has been determined based on an assessment of whether the enterprises are strategically acquired enterprises with a strong market position and a long-term earnings profile and whether the amount of goodwill includes intangible resources of a temporary nature that cannot be separated and recognised as separate assets. Useful lives are reassessed annually. The amortisation periods used are 10 years. Investments in associates are written down to the lower of recoverable amount and carrying amount. Investments in associates fall within the definitions of both participating interests and associates, yet in these consolidated financial statements they have been presented as investments in associates because this designation reflects more accurately the Group’s involvement in the relevant entities. Receivables Receivables are measured at amortised cost, usually equaling nominal value, less writedowns for bad and doubtful debts. InventoriesInventories are measured at the lower of cost using the FIFO method and net realizable value. Cost consists of purchase price, design fees plus delivery costs. The net realisable value of inventories is calculated as the estimated selling price less completion costs and costs incurred to execute sales. Contract work in progressContract work in progress is measured at the selling price of the work carried out at the balance sheet date. The selling price is measured based on the stage of completion and the total estimated income from the individual contracts in progress. Usually, the stage of completion is determined as the ratio of actual to total budgeted consumption of resources. If the selling price of a project in progress cannot be made up reliably, it is measured at the lower of costs incurred and net realisable value. Each contract in progress is recognised in the balance sheet under receivables or liabilities other than provisions, depending on whether the net value, calculated as the selling price less prepayments received, is positive or negative. Costs of sales work and of securing contracts as well as finance costs are recognised in the income statement as incurred. Deferred taxDeferred tax is recognised on all temporary differences between the carrying amount and the tax-based value of assets and liabilities, for which the tax-based value is calculated based on the planned use of each asset. However, no deferred tax is recognised for amortisation of goodwill disallowed for tax purposes and temporary differences arising at the date of acquisition that do not result from a business combination and that do not have any effect on profit or loss or on taxable income. Deferred tax assets, including the tax base of tax loss carryforwards, are recognised in the balance sheet at their estimated realisable value, either as a set-off against deferred tax liabilities or as net tax assets. Deferred tax relating to re-taxation of previously deducted losses in foreign subsidiaries is recognised on the basis of an actual assessment of the purpose of each subsidiary. Tax payable or receivableCurrent tax payable or receivable is recognised in the balance sheet, stated as tax computed on this year's taxable income, adjusted for prepaid tax. PrepaymentsPrepayments comprise incurred costs relating to subsequent financial years. Prepayments are measured at cost. Cash Cash comprises cash in hand and bank deposits. Minority interestsOn initial recognition, minority interests are measured at the minority interests’ share of the acquiree’s net assets measured at fair value. No goodwill related to the minority interests’ equity interests in the acquiree is recognised. Other provisionsOther provisions comprise anticipated costs of decided and published restructuring, etc. Other provisions are recognised and measured as the best estimate of the expenses required to settle the liabilities at the balance sheet date. Provisions that are estimated to mature more than one year after the balance sheet date are measured at their discounted value. Mortgage debt At the time of borrowing, mortgage debt to mortgage credit institutions is measured at cost which corresponds to the proceeds received less transaction costs incurred. Mortgage debt is subsequently measured at amortised cost. This means that the difference between the proceeds at the time of borrowing and the nominal repayable amount of the loan is recognised in the income statement as a financial expense over the term of the loan applying the effective interest method. Lease liabilities Lease liabilities relating to assets held under finance leases are recognised in the balance sheet as liabilities other than provisions, and, at the time of inception of the lease, measured at the present value of future lease payments. Subsequent to initial recognition, lease liabilities are measured at amortised cost. The difference between present value and nominal amount of the lease payments is recognised in the income statement as a financial expense over the term of the leases. Other financial liabilities Other financial liabilities are measured at amortised cost, which usually corresponds to nominal value. Prepayments received from customersPrepayments received from customers comprise amounts received from customers prior to delivery of the goods agreed or completion of the service agreed. Deferred incomeDeferred income comprises income received for recognition in subsequent financial years. Deferred income include grants received for development projects according to the Danish Financial Statements Act's requirement for gross presentation cannot be offset in the development cost in the balance sheet but must presented separately under liabilities. Prepayment are measured at cost less a straight-line income recognition in line with the linear depreciation of the associated activated project. Cash flow statement The cash flow statement shows cash flows from operating, investing and financing activities as well as cash and cash equivalents at the beginning and the end of the financial year. Cash flows from operating activities are presented using the indirect method and calculated as the operating profit/loss adjusted for non-cash operating items, working capital changes and income taxes paid. Cash flows from investing activities comprise payments in connection with acquisition and divestment of enterprises, activities and fixed asset investments as well as purchase, development, improvement and sale, etc. of intangible assets and property, plant and equipment, including acquisition of assets held under finance leases. Cash flows from financing activities comprise changes in the size or composition of the contributed capital and related costs as well as the raising of loans, inception of finance leases, instalments on interest-bearing debt, purchase of treasury shares and payment of dividend. Cash and cash equivalents comprise cash and short-term securities with an insignificant price riskless short term bank loan. Annual report Auditor's report on audited financial statements ParsePort XBRL Converter 2025-01-01 2025-12-31 2024-01-01 2024-12-31 2026-05-02 Reporting class C, large enterprise 2026-05-02 45998517 Kvadrat A/S Lundbergsvej 10 8400 Ebeltoft Opinion Basis for Opinion 2026-05-02 33963556 Deloitte Statsautoriseret Revisionspartnerselskab City Tower, Værkmestergade 2 8000 Aarhus C