The directors present the strategic report for the year ended 31 December 2024.

Sonae Arauco businesses, and wood-based panel industry in general, were still confronted with the market low performance in Europe, even with interest rates decrease and inflation levels controlled, which could have suggested an increase of confidence from consumers, but that did not materialize in 2024.

Market prices reduced significantly and raw materials prices also, although to a lesser extent, impacting negatively the profitability of our operations, especially in Germany. With the energy price volatility impacts in our operations, Sonae Arauco was continuing looking for opportunities to optimize these costs.

In the United Kingdom, the wood-based industry faced similar challenges. Despite a slight increase in woodland area, the market performance remained subdued. The industry continued to grapple with fluctuating raw material prices and energy costs, which affected overall profitability.

Consumer behavior in the UK showed some positive trends in 2024. Consumer confidence increased. Younger consumers, particularly those aged 18-34, were more likely to feel strongly positive. This optimism, however, did not fully translate into increased spending on wood-based products. Consumers showed a growing preference for environmentally friendly and ethical products. This trend indicates a shift towards more sustainable consumption patterns, which could influence the demand for wood-based products in the long term.

As a result of the business and operations carried out, the Group is exposed to several financial risks, namely credit risk, market risks (interest risk, price risk and liquidity risk) and legal risks. The Group’s global risk management policy, which is handled on a centralized basis, attempts to minimize the potential adverse effects on the Group’s financial performance arising from the relevant risk.

Turnover for the year was £23.3M (2023 - £26.1M) representing a 10% decrease on the prior year.

Profit for the financial year was £32.3K (2023 - £70.6K).

Net assets remained consistent at £1.7M (2023 - £1.7M).

By order of the board

The directors present their annual report and financial statements for the year ended 31 December 2024.

The principal activity of the company is the import and sale of chipboard and related wood-based products ("Product").

The profit for the financial year is £32,264 (2023: £70,551). The directors do not recommend the payment of a dividend (2023: £nil).

No ordinary dividends were paid. The directors do not recommend payment of a final dividend.

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

At the time this report is approved, no qualifying third party indemnity provisions or qualifying pension scheme indemnity provisions are in place for the benefit of one or more of the directors. At no time during the year were any such provisions in force for the benefit of one or more persons who were then directors.

No donations were made to any political party during the year (2023: £nil).

The company is exposed to commodity price risk as a result of its operations. However, given the size of the company's operations, the costs of managing exposure to commodity price risk exceed any potential benefits. The directors will revisit the appropriateness of this policy should the company's operations change in size or nature. The company has no exposure to equity securities price risk as it holds no listed or other equity investments.

The company has a policy of maintaining debt at fixed rates to ensure the certainty of the future interest cash flows. The directors will revisit the appropriateness of this policy should the company's operations change in size or nature.

While the greater part of the company's revenues and expenses are denominated in Sterling, the company is exposed to some foreign exchange risk in the normal course of business, principally on the purchase and sale of certain goods invoiced in Euros. While the company has not used financial instruments to hedge foreign exchange exposure, this position is kept constantly under review.

The company has implemented policies which require appropriate credit checks on potential customers before sales are made. The amount of exposure to individual customers is subject to a limit which is reassessed regularly by the Board.

The company actively maintains a mixture of short-term debt finance that is designed to ensure the company has sufficient available funds for operations and planned expansions.

There have been no significant events affecting the Company since the year end.

The year 2024 was marked globally, by inflation control and the progressive reduction of interest rates, which impacts positively demand, creating an opportunity for a gradual recovery throughout 2025 in all regions where Sonae Arauco operates, as consumer confidence could be restored and private consumption increase.

A more significant recovery in market conditions and demand in Europe could occur if the war in Ukraine ends and the process of rebuilding the country begins, which seems a scenario to be gaining some strength after Trump's election as US President, but Trump's global commercial strategy with increasing trade tariffs brings an additional level of uncertainty on the global markets.

Concerning raw materials prices, there is some uncertainty mainly related to the evolution of energy prices. In Europe, the year 2024 seems to have marked the beginning of the normalization of energy prices, and are expected to remain at similar levels in 2025 however, currently, there is enormous volatility in prices, with an upward trend.

Despite these uncertainties, we will continue focusing on the initiatives included in our strategic roadmap, namely on our journey towards carbon neutrality, on growing our decorative and construction businesses, on promoting a culture of innovation, on enlarging long-term partnerships with preferred customers and suppliers and on improving our value propositions to the selected market segments.

The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

• select suitable accounting policies and then apply them consistently;

• make judgements and accounting estimates that are reasonable and prudent;

• state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;

• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

In accordance with section 418 of the Companies Act 2006, each of the persons who is a director at the date of approval of this report confirms that:

• so far as each director is aware, there is no relevant audit information of which the company's auditors are unaware; and

• each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

This confirmation is given and should be interpreted in accordance with the provision of Section 418 of the Companies Act 2006.

Sedulo Audit Limited was appointed as auditor during the year and have expressed their willingness to continue in office as auditor and is deemed to have been reappointed in accordance with Section 487 of the Companies Act 2006.

We have audited the financial statements of Sonae Arauco (UK) Limited (the 'company') for the year ended 31 December 2024 which comprise the profit and loss account, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

• give a true and fair view of the state of the company's affairs as at 31 December 2024 and of its profit for the year then ended;

• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

• have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other 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 opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude 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.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

• the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

• the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

• adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

• the financial statements are not in agreement with the accounting records and returns; or

• certain disclosures of directors' remuneration specified by law are not made; or

• we have not received all the information and explanations we require for our audit.

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Our objectives are to obtain reasonable assurance about whether the 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 (UK) 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 financial statements. A further description of our responsibilities is on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

The auditor’s explanation of its audit response will depend on the risks identified but may include:

- Enquiry of management, those charged with governance and the entity’s solicitors (or in-house legal team) around actual and potential litigation and claims.

- Enquiry of entity staff in tax and compliance functions to identify any instances of non-compliance with laws and regulations.

- Reviewing minutes of meetings of those charged with governance.

- Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations.

- Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness, and evaluating the business rationale of significant transactions outside the normal course of business.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

The profit and loss account has been prepared on the basis that all operations are continuing operations.

The notes on pages 11 to 19 form part of these financial statements.

The notes on pages 11 to 19 form part of these financial statements.

These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.

The notes on pages 11 to 19 form part of these financial statements.

Sonae Arauco (UK) Limited is a private company limited by shares incorporated in England and Wales (company registration number 02210300). The registered office is Unit 6 Connect Business Village, 24 Derby Road, Liverpool, Merseyside, England, L5 9PR.

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

These financial statements are prepared on a going concern basis, under the historical cost convention.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The company is a wholly owned subsidiary of Sonae Arauco, SA. It is included in the consolidated financial statements of Sonae Arauco, SA, which are publicly available. Consequently, the company is a qualifying entity as per FRS 102 and has taken advantage of the disclosure exemption of FRS 102, Section 1, paragraph 1, 12(b) statement of cash flows, section 11 and 12 recognition, derecognition, measurement and disclosure of financial instruments, In addition, the company has taken advantage of the exemption, under FRS 102 from disclosing transactions with other members of the group headed by Sonae Arauco, SA.

Management assessed the Group’s capacity to keep on as a going concern using all relevant financial, commercial and other information, facts and circumstances, including subsequent events which were available at the date of issue of these consolidated financial statements. As a result of this assessment and in accordance with the treasury forecast prepared for the forthcoming months, Management concluded that the Group has adequate resources to keep its activities and that there is no intention to cease activities at short term, therefore considering adequate the preparation of these consolidated financial statements under a going concern basis.true

On the basis of these expectations the directors consider it appropriate to continue to prepare the financial statements on a going concern basis.

Revenue is measured at the fair value of the consideration received or receivable and represents the amount receivable for goods supplies or services rendered, net of returns, discounts and rebates allowed by the company and value added tax.

The company recognises revenue when the significant risks and rewards of ownership have been transferred to the buyer, the company retains no continuing involvement or control over the goods, the amount of revenue can be measured reliably and it is probable that future economic benefits will flow to the entity.

The company earns commission in relation to the sale of goods. Commission income is recognised on an accruals basis in accordance with the substance of the relevant agreement.

Other income

Recharges of expenses to other members of the group headed by Sonae Arauco SA , insurance claims and government grants received, and receivable are categorised as other income.

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is calculated, using the straight-line method, to allocate the cost of the assets to their residual values over their estimated useful lives as follows:

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Inventories are recognised as an expense in the period in which the related revenue is recognised.

Cost is determined on the moving average weighed cost method. Cost includes the purchase price, including taxes and duties and transport and handling directly attributable to bringing the inventory to its present location and condition.

At the end of each reporting period inventories are assessed for impairment. If an item of inventory is impaired, the identified inventory is reduced to its selling price less costs to complete an impairment charge is reversed, up to the original impairment loss as is recognised as a credit in the profit and loss account.

Cash and cash equivalents include cash in hand, deposits help at call with banks, other short-term highly liquid investments with original maturities of three months or less and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities,

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Current tax is the amount on income tax payable in respect of taxable profit for the year or prior years. Tax is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the period end.

Deferred tax arises from timing differences that are difference between taxable profits and total comprehensive income as stated in the financial statements. These timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements.

Deferred tax is recognised on all timing differences at the reporting date except for certain exceptions. Unrelieved tax losses and other deferred tax assets are only recognised when it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the period end and that are expected to apply to the reversal of the timing difference.

The company provides a range of benefits to employees, including annual bonus arrangements, paid holiday arrangements and defined contribution pension plans,

Short term benefits, including holiday pay and other similar non-monetary benefits, are recognised as an expense in the period in which the service is received.

The company operates an annual bonus plan for employees. An expense is recognised in the profit and loss account when the company has a legal or constructive obligation to make payments under the plan as a result of past events and a reliable estimate of the obligation can be made.

At inception the company assesses agreements that transfer the right to use assets. The assessment considers whether the arrangement is, or contains a lease based on the substance of the arrangement.

Leases of assets that transfer substantially all the risks and rewards incidental to ownership are classified as finance leases. The company does not have any finance leases.

Leases that do not transfer all the risks and rewards of ownership are classified as operating leases. Payments under operating leases are charged to the profit and loss account on a straight-line basis over the period of the lease. Incentives received to enter into an operating lease are credited to the profit and loss account, to reduce the lease expense on a straight-line basis over the period of the lease.

Grants relating to revenue are recognised in income systemically over the periods in which the company recognises the related costs for which the grant is intended to compensate.

The company's functional and presentation currency is pound sterling because that is the primary economic environment in which the company operates.

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of transaction.

Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the profit and loss account.

Share capital

Ordinary shares are classified as equity.

Critical accounting judgements and estimation uncertainty.

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

All sales arose in the UK (2023: same).

The average monthly number of persons (including directors) employed by the company during the year was:

Their aggregate remuneration comprised:

The company operates a defined contribution pension scheme on behalf of those directors and employees who have applied for membership, The assets of the scheme are help separately from those of the company in an independently administered fund. The pension charge for the year was £12,999 (2023: £12,599).

As at 1st April 2023 the government enacted a change in the national income tax rate from 19% to 25%.

The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:

Amounts owed by group undertakings are trading balances that are repayable on demand and interest free.

The amounts owed to parent and fellow group undertakings are unsecured, subject to interest at 2.94% pa (2023: 2.94%) on a 5 year revolving loan agreement incepted on 27 September 2022.

Potential deferred tax assets comprise:

The Company is party to a Group cash pooling arrangement held by the parent company.

The company's future minimum operating lease payments are as follows:

As a wholly owned subsidiary of Sonae Arauco S.A, whose financial statements are publically available, the company has taken advantage of the exemption under FRS 102 from disclosing transactions with other members of the group headed by Sonae Arauco, S.A.

The directors regard Efanor Investimentos, SGPS, S.A, a company in incorporated in Portugal, and AntarChile, S.A, a company incorporated in Chile, as the ultimate parent companies and the ultimate controlling parties.

The immediate parent company, Sonae Arauco, S.A, a company incorporated in Spain, is the parent undertaking of the largest and smallest group of undertakings to consolidated these financial statements at 31 December 2023. The consolidated financial statements of Sonae Arauco, S.A are available from Ulises 18, 28043 Madrid, Spain.

Sonae Arauco (UK) Limited ["the Company"] is a private limited company which imports and sells chipboard and related wood based products ["Product"] manufactured by Sonae Arauco, SA Group [the "Group"]. The company operates from office premises in Liverpool, United Kingdom.

The company is a private company limited by shares, Incorporated in the United Kingdom under he Companies Act 2006 and registered in England and Wales. The address of the registered office is Unit 6 Connect Business Village, 24 Derby Road, Liverpool L5 9PR.