Due to its international activities, AT&S is naturally exposed to changes in global relationships; however, this also offers a certain flexibility in countering disruptive developments.

The most significant geopolitical developments for the electronics market in 2025 will continue to result from the ongoing and in some cases increasing tensions between the US and China and between Europe and China. The renewed extensions of the US government's "Entity List" have further restricted the addressable market for certain semiconductor manufacturers and fabless IC suppliers (integrated circuits). Against the backdrop of the ongoing tense international climate, business activities in China remain particularly susceptible to negative effects. These may result in particular from a further deterioration in political and economic relations.

Additional export controls could lead to a fragmentation of global markets. As a result, the addressable market for AT&S and its customers may shrink further. The availability and delivery times of raw materials, equipment or other goods essential for business operations may also be adversely affected by export controls.

The uncertain global economic and geopolitical situation and the ever-increasing demand for AI applications and electrification have led to significant price increases for raw materials and precious metals. By the end of 2025, prices had risen to record highs (copper, gold, palladium). The volatility of market prices has been observed since the war in Ukraine. Most recently, tensions in the Middle East have intensified this trend. The rise in the price of oil is having a particular impact on the cost of chemicals, plastics and resins.

In the transport and logistics sector, the Middle East conflict between Iran and Israel is leading to numerous uncertainties. This is reflected above all in longer transit times. At the same time, freight costs are rising as a result of additional fuel surcharges. AT&S is monitoring the situation very closely together with its partners and freight forwarders. The company is trying to minimize the impact by reacting quickly and taking targeted measures.

In November 2024, we conducted an extensive climate risk analysis. This analysis used scenario analyses that focus on three different time horizons, which correspond to the expected lifetimes of company assets and the period in which climate risks materialize and intensify: short-term (2030), medium-term (2040) and long-term (2050).

Physical risks To assess physical risks, the Intergovernmental Panel on Climate Change (IPCC) SSP5-8.5 high-emission scenario with global warming of 4^o C was used. The analysis identified heat stress and storms as the most common risks to our operations and highlighted spatial differences, with the Shanghai site being exposed to the most risks, six in total, and the European sites being exposed to a maximum of three. In addition, the Shanghai site and other Southeast Asian sites have a higher concentration of more destructive risks such as tropical cyclones, tornadoes and floods. After conducting the risk analysis, which was carried out in the financial year 2024/25 for all locations except Ansan, data was collected and analyzed, and no significant net risks for AT&S were identified as a result. The assessment of both physical and transitory risks shows that the company is robustly positioned to overcome potential climate-related challenges.

We have implemented a number of adaptation measures to address physical climate risks at our sites. In Chongqing, China, we use air conditioning and natural shading to combat heat stress. The site is prepared for heat waves with emergency power and for storm-related damage with wind-resistant buildings and insurance. In Fehring, Austria, we manage flood risks with structural adaptations and insurance, while ensuring storm preparedness with robust building designs. Our site in Kulim, Malaysia, has green buffer zones and emergency power systems to cope with heat stress and storms. In Leoben, Austria, we have implemented storm insurance and have emergency plans in place. In Nanjangud, India, we mitigate heat stress with air conditioning, while we prepare for cyclones with wind-resistant construction and emergency plans. Our site in Shanghai, China, follows similar strategies.

Transition risks The transition risk analysis used the net zero emissions 2050 scenario of the International Energy Agency (IEA) with a temperature increase of 1.5^o C. We are particularly exposed to risks from rising prices for CO₂ emissions and raw materials. Market-related risks are expected to increase as raw material costs rise, potentially leading to price peaks for copper due to supply bottlenecks and increased costs for chemicals due to CO₂ pricing along the upstream value chain. Nevertheless, transition opportunities exist, especially as climate-related regulations and incentives are driving market shifts towards electrification, particularly in the automotive sector, which is driving demand. In addition, the transition to renewable energy sources offers AT&S the opportunity to reduce long-term operating costs and thus improve strategic resilience.

In conclusion, the climate risk analysis performed did not identify any significant net risks for AT&S. The assessment of both physical and transition risks shows that the company is well positioned to manage potential climate-related challenges. Nevertheless, AT&S remains vigilant and is committed to proactively monitoring and addressing emerging risks to ensure its long-term stability and sustainability.

Climate-related risks in enterprise risk management In addition, climate-related ESG risks were identified as part of enterprise risk management. Climate-related changes can lead to an increase in ambient temperature and a greater frequency of extreme weather events (such as heat waves and droughts), which could result in a limitation of resources (such as water and energy supplies). As a result, either costs could rise (e.g. for heating or cooling) or, in the worst case, production processes could be interrupted if the supply is disrupted. For this reason, both acute and chronic climate change as well as transitory risks were taken into account in enterprise risk management for a medium-term observation period (five years). To counter these risks, AT&S chooses a climate-resilient business model, obtains the energy required for its production processes from renewable sources wherever possible and relies on efficient energy management. AT&S counters climate-related risks with the AT&S energy strategy and the associated decarbonization targets. One of the targets of the energy strategy, namely to cover 80% of the Group's energy requirements from renewable energy sources, was achieved by the end of the financial year 2025/26.

A similar Group-wide strategy has been developed for the extremely important resource of water, the implementation of which is planned for the coming years.

All these measures minimize the impact of climate change on the AT&S Group. If measures arise from risk management that have an impact on the balance sheet (change in useful lives, additional provisions required), these are recognized in the financial statements. This may be the case in particular if plants can no longer be used due to legal measures because the emissions are too high and therefore have to be replaced by more modern ones.

In April 2020, the European Commission published detailed definitions of the economic activities that should contribute to climate change mitigation and adaptation. However, the regulations and standards related to the EU taxonomy not only create uncertainty and increase the costs of compliance in general, but also cause high costs for the actual implementation of necessary measures to comply with minimum standards. It is impossible to predict how the regulations will develop in the future. Strict rules will tend to lead to higher costs and thus have a greater negative impact on profitability.

In the financial year 2025/26 there was no change in the group of consolidated entities. In the previous year, AT&S AG sold 100% of its shares in AT&S Korea Co. Ltd., Ansan, South Korea, to SO.MA.CI.S. S.p.A., Milan, Italy, for a purchase price of € 405,218 thousand plus interest of € 16,678 thousand less a distribution of dividends to AT&S AG of € 54,440 thousand.

The transferred assets and liabilities as well as net assets at the date of the sale are shown in the following table: