ANDREAS STIHL LIMITED

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Andreas Stihl Limited

Annual Report and Financial Statements

for the year ended 31 December 2020

Company Number: 01376302

ANDREAS STIHL LIMITED STRATEGIC REPORT FOR THE YEAR ENDED 31 DECEMBER 2020

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The directors present their Strategic Report on the company for the year ended 31 December 2020. Principal activity The company’s principal activity is the marketing and sale of chainsaws, power tools, cleaning systems and garden machinery in the United Kingdom together with allied accessories, forestry equipment, safety clothing and spare parts. Review of the business During the year, the turnover of the company increased by 16.9% from £106,848,539 to £124,940,071. The Directors believe that the company has maintained its overall market share. Gross margin has decreased to 23.6% (2019: 25.0%), due largely to changes in the product mix sold in the year. Position of the business and dividends The company’s profit for the financial year was £8,791,280 (2019: £4,747,647). The company’s net assets for the financial year were £35,511,498 (2019: £27,720,218) A dividend of £Nil has been proposed since the year end for the year ended 31 December 2020 (2019: £1,000,000). The aggregate dividends on the ordinary shares recognised as an expense and paid during the year amount to £1,000,000 (2019: Nil). Key Performance Indicators Locally, progress is monitored via growth in Sales compared to the prior year. Performance is shown below with prior year comparatives expressed as %.

2020 2019 Growth in Sales +16.9 % +3.7% Despite the Global Pandemic, demand for our products has remained strong, and growth in sales has been achieved by increased volumes. The strong sales growth has been driven by consumers in lockdown working on their homes and gardens. Principal risks and uncertainties Brexit and the Global Pandemic may impact upon consumer confidence and therefore demand for the company’s products.


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Covid Risk The Directors have considered the impact of COVID-19 carefully and continue to manage the risks to our people and supply chain. Our main office site has been made a Covid secure workplace and the team working onsite have been educated as to how to operate safely in such an environment. Many of our staff have worked at home through the majority of 2020 and continued to do so into 2021. We have put in place policies and procedures to ensure a safe working environment for those staff, and we have provided support for the wellbeing of all our staff. The supply chain has been protected by increased focus on the forecasting of sales and the associated stock requirements, coupled with regular communication with Group supply chain management. Brexit Risk The agreement reached between the UK Government and the EU reduced the immediate risk from Brexit, and whilst there will be some additional costs and administration as a result of changes in customs arrangements, these do not significantly affect the business. The Directors of the Group manage the Group’s risks at a Group level, rather than an individual business unit level. Group is defined as the main Head Office. For this reason, the company’s directors believe that further discussion of the company’s risks would not be appropriate for an understanding of the development, performance or position of the business. Corporate Governance and s172 reporting The board of directors of Andreas Stihl Ltd consider that they have acted in the way they consider, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole (having regard to the stakeholders and matters set out in s172(1)(a-f) of the Act) in the decisions taken during the year ended 31 December 2020. The progress of the Company and its success towards achieving the objectives below are the subject of regular management meetings and discussion with the Head Office in Germany. The Group globally is very clear in its support of these matters and the whole ethos of the business is driven by the Family participation in the day to day management of the Group.

• The Directors have always taken a long term view in the running of the business, with all decisions taken for the best long term future of the company. A long term strategy is set by the parent Company in discussion with the Directors, which is then delivered at a local level. The most important item in the 2020 was the continuing project to purchase land and construct a new headquarters building. This has been discussed and approved by the Board and lays out a long term future for the company.


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• Our employees are essential to the success of our business. We aim to be a responsible employer in our approach to the long term careers that we offer to our employees. The health, safety and well-being of our employees is one of our primary considerations and is central in our decision making. This is reviewed and discussed in regular meetings with Management and Staff. Throughout the year, the company has particularly focussed on improving communication with all our staff. The lockdowns arising from the Covid pandemic have resulted in different ways of working, and it has been essential to adapt our communication for the different staff populations in the business. This has included surveys, regular bulletins, socially distanced face to face briefings and video briefings.

• The company has long term relationships with many of our customers and suppliers. These relationships are based on mutual trust and respect, allowing them to last for many years. These relationships are nurtured through a high level of support provided by the Company to our customers, including development of their businesses, both through Training and Development of their staff and by cooperating on investment to enhance their premises.

• As a family-owned company, the STIHL Group has a special responsibility for people and nature. We respect natural resources through efficient and sustainable processes and products. We have introduced the Streamlined Energy and Carbon Report this year, and will use the work done as a starting point for the company to identify areas where improvements can be made.

• All our actions are based on the fundamental values of sincerity, lawfulness and fairness. We stand for an open and trusting corporate culture. All Staff are aware of the Group Corporate Culture guidelines and these are reviewed and discussed on a regular basis.

On behalf of the board Nicholas Burroughs Director 29th April 2021 Company Number: 01376302

ANDREAS STIHL LIMITED DIRECTORS’ REPORT FOR THE YEAR ENDED 31 DECEMBER 2020

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The directors present their report and the audited financial statements of the company for the year ended 31 December 2020. Future developments The directors are satisfied with the performance of the company and have reviewed the prospects for the future with the impact of COVID-19 in mind, and trading levels are expected to be maintained in 2021. Our new Managing Director, Kay Green, joined the company on 1st March, and will be working with the management team to review the activities of the business, and to identify areas for improvement and development. The start of 2021 has seen very strong sales, coupled with supply issues for products coming from the Group manufacturing plants around the world. We are working with Group to obtain stock as quickly as possible, and are increasing communication to our Dealers to keep them informed of the situation. Financial risk management The company’s operations expose it to a variety of financial risks that include the effects of changes in exchange risk, price risk, and credit risk. The Group has in place a risk management programme that seeks to limit the adverse effects on the financial performance of the company by monitoring levels of debt finance and the related finance costs. Exchange risk Given the size of the company, the directors have delegated responsibility of monitoring exchange rate risk to the parent company, Stihl Holding AG & Co.KG. This company has procedures and policies for managing this risk through the use of forward contracts. Price risk The company is exposed to commodity price risk as a result of its operations. 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. Credit risk Financial instruments which potentially expose the company to a concentration of credit risk consist primarily of cash equivalents and trade debtors. Cash equivalents are deposited with high-credit quality financial institutions. The company provides credit to customers in the normal course of business. Collateral is not required for these receivables, but ongoing credit evaluations of customers’ financial conditions are performed.


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The company has implemented policies that require appropriate credit checks on potential customers before sales are made. The amount of exposure to any individual creditor is subject to a limit, which is assessed regularly by management. Stakeholder engagement As described in the Strategic Report, the Directors are focussed on maintaining and growing long term relationships with Customers, Suppliers and other stakeholders. The day to day management of the company is grounded in the Group ethos, established nearly 100 years ago when the company was founded by the Grandfather of the current Advisory Board Chairman. This is a family company with a family approach to how we do business. Streamlined Energy and Carbon Report Background This Streamlined Energy and Carbon Report has been produced in accordance with The Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018, which requires organisations to report their energy use and associated greenhouse gas emissions in their annual reports. Reporting period and Base Year The reporting period is our financial year 01/01/2020 to 31/12/2020. This is the first year that STIHL GB is in scope of the Regulations, so 2020 will be the Base Year. It is recognised that 2020 may not be a typical year for energy use and emissions due to the impact of the Covid-19 pandemic. Scope We have used the financial control approach to determine our operational boundary. As such the scope of reporting is: • Energy & emissions related to buildings:

Scope 1, direct emissions – natural gas, fugitive emissions Scope 2, indirect emissions – purchased electricity

• Business travel in company owned/leased vehicles, where we pay for the fuel (Scope 1) • Business travel in employees vehicles, where we reimburse the fuel (Scope 3) • Other business travel emissions, including from flights, rail travel and the use of taxis (Scope 3) Our main premises, STIHL House is included in the organisational boundary and therefore this report. Leased warehouse space in another location has been excluded from scope as we have no financial or operational control related to energy or waste at that location, and only lease only a small proportion of the total warehouse.


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Approach and calculation methodology We are committed to developing an accurate and transparent environmental footprint and related disclosures and reports, which will support our environmental sustainability programme and impact reduction measures. We have worked closely with foot printing specialist Consciam Limited to calculate our emissions using an industry standard approach (based on the Greenhouse Gas Protocol) and the relevant emission factors for 2020 provided by the UK Government (the Department for Environment, Food and Rural Affairs, Defra, and the Department for Business, Energy and Industrial Strategy, BEIS). We have collated data on gas and electricity consumption and verified the data back to invoices/supplier data in most cases. Our Scope 1 business travel data is based on a combination of actual mileage data and estimated mileage figures provided by our leasing company. We applied a reasonable adjustment for some vans that would have been driven less in 2020 than lease company estimates suggest, due to the cancellation of events as a result of the Covid-19 pandemic. Emissions related to onsite forklift trucks are included under our Scope 2 purchased electricity emissions as they are all electric and charged onsite. Outsourced deliveries have not been included in the scope of this report but will be assessed as part of a wider impact assessment exercise. The process has been documented in a method statement for future reference and enhancement. The footprint and method statement developed by Consciam Limited have been subject to an independent third-party review. The approach taken in developing this report is in accordance with HM Government’s Environmental Reporting Guidelines: Including streamlined energy and carbon reporting guidance, March 2019. Results

Aspect Emissions FY 2020 (tCO2e)

Direct emissions (Scope 1) • Natural gas • Fuel for company vehicles • Fugitive emissions

77.81 137.34

0

Total Scope 1 emissions 215.15 Indirect emissions (Scope 2) • Purchased electricity

123.03

Total Scope 2 emissions 123.03 Total Scope 1 & 2 emissions 338.18 Other indirect emissions (Scope 3) • Business travel in employee-owned vehicles • Transmission and other losses • Water and wastewater • Waste

0.93 3.55 0.74 2.99

Total Scope 3 emissions 8.21


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Total emissions 346.39 Intensity metric: Tonnes Gross CO2e emissions per employee 2.84

Energy use kWh

• Electricity • Gas • Travel (Owned/leased vehicles plus grey fleet)

527,694 423,171 557,812

Total energy consumption 1,508,677 kWh Energy efficiency measures We have continued our proactive approach to energy efficiency in 2020. The COVID-19 pandemic resulted in fewer staff working on site, and so measures were taken where to switch off lights in certain sections of the office and reduce heating/air-conditioning. Our LED lighting replacement programme has also continued. Energy consumption at STIHL House reduced by approximately 15% compared to 2019. In 2020 the electricity supply for STIHL House was switched from brown energy to 100% green energy (a wind backed generation tariff) which will take effect from February 2020. Our “Cycle to Work Scheme” was once again offered to members of staff and we saw a significant increase in take up from two to nine participants. An increasing number of employees are now choosing electric vehicles and hybrids, in part facilitated by the onsite electric vehicle charging points we installed in 2016. We also developed a detailed environmental footprint calculation and reporting process in 2020 which will be used to set local energy and other objectives and targets. We have worked closely with internal teams and our waste contractors to both minimise waste and divert the remaining from landfill. For example, wooden pallets damaged or broken during day to day warehouse operations are now refurbished on-site and re-used, rather than collected as scrap waste. In early 2020, the canteen was identified as an area where a reduction in single use plastics could be achieved. A review resulted in the following changes being implemented: • Single use plastic take away salad containers removed, replaced with cardboard • Plastic disposable cups replaced with glass tumblers • Staff encouraged to re-use cardboard coffee cups throughout the day A further dual electrical vehicle charging point has been installed in February 2021 taking our total to six charge points. We will continue to closely monitor energy consumption and waste and looking for efficiency opportunities. We will be holding an environmental impact reduction workshop in spring 2021, including further work on risks and opportunities. Projects and initiatives already being consider for 2021 include: • Developing local environmental objectives and targets • Continuing our LED lighting project • Further encouraging the switch to electric vehicles • Exploring expense payments for cycling, and additional passenger allowances to encourage car sharing


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• Exploring options for offsetting our carbon footprint • Improving onsite processing and segregation of electrical components, metal, polymers and COSHH

containers allowing for a much easier recycling process and more recycling. Our parent company, as part of the STIHL Group has set a carbon neutrality target for scopes 1 and 2 to be achieved by 2023 - 2028. Andreas Stihl Limited has not been subject to any environmental fines or penalties in the disclosure period (the last five years). Post Balance Sheet Events Following the year end, the company completed the purchase of land for the construction of a new headquarters and warehouse building, costing £7.9m. Directors

The directors of the company at 31 December 2020, and who held office throughout the year, and up to the date of signing the financial statements, were: Mr Robert Lennie (retired 31st December 2020) Mr Norbert Pick Mr Karl Angler Mr Nicholas Burroughs Mrs Kay Green (appointed 1st March 2021)

Statement of directors' responsibilities in respect of the financial statements

The directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulation. Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have prepared the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland”, 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 the financial statements, the directors are required to:

• select suitable accounting policies and then apply them consistently;

• state whether applicable United Kingdom Accounting Standards, comprising FRS 102, have been followed, subject to any material departures disclosed and explained in the financial statements;

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


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• 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 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. 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. Directors' confirmations In the case of each director in office at the date the Directors’ Report is approved:

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

• they have taken all the steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the company’s auditors are aware of that information.

Independent auditors The auditors, PricewaterhouseCoopers LLP, have indicated their willingness to continue in office and a resolution concerning their re-appointment will be proposed at the Annual General Meeting. On behalf of the board Nicholas Burroughs Director 29th April 2021 Company Number: 01376302

ANDREAS STIHL LIMITED INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF ANDREAS STIHL LIMITED

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Report on the audit of the financial statements Opinion

In our opinion, Andreas Stihl Limited’s financial statements:

• give a true and fair view of the state of the company’s affairs as at 31 December 2020 and of its profit for the year then ended;

• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland”, and applicable law); and

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

We have audited the financial statements, included within the Annual Report, which comprise: the Balance Sheet as at 31 December 2020; the Statement of Income and Retained Earnings for the year then ended; and the notes to the financial statements, which include a description of the significant accounting policies.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities under ISAs (UK) are further described in the Auditors’ responsibilities for the audit of the financial statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence

We remained independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, which includes the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements.

Conclusions relating to going concern

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.

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.

However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the company's ability to continue as a going concern.

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


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Reporting on other information

The other information comprises all of the information in the Annual Report other than the financial statements and our auditors’ report thereon. The directors are responsible for the other information. Our opinion on the financial statements does not cover the other information and, accordingly, we do not express an audit opinion or, except to the extent otherwise explicitly stated in this report, any form of assurance thereon.

In connection with our audit of the financial statements, 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 audit, or otherwise appears to be materially misstated. If we identify an apparent material inconsistency or material misstatement, we are required to perform procedures to conclude whether there is a material misstatement of the financial statements or a material misstatement of the other information. 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 based on these responsibilities.

With respect to the Strategic report and Directors' Report, we also considered whether the disclosures required by the UK Companies Act 2006 have been included.

Based on our work undertaken in the course of the audit, the Companies Act 2006 requires us also to report certain opinions and matters as described below.

Strategic Report and Directors’ Report

In our opinion, based on the work undertaken in the course of the audit, the information given in the Strategic report and Directors' Report for the year ended 31 December 2020 is consistent with the financial statements and has been prepared in accordance with applicable legal requirements.

In light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we did not identify any material misstatements in the Strategic report and Directors' Report.

Responsibilities for the financial statements and the audit Responsibilities of the directors for the financial statements

As explained more fully in the Statement of directors' responsibilities in respect of the financial statements, the directors are responsible for the preparation of the financial statements in accordance with the applicable framework and for being satisfied that they give a true and fair view. The directors are also responsible for such internal control as they 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.


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Auditors’ responsibilities for the audit of the financial statements 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 auditors’ 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.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

Based on our understanding of the company and industry, we identified that the principal risks of non-compliance with laws and regulations related to tax legislation, employment law, and product safety, and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the financial statements such as the Companies Act 2006. We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to posting inappropriate journal entries to manipulate financial results and potential management bias in determining accounting estimates. Audit procedures performed included:

• enquiry of management and those charged with governance around actual and potential litigation and claims or 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; and • auditing the risk of management override of controls, including through testing journal entries and other

adjustments for appropriateness, testing accounting estimates (because of the risk of management bias), and evaluating the business rationale of any significant transactions outside the normal course of business.

There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.

A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors’ report.


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Use of this report

This report, including the opinions, has been prepared for and only for the company’s members as a body in accordance with Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

Other required reporting Companies Act 2006 exception reporting

Under the Companies Act 2006 we are required to report to you if, in our opinion:

• we have not obtained all the information and explanations we require for our audit; or • adequate accounting records have not been kept by the company, or returns adequate for our audit

have not been received from branches not visited by us; or • certain disclosures of directors’ remuneration specified by law are not made; or • the financial statements are not in agreement with the accounting records and returns.

We have no exceptions to report arising from this responsibility.

Charlotte Anderson (Senior Statutory Auditor)

for and on behalf of PricewaterhouseCoopers LLP

Chartered Accountants and Statutory Auditors

Reading

29th April 2021

canderson036

Stamp

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ANDREAS STIHL LIMITED

STATEMENT OF INCOME AND RETAINED EARNINGS

for the year ended 31 December 2020

Note

2020 2019 £ £

Turnover 4 124,940,071 106,848,539

Cost of sales (95,430,811) (80,141,303)

Gross Profit 29,509,260 26,707,236

Distribution costs (9,904,370) (11,598,437) Administrative expenses (8,644,981) (9,093,130) Other operating income 24,339 43,318 Operating profit 5 10,984,248 6,058,987

Interest receivable and similar income 7 10,493 46,719 Interest payable and similar expenses 8 (9,628) (20,811)

Profit before taxation 10,985,113 6,084,895

Tax on profit 9 (2,193,833) (1,337,248)

Profit and total comprehensive income for the financial year

8,791,280 4,747,647

Retained earnings at 1 January 21,720,218 16,972,571

Dividend paid 10 (1,000,000) -

Retained earnings at 31 December 29,511,498 21,720,218

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ANDREAS STIHL LIMITED

BALANCE SHEET as at 31 December 2020

Note

2020 £

2019

£ Fixed assets Intangible assets

11

806

4,421

Tangible assets 12 5,914,420 5,793,118

5,915,226 5,797,539 Current assets Stocks

13

14,667,816

20,343,791

Debtors 14 18,320,856 13,586,914 Cash at bank and in hand 20,400,642 4,944,898

53,389,314 38,875,603

Creditors: amounts falling due within one year

15

(23,793,042)

(16,952,924)

Net current assets 29,596,272 21,922,679

Net assets 35,511,498 27,720,218 Capital and reserves Called up share capital 16 6,000,000 6,000,000 Retained earnings 29,511,498 21,720,218

Total equity 35,511,498 27,720,218 The notes on pages 17 to 26 are an integral part of these financial statements. The financial statements on pages 15 to 26 were approved by the board of directors on 29th April 2021 and were signed on its behalf by:- Nicholas Burroughs Director Andreas Stihl Limited Registered Number: 01376302

ANDREAS STIHL LIMITED NOTES TO THE FINANCIAL STATEMENTS

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1. General Information Andreas Stihl Limited is a private company limited by shares and is incorporated in the United Kingdom and registered in England, registration number 01376302. The registered office is at Stihl House, Stanhope Road, Camberley, Surrey, GU15 3YT. 2. Statement of compliance The financial statements of Andreas Stihl Limited have been prepared in compliance with United Kingdom Accounting Standards, including Financial Reporting Standard 102, ‘The Financial Reporting Standard applicable in the United Kingdom and the Republic of Ireland’ (‘FRS 102’) and the Companies Act 2006. 3. Summary of significant accounting policies The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

(a) Basis of preparation of financial statements The financial statements have been prepared on a going concern basis, under the historical cost convention. The presentation currency is in £ sterling. The company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by FRS 102:

• the requirements of Section 7 Statement of Cash Flows • the requirements of Section 3 Financial Statement Presentation paragraph 3.17 (d) • the requirements of Section 11 Financial Instruments paragraphs 11.41(b), 11.41(c), 11.41(e), 11.41(f),

11.42, 11.44, 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b), 11.48(c) and 12.26 • the requirements of Section 33 Related Party Disclosures paragraph 33.7 and 33.1A

The principle accounting policies which have been applied consistently throughout the year are set out below:

(b) Critical accounting estimates and assumptions The company makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities within the next financial year are addressed below.

i) Inventory provision


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The nature of the company’s inventory means that it is necessary to consider the recoverability of the cost of inventory and the associated provisions required. When calculating the inventory provision, management considers the nature and condition of the inventory, as well as applying assumptions around the saleability of finished goods. See note 13 for the net amount of the inventory and the impairment cost incurred during the year.

ii) Impairment of debtors

The company makes an estimate of the recoverable value of trade and other debtors. When assessing impairment of trade and other debtors, management considers factors including the current payment record of the debtor, the ageing profile of debtors and historical experience. See note 14 for the net carrying value of debtors.

(c) Turnover Turnover represents the price of goods less discount delivered to customers during the year and excludes value added tax. Turnover is recognised at the date of dispatch. (d) Intangible assets Intangible assets represent licences and external development costs and are stated at historic purchase cost less accumulated amortisation and accumulated impairment losses. Amortisation is provided on a straight line basis over the estimated useful life of the asset, at the following rate:

% Licences and development costs 20 Computer software 20

(e) Tangible assets Tangible assets are stated at historic purchase cost less accumulated depreciation and accumulated impairment losses. The cost of tangible assets is their purchase cost together with any incidental costs of acquisition. Depreciation is not provided on freehold land. On other assets, depreciation is provided so as to write off the cost less the estimated residual value by equal annual instalments based on the estimated useful lives of the assets, at the following rates:

% Freehold buildings 2 Freehold improvements 10 Furniture and fittings 12.5 - 25 Motor vehicles 20 - 25


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(f) Stocks

Stocks are valued at the lower of cost and selling price less costs to complete and sell. Cost represents the lower of the latest purchase price and the weighted average purchase price and includes freight and duty into the United Kingdom, and all other costs incurred in bringing the inventories to their present location and condition. Where necessary, provision is made for obsolete, slow moving and defective stocks.

(g) Translation of foreign currencies Monetary assets and liabilities denominated in foreign currencies are translated into sterling at rates of exchange ruling at the balance sheet date. Trading transactions denominated in foreign currencies are translated into sterling at the rate of exchange ruling at the date of the transaction. Exchange gains or losses are included in the profit and loss account in the period in which they arise (h) Operating leases Leases that do not transfer all the risks and rewards of ownership are classified as operating leases. Costs in respect of operating leases are charged to the profit and loss account on a straight-line basis over the lease term. (i) Taxation UK Corporation tax is provided at amounts expected to be paid using the tax rates and laws that have been substantively enacted by the balance sheet date. Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date, where transactions or events that result in an obligation to pay more tax in the future or a right to pay less tax in the future have occurred at the balance sheet date. Deferred taxation is recognised as a liability or asset if transactions have occurred at the balance sheet date that give rise to an obligation to pay more taxation in the future, or a right to pay less taxation in the future. Deferred tax assets and liabilities recognised have not been discounted. Deferred tax is measured at the average tax rates that are expected to apply in the periods in which the timing differences are expected to reverse based on tax rates and laws that have been enacted or substantively enacted by the balance sheet date. (j) Pensions The company operates a defined contribution scheme. The cost of providing retirement pensions and related benefits is charged to the profit and loss account as incurred. Amounts not paid are shown in accruals in the balance sheet. The assets of the scheme are held separately from those of the company in independently administered funds.


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(k) Cash and cash equivalents Cash and cash equivalents includes cash in hand and deposits held at call with banks. (l) Share capital Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new ordinary shares or options are shown in equity as a deduction, net of tax, from the proceeds. (m) Distributions to equity holders Dividends and other distributions to the company’s shareholders are recognised as a liability in the financial statements in the period to which the dividends and other distributions are approved by the company’s shareholders. 4. Turnover Turnover relates to one class of business, that of the sale of chainsaws, power tools, cleaning systems and garden machinery together with their allied spares and accessories within Great Britain. 5. Operating profit Operating profit is stated after charging / (crediting):

2020 2019

£ £ Staff costs Wages and salaries 5,837,507 5,712,597 Social security costs 736,304 675,118 Other pension costs (note 17) 541,092 531,015 Total staff costs 7,114,903 6,918,730

Other personnel costs 407,176 413,088 Depreciation (note 12) 650,750 702,515 Amortisation (note 11) 3,615 20,243 Services provided by the company’s auditors: – Fees payable for the audit of the company’s financial statements 69,991 54,080 – Services relating to taxation 12,000 19,100 (Gain) / Loss on foreign currency exchange (352,800) (154,881) Hire of plant and machinery – operating leases 275,401 257,245


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Loss / (Gain) on sale of tangible fixed assets 3,187 (3,622) Impairment of trade debtors 58,251 120,943 Impairment of inventory 82,300 69,628 Inventory recognised as an expense 96,736,170 80,711,603

6. Directors and employees The average monthly number of employees, including executive directors, employed by the company during the year was:

2020 2019

Number Number Selling and Distribution 90 89 Administration 37 41 Total 127 130

2020 2019

£ £ Directors’ emoluments Aggregate emoluments Highest Paid Director Company pension contributions to money purchase schemes

489,721

275,782

25,900

476,979

270,889

25,375 During the year, retirement benefits were accruing to two directors (2019: two) under the company’s money purchase pension scheme. At the year-end retirement benefits are accruing to two directors (2019: two). There are no additional key management who are not directors of the company. Remuneration in respect of services provided by Mr Norbert Pick and Mr Karl Angler is borne by Stihl Holding AG & Co. KG. Their services to the company are of a non-executive nature, and their remuneration is deemed to be wholly attributable to services to the parent company. Therefore, the remuneration of these directors is not apportioned to Andreas Stihl Limited, no recharge is made to the company, and therefore the amounts disclosed relate to the highest paid director of Andreas Stihl Limited.


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7. Interest receivable and similar income

2020 2019

£ £ Interest on short-term deposits 10,493 46,719

10,493 46,719

8. Interest payable and similar expenses

2020 2019

£ £ Interest payable on overdrafts 465 - Interest payable on intercompany loans 9,163 20,811

9,628 20,811

9. Tax on profit (a) Tax expense included in profit or loss

2020 2019

£ £ Current Tax: United Kingdom corporation tax on profit for the year 2,178,550 1,261,114 Adjustments in respect of prior years (3,171,) 687 Total current tax 2,175,379 1,261,801 Deferred tax – Origination and reversal of timing difference 18,454 75,447 Total deferred tax 18,454 75,447 Tax on profit 2,193,833 1,337,248

The tax assessed for the year is higher (2019: higher) than the standard rate of corporation tax in the UK for the year ended 31 December 2020 of 19.0% (2019: 19.0%). The differences are explained below:


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2020 £

2019 £

Profit before tax 10,985,113 6,084,894 Profit multiplied by the standard rate of tax in the UK of 19.0% (2019: 19.0%)

2,087,172

1,156,130

Effects of: Expenses not deductible for tax purposes 116,749 152,662 Tax rate changes (21,445) 23,155 Adjustments in respect of prior years 11,357 5,301 Total tax charge for the year 2,193,833 1,337,248

Tax rate changes In the Spring Budget 2021, the Government announced that from 1 April 2023 the corporation tax rate would increase to 25%. This new law had not been substantively enacted on 31st December 2020. As the proposal to increase the rate to 25% had not been substantively enacted at the balance sheet date, its effects are not included in these financial statements. (b) Analysis of movement in deferred tax

2020 2019 £ £ Opening balance (196,821) (272,268) Adjustment in respect of prior years 14,527 - Charged to Profit and loss account 3,927 75,447 Closing balance (178,367) (196,821)

10. Dividend paid

2020 2019 £ £

Final paid in 2020: 16.67p per £1 ordinary share (2019: Nil per £1 ordinary share )

1,000,000 -

1,000,000 -


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11. Intangible assets Intangible assets

Software Total

£ £ Cost 1 January 2020 413,219 413,219 Disposals (295,069) (295,069) 31 December 2020 118,150 118,150

Accumulated amortisation 1 January 2020 408,798 408,798 Charge for year 3,615 3,615 Disposals (295,069) (295,069) 31 December 2020 117,344 117,344

Net book amount At 31 December 2020 806 806 At 31 December 2019 4,421 4,421

12. Tangible assets

Tangible fixed assets

Freehold land and buildings

Assets under construction

Freehold improvements

Furniture and fittings

Motor vehicles

Total

£ £ £ £ £ £ Cost 1 January 2020 5,500,000 943,034 4,242,831 1,948,075 756,380 13,390,320 Additions - 720,042 - 55,198 - 775,240 Disposals - - (142,968) (90,703) (360) (234,031) 31 December 2020 5,500,000 1,663,076 4,099,863 1,912,570 756,020 13,931,529 Accumulated depreciation

1 January 2020 2,587,500 - 2,945,545 1,439,794 624,364 7,597,203 Charge for year 90,000 - 349,376 181,118 30,256 650,750 Disposals - - (142,887) (87,597) (360) (230,844) 31 December 2020 2,677,500 - 3,152,034 1,533,315 654,260 8,017,109 Net book amount At 31 December 2020 2,822,500 1,663,076 947,829 379,255 101,760 5,914,420 At 31 December 2019 2,912,500 943,034 1,297,287 508,281 132,016 5,793,118


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13. Stocks

2020 2019

£ £ Finished goods and goods for resale 14,667,816 20,343,791

Inventories are stated after provisions for impairment of £968,867 (2019: £766,245) 14. Debtors

2020 2019

£ £ Trade debtors 17,690,893 12,713,251 Deferred tax (note 9) 178,367 196,821 Other debtors 14,349 6,534 Prepayments and accrued income 437,247 670,308

18,320,856 13,586,914 Trade debtors are stated after provisions for impairment of £644,326 (2019: £586,075) 15. Creditors: amounts falling due within one year 2020 2019 £ £ Trade creditors 849,853 665,871 Amounts owed to group undertakings 16,515,504 11,716,353 Taxation and social security 4,346,239 2,418,433 Other creditors 1,245,518 1,373,271 Accruals and deferred income 835,928 778,996

23,793,042 16,952,924

Amounts owed to group undertakings relate to normal trading activities, and are unsecured and interest free. 16. Called up share capital

2020 2019

£ £ Allotted and fully paid 6,000,000 (2019: 6,000,000) ordinary shares of £1 each 6,000,000 6,000,000


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17. Pension obligations The total pension cost for the company was £541,092 (2019: £531,015). Pension costs relate to the company’s defined contribution pension scheme “The Andreas Stihl 1994 Pension Plan”. There are no outstanding or prepaid contributions to the scheme at 31 December 2020 (2019 – £nil). 18. Other financial commitments At 31 December 2020 the company had the following future minimum lease payments under non-cancellable operating leases for each of the following periods:

Payments due 2020 2019

£ £ Not later than one year 130,863 121,589 Later than one year and not later than five years 123,021 135,032 Later than 5 years - -

253,884 256,621

19. Related party transactions As a wholly owned subsidiary of Stihl International GmbH, the company is exempt from the requirements of FRS 102 Section 33.1A ‘Related party disclosures’ to disclose transactions with other members of that group. Other than the directors emoluments disclosed in note 6, there were no other related party transactions requiring disclosure. 20. Controlling Parties The immediate parent undertaking is Stihl International GmbH. The ultimate parent undertaking and controlling party is Stihl Holding AG & Co.KG, a company incorporated in Germany. Stihl Holding AG & Co.KG is the parent undertaking of the largest and smallest group of undertakings to consolidate these financial statements at 31 December 2020. The consolidated financial statements of Stihl Holding AG & Co.KG are available from Postfach 1771, D-71307 Waiblingen, Germany.

ANDREAS STIHL LIMITED

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