Kendrion: Motion Technology and Control

Integrated Annual Report 2025

KENDRION 2025

HOW OUR PRODUCTS IMPACT EVERYDAY LIFE

Even potato chips need perfect, gentle motion

In snack factories, chips must flow smoothly or quality suffers.

Kendrion oscillating solenoids create controlled vibrations that feed

and dose products evenly, helping avoid breakage, blockages, and

downtime. Simple, robust motion control keeps high-speed food

lines running reliably, batch after batch.

A warning you can feel under your foot

In the operating room, feedback reduces risk. Kendrion brakes

integrated into surgical pedals add a clear, controllable resistance

that signals when a critical threshold is near. This intuitive feel helps

surgeons stay precise without shifting attention, supporting safer

procedures.

Accurate lung tests start with stable pressure

During lung function testing, patients rely on equipment that must

stay consistent and safe. Kendrion pressure regulators keep medical

airflows and working pressures steady so downstream valves and

sensors perform correctly. Biocompatible designs support clean

operation, helping clinicians trust every measurement.

Balancing machines that keep production on track

From e-motors to precision rotors, balance is quality. Kendrion

control and I/O solutions help automated balancing machines

measure and correct faster and more accurately, reducing scrap and

rework. Manufacturers gain higher throughput, consistent

performance, and flexible lines that adapt to new products.

Battery tools that perform when lives depend on it

Rescue crews and forestry teams need cordless tools that won't fail

in harsh conditions. Kendrion motor control and power management

help deliver strong, efficient performance while protecting batteries

and logging faults. The payoff is dependable operation, where

reliability can save time and lives.

Safe, steady medical gases in critical care

In ventilators and anesthesia systems, the right gas pressure cannot

be optional. Kendrion low-flow regulators precisely reduce supply

pressure to the stable levels devices need for oxygen and other

medical gases. Reliable control supports patient safety and

dependable treatment when every second matters.

Integrated Annual Report 2025

HOW OUR PRODUCTS IMPACT EVERYDAY LIFE

Holding satellites steady on their way to orbit

Launching small satellites demands absolute reliability. Kendrion

custom holding magnets help secure CubeSat dispensers through

vibration, vacuum, and extreme temperature swings, then release on

command. It's a small component with a big job: enabling safe,

predictable deployment in space.

Guiding surgeons with pinpoint magnetic detection

In breast-conserving surgery, finding the exact target is crucial. With

Kendrion engineering, magnetic localization systems can guide

surgeons in real time with visual and acoustic cues, improving

accuracy and comfort. Robust software development and

compliance support reliable performance in the Operating Room.

Safety that supports climbers in tough forests

Forestry climbers depend on gear that must hold without hesitation.

Kendrion holding brakes can secure a rope winch in an emergency,

preventing dangerous slips, and allow controlled manual release for

descent. A reliable braking moment can make the difference when

conditions turn risky.

Power tools that stop instantly, work efficiently

Cordless tools are getting smaller, stronger, and more electrified.

Kendrion compact brake solutions help high-performance motors

stop and hold safely, improving control and energy efficiency. From

workshops to job sites, users get confident handling and

dependable safety, without adding bulk.

Precise positioning for scans that must be right

For MRI and CT procedures, patient tables must move smoothly,

then lock perfectly still. Kendrion brakes help medical couches

position and hold with confidence, supporting accurate imaging and

targeted therapy. Quiet, dependable holding improves workflows

and helps clinicians focus on care.

Turning used oil into new value

Mountains of used oil from vehicles and machines do not have to be

waste. With Kendrion's inductive heating, recycling plants can heat

and separate oil cleanly and precisely, turning it back into high-grade

lubricants. The result: less burning, lower emissions, and more value

recovered.

Integrated Annual Report 2025

This document is the PDF version of the 2025 Integrated Annual Report of Kendrion N.V. and has been prepared for ease of use.

The European Single Electronic Format (ESEF) reporting package is available on the company’s website at www.kendrion.com.

In case of discrepancies or ambiguities between this PDF version and the ESEF reporting package, the latter prevails.

2 How our products impact everyday life

5 Profile

6 Organization

7 Facts and figures

9 World map

10 Preface Joep van Beurden, CEO

12 Members of the Executive Board

13 Business Groups

25 Strategy and financial objectives

27 Financial review

CONTENTS

PHOTOGRAPHY

AND IMAGES

Wessel de Groot Fotografie

Kendrion N.V.

Shutterstock

iStock

A digital version of this Report

is available on the website

www.kendrion.com

along with other publications

such as press releases.

30 Outlook

31 Risk management

38 Corporate governance report

43 Sustainability statements

102 Preface Frits van Hout,

Chairman of the Supervisory Board

103 Members of the Supervisory Board

105 Report of the Supervisory Board

109 Remuneration report

125 Share and shareholder information

128 Financial statements

203 Other information

204 Independent auditor’s report financial statements

215 Limited assurance report of the independent

auditor on the sustainability statements

217 Principal subsidiaries

219 Glossary – definitions of non IFRS financial

measures

221 Reconciliation of non IFRS financial measures

Integrated Annual Report 2025

PROFILE

Kendrion shapes the future with high precision

brakes, electromagnetic components, fluid

technology, control systems and embedded

systems.

Our solutions deliver precise control, maximum safety and

smooth motion across a wide range of applications. These

include machinery, robotics, automation, medical technology,

energy and process industries, and industrial mobility solutions.

We offer a broad portfolio of standard products and strong

project and coengineering capabilities. We work closely with

customers to develop solutions tailored to their needs. We

combine deep technical expertise across multiple technologies

with the ability to integrate them intelligently. This is how we

deliver precision, safety and reliability for tomorrow’s challenges.

Kendrion is headquartered in the Netherlands, with strong

engineering roots in Germany. We serve customers across

Europe, the Americas and Asia. For more than a century, we

have engineered precision solutions for leading innovators in

industrial applications. Kendrion N.V. is listed on Euronext

Amsterdam.

Innovative solutions for

tomorrow, built on precision,

safety and reliability

Integrated Annual Report 2025

Industrial Brakes

ORGANIZATION

Industrial Actuators

and Controls

We enable motion and process control for medical technology, energy

and industrial automation. Our portfolio includes solenoids, fluid

assemblies, inductive heating systems and precision electronics.

Customers benefit from reliable actuation, consistent control and

efficient performance in demanding applications.

We offer electromagnetic braking solutions for electric drives and safety

critical industrial applications. Our portfolio includes spring applied and

permanent magnet brakes, as well as engineered braking systems.

Customers rely on our solutions for precise stopping, holding and

controlled emergency braking within motion control systems, where

reliability, functional safety and precise axis control are essential.

Integrated Annual Report 2025

Non-IFRS financial measure. For the definition and reconciliation of the most directly comparable IFRS measure, refer to reconciliation of non-IFRS financial measures, starting on page 219.

Invested capital excluding intangibles arising from acquisitions.

Not Meaningful

Revenue

(EUR million)

245.5

2024 247.5

Profit for

the period

(EUR million)

19.5

2024 (4.5)

Normalized

EBITDA

(EUR million)

15%

38.1

2024 33.2

Dividends

(proposed)

(EUR million)

57%

11.0

2024 7.0

ROI

1, 2

(in %)

105%

24.6%

2024 12.0%

FACTS AND FIGURES

Free cash flow

(EUR million)

89%

83.9

2024 44.3

Integrated Annual Report 2025

For more information we refer to our sustainability statements on page 43.

Total number

of employees

by gender

(in % F vs M)

44/56

2024 43/57

Total number of

employees (FTE)

(at 31 December)

1,269

2024 1,359

Illness rate

(in %)

5.9%

2024 5.9%

Accidents

(per 1,000 FTE)

27%

2024 15

Relative energy

consumption (in

tonnes kWh/million

added value)

20%

93.1

2024 117.1

Relative CO

emission

(in tonnes kWh/

million added value)

27%

12.2

2024 16.8

Number of

CSR supplier

audits

19%

2024 16

Integrated Annual Report 2025

FACTS AND FIGURES

WORLD MAPWORLD MAP

Revenue (in EUR million) segmented by customer location

FTE segmented by region

18.6

Kendrion

business

location

Including other countries with revenue of EUR 2.0 million.

18.7

208.2

84%

15% 85%

45% 55%

1,167

42% 58%

EUROPE

THE AMERICAS

ASIA

Integrated Annual Report 2025

PREFACE

Kendrion 2025: completing the industrial transformation

In the summer of 2023, after a thorough strategic review of the

automotive market and Kendrion’s position, we took a bold

decision to transform Kendrion into a pure-play industrial

technology leader. I am proud to report that this transformation

has been completed by the end of 2025.

Why the shift: After several challenging years for our

Automotive Business Group, we recognized that the issues

facing the automotive sector were fundamental rather than

temporary. With full support from our Supervisory Board, we

determined that staying in this sector would restrict our

potential to capitalize on the numerous opportunities within the

industrial sector, limit our profitability, and strain our finances.

Amid global uncertainty, geopolitical tensions and rising tariffs,

we chose to take a decisive action by focusing exclusively on

industrial markets.

A multi-year transformation

This transformation has been driven by a sequence of strategic

projects and continuous operational improvement. In 2025, we

completed three defining steps: the sale of our European and

USA automotive operations to Solero Technologies, the

transition of our China-based businness to local management,

and a long-term cooperation with Knorr-Bremse for the Sibiu

mobility electronics operations.

In parallel, we simplified structures, removed automotive-related

complexity, and have initiated the implementation of a new,

simpler, ERP system. With these actions now in place, we are

faster, leaner, and more responsive.

The initial results are good: in 2025 we exceeded our 15%

EBITDA target ahead of schedule. To achieve this while

completing such a significant transformation demonstrates the

strength, focus, and execution discipline of our teams.

Strong industrial portfolio and market position

Our industrial technologies – including valves, actuators,

brakes, and advanced control systems – are used in over 30

different industrial market segments. Fast-growing segments

we serve include parcel locker security, medical flow-control

devices, robotics, warehouse automation, and sectors driven

by electrification. With deep technical knowledge and a solid

presence in these areas, we consistently deliver solutions that

offer distinct competitive benefits. In every segment, we have

the technology, the scale, and the credibility to make an impact

on the industries we support.

Joep van Beurden, CEO

Integrated Annual Report 2025

Financial strength and shareholder value

The much-improved profitability – our normalized EBITDA

over

2025 was 15.5% of revenue – and stronger-than-expected

cash flow reflect the benefits of our industrial shift and

disciplined execution. It has enabled us to return value to

shareholders through a EUR 1.00 per share special dividend

and the start of a share buyback program of up to EUR 10

million, while continuing to invest in growth.

Trust and teamwork

A transformation of this scale requires courage, persistence,

resilience, and trust. Trust in the strategy, trust in each other,

and trust in our ability to deliver. Our progress is the result of

the talent and dedication of our teams worldwide. Their

commitment has turned the bold decision of 2023 into reality

and positions Kendrion for sustainable, long-term growth.

I thank everyone at Kendrion for their confidence, drive, and

teamwork that made this transformation possible. Together,

we have created a stronger, more focused, and future-ready

company.

Joep van Beurden

CEO

Non-IFRS financial measure. For the definition and reconciliation of

the most directly comparable IFRS measures, refer to reconciliation

of non-IFRS financial measures, starting on page 219.

2025 was a pivotal year for Kendrion as we

completed the transformation to a focused, pure-

play industrial company. Going forward we are

entirely focused on high value industrial niches, and

aim to be significantly more profitable.

Integrated Annual Report 2025

PREFACE

J.H. (Jeroen) Hemmen

Position Chief Financial Officer

Year of birth 1973

Nationality Dutch

Joined Kendrion 1 June 2005

Appointment to position

Current term

1 July 2019

1July 2023 – 1 July 2027

(second term, AGM 17 April 2023)

Other positions None

MEMBERS OF THE EXECUTIVE BOARD

J.A.J. (Joep) van Beurden

Position Chief Executive Officer

Year of birth 1960

Nationality Dutch

Joined Kendrion 1 December 2015

Appointment to position 1 December 2015

Current term 1 December 2023 – 1 December 2027

(third term, AGM 17 April 2023)

Other positions

Vice-chair of the Supervisory Board and member of the Nomination

and Remuneration Committee of Adyen N.V.

Integrated Annual Report 2025

OUR PRODUCTS ARE USED IN

Cranes & Hoists

Electric Motors

Elevators

Industrial Robots

Industrial Trucks & AGV

Medical Surgical Robots

Wind Power

OUR CUSTOMERS INCLUDE

Bosch Rexroth AG

Bonfigioli

Liftket

Juli

Lenze

Nord

Raymond

Schneider Electric

SEW

Siemens

Toyota

BUSINESS GROUPS

Industrial Brakes

Industrial Brakes is a full-line provider of high-

performance electromagnetic brakes for electric

motors, serving diverse industrial markets. With a

focus on precision and safety, the business group

offers both standard and customized braking

solutions.

INDUSTRIAL BRAKES REVENUE

(in EUR)

93.7 million

2024 95.9 million

Europe

90%

Asia and

Rest of the world

The Americas

Kendrion locations with regional revenue breakdown

Integrated Annual Report 2025

OUR CUSTOMERS INCLUDE

ABB

ASML

Collins Aerospace

Dräger

Electrolux

Euchner

Fresenius

Gorenje

Oerlikon

Schmersal

Siemens

OUR PRODUCTS ARE USED IN

AGV

Aviation

Energy generation & distribution

Food & beverage machinery

Industrial appliances

Industrial automation

Robotics

Print & paper handling

Analysis Technology

Anesthesia & respiration machines

Dental treatment units

Dialysis machines

Laboratory equipment

Industrial Actuators and Controls develops

customized solutions for industrial applications,

leveraging expertise in electromagnetic

actuators, control technology, and fluid

technology. With a focus on precision and

reliability, the business group delivers tailored

solutions for a wide range of industries.

INDUSTRIAL ACTUATORS AND

CONTROLS REVENUE

(in EUR)

110.4 million

2024 111.7 million

Europe

92%

Asia and

Rest of the world

The Americas

Kendrion locations with regional revenue breakdown

Industrial Actuators and Controls

Integrated Annual Report 2025

BUSINESS GROUPS

In an era demanding smarter, more efficient and more resilient

industrial systems, Kendrion delivers automation and intelligent

motion control across a broad range of industries — including

robotics and factory automation, medical technology, and

sustainable energy systems.

Specializing in high-performance electromagnetic brakes,

actuators, and control technologies, Kendrion translates

complex engineering requirements into reliable, mission-critical

motion-control solutions. These solutions support safe, precise

and energy-efficient automated motion, helping customers

improve productivity, system reliability, and sustainability.

Kendrion operates through two Business Groups, each

focused on core motion and control functions within automated

systems: Industrial Brakes (IB), specializing in electromagnetic

braking solutions for application in robotics, wind power,

intralogistics and electric motors, and Industrial Actuators and

Controls (IAC), focused on advanced actuators, valves and

control systems.

Industrial Brakes (IB): Enabling safe, precise

and reliable motion control

The Industrial Brakes (IB) Business Group develops high-

performance electromagnetic braking systems for a wide range

of automation and motion-control applications, including AGVs,

industrial automation, intralogistics, medical devices, robotics,

and wind energy.

Demand is driven by the need for more efficient and compact

system designs and electric motors with higher power and

energy density. As motion systems become faster and more

automated, also driven by the significant developments in

Artificial Intelligence (AI), reliable braking and holding functions

are increasingly critical for safety, precision, and system

availability.

Kendrion is unique in its worldwide offering of a complete

portfolio of both spring-applied and permanent-magnet brake

technologies. This broad technology base positions IB as a

preferred partner for electric motor manufacturers and system

integrators seeking suppliers with deep application knowledge

in automation and motion control.

IB maintains a strong global presence with operations in

Germany, the United States of America and India. With AI

driving increasing demand for advanced automation, growth is

anticipated in all geographies, with India in particular emerging

as a key market.

Industrial Actuators and Controls (IAC):

Advancing automation and control

technologies

The Industrial Actuators and Controls (IAC) Business Group

serves industries including machine automation, energy

distribution, medical technology, aviation, industrial appliances,

and motion control.

Enabling automation and intelligent

motion control across industries

Industrial Activities – IB & IAC

Integrated Annual Report 2025

BUSINESS GROUPS

Long-term trends such as AI driven automation electrification,

automation, and the global energy transition support these

markets.

IAC has built strong positions in actuation, control, and

specialized system solutions, including inductive heating,

industrial locks, energy-distribution components, and high-

performance valves for nuclear and critical infrastructure

applications. These tailored solutions give Kendrion a

competitive advantage in complex and safety-critical

environments where reliability and precision are essential.

The retained Mobility activities, following the Automotive

divestments, are integrated into IAC, but reported separately.

2025 Group financial performance

Kendrion’s industrial activities generated EUR 204.1 million

in revenue in 2025, compared to EUR 207.6 million in 2024.

IB reported EUR 93.7 million in revenue (FY 2024: EUR 95.9

million), IAC EUR 110.4 million (FY 2024: EUR 111.7 million),

and other revenue, including retained Mobility activities,

EUR 41.4 million (FY 2024: EUR 39.9 million).

The slight decline reflects weaker industrial conditions in

Germany and broader Europe, particularly in the first part of the

year, as low industrial production and subdued investment

activity persisted. High interest rates and continued uncertainty

weighed on demand for capital goods. Despite these

headwinds, Kendrion demonstrated strategic resilience, making

progress in its core industrial markets. Mobility activities

performed comparatively better, supported by price increases

and the ramp-up of projects stemming from prior development

work.

Key milestones - Industrial Brakes

In 2025, IB took strategic and operational steps to address

diverging regional conditions and the growing differentiation

between standard products and technologically demanding,

integrated and safety-critical motion-control applications.

Rather than focusing on short-term volumes, IB prioritized

structural focus, disciplined decision-making and execution

capability.

IB conducted a systematic review of market segments and

project pipelines, assessing customer inquiries, development

activities, and new projects against defined criteria, including

technological differentiation, system integration requirements,

and long-term value creation potential. Resources were

deliberately shifted toward technologically demanding,

integrated, and safety-critical motion-control applications,

where application know-how and reliability are key value

drivers. At the same time, IB consciously discontinued or

avoided projects in segments where competition is primarily

price-driven and differentiation is structurally limited.

Within the product portfolio, IB accelerated the transition from

individual developments to clearly defined product platforms.

The Slim Permanent Magnet (PM) platform represents a key

milestone, providing a scalable technical foundation for multiple

applications and markets, including advanced robotics such

as medical robots. This approach enables faster product

implementation, reduced variant complexity, and improved

economic efficiency, while maintaining technological depth.

Operational execution was further strengthened through

a realignment of sales and business development activities.

IB shifted from reactive key-account management to structured

market development supported by clearer priorities and

dedicated business development teams. This realignment

improved visibility of market potential, raised lead quality, and

strengthened positioning based on value and application

expertise.

Targeted cost measures, including selective investment

approvals and tighter resource allocation, reinforced resilience

and profitability. IB completed the year with a more focused

portfolio, clearer strategic positioning, expanding project

pipeline and improved operational control, laying the foundation

for sustainable growth in structurally attractive automation and

motion-control markets.

Key milestones Industrial Actuators and Controls

The second half of 2025 saw an increase in demand from

existing customers and a higher level of customer inquiries,

allowing IAC to compensate for weaker conditions in the first

half of the year.

Targeted sales initiatives in Asia delivered new contracts in

South Korea, India, and Singapore. In the medical technology

sector, Kendrion developed its first biocompatible pressure

regulator, designed for use in anesthesia and respiratory

applications. The increasing implementation of Medical Device

Regulations in Europe further created market opportunities,

where Kendrion is well-positioned with compliant and

application-specific solutions.

In the logistics sector, actuator solutions for automated

warehouse applications grew through new project wins. In

preparation for the next phase of logistics automation, Kendrion

advanced a new parcel locker locking solution, built on a new

technology platform designed to deliver a structural cost

advantage. These initiatives allowed IAC to offset continued

weakness in the German machinery market, while

strengthening its competitive position in Europe.

Despite the continued downturn in the European machinery

market, IAC secured new business in machinery applications,

particularly with safety control systems, inductive heating, and

embedded control technologies. In the United States of

America, Kendrion strengthened its position in the beverage

dispenser market, working closely with partners and customers

on both existing and newly developed valve solutions, with

revenue ramp ups expected in future periods.

The retained Mobility activities, integrated into IAC, achieved

Integrated Annual Report 2025

BUSINESS GROUPS

strong results through a simplified organization, targeted cost-

saving measures, and efficient execution across sales,

engineering, and production, delivering above-average EBITDA.

IAC simplified collaboration between sales, product

management and development, shortening decision-making

time, and aligning responsibility more closely with market and

product requirements.

Development resources were concentrated on strategically

relevant products and applications, with a keen focus on

developing IP to protect its inventions. Leadership in this

context meant setting direction, making decisions, and

ensuring consistent implementation.

Focus and opportunities for 2026 and beyond

Industrial Brakes

IB enters 2026 with a clear strategic positioning, a more

focused portfolio, an expanding project pipeline and a

strengthened organizational foundation. The basis for the next

phase of development has been firmly established, shaped by

platform-based innovation, a continued focus on

technologically demanding and safety-critical motion-control

applications, and disciplined execution. Growth in these areas

will be increasingly driven by advancements in robotics,

automation and advanced motion systems.

Looking ahead, IB will continue to strengthen its position as a

supplier of high-performance braking solutions for robotics,

and intralogistics. The group will reinforce its leadership in the

wind energy sector, focusing on pitch and yaw braking systems

for both onshore and offshore wind turbines, where reliability

and lifetime performance are critical. In addition, IB will continue

to expand its medical technology activities where high technical

requirements offer attractive long-term growth opportunities.

Industrial Actuators and Controls

IAC will focus on expanding its product portfolio and deepening

its application expertise, particularly across its three medical

technology segments. Priorities include addressing increasing

biocompatibility requirements driven by stricter medical device

regulations and developing high-flow capabilities for advanced

clinical and industrial applications.

In parallel, IAC will strengthen its position in the electronic

locking market, introducing new technologies and patented

solutions tailored to customer-specific requirements. Growing

demand across energy generation, energy distribution, and

energy-efficiency applications will be addressed through the

development of new inductive heating solutions, motor control

systems, and actuator technologies.

IAC’s expertise in niche market identification, combined with its

technological capabilities and a cost-conscious execution

approach, positions the business to navigate economic volatility

while delivering above-average profitability and sustainable

growth over the medium term.

Conclusion

Kendrion’s IB and IAC Business Groups are well positioned to

capture structurally attractive opportunities in their respective

markets.

Across both Business Groups, Kendrion’s emphasis on

technological differentiation, disciplined market selection, and

consistent execution underpins sustainable value creation. By

focusing on innovation aligned with customer requirements,

Kendrion is well positioned to support safer, more precise and

more reliable industrial applications worldwide.

Integrated Annual Report 2025

BUSINESS GROUPS

Decentralized parcel locker networks increasingly operate with

solar or battery power, making energy efficiency and compact

integration key differentiators for Original Equipment

Manufacturer (OEM) platforms. Kendrion specializes in locking

solutions for industrial applications and is among the market

leaders for industrial locks in Europe. This focus enables

continuous innovation and customer specific adaptation,

particularly where large standard suppliers often offer limited

flexibility. In 2025, Kendrion introduced a new technology

platform that further advances performance and

miniaturization, resulting in one of the smallest high load locks

available for industrial use.

Ultra low power locking enables Decentralized parcel locker networks

The Ultra Compact Lock combines very low power

consumption of 1 watt with compact dimensions of 45 x 45 x

15 millimetres and high locking performance. The solution

delivers static locking force up to 5000 newtons and is

designed for challenging environments, including high humidity

and temperatures from minus 25 to plus 50 degrees Celsius.

This supports OEMs in building reliable locker platforms at

scale without compromising security.

Kendrion focuses on specific industrial areas where

requirements are demanding, and our expertise truly

matters. In these markets, there is typically less

competition, and customers appreciate partners who are

reliable, flexible, and knowledgeable. With a wide range of

brakes, locks, actuators, valves, and control solutions, we

combine proven products with custom engineering to

deliver solutions that fit well and perform reliably in tough

conditions. The examples below show how this approach

creates distinctive value across different applications.

Global niche leader turning specialization into strength

Integrated Annual Report 2025

BUSINESS GROUPS

Forestry climbing systems represent one of the most

demanding environments for brake technology. Components

must perform reliably under moisture, dirt, cold, vibration and

high dynamic loads, often after long idle times in the field.

Kendrion’s BFK458 06 serves as a holding brake in these

systems, ensuring that the rope winch locks safely during a fall

arrest and allows controlled manual release for a secure

descent.

Consistent performance in such conditions depends on stable

torque behavior, robust mechanical design and materials that

withstand corrosion and wear. Kendrion’s brake portfolio is

engineered to deliver this reliability through precision

Forestry safety brakes provide reliable holding in extreme conditions

In many industrial processes, the heating step defines

product quality and throughput, while electrification

increases the need for cleaner and more efficient process

heat. Kendrion’s induction heating systems generate heat

directly in the tool or roll, with dynamically controllable and

reproducible heating patterns. Compared with conventional

concepts using thermal oil, water or steam, this can

significantly reduce energy use and associated emissions,

with reported savings of up to 50 percent in energy costs

depending on the application.

manufacturing, defined air gaps and careful selection of friction

materials. Decades of experience in safety critical applications

and testing under real environmental conditions enable

Kendrion to provide tailored braking solutions that maintain

performance where failure is not an option.

This specialization reflects Kendrion’s broader strategy of

turning complex requirements into technological strength,

backed by verified safety, endurance and the ability to

adapt each brake configuration to the specific

environment and load case.

To make this technology practical for machine builders,

Kendrion combines a modular heating platform consisting

of a controller and up to seven generator modules with a

standardized portfolio of roller, surface and contour inductors

that can be adapted to individual geometries and heating

zones. Typical applications include food equipment, such as

waffle baking machines, where compact

integration and precise thermal control are

decisive, as well as printing and paper processes

including roller heating for embossing, lamination

and finishing in converting lines.

Inductive heating delivers efficient precision process heat

Integrated Annual Report 2025

BUSINESS GROUPS

Breast conserving procedures depend on accurate localization

and a workflow that supports surgeons while improving patient

comfort. Together with Sirius, Kendrion supported the

development of the Sirius Pintuition System, using a titanium

encased magnetic marker positioned through a fine needle and

a compact probe that measures the magnetic field to determine

the marker location. During the procedure, the system provides

visual and auditory guidance and enables point source

localization without radioactive markers, offering an effective

alternative to wire localization.

Precise tumor localization supports breast conserving surgery

Many machines in special purpose engineering are built in

small series and remain in operation for years, yet they

increasingly require connectivity and local intelligence.

This creates a space where classic Programmable Logic

Controller (PLC) architectures can be too rigid and large

standard automation suppliers too inflexible, while

consumer grade compute is often not robust enough for

industrial duty. Kendrion develops compact edge control

solutions built around the Raspberry Pi Compute Module 4,

designed for industrial reliability and real time capable

automation tasks.

By combining industrial interfaces, scalable IO and CODESYS

control, Kendrion helps customers integrate automation and

connectivity in one compact platform that can be adapted to

specific machine concepts and lifecycle needs.

Kendrion contributed the electronics, embedded software

and optimized detection algorithms, applying model driven

development to achieve millimetre precision. Development was

aligned with relevant medical device software and electrical

safety requirements, and Kendrion supported the path to

market approval in Europe and North America. Certified

development services according to ISO 13485 complement this

capability and help reduce risk for customers in highly regulated

applications.

Compact edge control enables adaptable industrial automation

Integrated Annual Report 2025

BUSINESS GROUPS

Automation and robotics

Precision. Safety. Motion. built into every movement

Automation and robotics are becoming faster,

more compact and increasingly collaborative.

This increases expectations for repeatable

accuracy, functional safety and predictable

motion in real production environments.

Precision that starts at the point of contact

Precision in robotics is not only about the

robot’s path. It also depends on how reliably

parts are gripped, positioned and held.

Kendrion contributes with end of arm tooling

such as finger grippers based on high

performance linear solenoids for continuous

pick and place operation, designed for energy

efficient handling. These grippers use a widely

adopted ISO robot mounting interface and are

plug and play capable, which supports fast

integration into cobot applications.

Safety that holds when control or power fails

In robotics, safety must remain effective even

during a control fault or power loss. Kendrion

addresses this with electromagnetic brakes

installed in robot axes to hold the robot arm

safely in position in case of malfunction.

For compact joints in small articulated arms,

SCARA robots and cobots, high torque

solutions in limited installation space are

essential. Kendrion’s portfolio includes

permanent magnet brakes for high torques in

small space, as well as specialized designs

such as flat brakes that allow cable routing.

Functional safety also depends on control.

Kendrion control and safety modules support

certified safety functions such as STO, SS1

and SLS, and enable sensor integration and

emergency stop concepts for robotic

platforms.

Motion that stays controllable at high

dynamics

Smooth motion is what makes speed and

productivity usable. It requires fast, repeatable

actuation and coordinated drive control across

the cell. Kendrion supports the shift toward

electrified automation with electromagnetic

actuators and assemblies, ranging from linear

to vibrating and rotary solenoids. These

components enable simple controllability, very

fast switching and clean operation compared

with pneumatic alternatives.

Around robotic cells, vibratory feeding systems

with oscillating solenoids help ensure accurate

dosing, continuous material flow and reliable

part orientation, supported by electronic

control units for precise adjustment to the

material. Where customers need deeper drive

and control integration, Kendrion’s electronics

and embedded systems capabilities include

scalable, software programmable motor

control platforms that support multiple motor

types and interfaces.

FOCUS INDUSTRYFOCUS INDUSTRY

Integrated Annual Report 2025

BUSINESS GROUPS

Medical technology

Regulatory confidence through collaboration

and decades of know-how

Medical technology demands more than

performance. Regulatory requirements,

traceability, and risk management shape every

design decision, from material selection to

validation and change control. Kendrion

supports customers with solutions developed

for critical applications, backed by high

standards of cleanliness in manufacturing and

careful material choices. This helps prepare

products for biocompatibility requirements and

testing in line with DIN EN ISO 10993 and DIN

EN ISO 18562. We also offer development

services in accordance with ISO 13485,

including for Class III medical devices.

Collaboration is essential in this environment.

Requirements often evolve during

development, and the cost of late changes is

high. Kendrion works with customers early to

translate clinical and regulatory needs into

robust components and assemblies. In

ventilation and anaesthesia equipment, for

example, Kendrion solutions support safe and

efficient handling of medical gases.

Our bistable solenoid valve is used in

anaesthesia machines for energy efficient and

quiet switching of medical oxygen. Pressure

regulators from the Pure Flow series are

designed for medical gases and focus on

reliable, precise pressure regulation even in

continuous operation.

This capability builds on decades of know-

how across fluid technology, electromagnetics,

and embedded intelligence. Holding brakes

help provide accurate positioning and stability

in surgical devices and robots, where safety

and precision are non negotiable. Where a

device needs more than a component, our

subsidiary company 3T adds electronics and

embedded systems expertise, with over 40

years of experience in mission critical designs

for medical applications. Together, these

strengths help customers meet regulatory

expectations, reduce development risk, and

deliver reliable performance in life critical use

cases.

FOCUS INDUSTRYFOCUS INDUSTRY

Integrated Annual Report 2025

BUSINESS GROUPS

AGVs are rapidly moving from isolated

applications to scalable fleets in modern

warehouses and production sites. At the same

time, intralogistics is undergoing a broader

transformation. Conventional industrial trucks

are becoming increasingly electrified,

connected and automated. This shift raises

expectations for safety, energy efficiency,

uptime and seamless system integration.

Kendrion supports this transformation with

components and systems that help make

mobile platforms safer and more reliable.

Our electromagnetic brakes provide precise

stopping, secure holding and controlled

emergency braking for electric drives,

including applications with higher loads and

demanding duty cycles. Complementary

actuation and control solutions add

functionality for vehicle subsystems and

automated material handling tasks. Together,

these technologies help manufacturers design

compact platforms with predictable behavior

and stable performance.

As electrification and automation accelerate,

requirements are changing across the full

lifecycle of a vehicle or fleet. Energy efficient

operation, robust safety concepts and reliable

availability become critical differentiators.

Kendrion contributes with proven technology,

application expertise and a broad portfolio that

supports both standard platform designs and

customer specific configurations. This helps

customers manage complexity, speed up

development and keep intralogistics moving

safely and efficiently as the industry evolves.

AGVs and intralogistics

Enabling the shift to electrified,

automated material handling

FOCUS INDUSTRYFOCUS INDUSTRY

Integrated Annual Report 2025

BUSINESS GROUPS

Brake innovation for servo

motor platforms

The servo motor market is shifting fast. Many manufacturers are pushing modular motor

architectures that reduce variant complexity and total cost, while keeping qualification effort and

production processes stable.

Kendrion’s response is rooted in customer

proximity and a willingness to challenge one

size fits all concepts. Instead of equipping

every motor variant with one high performance

brake, Kendrion has expanded its permanent

magnet brake offering into a scalable platform.

The Slim Permanent Magenet (PM) Line,

launched in November 2025, was developed

specifically for low and mid torque servo

motors and complements the High Torque

Line. Both lines share the same mechanical

and electrical interface, enabling a true kit

approach for brake selection across an OEM

motor family and helping avoid unnecessary

oversizing.

For motor manufacturers, the value goes

beyond a new component. A shared interface

supports standardized integration, consistent

documentation and efficient production setups

across multiple motor sizes. Slim PM Line is

engineered to be cost efficient while leveraging

the functional advantages of permanent

magnet technology, combining reliable holding

performance and a compact design with

a cost level suited to the volume segment.

This launch underlines Kendrion’s ability

to translate market pressure into practical

innovation. With a two brake platform that

covers the relevant torque ranges while

keeping interfaces consistent, Kendrion

strengthens its role as a partner for the next

design cycles of industrial servo motor

platforms.

Integrated Annual Report 2025

BUSINESS GROUPS

STRATEGY AND FINANCIAL OBJECTIVES

In 2025, the global economy continued to face significant

headwinds, with challenging trading conditions across most

regions. Global GDP growth remained subdued – projected at

between 2.8% and 3.2%, reflecting ongoing policy uncertainty,

trade tensions, and weak investment.

Industrial production in Europe showed modest improvement,

but the recovery was uneven and fragile. The euro area

recorded a slight annual increase in industrial output, however,

Germany experienced stagnation, after two years of

contraction. Structural challenges, including demographic shifts

and high energy costs, continued to weigh on German industry,

while investment remained subdued.

GDP in the United States of America still outpaces Europe and

China. The USA economy benefited from robust consumer

demand, continued investment in technology, and a resilient

labor market, although growth moderated slightly compared

to 2024.

On the monetary front, interest rates were lowered in both the

USA and Europe during 2025. The European Central Bank cut

its main rate to 2.15% by November, while the USA Federal

Reserve maintained its target range at 4.25-4.50% for much

of the year, with expectations of further easing as inflation

pressures receded. Despite these reductions, lower rates did

not lead to a significant rebound in capital investment or

economic activity, as uncertainty and weak sentiment persisted.

The New Kendrion: more focused, more profitable

Integrated Annual Report 2025

ACTUAL

24.6%

TARGET

23-27%

ACTUAL

15.5%

TARGET

15-18%

ACTUAL

193%

TARGET

≥ 50%

Return on

investment

1, 2

EBITDA margin

Dividend pay-out

Invested capital excluding intangibles arising from acquisitions.

Non-IFRS financial measure. For the definition and reconciliation of the most directly comparable IFRS measures, refer to reconciliation

of non-IFRS financial measures, starting on page 219.

Amid this challenging environment, 2025 was a

transformational year for Kendrion. The company completed

the divestment of its European and USA automotive operations

to Solero Technologies in February and sold its China-based

business to local management in August. In September,

Kendrion began a phased cooperation with Knorr-Bremse to

transfer Sibiu Mobility electronics and implemented further

organizational streamlining to remove automotive-related

complexities. These strategic actions marked a major shift,

enabling Kendrion to focus exclusively on industrial growth in

Europe, the USA, and Asia. By concentrating on the industrial

sector and maintaining strict cost controls, Kendrion achieved

stronger profitability and robust cash flow. This performance

enabled the distribution to shareholders of both a regular

dividend of EUR 0.45 per share in May and a special dividend

of EUR 1.00 per share in November.

Our strategy

With our focus now fully on industrial opportunities within our

Industrial Brakes (IB) and Industrial Actuators and Controls (IAC)

business groups in Europe, the USA, and Asia, we now present

a clear investment narrative. As a global niche leader, we select

industrial market segments that support a minimum EBITDA

margin of 15%. We target opportunities where our expertise in

valves, actuators, brakes, and control technology allows us to

clearly differentiate our products.

In IAC, we have identified several niche segments offering

strong and profitable growth potential. These include induction

heating systems for industrial processes, industrial locks for

professional kitchens and parcel lockers, safety valves for

nuclear power plants and solenoids for high-voltage circuit

breakers. With Kendrion’s renewed industrial focus, IAC is well

positioned to capitalize on these opportunities.

IB is a leading player in permanent magnet- and spring-applied

brakes. As these brake technologies are closely integrated into

electromotors, the accelerating transition towards electrification

presents significant opportunities. Our focus is on high-potential

applications such as industrial robots, collaborative robots,

wind turbines, and intra-logistics.

The niche markets we focus on are expected to drive average

annual growth of at least 5%. Over the medium- to long-term,

we are also exploring opportunities within the European

defense industry. By concentrating on specialized areas where

our technical know-how provides a clear competitive

advantage, we ensure that every investment aligns with our

profitability and growth objectives.

Financial targets

As a pure-play industrial company, Kendrion is strategically

positioned to deliver sustainable, superior profitability. By

focusing on carefully selected niche opportunities that leverage

our deep expertise in valves, actuators, brakes, and control

technology we drive disciplined growth and long-term value

creation. In 2025, we achieved our minimum EBITDA target of

15% ahead of schedule, underscoring the strength of our

execution and strategic focus. While growth remains important

and is available within our chosen niche segments, we will

pursue it only at a minimum EBITDA margin of 15%,

safeguarding profitability as our primary objective.

Aligned with our updated strategy and financial targets, we aim

to achieve an EBITDA margin of 15-18% from 2025 onwards

and an ROI of 23-27% by 2027. Under our dividend policy, we

strive to distribute at least 50% of normalized annual net profit

as of 2025, emphasizing our commitment to delivering

consistent shareholder returns.

Integrated Annual Report 2025

STRATEGY AND FINANCIAL OBJECTIVES

FINANCIAL REVIEW

Integrated Annual Report 2025

Key figures

2025 2024

EUR million Reported Adjustments Normalized Reported Adjustments Normalized

Revenue 245.5 - 245.5 247.5 - 247.5

Other income 4.4 - 4.4 1.7 - 1.7

Total revenue and other income 249.9 - 249.9 249.2 - 249.2

Changes in inventories of finished goods and work in progress 0.4 - 0.4 (0.9) - (0.9)

Raw materials and subcontracted work 106.6 (0.1) 106.7 114.3 1.0 113.3

Staff costs 87.6 1.9 85.7 86.3 0.6 85.7

Impairments of fixed assets 0.0 - 0.0 1.0 1.0 0.0

Other operating expenses 19.0 0.0 19.0 17.9 0.0 17.9

EBITDA

36.3 (1.8) 38.1 30.6 (2.6) 33.2

EBITDA margin %

14.8% 15.5% 12.4% 13.4%

Depreciation and amortization 15.0 - 15.0 16.0 - 16.0

Finance income and expense 3.7 - 3.7 3.9 - 3.9

Share profit or loss of an associate 0.3 - 0.3 0.1 - 0.1

Income tax expense 3.7 (1.3) 5.0 2.2 (1.1) 3.3

Profit for the period continuing operations 13.6 (0.5) 14.1 8.4 (1.5) 9.9

Amortization after tax 1.6 - 1.6 2.4 - 2.4

Net profit before amortization from discontinued operations 5.9 3.7 2.2 (12.9) (12.4) (0.5)

Profit for the period before amortization

21.1 3.2 17.9 (2.1) (13.9) 11.8

Cash flows

Cash flow from operations 30.4 6.2 36.6 18.5 5.2 23.7

Cash flow from investing activities 53.5 (64.5) (11.0) 25.8 (52.5) (26.7)

Free cash flow

83.9 (58.3) 25.6 44.3 (47.3) (3.0)

Non-IFRS financial measure. For the definition and reconciliation of the most directly comparable IFRS measures, refer to reconciliation of non-IFRS financial measures, on page 219.

Group performance

Kendrion reported revenue of EUR 245.5 million from continued

operations in 2025, compared to EUR 247.5 million in the

previous year. Currency translation did not have a material

impact, and revenue at constant exchange rates decreased by

1%. The Industrial Brakes business group generated revenue of

EUR 93.7 million, down 2% from the previous year reflecting

weak global industrial production and particularly continued

challenging conditions in Germany’s machine building sector.

The decline was concentrated in the first half of the year, with

revenue dropping by 5%, while the second half showed gradual

improvement leading to 3% year-on-year revenue growth in the

last quarter of the year. Revenue in Industrial Actuators and

Controls reached 110.4 million, a 1% decline from the EUR

111.7 million revenue in the previous year. While IAC revenue

was also impacted by weakness in German manufacturing, the

business benefited from its diversified segment exposure. The

Mobility segment achieved revenue of EUR 41.4 million, up

from EUR 39.9 million in the prior year. The increase was driven

by increased pricing and the ramp-up of two projects that

were awarded prior to the Automotive divestment. Kendrion

recorded EUR 4.4 million other operating income (2024: EUR

1.7 million). This primarily relates to IT transition services, rental

income from the buyer of the divested Automotive business,

and contributions under the cooperation agreement for the

Mobility sound and electronics plant in Sibiu, Romania.

Profit for the period ended at 19.5 million, compared to a loss

of EUR 4.5 million in the previous year. Profit from continued

operations was EUR 13.6 million (2024: EUR 8.4 million, while

discontinued operations recorded a profit of EUR 5.9 million

(2024: loss of EUR 12.9 million). Profit from discontinued

operations includes EUR 0.6 million profit from the operations

and EUR 5.3 million gain on the disposal, including transaction

costs.

For a meaningful analysis of the group’s underlying financial

performance, Kendrion presents certain performance measures

on a normalized basis. The normalized performance measures

exclude costs and benefits outside the ordinary course of

business and include restructuring charges, asset impairments

and other items of an incidental nature. Definitions and detailed

reconciliations of these alternative performance measures to

the closest applicable IFRS performance measures are

available on page 219 of this integrated annual report.

Normalized EBITDA

from continued operations in 2025 was

EUR 38.1 million, compared to EUR 33.2 million in the previous

year. As a percentage of revenue, normalized EBITDA stood

at 15.5% (2024: 13.4%). Normalized costs for raw materials

and subcontracted work decreased by EUR 6.6 million, or 6%,

driven by the lower sales volumes. Normalized staff costs

were stable as cost-saving measures offset wage inflation.

Normalized other operating expenses

rose by EUR 1.1 million,

largely due to reduced income from group services following

the Automotive and China divestments. This was more than

offset by EUR 2.7 million in additional other operating income,

primarily from rent and IT services provided to the divested

Automotive activities and income related to the co-operation

agreement for the Mobility sound and electronics plant

in Romania. Depreciation charges were stable at

EUR 12.8 million. Normalized net finance expenses

slightly

decreased to EUR 3.7 million, from EUR 3.9 million in 2024.

The share of profit or loss of an associate related to a 30%

shareholding in CFV Innovations Inc, a US-based developer of

constant-flow valve technology, was a loss of EUR 0.3 million,

against a loss of EUR 0.1 million in the previous year.

Normalized tax charges

increased by EUR 1.7 million to

EUR 5.0 million, resulting in a normalized effective tax rate of

26.1% (2024: 25.0%). Normalized net profit from discontinued

operations

amounted to EUR 2.2 million, improving from a loss

of EUR 0.5 million in the previous year. Total normalized profit

before amortization

totaled EUR 17.9 million, (2024:

EUR 11.8 million). In 2025, continued operations incurred

EUR 1.8 million in costs outside the normal course of business

(2024: EUR 2.6 million). These costs were mainly related to

restructuring charges to offset dissynergies following the

divestment of China in October 2025. After tax, the normalized

costs amounted to EUR 0.5 million (2024: EUR 1.5 million) and

also include a EUR 0.8 million deferred tax gain resulting from

a reduction in German corporate tax rates.

Net cash flow from operating activities totaled EUR 30.4

(2024: EUR 18.5 million). Cash flows from investing activities

amounted to EUR 53.5 million (2024: EUR 25.8 million),

bolstered by EUR 64.5 million in cash receipts from the final

payment of the Automotive divestment in February 2025 and

the divestment of the China business in October 2025. In 2025,

cash flows included EUR 6.2 million (2024: EUR 5.2 million)

related to normalized costs, primarily related to restructuring

expenses and transaction costs linked to the Automotive and

China divestments. Total normalized free cash flow

was

25.6 million (2024: negative EUR 3.0 million). Continuing

operations contributed EUR 25.4 million to normalized free

cash flow

, while discontinued operations contributed

EUR 0.2 million.

Total net debt

as of 31 December 2025 stood at

EUR 30.3 million, marking a decrease of EUR 73.1 million

compared to 31 December 2024. This reduction was driven

by the proceeds from the divestments of the Automotive

and China businesses and strong cash flow generation,

partially offset by cash dividends of EUR 19.7 million and

the repurchase of own shares for EUR 2.5 million under

the EUR 10 million share buyback program commenced

in November 2025.

Non-IFRS financial measure. For the definition and reconciliation of the most directly comparable IFRS measures, refer to reconciliation of non-IFRS financial measures, on page 219.

Integrated Annual Report 2025

FINANCIAL REVIEW

Total invested capital as of 31 December 2025 was EUR 99.2

million (31 December 2024: EUR 162.6 million), excluding

goodwill and other intangibles from acquisitions. Return on

invested capital

was 24.6% (2024: 12.0%).

Liquidity position

Kendrion’s liquidity position comprises freely available cash

balances and undrawn credit facilities. As of 31 December

2025, cash balances amounted to EUR 29.4 million (2024:

EUR 8.5 million). Additionally, Kendrion had EUR 78.9 million

(2024: EUR 64.0 million) available under undrawn credit

facilities. The Company’s primary debt funding instruments

consist of a EUR 52.5 million Schuldschein private placement

loan maturing on 26 April 2027 and a EUR 75.0 million

revolving credit facility with HSBC Bank and ING Bank, which

runs until 26 April 2027. The revolving credit facility will be

reduced by EUR 25 million in February 2026 reducing the total

credit facilities after the divestment of the China business to fit

the new Kendrion. The facility is subject to certain covenants,

including a maximum leverage ratio of 3.25, with a temporary

spike to 3.75 under certain conditions. Kendrion’s leverage

ratio

based on the definitions in the facility agreement as of 31

December 2025 was 0.8 (31 December 2024: 2.7).

Research & Development

R&D expenses for 2025 amounted to EUR 11.6 million

(2024: EUR 11.5 million), of which EUR 9.6 million related to

staff costs, of which EUR 0.5 million in R&D expenses (2024:

EUR 0.2 million) was capitalized on the balance sheet. R&D

costs represented 4.7% of revenue in 2025 (2024: 4.6%).

The Kendrion Group employed 95 FTE in R&D during the year.

Key R&D activities focused on developing locking solutions for

industrial applications, refining inductive heating technology for

industrial processes and advancing electromagnetic brake

technology for growth markets, including collaborative robots

and automated guided vehicles (AGVs).

Management statement

Pursuant to article 5:25c of the Financial Supervision Act

(Wet op het Financieel Toezicht), the Executive Board

confirms, to the best of its knowledge, that:

(i) The consolidated financial statements present a true and

fair view of the assets, liabilities, financial position, and profit

and loss of Kendrion N.V. and its consolidated companies.

(ii) The Integrated Annual Report provides a true and fair

account of Kendrion N.V.’s position as of 31 December

2025, as well as the developments during the financial year

of Kendrion N.V. and its group of companies included in

the consolidated financial statements.

(iii) The Integrated Annual Report outlines the primary risks

faced by Kendrion.

The members of the Executive Board have signed the

consolidated financial statements in compliance with their

statutory obligations under Article 2:101, paragraph 2 of the

Dutch Civil Code and article 5:25c of the Financial Supervision

Act.

Non-IFRS financial measure. For the definition and reconciliation of the most directly comparable IFRS measures, refer to reconciliation of non-IFRS financial measures, on page 219.

Integrated Annual Report 2025

FINANCIAL REVIEW

OUTLOOK

Looking back on 2025, trading conditions remained

challenging. The European economy – particularly Germany –

stayed weak, interest rates were lowered during the year but

did not lead to a meaningful increase in capital investment or

economic activity.

In 2025, Kendrion underwent a significant transformation.

The company completed the divestment of its European and

USA automotive operations to Solero Technologies in February

and sold its China automotive business to local management in

August. In September, Kendrion entered into a cooperation

agreement with Knorr-Bremse to ultimately transfer the Sibiu

mobility electronics facility in phases over the coming years.

At the same time, the organization was streamlined to remove

automotive-related complexities.

These actions marked a major shift, enabling Kendrion to focus

exclusively on industrial growth in Europe, the USA, and Asia.

By concentrating on the industrial sector and maintaining tight

cost controls, the company achieved stronger profitability and

robust cash flow. This performance enabled the distribution of

a regular dividend of EUR 0.45 per share in May, along with

a special dividend of EUR 1.00 per share in November.

Going forward, our focus will remain solely on industrial

opportunities within our Industrial Brakes (IB) and Industrial

Actuators and Controls (IAC) business groups worldwide. We

target projects where our expertise in valves, actuators, brakes,

and control technology provides a sustainable competitive

advantage. We will invest only where we have a clear edge,

expect a minimum EBITDA of 20% and anticipate annual

revenue growth of at least 10% in the area of investment and

preferably more.

Looking ahead to 2026, industrial output across Europe, the

USA, and China is expected to remain broadly in line with 2025

levels. Our primary focus is to sustain and further enhance the

profitable results achieved last year. Key strategic sectors

The New Kendrion

include induction heating systems for industrial processes,

industrial locks for professional kitchens, laboratory equipment

and parcel lockers, safety valves for nuclear facilities, brakes for

industrial and collaborative robotics, and intra-logistics.

In 2025, we achieved our minimum EBITDA profitability target

of 15% of revenue ahead of schedule. Despite continued

economic uncertainty, we remain committed to our financial

objectives: a normalized EBITDA

margin of 15%-18% from

2026 onwards, and an ROI of 23-27% by 2027. We also

commit to distributing annual dividends of at least 50% of

normalized net profit before amortization.

Integrated Annual Report 2025

Non-IFRS financial measure. For the definition and reconciliation of the most directly comparable IFRS measures, refer to reconciliation of non-IFRS financial measures, starting on page 219.

Effective risk management

Effective risk management is critical to executing Kendrion’s

strategy, delivering long-term value for stakeholders, protecting

the company’s reputation, and ensuring sound corporate

governance. While Kendrion promotes entrepreneurship and

empowers management to exercise appropriate discretionary

powers, its risk management approach acknowledges that

exposure to risk is an inherent part of doing business.

Kendrion seeks to balance fostering an entrepreneurial spirit

with maintaining a strong culture of risk awareness. The goal is

to manage risks in line with Kendrion’s risk appetite, reducing

the likelihood and impact of adverse events while staying

competitive in a dynamic business environment. In the context

of the updated Dutch Corporate Governance Code, the

Executive Board has further validated and documented its

internal risk management and control systems and the

effectiveness thereof. Based on this assessment the Executive

Board concludes that Kendrion’s risk management and control

systems are effective and provide sufficient comfort.

Nonetheless they cannot guarantee the achievement of

objectives or entirely prevent material errors, losses, fraud,

or regulatory breaches.

Risk management framework

Kendrion’s risk management framework is based on the ISO

31000 framework and seamlessly integrated into its business

practices, encompassing culture, policies, processes, and

behaviors. This comprehensive approach comprises two main

complementary elements: a top-down strategic view of risk at

the enterprise level and a bottom-up view of risk at the

operational level. Together, these perspectives ensure a

consistent and systematic approach to identifying risks and

implementing appropriate controls in line with Kendrion’s risk

appetite. By fostering a culture of risk awareness, the

framework empowers employees at all levels to actively

contribute to risk mitigation and management.

RISK MANAGEMENT

The Executive Board oversees the comprehensive risk

management and internal control system, ensuring alignment

with the company’s strategic objectives and activities. The

Executive Board is responsible for embedding these systems

into daily operations and regularly reviewing their effectiveness.

An annual risk assessment is conducted to evaluate potential

adjustments to the risk management and internal control

system as market conditions and circumstances evolve. This

assessment includes a dedicated focus on fraud risks relevant

to Kendrion. The outcomes of the annual risk assessment are

discussed within Kendrion’s Management Team and

subsequently shared with the Supervisory Board. To enhance

risk management and oversight, risk owners are assigned to

the most significant risks identified. Each risk owner is tasked

with preparing and updating mitigation plans during the

subsequent years.

At the operational level, Kendrion’s plants maintain

internationally recognized certifications that assess and improve

their processes. Local management is responsible for

implementing internal controls and procedures, regularly

testifying their effectiveness, and maintaining full awareness of

operational risks. Corporate oversight is effectively maintained

trough a framework of group-level controls, including internal

audits and business review meetings. This approach ensures

that internal controls remain robust and aligned with Kendrion’s

overarching risk management framework.

CONTROL ENVIRONMENT

Annual corporate

risk management

cycle

Code of conduct

Speak-up procedure

Corporate policies

Internal audit

Local entity

risk management

process

OPERATIONAL

LEVEL

Periodic business reviews

Planning & Control cycle

Local policies and procedures

ENTERPRISE

LEVEL

Project risk

management

process

Certificates

Quarterly

reporting

Risk

owners

Corporate

top 10

Integrated Annual Report 2025

Risk appetite

Kendrion’s risk management framework balances risk and

opportunity, while clearly identifying the Executive Board’s

appetite for risk. The Executive Board and the Management

Team periodically review and discuss Kendrion’s approach to

risk management, as the company’s risk appetite may evolve in

response to societal developments, geopolitical shifts, the

competitive and customer landscape, and internal changes.

Kendrion’s risk appetite provides an indicative bandwidth that

guides decision-making processes across the organization.

This bandwidth is defined for each of the following risk areas:

Strategic, Operational, Financial, (financial and sustainability

reporting) and (tax) Compliance. The width of the bandwidth

and its position on the risk spectrum —from risk averse to risk

taking —vary by risk area. For instance, as illustrated in the

visual, Kendrion adopts a risk-averse approach to compliance

risks, while the bandwidth for strategic risks is significantly

broader, enabling a higher degree of risk-taking in pursuit of

strategic objectives.

RISK AREA RISK APPETITE TARGET

Risk averse Risk taking

Strategic

Operational

Financial & reporting

Compliance

Entrepreneurial

Innovative

Punctual

Sincere

Integrated Annual Report 2025

RISK MANAGEMENT

Risk overview

Risk area Risk name Risk description

Strategic M&A activities or strategic projects fail to deliver results Mergers, acquisitions or strategic projects may fail to deliver the anticipated synergies or expected results and

could adversely affect the company’s financial performance, operational effectiveness or strategic objectives.

Uncertainties of (global) economic and political conditions An inability to respond swiftly and effectively to volatile economic and political conditions or sudden market

disruptions may impair our ability to manage operations efficiently and could negatively affect financial

performance and strategic objectives.

Operational IT system reliability and implementation risk Issues with IT hardware, software, or implementation delays could disrupt system transactions, create data

gaps, or fail to meet business requirements, leading to potential revenue losses or increased costs.

IT and cyber security risks Cyber risks, such as failures in information systems or unauthorized access leading to the alteration,

destruction or theft of data, could cause business interruptions, loss of confidential data, or damage to the

company’s reputation.

Sourcing disruptions and purchase price increases Disruptions in the availability of raw materials, components or services, as well as increases in purchase prices,

may negatively impact production continuity, cost levels and margins.

Order volatility or project cancellation risk Significant volatility in order intake or the cancellation, postponement or modification of projects by customers

may adversely affect revenue visibility, capacity utilisation and financial performance.

Intellectual property protection Insufficient protection of intellectual property could allow potential competitors to use or copy our products,

potentially undermining growth and impacting product margins.

In addition to the key risks outlined in the table above,

Kendrion explicitly identifies risks associated with climate

change, tax compliance, and fraud. Each of these risk areas,

along with their corresponding key risks, will be elaborated

on in more detail.

Strategic risks

M&A activities or strategic projects fail to deliver results

Strategic risks arise when mergers, acquisitions, or internal

strategic projects fail to deliver the anticipated benefits, such

as margin expansion, cost reductions or the realization of

synergies. This could result in inefficiencies, missed financial

targets, or a loss of stakeholder confidence.

Kendrion recognizes the importance of planning and executing

strategic changes, as well as remaining flexible to adapt to

changing circumstances. For strategic projects, including M&A,

dedicated oversight teams are established to ensure focused

execution and accountability. Additionally, regular reviews of

actions related to strategic projects, such as the sale of the

China activities in 2025, are conducted to monitor progress,

address bottlenecks, and ensure alignment with strategic and

financial objectives. Kendrion also undertakes an in-depth

annual strategic review process in which concrete strategic

options are evaluated. This includes a review of the M&A

strategy to ensure alignment with overarching business goals

and adjustments based on market conditions and strategic

priorities.

Uncertainties of (global) economic and political conditions

Kendrion operates in markets that are exposed to volatile

economic and political conditions, geopolitical developments and

structural industry changes. Such uncertainty may affect

customer investment behavior, order intake, supply chains and

cost levels, and may complicate planning, forecasting and

operational decision-making. An inability to respond swiftly and

effectively to volatile economic and political conditions or sudden

market disruptions may impair our ability to manage operations

efficiently and could negatively affect financial performance and

strategic objectives. Kendrion mitigates the impact of economic

and political uncertainty through sensitivity analyses and frequent

updates of forecasts and outlook assumptions. The Group

maintains financial flexibility through a disciplined capital

allocation approach, adequate liquidity buffers and access to

Integrated Annual Report 2025

RISK MANAGEMENT

committed financing. Operational flexibility is supported by

variable cost structures, flexible capacity management and

diversification across end markets. Timely and transparent

management information enables early identification of

developments and supports informed decision-making in volatile

market conditions.

Operational risks

IT system reliability and implementation risk

Issues relating to IT hardware, software or system

implementations may disrupt business operations. Such issues

could result in transaction failures, data loss or corruption, and

limitations in meeting business or regulatory requirements.

These disruptions may lead to operational inefficiencies,

increased costs, revenue loss and a reduced ability to serve

customers effectively. Kendrion is undertaking an ongoing

transition of its ERP landscape, which increases the importance

of disciplined system implementation, testing and change

management. To mitigate these risks, the Group applies a

structured approach to IT governance and system

management. Rigorous testing is performed prior to the

deployment of new systems, hardware or software to identify

and address potential issues before they affect operations.

Critical IT systems are supported by redundant infrastructure

and robust backup and recovery solutions to safeguard

business continuity. Implementation risks and delays are

mitigated through detailed project planning, clear milestones

and close collaboration between IT teams and business

stakeholders. Targeted user training supports effective system

adoption and reduces operational errors. In addition, regular

maintenance, continuous performance monitoring and strong

vendor partnerships contribute to the reliability and resilience of

the IT environment.

IT and cyber security risks

Cyber risks, including failures of information systems and

unauthorised access to, alteration, destruction or copying

of data, may lead to business interruptions, compromise

confidential or sensitive information and adversely affect the

Group’s reputation. Ensuring the security and resilience of IT

systems is critical to Kendrion’s operational integrity and

stakeholder trust. Kendrion maintains a comprehensive

cybersecurity framework designed to prevent, detect and

respond to cyber threats. This framework includes continuous

security monitoring with 24/7 threat detection, network

surveillance and real-time alerting to enable timely identification

and mitigation of potential incidents. Business continuity is

supported by robust contingency planning, including redundant

data storage, backup solutions and disaster recovery

arrangements. In addition, Kendrion applies a multi-layered

defence strategy combining technological, organizational and

procedural measures. These include regular software updates

and patch management, ongoing vulnerability assessments,

and targeted employee awareness and training programs.

Through this structured and continuously evolving approach,

Kendrion aims to protect its digital infrastructure and sensitive

data and to maintain secure, resilient and responsible

operations.

Sourcing disruptions and purchase price increases

Kendrion depends on the continuous availability of raw

materials and components to operate its production facilities

and meet customer demand. Disruptions in the supply chain

or sustained increases in purchase prices may adversely affect

production continuity and margins. Supply chain disruptions

may arise from a variety of factors, including transport

constraints, supplier insolvency, material scarcity, geopolitical

developments or increased demand at suppliers. In addition,

rising raw material prices or capacity shortages at suppliers

may result in higher purchase prices for Kendrion. Kendrion

mitigates these risks through an active and structured sourcing

and supplier management approach. Where possible, the

Group seeks to diversify its supplier base and increase the

availability of alternative sources for critical materials, while

ensuring procurement from reliable and reputable suppliers.

Supply continuity is supported through advance capacity

commitments and regular financial assessments of suppliers.

Critical suppliers are identified and subject to enhanced

monitoring to safeguard supply chain continuity. Kendrion

predominantly applies a local-for-local sourcing strategy to

reduce logistical dependencies and exposure to global

disruptions. Where single-source dependencies exist,

contingency measures are evaluated and implemented where

feasible, including alternative sourcing options, insourcing

opportunities and increased monitoring, to ensure risks remain

within the Group’s risk appetite. In the event of supply chain

disruptions, Kendrion engages proactively with affected

customers to communicate potential impacts and jointly identify

appropriate mitigation measures.

Order volatility or project cancellation

Order intake may be subject to significant volatility, and

customer projects may be postponed, modified or cancelled

as a result of external factors such as economic downturns,

geopolitical uncertainty, supply chain disruptions, regulatory

changes or shifts in customer preferences. Such developments

may lead to a structural decline in demand for certain products

or to short-term fluctuations in order volumes. In addition,

shortages of raw materials or components at customers may

result in order adjustments or cancellations, increasing

uncertainty in demand patterns. Order volatility and project

cancellations may adversely affect capacity utilisation, require

rapid adjustments to production planning and sourcing, and

lead to inefficiencies such as underutilised capacity, production

backlogs or elevated inventory levels. These effects may

negatively impact profitability, cash flow and working capital.

Integrated Annual Report 2025

RISK MANAGEMENT

Kendrion mitigates this risk through active customer

engagement and close monitoring of order volumes and project

timelines. Where possible, frame contracts are aligned with

both customers and suppliers to reduce supply chain volatility.

Contractual arrangements are structured to protect Kendrion

against adverse volume developments, including mechanisms

for price adjustments and recovery of investments in tools and

equipment in the event of cancellations or unmet volume

commitments. Demand developments are continuously

monitored, and production capacity, inventory levels and

purchasing volumes are adjusted to maintain operational

flexibility and limit adverse impacts on profitability and working

capital.

Intellectual property protection

Insufficient protection of intellectual property (IP) may allow

competitors to replicate or use Kendrion’s products, potentially

impacting growth and Kendrion’s competitive advantage. This

risk could result in reduced market share, and diminished

profitability. To mitigate this risk, Kendrion employs a

comprehensive IP protection strategy. Key innovations and

product designs are safeguarded through patents, trademarks,

and copyrights, filed in all relevant markets to ensure legal

protection. Confidentiality agreements and secure data-

handling protocols are strictly enforced to minimize the risk of

unauthorized disclosure or misuse. Additionally, Kendrion

actively monitors competitor activities and responds decisively

to any IP infringement through appropriate legal action. These

combined efforts help Kendrion maintain its competitive edge,

protect product margins, and support sustainable growth by

securing the value of its intellectual property.

is embedded in the reporting process and discussed

periodically with finance leadership and senior management.

Financial risks related to debt financing, credit exposure and

movements in interest and foreign exchange rates are managed

through dedicated policies and controls and are disclosed

separately in the financial statements (page 128). These risks

are monitored at appropriate levels within the organization and

mitigated in line with the Group’s risk appetite.

Compliance risks

Kendrion is committed to conducting business in full

compliance with its Code of Conduct, the values underpinning

the Code, and all applicable laws and regulations. These

include employment laws, data protection laws and regulations,

accounting standards, tax laws, health and safety requirements,

and governance and statutory filing obligations relevant to the

countries in which it operates. Senior management is

responsible for promoting awareness and ensuring adherence

to these laws and regulations.

To support compliance, Kendrion develops and maintains

global and local policies. Its global policies include a range of

procedures and policies, such as the Code of Conduct, Insider

Trading Code, Speak-up procedure, among others. The Code

of Conduct, central to Kendrion’s operations, reflects the core

values of “The Kendrion Way,” an inspiring motto that lies at the

heart of the organization.

The Code of Conduct outlines the principles and expectations

that guide the behavior of everyone at Kendrion. To support

employees in navigating compliance dilemmas, Kendrion

provides guidance and training, enabling them to recognize

issues and report actual or suspected misconduct or

Financial & reporting risks

As a globally operating, publicly listed company, Kendrion is

subject to extensive financial reporting, disclosure and

compliance requirements. Material misstatements or

deficiencies in financial or non-financial reporting could

adversely affect Kendrion’s reputation, stakeholder confidence

and stock market valuation. Kendrion reports quarterly in

accordance with IFRS and applicable regulatory requirements.

Given the low-risk appetite in this area, the Group has

implemented a robust governance, control and reporting

framework to ensure the accuracy, completeness and

consistency of reported information across all operating entities.

All entities report in line with uniform accounting policies,

reporting standards and timelines, as defined in the Group

Reporting Manual. Standardised planning and control cycles

provide financial and non-financial information on a weekly,

monthly and annual basis, enabling timely consolidation,

analysis and decision-making at Group level.

The integrity and reliability of reporting processes are supported

by up-to-date segregation of duties and a strong reliance on

general IT controls, including segregation of duties, system

access controls, data integrity safeguards and change

management procedures across critical accounting and

reporting systems. These IT-based controls are designed to

reduce dependency on manual controls and to support

consistent, high-quality reporting.

On a quarterly basis, responsible officers provide written

representations confirming the completeness and accuracy

of reported information and compliance with applicable laws,

regulations and internal policies, including the Kendrion Code of

Conduct. Ongoing monitoring of developments in accounting

standards, reporting requirements and regulatory frameworks

Integrated Annual Report 2025

RISK MANAGEMENT

irregularities through the Speak-up procedure. For more details

about “The Kendrion Way”, refer to the People & Culture

section of this Integrated Annual Report.

Compliance with Kendrion’s internal policies, procedures, and

applicable local laws and regulations is regularly assessed by

the internal audit department managed by our finance function.

The Group Finance & Control department is responsible for

designing and executing the annual audit plan, which evaluates

the adequacy of Kendrion’s internal control systems. Audit

findings are reported to the Executive Board, and key insights

are discussed with the Audit Committee and external auditors

on a regular basis. In 2025, audit results were reviewed with

local management, and identified significant control deficiencies

were addressed through agreed remediation actions and

follow-up procedures.

Tax compliance risks

In line with its overall risk-averse appetite for compliance risks,

Kendrion specifically reiterates this approach for tax compliance

and associated risks. Tax risks arise from local tax rules and

regulations as well as international regulatory frameworks.

These include transfer pricing risks on intercompany cross-

border deliveries of goods and services, tax risks related to

acquisitions and divestments, tax losses, taxes carried forward,

permanent establishments and potential changes in tax law.

Such risks may result in financial impacts, including tax

expenses and payments, tax adjustments, accrued interest,

fines, litigation against Kendrion’s management, and damage to

Kendrion’s reputation with (local) authorities and stakeholders.

The Group Finance & Control department is responsible for

establishing and overseeing group wide tax policies. Potential

risks are periodically monitored and assessed based on their

likelihood of occurrence and potential impact on both local and

group-wide financial tax results. For the most significant tax

jurisdictions, Kendrion holds regular meetings with external tax

specialists to review the tax position, evaluate tax risks, and,

where applicable, assess the impact of potential changes in tax

laws and legislation. To actively mitigate risks, Kendrion involves

external tax advisors where specialist knowledge is required

and consults (local) authorities when interpretations of tax

requirements could have a significant impact.

CSRD compliance and assurance requirements

The regulatory framework for sustainability reporting under the

Corporate Sustainability Reporting Directive (CSRD) is still

evolving in the Netherlands and at EU level, including the

scope, timing and assurance requirements, as well as potential

amendments arising from the proposed Omnibus regulation.

Based on the current interpretation of applicable legislation and

the new threshold, Kendrion does not expect to fall within the

scope of mandatory CSRD reporting with limited or reasonable

assurance for the 2025 reporting year.

However, changes in legislation, regulatory guidance or

enforcement practice may result in Kendrion becoming subject

to CSRD reporting and assurance requirements with retroactive

effect. In such circumstances, Kendrion could be required to

prepare and obtain assurance over sustainability information for

prior reporting periods, which may lead to additional costs,

increased workload, pressure on internal resources and the

need to accelerate data collection, controls and

documentation. Kendrion closely monitors regulatory

developments related to CSRD, ESRS and assurance

requirements and assesses their potential impact on reporting,

governance and internal processes. Where appropriate,

preparatory measures are taken to ensure that the Group

remains able to respond in a timely and controlled manner to

changes in sustainability reporting obligations.

Climate change

Society, shareholders and other stakeholders increasingly

expect companies to address environmental challenges and

the impacts of climate change, driving demand for more

sustainable operations, solutions and products. Climate change

and the related transition towards a low-carbon economy

present Kendrion with both risks and opportunities across its

value chain.

The direct physical impact of climate change on Kendrion’s

facilities is currently limited due to their geographical locations.

However, indirect effects such as extreme weather events may

disrupt supply chains, delay production, reduce operational

efficiency and contribute to material shortages. In addition,

rising raw material and energy costs, as well as potential

regulatory measures such as carbon pricing or environmental

levies, may increase cost levels. The extent to which these

costs can be recovered will depend on market dynamics and

the ability to pass on price increases across the value chain.

Climate change and the sustainability transition are also

expected to influence customer preferences, regulatory

requirements and demand patterns. Kendrion anticipates

growth opportunities in markets aligned with long-term

sustainability trends. These include solutions supporting

electrification and automation of industrial processes and

energy transition, such as inductive heating control units,

electromagnetic brakes for wind turbines and safety-critical

components for low-carbon energy applications.

Integrated Annual Report 2025

RISK MANAGEMENT

Overall, Kendrion’s Business Groups are well positioned to

benefit from the ongoing transition towards electrification of

industrial processes, reduced reliance on fossil fuels and lower

greenhouse gas emissions. The Group continues to invest in a

responsible and future-proof product portfolio while supporting

customers in achieving their sustainability and emission-

reduction objectives. Kendrion mitigates climate-related risks by

reducing its own environmental footprint through energy

efficiency initiatives, increased use of renewable energy, waste

reduction and recycling programs, while continuously assessing

climate-related developments and their potential impact on

operations, supply chains and markets.

Fraud

Given its global footprint, Kendrion is exposed to a broad range

of fraud risks. As an industrial manufacturing company, the

most relevant fraud risks arise in areas such as the supply chain

(including kickbacks, bribery and false invoicing), inventory and

asset management (including theft and manipulation),

administrative and financial processes (including fraudulent

payments and falsified records), and cyber-related fraud. Fraud

incidents may result in financial losses, operational disruption,

reputational damage and loss of stakeholder trust, particularly

in jurisdictions with strict regulatory and enforcement regimes.

Fraud risk is explicitly included as a separate category in

Kendrion’s annual enterprise risk assessment. This ensures

systematic identification, monitoring and discussion of fraud

risks and supports ongoing awareness among senior

management of the importance of fraud prevention and

detection. Kendrion applies a comprehensive set of preventive

and detective measures to reduce exposure to fraud. Access to

systems, data and physical locations is restricted to what is

necessary for employees to perform their roles, supported by

segregation of duties to prevent the concentration of

incompatible responsibilities. User access rights and

segregation of duties are reviewed periodically and adjusted

where required to remain aligned with the Group’s risk appetite.

Fraud prevention and detection are further supported by a

combination of IT-based and business controls, including

transaction monitoring, variance and margin analyses, and

reviews of changes to key master data. Where limitations in

automated controls are identified, complementary controls are

applied to mitigate residual risks.

Clear authorization limits are defined for financial and

operational transactions, ensuring that decisions involving

increased risk are subject to appropriate approval levels. Ethical

conduct and fraud awareness are reinforced through Kendrion’s

Code of Conduct, which is introduced to all employees upon

joining the Group and addresses expected behavior and

common fraud scenarios. Awareness of the Code of Conduct

and related topics is refreshed regularly through targeted

communication and training initiatives, including e-learning,

workshops and internal communications.

In control statement

Based on the approach described above, the Executive Board

is of the opinion that, to the best of its knowledge:

■ this chapter provides sufficient insights into any failings in

the effectiveness of the risk management and internal

control systems (if any);

■ the risk management and internal control systems provide

reasonable assurance that the financial reporting, including

tax reporting, does not contain any material misstatements;

■ the risk management and internal control systems provide

limited assurance that the sustainability report does not

contain any material misstatements;

■ in reference to our risk appetite and the complexity of our

organization, our internal risk management and control

systems provide sufficient comfort that operational and

compliance risks were effectively managed, while keeping

in mind inherent limitations;

■ based on the current state of affairs, it is justified that the

financial reporting is prepared on a going concern basis;

and

■ this chapter describes the material risks and uncertainties

that are relevant to the expectation of Kendrion’s continuity

for the period of twelve months after the date of this

Integrated Annual Report.

The Executive Board acknowledges that, while well-designed

and effectively implemented risk management and internal

control systems significantly reduce risks, they cannot provide

absolute assurance. Such systems may be subject to inherent

limitations, including human error, errors of judgement,

deliberate circumvention of controls, fraud, violations of laws

and regulations, or unforeseen circumstances. In addition,

the design and maintenance of these systems involve a cost-

benefit consideration.

Integrated Annual Report 2025

RISK MANAGEMENT

Kendrion’s governance framework is rooted in the statutory

requirements applicable to public limited liability companies in

the Netherlands. This framework incorporates the principles

and best practice provisions outlined in the Dutch Corporate

Governance Code, most recently updated on 20 March 2025

(the ”Code”), along with Kendrion’s Articles of Association, last

amended on 25 June 2020. Key topics from the Code are

addressed in the various sections of this Integrated Annual

Report. The Articles of Association, alongside related policies

such as the Supervisory Board Regulations and the regulations

for its committees form a framework for Kendrion’s governance

and operations. This framework establishes a sound and

transparent system of checks and balances. For the Articles of

Association, the Supervisory Board Regulations, the regulation

of its committees, and additional information about Corporate

Governance at Kendrion, please visit our corporate website at

www.kendrion.com.

Kendrion N.V.

Kendrion N.V. is a public limited liability company incorporated

under the laws of the Netherlands, with its corporate seat in

Amsterdam, the Netherlands. Details regarding Kendrion N.V.’s

share capital can be found in the section ‘Share and

Shareholder Information on page 125 of this Integrated Annual

Report.

As the ultimate parent company, Kendrion N.V. holds all shares

in Kendrion Finance B.V., a private limited liability company

incorporated under Dutch law, with its corporate seat in Zeist,

the Netherlands. Kendrion Finance B.V., directly or indirectly,

holds shares in all Kendrion’s operating companies, each of

which is directly or indirectly a wholly owned subsidiary.

Kendrion N.V. is not subject to the large company structure

regime. Additionally, no works council has been established at

the level of Kendrion N.V., nor is there a statutory requirement

to establish one. For information on works councils and

employee representation within certain Kendrion operating

CORPORATE GOVERNANCE REPORT

companies, please refer to the ‘Sustainability Statements -

Social’ section on page 83 of this Integrated Annual Report.

Two-tier governance structure

The Executive Board, consisting of the CEO and the CFO, is

responsible for managing Kendrion, under the supervision of

the Supervisory Board. Members of the Executive Board and

the Supervisory Board are appointed and dismissed by the

General Meeting of Shareholders. The General Meeting of

Shareholders may amend the Articles of Association upon a

proposal by the Executive Board, provided it has received prior

approval of the Supervisory Board. Such amendments require

an absolute majority of the votes cast at the General Meeting

of Shareholders.

Executive Board

The Executive Board is responsible for managing Kendrion and

ensuring the continuity of Kendrion’s long-term, sustainable

value creation strategy, objectives, results, and policies. This

includes defining strategies and plans that align with the goals

of the Paris Agreement to limit global warming. In carrying out

its duties, the Executive Board considers the impact of

Kendrion and its affiliated enterprise on people and the

environment, carefully balancing the interests of all relevant

stakeholders. A key aspect of the Executive Board’s

responsibilities is fostering and maintaining a culture focused

on sustainable long-term value creation. A strong, healthy

company culture, as outlined in the ‘Sustainability Statements -

Social’ section in this Integrated Annual Report, plays a vital

role in preventing misconduct and irregularities. The Executive

Board is accountable to the Supervisory Board and the General

Meeting of Shareholders. Major decisions made by the

Executive Board require approval from the Supervisory Board.

In accordance with Kendrion’s Articles of Association, which

stipulate that the Executive Board must consist of at least two

members, the Supervisory Board determines the number of

members on the Executive Board. Executive Board members

are appointed by the General Meeting of Shareholders, based

on recommendations from the Supervisory Board. In line with

provision 2.2.1 of the Code, Executive Board members are

appointed for a maximum term of four years, with the possibility

of reappointment for successive terms of no more than four

years each. The selection process for Executive Board

members takes into account the diversity objectives outlined in

Kendrion’s diversity policy, which can be found on the

corporate website at www.kendrion.com.

Other than upon proposal of the Supervisory Board, members

of the Executive Board can also be suspended or dismissed by

the General Meeting of Shareholders. In that case, a resolution

to suspend or dismiss Executive Board members is adopted by

an absolute majority, representing at least one-third of the

issued share capital. If the Supervisory Board recommends

suspension or dismissal, the resolution is adopted by an

absolute majority of the votes cast at a General Meeting of

Shareholders. Executive Board members comply with statutory

requirements regarding the number of supervisory or non-

executive roles they may hold in large enterprises.

For further details on the composition of the Executive Board

and its members, please refer to page 12 of this Integrated

Annual Report.

An Executive Board member must refrain from participating in

deliberations or decision-making on any matter where they

have a direct or indirect personal interest that conflicts with

Kendrion’s interests. In such cases, the Executive Board

member must promptly report the conflict to the Chairman of

the Supervisory Board and to the other members of the

Executive Board. Transactions involving a conflict of interest

Integrated Annual Report 2025

with an Executive Board member require Supervisory Board

approval. In 2025, no transactions involving conflicts of interest

with Executive Board members occurred. Kendrion maintains a

policy of not providing loans or guarantees to Executive Board

members.

Management Team

The Management Team comprises the CEO, CFO, and

executives with clear accountability for delivering all aspects of

the strategic plan. It includes the Business Group Directors

from Industrial Actuators and Controls and Industrial Brakes.

Functional areas such as Information Technology, Compliance

and Sustainability, are represented by the CIO and General

Counsel within the Management Team.

The number of members of the Management Team is

determined by the Executive Board in consultation with the

Supervisory Board. For Management Team members who are

not part of the Executive Board, appointments and dismissals

are made by the Executive Board, following consultation with

the Supervisory Board. The diversity objectives outlined in

Kendrion’s diversity policy are considered when appointing

members to the Management Team.

The Management Team convenes regularly, and members not

part of the Executive Board are often invited to attend

Supervisory Board meetings.

Leadership Team

The Leadership team comprises the Management Team and

the executives reporting to its members, all playing a key role in

delivering Kendrion’s strategic and operational performance.

Consisting of approximately 30 executives, the Leadership

of the Supervisory Board, serving a term of four years.

The Supervisory Board internally elects a Chairman from

among its members.

The Chairman presides over Supervisory Board meetings,

ensuring their effective operation, as well as that of its

committees. The Chairman also facilitates communication

between the Supervisory Board, the Executive Board, the

Management Team, and the General Meeting of Shareholders.

Regular contact is maintained between the Chairman and the

CEO on matters within the Supervisory Board’s scope. Similarly,

the Chair of the Audit Committee maintains regular contact with

the CFO regarding the Audit Committee’s responsibilities.

Supervisory Board members step down in accordance with a

rotation schedule adopted by the Supervisory Board. Members

whose term expires may be reappointed, with consideration

given to their performance, the diversity objectives outlined in

Kendrion’s diversity policy, and best practice provision 2.2.2 of

the Code regarding appointment and reappointment periods.

Each Supervisory Board member may be dismissed by the

General Meeting of Shareholders.

New members of the Supervisory Board undergo an

introductory program, providing them with an overview of

Kendrion’s business activities, including manufacturing

operations, and essential internal procedures and processes

required for fulfilling their duties as Supervisory Board members.

Regular meetings of the Supervisory Board typically involve the

attendance of the Executive Board and, periodically, members

of the Management Team. The Supervisory Board also holds

independent meetings, without the Executive Board present.

The Company Secretary assists the Supervisory Board by

ensuring adherence to correct procedures, statutory

obligations, and the Articles of Association. The Company

Secretary also facilitates communication between the Executive

Team represents all operating companies of Kendrion across

Europe, the US and Asia. For members of the Leadership Team

not part of the Management Team, appointments and

dismissals are made by the Executive Board.

The Leadership holds monthly online meetings and convenes

annually in person at the ‘Top Management’ meeting.

Supervisory Board

The Supervisory Board supervises and advises the Executive

Board in executing its responsibilities, while overseeing

Kendrion’s overall development and performance. It prioritizes

the interests of Kendrion and its stakeholders, emphasizing the

effectiveness of risk management, internal control systems, and

the integrity and quality of financial and sustainability reporting.

The composition of the Supervisory Board ensures that its

members can operate critically and independently, free from

influence by each other, the Executive Board, the Management

Team, or any specific interests. Each member brings the

expertise, experience, and background required to perform

their duties, in line with the 'Profile outline' for the Supervisory

Board, and the diversity objectives outlined in Kendrion’s

diversity policy. Both the 'Profile outline' and the diversity policy

are available on the corporate website at www.kendrion.com.

The Supervisory Board currently comprises four independent

members, as defined by the Code. All members comply with

statutory requirements regarding the maximum number of

supervisory or non-executive functions in large enterprises.

The Supervisory Board’s composition also aligns with the

statutory provisions of the Dutch Gender Balance Act.

Members of the Supervisory Board are appointed by the

General Meeting of Shareholders upon the recommendation

Integrated Annual Report 2025

CORPORATE GOVERNANCE REPORT

Board and the Supervisory Board and assists the Chairman in

organizing Supervisory Board affairs.

The Supervisory Board has established two committees: the

Audit Committee and the HR Committee (which combines the

Remuneration Committee and the Selection and Appointment

Committee). These committees are responsible for preparing

decisions for the Supervisory Board. The regulations outlining

the tasks and procedures of the committees can be found on

the corporate website at www.kendrion.com. For detailed

information on the composition of the Supervisory Board, its

committees, and its members, please refer to the section

‘Report of the Supervisory Board’ on page 105 of this

Integrated Annual Report.

Annually, the Supervisory Board evaluates its own functioning,

the performance of its committees, and that of individual

Supervisory Board members. The results of this evaluation are

discussed among the members of the Supervisory Board, and

the Chairman subsequently informs the Executive Board as

appropriate.

Members of the Supervisory Board do not receive shares or

rights to acquire shares in Kendrion as compensation. Kendrion

does not provide loans or guarantees to Supervisory Board

members. In accordance with the Supervisory Board

regulations, a member may not participate in the deliberation or

decision-making process on any matter in which they have a

personal interest that conflicts with Kendrion’s interests. In

2025, there were no transactions involving a conflict of interest

with any member of the Supervisory Board.

As of 31 December 2025, the following Supervisory Board

members hold shares in Kendrion: Mr. Van Hout (26,500

shares) and Mrs. Slijkhuis (3,500 shares).

Diversity within the Executive Board,

Management Team, Leadership Team and

Supervisory Board

Kendrion places significant importance on fostering diversity

across its workforce, including the Executive Board, the

Management Team, the Leadership Team and the Supervisory

Board. As part of Kendrion’s sustainability program, the Social

and Human Capital pillar emphasizes advancing diversity

throughout the organization. Ambitious diversity targets, aligned

with Kendrion’s diversity framework, have been set for each

Business Group. Details of the framework and targets can be

found in the ‘Sustainability Statements - Social’ section on

page 83 of this Integrated Annual Report.

A diverse range of competences, skills and backgrounds within

the Executive Board, the Management Team, the Leadership

Team and the Supervisory Board enhances decision-making

and contributes to long-term, sustainable value creation.

Kendrion prioritizes diversity aspects such as gender,

nationality, and background (including education and (work)

experience) as essential to its business. The company remains

committed to ongoing efforts to improve diversity across all

leadership levels.

According to Kendrion’s diversity policy, at least 33% of the

members of the Supervisory Board must be women, and at

least 33% of the Supervisory Board members must be men.

The current composition of the Supervisory Board, with two

female members and two male members, meets the 33%

gender diversity target.

Gender diversity targets have also been set for Kendrion’s

Leadership Team and for the global so-called Indirect staff.

Kendrion is committed to reshaping the composition of both

groups so that, per 2028, at least 33% of the Leadership Team

and the Indirect staff will be women, and at least 33% will be

men. As of December 31, 2025, the Leadership Team

comprises 81% men and 19% women, while the Indirect Staff

comprises 27% women and 73% men. These figures indicate

that the targets for both groups have not yet been met. In 2025,

there were no changes to the Executive Board and there was

one change to the Management Team, because of the sale of

the company’s China-based business.

As a global company, Kendrion has also set nationality-related

targets. According to the diversity policy, the Management

Team must include representatives from at least two regions

where Kendrion operates. This nationality diversity objective for

the Management Team was met in 2025. For the Supervisory

Board and the Executive Board, the objective is to maintain

appropriate nationality diversity. In the Supervisory Board one

member holds German nationality, reflecting Kendrion’s

significant operations in Germany.

Furthermore, Kendrion’s diversity policy includes a background

diversity objective. According to this policy, at least one member

of the Executive Board and at least three members of the

Management Team must have experience in international

industrial business. For the background diversity objective of

the Supervisory Board, please refer to the Supervisory Board

‘Profile outline’, available on Kendrion’s corporate website.

The compositions of the Executive Board, the Management

Team and the Supervisory Board align with their respective

background diversity objectives.

The Supervisory Board’s composition is both diverse and

experienced, reflecting a balanced participation of two female

members and two male members. The Executive Board

comprises qualified, knowledgeable, and experienced

members. The Management Team demonstrates a strong blend

of skills, nationalities, ages, backgrounds, and other relevant

factors.

Integrated Annual Report 2025

CORPORATE GOVERNANCE REPORT

Kendrion’s diversity policy outlines specific objectives that will

be explicitly considered – beyond functional requirements –

when selecting individuals for (re)appointment to the

Supervisory Board and Executive Board, as well as when filling

vacancies within the Management Team. When engaging

external recruitment consultants, Kendrion provides search

instructions underpinning the diversity policy. The diversity

policy is available on the corporate website at www.kendrion.

com.

General Meeting of Shareholders

At least once a year, Kendrion convenes a shareholder meeting.

These meetings are convened by the Executive Board and/or

Supervisory Board. Additionally, meetings may be convened at

the request of shareholders jointly representing at least 10% of

Kendrion’s issued share capital, subject to authorization by the

competent Dutch court. Shareholders holding at least 3% of

the issued share capital have the right to propose items for

inclusion on the agenda. Kendrion will generally include such

items if a substantiated proposal, clearly stating the matter to

be discussed or a draft resolution, is submitted in writing, at

least 60 days before the meeting date. Each shareholder is

entitled to attend shareholder meetings in person or by written

proxy and may exercise voting rights in accordance with the

Articles of Association. Each outstanding share carries one

vote. Resolutions are adopted by an absolute majority of votes

cast unless otherwise specified by the Articles of Association or

applicable law.

Shareholders representing 53.07% (2024: 59.17%) of the total

number of shares entitled to vote were represented at the

General Meeting of Shareholders held on 14 April 2025.

Kendrion maintains an internal audit department managed by

our finance function, with reporting lines to the CFO. The

internal audit department, managed by our finance function,

evaluates the design and effectiveness of the internal risk

management and control systems. In line with the Code,

both the Executive Board and the Audit Committee of the

Supervisory Board are involved in preparing and approving

the internal audit plan.

The annual internal audit plan is submitted for approval to the

Executive Board and the Supervisory Board. Internal audit

reports are reviewed with the Executive Board and the Audit

Committee, and the external auditor is informed accordingly.

For further details on the Audit Committee and the performance

of its duties, reference is made to the ‘Report of the

Supervisory Board’ on page 105 of this Integrated Annual

Report.

For the management statement of the Executive Board,

required under article 5:25c of the Financial Supervision Act

(Wet op het Financieel Toezicht), please refer to the ‘Financial

Review’ on page 27 of this Integrated Annual Report.

Agreements in the meaning of the decree for

the implementation of article 10 of the takeover

directive (besluit artikel 10 overnamerichtlijn)

The credit facilities of Kendrion N.V. include a change of control

provision. An early repayment obligation is triggered if a party

acquires more than half of Kendrion’s issued share capital or

voting rights.

For further details about the authority of the General Meeting

of Shareholders and Kendrion’s Articles of Association, please

refer to the corporate website at www.kendrion.com.

Special Provisions Relating to Shares

Unless otherwise indicated, there are no restrictions on the

transfer of shares, the exercise of voting rights, or the term for

exercising those rights Additionally, no special controlling rights

are attached to shares. On 14 April 2025, the General Meeting

of Shareholders granted the Executive Board the authority to:

(i) issue shares or grant rights to acquire shares and restrict or

exclude pre-emptive rights in relation to such issuances of

shares; and (ii) acquire shares in Kendrion N.V., within the limits

prescribed by the Articles of Association and applicable

statutory provisions. This authority was granted for a period

of 18 months from the date of the General Meeting of

Shareholders (i.e. until 14 October 2026) and is subject to

the prior approval by the Supervisory Board.

Auditor

Before being presented to the General Meeting of Shareholders

for adoption, the annual financial statements, as prepared by

the Executive Board, must be audited by an external certified

public auditor. The General Meeting of Shareholders holds the

authority to appoint the auditor. On 15 April 2024, the General

Meeting of Shareholders appointed Mazars Accountants N.V.

for an initial three-year term, beginning with the financial year

2024. The General Meeting of Shareholders may direct

questions to the external auditor regarding their opinion on the

financial statements. As a result, the external auditor is required

to attend and is entitled to address the General Meeting of

Shareholders.

Integrated Annual Report 2025

CORPORATE GOVERNANCE REPORT

Corporate Governance Statement

This Corporate Governance Report, along with the section

‘Share and shareholder information’ on page 125 of this

Integrated Annual Report, contains the information specified in

the Decree for the implementation of article 10 of the Takeover

Directive. Furthermore, when combined with the sections ‘Risk

management’ and 'Report of the Supervisory Board' included

in this Integrated Annual Report, it should be considered as the

Corporate Governance Statement as required by the Decree on

the contents of the management report (Besluit inhoud

bestuursverslag).

Relevant Documents on Corporate Website

■ Articles of Association

■ Supervisory Board Regulations and Committee Regulations

■ Diversity Policy for the Supervisory Board, Executive Board

and Management Team

■ Profile outline for the Supervisory Board

■ Insider Trading Code

■ Policy on Bilateral Contacts with Shareholders

■ Code of Conduct

■ Speak-Up Procedure

Taxes

Kendrion’s tax policy is based on the core values embedded

in Kendrion’s Code of Conduct and aligned with Kendrion’s

strategy and the rationale underlying the value creation pillar

‘Responsible Business Conduct’, which is part of Kendrion’s

global sustainability program.

Taxable profits are recognized in jurisdictions in which value is

created, in accordance with the applicable tax regulations and

standards, including the OECD Guidelines for Multinational

Enterprises and local transfer pricing and other applicable tax

regulations. Tax is not limited to corporate income tax but also

includes VAT, wage withholding tax, social security

contributions, dividend withholding tax, real estate tax and

any other taxes payable by Kendrion in the relevant

jurisdictions. Kendrion explicitly avoids tax practices that result

in double non-taxation, profit shifting, or the artificial transfer of

profits to low-tax jurisdictions and does not seek to establish

aggressive tax-driven structures that are not compliant with the

letter or spirit of applicable tax regulations. This means that

Kendrion does not pursue any aggressive tax planning or has

entities established in tax haven jurisdictions solely for tax

optimization purposes and without commercial substance.

Kendrion provides adequate transparency towards tax

authorities and builds and maintains a professional relationship

with them. When appropriate, tax authorities are consulted in

advance on certain material transactions or business

restructuring to, for instance, ascertain compliance with the

applicable tax regulations. Kendrion makes tax-related

disclosures in accordance with the applicable statutory

regulations and applicable reporting requirements and

standards, such as IFRS. Stringent controls are implemented

to identify, monitor and address (potential) tax risks, aiming to

mitigate and avoid these risks. Accredited tax advisors are

engaged in reviewing and preparing material corporate income

tax returns, if appropriate. Tax compliance is integrated into

Kendrion’s internal audit plan, with material tax risks and topics,

including Kendrion’s tax policy, reported and discussed within

the Audit Committee.

Kendrion takes responsibility and shows prudence regarding

corporate tax obligations. The effective tax rate of Kendrion

or any of its affiliates is not a key performance indicator for

Kendrion’s finance and tax department, nor do individual bonus

schemes contain effective tax rate performance targets.

Kendrion’s tax strategy and compliance are reviewed annually

by the Audit Committee, ensuring alignment with the

company’s ethical and strategic objectives. Additional

information about the reconciliation of the effective tax rate can

be found on page 191 of this Integrated Annual Report.

Integrated Annual Report 2025

CORPORATE GOVERNANCE REPORT

Integrated Annual Report 2025

Content sustainability statements

SOCIAL 83

ESRS S1 – Own workforce 83

Impacts, Risks & Opportunities 83

Policies 83

Actions 84

Metrics & targets 87

ESRS S2 – Workers in the value chain 92

Impacts, Risks & Opportunities 92

Policies 92

Actions 93

Metrics & targets 94

GOVERNANCE 95

ESRS G1 – Business conduct 95

Impacts, Risks & Opportunities 95

Policies 95

Actions 96

Metrics & targets 97

Reference Table 98

GENERAL 44

ESRS 2 General disclosure requirements 44

Introduction to Sustainability 44

General basis for preparation 44

Strategy and ESG Program 47

Double materiality assessment 48

Impacts, Risks and Opportunities 52

Value Chain Overview 57

Stakeholder engagement 58

Key figures overview 60

ENVIRONMENT 64

Climate Scenario Analysis 64

ESRS E1 – Climate Change 66

Strategy 66

Impacts, Risks and Opportunities 67

Policies 68

Actions 68

Metrics & targets 69

EU Taxonomy 76

ESRS E2 – Pollution 77

Impacts, Risks & Opportunities 77

Policies 77

Actions 78

Metrics & targets 78

ESRS E5 – Resource Use and Circular Economy 80

Impacts, Risks & Opportunities 80

Policies 80

Actions 80

Metrics & targets 81

Integrated Annual Report 2025

Introduction to sustainability

Sustainability is integral to our business approach. In an

environment shaped by geopolitical uncertainty and the

growing impact of climate change on economies and societies,

advancing toward a more sustainable future remains important.

At Kendrion, we focus on limiting the environmental footprint of

our operations while contributing to the transition to a more

sustainable world. Our commitment to sustainability

encompasses environmental, social, and governance

dimensions. Employees play a pivotal role in driving these

efforts, supported by governance structures that enable

responsible decision-making and uphold ethical standards.

Together, these principles form the foundation for long-term

resilience and our contribution to a sustainable future.

We recognize that meaningful progress depends on a

consistent approach across the entire industry supply chain.

Our efforts are supported by customers, suppliers, and other

stakeholders who actively contribute to and encourage the

sustainability transition. We remain committed to strengthening

our own initiatives and working with supply chain partners to

advance these shared objectives.

Kendrion’s 2024–2028 ESG program (our “ESG Program”) is an

integral part of our strategic plan and supports both short- and

long-term objectives. Continuously improving our sustainability

performance requires ongoing cultural and organizational

development, which remains a key focus across the company.

Our ESG Program and its objectives are embedded within our

organizational structure, ensuring that decision-makers are

empowered to prioritize and strengthen sustainability

performance. These objectives have been cascaded to our

GENERAL

ESRS 2 General disclosure requirements

Business Groups and incorporated into the performance-based

remuneration framework for Kendrion’s management team.

Further details on remuneration for the Executive Board and

Supervisory Board can be found in the Remuneration Report

on pages 109 to 124.

We are confident that our ESG Program supports the long-term

interests of all stakeholders, including the communities in which

we operate. As sustainability (reporting) expectations continue

to grow, we remain committed to refining, strengthening, and

implementing our ambitions and strategy in this area in a

manner that aligns with the size and responsibilities of our

company.

The following sections of this Integrated Annual Report outline

how we identify impacts, risks and opportunities through a

double materiality assessment. For detailed information on

each topic, including related policies, actions, targets, and

performance data, please refer to the sections on

‘Environment’, ‘Social’, and ‘Governance’.

General basis for preparation

The Corporate Sustainability Reporting Directive (“CSRD”) has

not yet been transposed into Dutch national law, and the final

approach and timeline for its implementation remain uncertain

as of the date of this publication. Subject to the implementation

of the Omnibus regulation into Dutch law, Kendrion is expected

to fall out of scope of the CSRD, meaning that mandatory

CSRD reporting and assurance would no longer apply.

Nevertheless, Kendrion decided to proceed with CSRD

reporting in a manner consistent with our 2024 approach. We

only moved back to the assurance scope applied to reporting

years 2023 and earlier, focusing on a set of KPIs, in alignment

with our ESG Program, only. Under the CSRD, reporting must

follow the European Sustainability Reporting Standards (the

“ESRS”) issued by the European Financial Reporting Advisory

Group (“EFRAG”). For our 2025 disclosures, we considered the

quick-fix amendments to the ESRS dated 11 July 2025.

Compared to the previous reporting year, ESRS S4 was not

identified as material for reporting year 2025 and as such, no

disclosures are therefore provided. The agreed amendments

through the quick fix applicable to the phase-in of ESRS E1,

E5, and S1 have also been applied. All data points presented in

the ‘Environment’, ‘Social’, and ‘Governance’ sections have

been assessed as material based on our Double Materiality

Assessment (the “DMA”) as defined by the CSRD. The

sustainability statement addresses the Impacts, Risks, and

Opportunities (the “IROs”) related to our operations and those

arising from our upstream and downstream value chain.

Further details on our DMA methodology and scope limitations

are available on pages 48 to 52 of this Integrated Annual

Report. All greenhouse gas (“GHG”) data points for Scopes 1

through 3 are reported in accordance with the Greenhouse Gas

Protocol. Our Scope 3 emissions for the upstream value chain

have been calculated using a cost-based approach supported

by a Scope 3 Analyzer tool. We plan to conduct our Scope 3

calculations using a different calculation tool in future reporting

years to further improve data accuracy and methodological

robustness. Refer to pages 69 to 74 for comprehensive details

on the calculation of Scopes 1–3.

Our 2025 waste hierarchy data and Scope 3 calculations are

subject to a degree of uncertainty. The waste hierarchy for

2025 is estimated based on reported data from 2024, as

complete information was not available in time for the year-end

Integrated Annual Report 2025

audit. Additional details are provided in Chapter ESRS E5 –

Resource Use and Circular Economy. Scope 3 data carry

higher uncertainty than other datasets due to the cost-based

methodology, which is sensitive to market price fluctuations.

Further information on Scope 3 can be found in Chapter ESRS

E1 – Climate Change.

The sustainability information disclosed in this report has been

compiled using the Company’s internal methodologies and

data management processes. The reported figures are not

prepared in accordance with any European standards

developed or adopted by the European Standardisation

System, including CEN, CENELEC, or EN ISO standards. In

addition, no external third party has assessed or confirmed that

the reported information conforms to any such standards.

The policies described in this Integrated Annual Report apply

across the organization unless otherwise specified in individual

sections. These policies are generally developed with the

involvement of the General Counsel, adopted by the Executive

Board, and, where applicable, approved by the Supervisory

Board. They are accessible to all employees through our

internal intranet and, when relevant, made available to external

stakeholders on our corporate website.

We use the ESRS reference claims for most of the general

information and material topics, including economic

performance, anti-corruption, energy efficiency, emissions to air,

occupational safety and health, non-discrimination and equal

opportunities, and gender pay gap. For the material themes

‘responsible procurement practices’, and ‘disability’ Kendrion

has developed its own indicators. No other sustainability

reporting standards or frameworks have been applied in the

preparation of this Integrated Annual Report.

Data has been sourced from existing internal management and

reporting systems. Any figures presented as estimates or

forecasts are clearly identified as such.

The short-, medium-, and long-term time horizons have been

determined based on Kendrion’s risk assessment and are

defined as follows: short-term refers to one to two years,

medium-term to three to five years, and long-term to more than

five years.

Each of the ‘Environment’, ‘Social’, and ‘Governance’ sections

of the sustainability statements includes references to the

definitions and reporting scope applied to each data point. This

Integrated Annual Report has been reviewed to ensure that no

classified information has been omitted.

As part of our compliance with CSRD, we conduct due

diligence processes and have integrated the DMA process. Our

approach further includes value chain analysis, stakeholder

engagement, and continuous monitoring of structural changes.

We are in the process of integrating our sustainability risks into

our overall corporate risk framework and conducting resilience

analyses and already have CSRD-related questions in our

annual risk assessment procedure.

Core Elements of Due Diligence Paragraph in the sustainability

statement

a) Embedding due diligence

in governance, strategy and

business model

General basis for preparation;

Remuneration report (not in

sustainability statement); Double

materiality assessment; Impact,

Risks and Opportunities

b) Engaging with affected

stakeholders in all key steps

of the due diligence

General basis for preparation;

Stakeholder engagement

c) Identifying and assessing

adverse impacts

General basis for preparation;

Double materiality assessment;

Impact, Risks and Opportunities

d) Taking actions to address

those adverse impacts

Action chapters under ESRS E1,

ESRS E2, ESRS E5, ESRS S1,

ESRS S2; ESRS E1 Metrics &

Targets

e) Tracking the effectiveness of

these efforts and communicating

Metrics & Targets Chapters under

ESRS E1, ESRS E5, ESRS S1,

ESRS G1

Consolidation

The quantitative ESG data presented in this report include

information for Kendrion N.V. as the parent company and all its

wholly owned subsidiaries, whether held directly or indirectly,

unless explicitly stated otherwise. The overall scope of the

sustainability statement is fully aligned with the scope of the

financial statements. Both financial and non-financial reporting

are prepared using consistent organizational boundaries to

ensure comparability and compliance with ESRS requirements.

The only metric that extends beyond our consolidation scope is

Scope 3 – Purchased Goods and Services, which covers

emissions associated with our upstream value chain.

Divestments are reported separately as discontinued operations

in the calendar year in which the divestment is completed, and

the activity is removed from Kendrion N.V.’s consolidation

scope. For the financial year 2025, this applies to the ESG data

for our China-based business, including our entity in Suzhou,

China (the “China Divestment”), which was divested during the

reporting year. For a comprehensive overview of all entities

included in the reporting scope, please refer to page 217 of this

Integrated Annual Report.

Threshold for restatements

Adjustments to financial figures are reflected in line with the

financial statements. For changes to ESG data, we assess on a

case-by-case basis whether a restatement is necessary.

Wherever re-presented data is used, it is clearly indicated.

External review

A selected number of quantitative KPIs will be covered by the

ESG review (limited assurance), performed by our auditor Forvis

Mazars N.V.. This approach differs from 2024, where the scope

of limited assurance covered our full statement. The selected

KPIs in scope of the limited assurance engagement will be

highlighted accordingly throughout the Sustainability Statement

with the following symbol .

GENERAL

Integrated Annual Report 2025

The limited assurance engagement is focused on the continued

business KPIs. For further details, please refer to the auditor’s

assurance report on page 215 of this Integrated Annual Report.

How to read our sustainability statements

Our sustainability statements are organized into four main

sections: ‘General’, ‘Environment’, ‘Social’, and ‘Governance’.

Certain strategy and governance disclosures requested under

ESRS have been integrated into other parts of this Integrated

Annual Report where they fit more appropriately within the

context. To support readability, cross-references to these

sections are included in the sustainability statements where

relevant.

Leadership and Accountability in Sustainability

Sustainability is embedded within Kendrion’s governance

framework to ensure clear accountability and oversight at all

leadership levels. The Executive Board holds primary

responsibility for managing the company’s long-term value

creation strategy and setting targets, with sustainability as a

core component. The General Counsel, as part of the

Management Team (MT), represents sustainability interests,

ensuring timely communication of material topics and updates.

The Supervisory Board monitors sustainability matters—

including the DMA, IROs, and targets—through updates,

reviews, and discussions to support informed decision-making

and effective oversight. Our governance bodies integrate the

assessment of IROs into strategic planning, major transactions,

and risk management by incorporating these considerations

into board discussions and evaluations. This approach ensures

that trade-offs between financial performance, sustainability

objectives, and stakeholder interests are carefully assessed.

Stakeholder engagement (see page 58) is an essential part of

our sustainability approach. Results from the refreshment of our

DMA, performed in the reporting year 2025, including key

findings from internal and external stakeholders, have been

communicated to the Leadership Team, the Management

Team, and the Supervisory Board facilitating well informed

decisions. Employee representation in the DMA process is

facilitated through the involvement of representation from

various departments within the organization. Representation of

the interests of our employees specifically is covered by the

involvement of our Human Resources department. We continue

to explore ways to strengthen employee participation.

Both the Executive Board and Supervisory Board bring

expertise relevant to Kendrion’s sectors, products, and

geographic markets. The members of our Executive Board and

Management Team have experience in international industrial

and/or automotive businesses or related industries.

Sustainability-related expertise is supported through internal

knowledge, including from our Sustainability Manager and

General Counsel, and complemented by external specialists

where required, ensuring that sustainability requirements are

well understood and properly integrated into our governance

and decision-making processes.

Strategy and 2024-2028 ESG program

Focus on projects that deliver on our environmental targets

Our Environment framework focuses on reducing the negative

impact of climate change by increasing energy efficiency and

use of renewable energy, reducing CO

e emissions and

strengthening pollution practices and resource use and circular

economy transitions.

A culture that empowers our people to contribute

The Social framework is centered around the well-being of both

our workforce and our customers and end-users. For our

employees, we prioritize maintaining a high-quality, safe work

environment. For our customers and end-users, we focus on

delivering products designed to ensure safety and promote

health.

Governance that enables responsible business

The Governance framework focuses on business conduct,

integrity, accountability, and transparency. Material themes

revolve around the principles of ethical business conduct.

■ Achieve a further 12%*

reduction in CO

e emissions

for Scope 1&2

■ Establish reporting

frameworks for Scope 1, 2

and 3 reporting (including

disclosure)

Implement gender diversity

targets at Business Group level

for indirect staff

■ Sustainable sourcing:

Enhance supplier selection

and screening through

integration of ESG metrics

into sourcing process

■ Sustain ESG ratins from

EcoVadis and CDP

p. 95 - 97

Environmental

Social

Governance

GENERAL

Table 1: ESG overview

The target has been recalculated excluding the China Divestment.

Integrated Annual Report 2025

Our policies and related documents undergo a structured

review process. Depending on their scope, these documents

are prepared and reviewed with input from the General Counsel

and adopted by the Executive Board. Local policies for specific

jurisdictions or entities may follow separate approval processes

under the responsibility of local management where the

aforementioned process is not required in view of their scope.

The Sustainability Manager, who reports directly to the General

Counsel, is generally responsible for sustainability management

and ensures effective communication across all entities within

scope and relevant departments. The Sustainability Manager

provides regular updates to the General Counsel and Executive

Board who collectively oversee this topic.

We apply a structured monitoring process for sustainability

metrics and targets. Scope 1 and 2 emissions are measured

quarterly. Health and safety KPIs—including illness rates,

accident rates, and Lost Time Injuries (LTI (Days Lost))—are

reported monthly to the Executive Board and quarterly to the

Supervisory Board.

Strategy and ESG Program

The ESG Program was launched at the beginning of 2024, and

this program includes targets and objectives that align with our

company, business and industry. The targets are based on the

reported values for 2023, as included in our 2019-2023 ESG

program, which have been re-presented to reflect the impact of

the China Divestment. To arrive at our objectives, we used

various external and internal analyses of possible areas for

improvement and an evaluation of the targets from the 2019-

2023 program.

An overview of the key components and targets of the ESG

Program is included in the table on page 46.

Our Scope 1 and 2 emission reduction target of 48% as

disclosed in 2024 has been adjusted to 12% to reflect the

China Divestment. This divestment materially altered the

Group’s emissions baseline and reduction potential. In addition,

we have set a target to achieve 96% renewable electricity

consumption by 2028. Since 2015, Kendrion has already

achieved a substantial reduction in Scope 1 and Scope 2 CO

emissions, as further detailed in the ESRS E1 chapter. As a

result, the remaining emissions predominantly relate to more

difficult-to-abate sources, enabling future reductions

increasingly challenging. The adjusted target reflects a realistic

and credible trajectory that remains aligned with Kendrion’s

long-term sustainability ambitions and continued efforts to limit

its environmental footprint. In 2025, we continued exploring

opportunities to further reduce CO

e emissions in alignment

with our 2028 reduction target. Our efforts focused primarily on

Scope 1 emissions, with particular attention to replacing

heating technologies currently powered by fuel oil. We are

currently investigating possible solutions and assessing their

feasibility for implementation.

Kendrion remains dedicated to advancing the quality and

impact of our responsible product portfolio (page 75), which is

designed to support the safety and well-being of our customers

and the industries we serve. Around 40% of our revenue from

sold products already stems from our sustainable product

portfolio, reflecting our commitment to integrating sustainability,

safety, and collaboration into the way we develop and deliver

our solutions.

Natural Capital

■ Renewable energy

■ Energy efficiency

■ CO

e emission

values cradle to gate

■ Waste prevention /

Waste management

Social and Human Capital

■ Human Rights

■ Labour Rights

■ Diversity, equality

and inclusion

■ Occupational health

and safety

Responsible Business Conduct

■ Export controls and

economic sanctions /

Sanction monitoring

■ Environmental

management system

(ISO14001)

Materials

■ Percentage of recycled materials

■ Product less CO

e impact than

comparable products

■ Reuse and recycling

■ Regulations - Conflict Minerals,

RoHS, REACH, VDA etc.

■ Hazardous substances

Ecology

■ Land, forest and water rights

■ Biodiversity, land use and

deforestation

■ Soil quality

Compliance

■ Whistleblower / Anti-Corruption

& anti-bribery

■ Data Security / personal data

protection

■ Intellectual Property

GENERAL

Table 2: Sustainable sourcing metrics

Integrated Annual Report 2025

Our commitment to the ESG Program remains strong, with

continued progress in sustainable sourcing. The tools

introduced in 2024, a sustainability supplier questionnaire and a

supplier risk assessment, are now fully operational. These tools

provide deeper insights into our Tier-1 suppliers and enable

more effective evaluation of potential risk factors.

The supplier risk assessment tool leverages globally recognized

indices to evaluate suppliers, allowing us to identify high-risk

areas within our Tier-1 supply chain. The results of this

assessment guide the selection of suppliers for on-site CSR

audits and determine which suppliers receive the sustainability

questionnaire. This questionnaire, based on our sustainable

sourcing metrics (see Table 2 on page 47), covers key areas

such as environmental impact, human rights, labour standards,

business conduct, materials sourcing, and compliance. While

these metrics do not directly correspond to material ESRS

topics, they address a broad range of sustainability topics

relevant to our supply chain. These metrics were defined prior

to initiating the initial DMA process in 2023/2024.

During 2025, we invited our top 50 suppliers and 50 high-risk

suppliers identified through our internal tool, to complete the

sustainability questionnaire. These 100 suppliers represent

approximately 20% of our annual sourcing volume. Further

details on the outcomes of this disclosure request are provided

in Chapter S2 – Workers in the Value Chain (page 92).

By embedding sustainability in our sourcing processes, we

ensure it remains a core requirement in line with stakeholder

expectations and regulatory compliance. This strengthens risk

management and supports continuous improvements in social

and environmental practices across our supply chain.

Our ESG strategy was defined prior to the DMA, and based on

the outcomes of this assessment, we did not identify a need for

adjustments at this stage. Nevertheless, we will continue

reviewing our strategy on a regular basis, including assessing

whether DMA-related considerations should be embedded.

Double Materiality Assessment

DMA Introduction

As defined by the CSRD, we have conducted our initial DMA in

2023/2024 in alignment with the ESRS guidelines. In 2025, we

performed a refreshment of this DMA. This refreshed DMA

remains a critical component of our strategy for CSRD

reporting.

Building on previous, sustainability-specific materiality

assessments, our initial approach evaluated materiality through

two dimensions: (i) significance to stakeholders and (ii)

significance to Kendrion. These assessments identified the

most relevant topics for our activities and shaped our ESG

program (2019–2023). Since 2024, we have adopted a double

materiality perspective and finalized our first comprehensive

DMA that year. In 2025, we performed the refreshment of our

DMA, aimed to further improve the quality and robustness of

our DMA process and to validate the outcome of our DMA of

2023/2024.

DMA Methodology

We developed our initial methodology with reference to the

principles outlined in the ESRS and other available guidelines.

Learnings from previous materiality assessments, including

stakeholder dialogues, were incorporated to support the

process. For the refreshment in 2025, we also integrated

lessons learned from first DMA process, our first CSRD

reporting cycle and considered insights from available

guidelines and practices shared by Wave 1 companies.

Scoping boundaries

The DMA was carried out across all Kendrion entities without

excluding any legal entity. The resulting Impacts, Risks, and

Opportunities (IROs) were evaluated collectively across the two

Business Groups, as their operational structures are largely

uniform and do not require separate assessments unless

specific, relevant IROs are identified.

We actively monitor any material changes such as mergers,

acquisitions, divestments, or internal reorganizations that could

affect the outcome of our DMA. When significant changes

occur, we conduct a detailed assessment to determine their

impact on both financial materiality and impact materiality. This

assessment focuses on:

■ New or former entities or divisions: Identifying changes in

environmental, social, or governance risks, as well as

opportunities for positive impact.

■ Operational scale or geographic presence: Evaluating

changes that may influence risk exposure, particularly in

regions with differing regulatory or sustainability challenges.

■ Integration of new technologies or business models:

Assessing opportunities to improve sustainability

performance.

Each of these factors is reviewed in line with the principles of

double materiality, ensuring that both sustainability impacts on

external stakeholders (impact materiality) and risks to financial

performance (financial materiality) are thoroughly considered.

Outside-in-effect

Inside-out-effect

Double Materiality Assessment

GENERAL

Integrated Annual Report 2025

As part of this structural change analysis, any newly identified

IROs are incorporated into our materiality matrix through the

following steps:

■ Risk Identification: Assessing emerging sustainability-related

risks, including supply chain vulnerabilities and regulatory

developments.

■ Opportunity Exploration: Identifying ways to leverage

sustainability trends, such as improving energy efficiency,

advancing circular economy initiatives, and innovating in

sustainable product design.

■ Stakeholder Engagement: Consulting relevant

stakeholders—including employees, investors, suppliers,

and customers—to understand how structural changes

may influence their expectations and introduce new

sustainability priorities.

DMA Process

After our first year of CSRD reporting in 2024 we conducted a

benchmark analysis comparing our CSRD disclosures with

those of other Dutch stock-listed companies. The comparison

focused on key areas such as the structure and depth of

others´ DMA process, stakeholders engagement processes,

integration of ESRS topics, and transparency in reporting

practices. Through this analysis, we gained a better

understanding of the appropriateness of our disclosures.

Considering our size, our approach is considered appropriate

and aligned with industry expectations.

While our benchmarking confirmed the appropriateness of our

approach, we also undertook a refreshment of our DMA. This

refreshment was carried out through a structured, step-by-step

process across the whole Kendrion organization. Initially, our

Sustainability Manager and General Counsel established the

refreshment action plan based on auditor’s input and own

insights on improvement possibilities. Subsequently, the IRO list

was updated, and materiality thresholds were challenged by

internal and external stakeholders.

Following this, a detailed review of the value chain was carried

out to identify key activities. Additional data sources included

the SASB Materiality Finder, the MSCI Industry Materiality Map,

and the EcoVadis industry risk benchmark. These tools were

also used to incorporate perspectives from affected

communities and to identify potential IROs related to

environmental matters within the DMA.

As part of the assessment, we considered dependencies

related to suppliers and social actors, including employees.

Given that our operations do not rely directly on biodiversity or

ecosystem services, no material dependencies on these factors

were identified within our value chain.

We reviewed the locations of our sites using the WWF Risk

Filter, a recognized biodiversity risk assessment tool. This

analysis highlighted sites situated in biodiversity-sensitive areas,

including Atlanta (USA), and Maharashtra (IN). However, the

review did not reveal any significant impacts from our activities

that would lead to the deterioration of natural habitats,

disruption of species, or degradation of designated protected

areas.

Following this, we validated the outcome of the refreshment

and completed the identification of material issues followed by

the adoption of the refreshed DMA by the Executive Board

which was then presented to and approved by the Supervisory

Board.

Our DMA process, its outcome and our IROs will be reviewed

on a recurring basis to ensure it remains aligned with our

current business, strategy and global developments,

considering emerging risks, mitigating actions, and ongoing

developments in our business operations and supply chain, all

in collaboration with relevant internal and external stakeholders.

Impact of China Divestment

The China Divestment took place after completion of the DMA

refreshment. It was assessed if this had any potential

implications on our DMA and ESRS considerations. However,

our analysis confirmed that the integrity and conclusions of the

assessment remain unaffected, as we continue to operate

some retained automotive activities.

While the underlying set of IROs remained unchanged

compared to the 2023-2024 DMA, the scope of involved

stakeholders was affected by the divestment. The group

involved in 2025 were predominantly drawn from the continuing

industrial-oriented businesses. As a result, the evaluation of the

same IROs reflects a stronger industrial focus than in previous

years, leading to changes in the relative prioritization and a

reduction of certain risks. This outcome reflects the

composition of the participating stakeholders rather than a

change to the DMA process, criteria or identified IROs.

Although the divested operations were significant, our industrial

segment represents a substantial share of our financial

performance. This segment continues to generate strong

revenue and earnings, ensuring that the financial risks and

opportunities identified in our assessment remain valid and

resilient.

The environmental and social impacts of the remaining

Business Groups, including emissions, energy consumption,

and responsible supply chain practices, are comparable to

those previously associated with the divested operations.

Consequently, our refreshed DMA remains robust, as these

sustainability challenges and opportunities persist across our

ongoing activities.

In this Integrated Annual Report, sustainability data related to

the divested China-based business are disclosed separately.

Please refer to pages 60 to 63 for ESG data on these divested

GENERAL

Integrated Annual Report 2025

ESRS Matrix

S1 Own Workforce

S2 Workers in the value chain

G1 Business Conduct

S3 Affected communities

S 4 Consumers and end users

E3 Water and

marine resource

E4 Biodiversity

and ecosystems

E2 Pollution

E1 Climate change

E5 Circular economy

High

Low

Medium

Financial Materiality

Impact Materiality

20151050

High

Low Medium

activities. Comparable data for the previous year have been

re-presented accordingly.

Stakeholder involvement

The stakeholder engagement process for our DMA was

structured to ensure high-quality qualitative input,

complemented by a targeted set of stakeholder interviews. This

approach is closely integrated with our ongoing stakeholder

interaction activities.

In the previous year, interviews were conducted with a selective

group of employees across all Kendrion entities and group

functions to provide a comprehensive input for the DMA, while

the assessment itself was carried out by a smaller stakeholder

group. For 2025, we expanded this approach by involving a

broader group of employees from various departments to

assess IROs within their area of expertise. We selected internal

stakeholders, with one group being responsible for reassessing

the list of IROs (the so-called “IRO Stakeholders”), with a

second group being responsible for validating the materiality of

the IROs (“Materiality Stakeholders”). On the external side, we

revisited and validated the input from our major customer in

Industrial Brakes and a key copper supplier. Additionally, we

engaged two major customers from Industrial Actuators and

Controls to gain deeper insights from the customer perspective.

Outreach was also extended to steel suppliers—given the

importance of steel in our products—although these suppliers

declined to participate. Regular engagement with lenders

continues as part of our sustainability-linked financing

arrangements.

Our primary copper wire supplier is critical to our operations, as

copper wire—alongside steel components—is essential for

producing electromagnets and valves. Their extensive market

knowledge and importance within our supply chain establish

them as a key contributor to the DMA. Steel suppliers are

GENERAL

equally important; however, it was not possible to engage with

them this year, partly because we primarily interact with

distributors rather than direct producers. We will maintain a

strong focus on involving steel suppliers in future assessments

to ensure comprehensive input across all critical materials.

Given the substantial investment from our largest shareholder,

their expectations and priorities influence our strategic direction.

The importance of Environmental, Social, and Governance

topics for future alignment underscores the value of this

stakeholder’s perspective in shaping our sustainability initiatives

and identifying potential risks and opportunities.

Our major customer has articulated their commitment to

sustainability, expressing a clear expectation for collaboration

with their suppliers who prioritize sustainability. This customer

Integrated Annual Report 2025

has already implemented sustainability measures, making them

a valuable partner for further collaboration and knowledge

exchange in the DMA.

Our primary copper wire supplier is critical to our operations,

as copper wire—alongside steel components—is essential for

producing electromagnets and valves. Their extensive market

knowledge and importance within our supply chain establish

them as a key contributor to the DMA. Steel suppliers are

equally important; however, it was not possible to engage with

them this year, partly because we primarily interact with

distributors rather than direct producers. We will maintain a

strong focus on involving steel suppliers in future assessments

to ensure comprehensive input across all critical materials.

The feedback gathered from various stakeholders was

validated and given equal consideration throughout the DMA

process. The insights obtained were largely aligned with the key

IROs previously identified in the initial DMA in the year

2023/2024.

We maintain direct collaboration with major customers across

both Business Groups to address their sustainability

requirements, which provides us with a clear understanding of

their expectations for supply chain practices. Additional details

on supplier engagement can be found in the Stakeholder

Engagement section of this report (see page 58). We intend

to further maintain and strengthen our close connection with

stakeholders and integrate their insights into our overall

sustainability efforts in the coming years.

Scoring and thresholds

In line with ESRS guidance, we assessed our impacts using

the parameters of scale, scope, and irremediability (the latter

applicable only to negative impacts). For risks and

opportunities, we evaluated both the potential magnitude and

likelihood for each ESRS topic.

The highest-rated risk or opportunity within each ESRS

determines its overall financial materiality, while the highest-

rated impact reflects its total impact materiality.

Materiality thresholds were set at 16 for impact materiality and

financial materiality, based on a maximum possible score of 25.

This means that any impact, risk, or opportunity meeting or

exceeding these thresholds—along with their associated ESRS

topics—are considered material to Kendrion.

DMA Result

We have identified and assessed our impacts—both positive

and negative—on the environment and society through an

impact materiality assessment, as well as the sustainability-

related risks and opportunities to which we are exposed

through a financial materiality assessment. In addition, all

impacts were classified as either ‘actual’ or ‘potential,’ and the

same categorization was applied to risks and opportunities.

The results of our refreshed DMA have been consolidated by

ESRS topic and are illustrated in the tables on pages 53 to 56.

As shown, the following topics are considered our most

material sustainability priorities:

E1 Climate change

E2 Pollution

E5 Resource use and circular economy

S1 Own workforce

S2 Workers in the value chain

G1 Business conduct

Please note that, compared to the previous reporting year,

ESRS S4 is excluded from the scope of our DMA 2025 as it

was not defined to be material in 2025.

Kendrion anticipates future enhancements in its ongoing due

diligence process. Due diligence is a continuous practice that

may trigger conversations about updates to the company’s

strategy, business model, activities, relationships, and

operating, sourcing, or sales contexts. The sustainability

statement may not capture every impact, risk, opportunity, or

entity-specific disclosure that individual stakeholder groups

might consider significant in their own assessments.

The processes for identifying, assessing, and managing IROs

have not yet been fully integrated into Kendrion’s overall risk

management and broader management systems, as outlined in

points (e) and (f) of ESRS IRO-1. These processes will be

reassessed in the next reporting year to determine if and how

they can be incorporated into the company’s risk and

management frameworks. This evaluation aims to ensure

alignment with Kendrion’s broader risk management practices

and strategic objectives.

GENERAL

Integrated Annual Report 2025

Impact, Risks and Opportunities

The following tables present the sustainability related IROs

identified and assessed as material through our DMA process.

For each material ESRS topic, we outline the relevant subtopics

associated with IROs. We indicate whether these factors are

actual or potential and provide brief descriptions in the tables.

Additional details on how we address the effects of these IROs

and how those have changed compared to the previous

reporting year can be found in the subsequent sections

covering ‘Environment,’ ‘Social,’ and ‘Governance.’ While last

year’s IROs assessment followed a pragmatic mid-level

granularity approach, this year we have adjusted the IROs and

ESRS topics in line with ESRS 1.

The financial impacts of the identified IROs have not been

precisely defined or calculated. However, Kendrion has utilized

estimated bandwidths to assess potential impacts and support

decision-making processes. We will continue to review and

refine this approach, as appropriate, in future reporting periods

as more data becomes available. A resilience analysis, as

required under ESRS 2 SBM- 3, was not conducted for this

reporting period. For future reporting years, we will consider

including a resilience analysis to evaluate the robustness of our

business model in addressing these material IROs, ensuring our

strategy remains resilient and adaptable to evolving conditions.

Sustainable procurement

Responsible & innovative product portfolio

Resource extraction

Pollution

Mobility & Logistics Management

Inclusive workplace

Human right

Energy management & emissions

Employee health & safety

Ecosystem preservation

Diversity

Business ethics & integrity

Financial Materiality Impact Materiality

Material topics

GENERAL

Integrated Annual Report 2025

E1 | Climate change

Climate change mitigation

Impact or Financial

Materiality

Impact, Risk or

Opportunity

Actual or

Potential

Material Topic

Description Topic Description

Location

in value chain Time horizon

Impact Positive Impact Actual Responsible &

innovative product

portfolio

Product portfolio Positive contribution to climate change by reducing GHG emissions

through product portfolio that enables a clean energy transition

(downstream)

Downstream Longterm

Impact Negative Impact Actual Energy management &

emissions

Own production &

facilities

Negative contribution to climate change through GHG emissions

from own production and facilities

Own operations Longterm

Impact Negative Impact Actual Sustainable

procurement

Production of raw

materi-als and

component

Negative contribution to climate change through GHG emissions in

the upstream supply chain

Upstream Longterm

Impact Negative Impact Actual Mobility & logistics

management

Business travel Negative contribution to climate change through GHG emissions

from own business travel

Own operations Longterm

Impact Negative Impact Actual Mobility & logistics

management

Transport &

logistics

Negative contribution to climate change through GHG emissions

from transport & logistics in the upstream & downstream supply

chain steps

Upstream,

Downstream

Longterm

Impact Negative Impact Actual Responsible &

innovative product

portfolio

Product use

phase & end of life

Negative contribution to climate change through GHG emissions in

the product use phase & end of life treatment (downstream)

Downstream Longterm

Impact Negative Impact Actual Mobility & logistics

management

Company cars

(fleet)

Negative contribution to climate change through green-house gas

emissions when commuting with own fleet (com-bustion engine)

Own operations Longterm

Financial Opportunity Potential Responsible &

innovative product

portfolio

Low-carbon

products

Increase revenue by retaining and attracting customers who are

increasingly demanding low-carbon products (low carbon footprint)

Own operations Longterm

GENERAL

Integrated Annual Report 2025

E2 | Pollution

Pollution of air, water and soil

Impact or Financial

Materiality

Impact, Risk or

Opportunity

Actual or

Potential

Material Topic

Description Topic Description

Location in value

chain Time horizon

Impact Positive Impact Actual Responsible &

innovative product

portfolio

Product portfolio

enables less

pollution

Positive contribution to reducing air pollution through a product

portfolio that enables a clean energy transition

Downstream Longterm

Impact Negative Impact Actual Resource extraction Resource

extraction and

processing

Contribution to water and air pollution through the release of

pollutants during resource extraction and processing of raw

materials in the upstream supply chain

Upstream Longterm

Impact Negative Impact Actual Pollution Pollution in the

use phase

Contribution to environmental pollution caused by the release of

pollutants into natural ecosystems during the use phase of certain

products

Downstream Longterm

Impact Negative Impact Actual Resource extraction Mining Contribution to environmental pollution (soil, water, air) due to

mining

Upstream Longterm

Use of microplastics

Impact or Financial

Materiality

Impact, Risk or

Opportunity

Actual or

Potential

Material Topic

Description Topic Description

Location in value

chain Time horizon

Impact Negative Impact Actual Responsible &

innovative product

portfolio

Microplastics

creation during

transport

Contribution to environmental pollution caused by micro-plastics

from transport that end up in natural ecosystems

Upstream,

Own operations,

Down-stream

Longterm

GENERAL

E5 | Resource Use & Circular Economy

Resource inflows

Impact or Financial

Materiality

Impact, Risk or

Opportunity

Actual or

Potential

Material Topic

Description Topic Description

Location in value

chain Time horizon

Impact Negative Impact Actual Ecosystem

preservation

Natural resource

depletion

Contribution to natural resource depletion using various input

materials and rare earth metals

Upstream Longterm

Resource outflows

Impact or Financial

Materiality

Impact, Risk or

Opportunity

Actual or

Potential

Material Topic

Description Topic Description

Location in value

chain Time horizon

Impact Negative Impact Actual Responsible &

innovative product

portfolio

Non-circular

product portfolio

Contribution to a linear use of resources through product design

that follows a linear life cycle

Own operations,

Downstream

Longterm

Integrated Annual Report 2025

S1 | Own Workforce

Equal treatment and opportunities for all

Impact or Financial

Materiality

Impact, Risk or

Opportunity

Actual or

Potential

Material Topic

Description Topic Description

Location in value

chain Time horizon

Impact Positive Impact Actual Inclusive workplace Empower women

in ca-reers

Positive impact on women and female employees by equal pay and

opportunities

Own operations Longterm

Financial Opportunity Potential Diversity Effectiveness

through diversity

Increased company performance through higher perfor-mance in

diverse teams

Own operations Longterm

Financial Risk Actual Diversity Diversity in

management

roles

Revenue loss through decreased team performance be-cause of

non-diverse leadership positions

Own operations Longterm

Working conditions

Impact or Financial

Materiality

Impact, Risk or

Opportunity

Actual or

Potential

Material Topic

Description Topic Description

Location in value

chain Time horizon

Impact Negative Impact Actual Employee health &

safety

Occupational

accidents and

injuries

Negative impact on individuals who experience an accident at work

and get injured

Own operations Longterm

GENERAL

S2 | Workers in the value chain

Equal treatment and opportunities for all

Impact or Financial

Materiality

Impact, Risk or

Opportunity

Actual or

Potential

Material Topic

Description Topic Description

Location in value

chain Time horizon

Impact Negative Impact Potential Human rights Forced labour in

metal supply

chain

Negative impact on workers in the upstream value chain due to

forced labour practices

Upstream Longterm

Impact Negative Impact Potential Human rights Child labour in

metal supply

chains

Negative impact on workers in the upstream value chain due to

regional practices like child labour

Upstream Longterm

Integrated Annual Report 2025

G1 | Business Conduct

Corruption and bribery

Impact or Financial

Materiality

Impact, Risk or

Opportunity

Actual or

Potential

Material Topic

Description Topic Description

Location in value

chain Time horizon

Impact Positive Impact Actual Business ethics &

integrity

Ethical business

behavior

Positive contribution to ethical business conduct regarding fraud

and corruption through various internal and external policies

Upstream,

Own operations,

Down-stream

Longterm

Corporate culture

Impact or Financial

Materiality

Impact, Risk or

Opportunity

Actual or

Potential

Material Topic

Description Topic Description

Location in value

chain Time horizon

Impact Positive Impact Actual Business ethics &

integrity

Ethical business

behavior

Positive contribution to ethical business conduct regarding

harassment and discrimination through various internal and external

policies

Upstream,

Own operations,

Down-stream

Longterm

GENERAL

Integrated Annual Report 2025

GENERAL

Value chain overview

Environmental

Governance

Biodiversity and ecosystems

Circular economy

Climate change

Pollution

Water and marine resources

Social

Own workforce

Workers in the value chain

Affected communities

Index

• Material

Non-material

Business conduct

OWN ENTITIES DOWNSTREAMUPSTREAM

Customer engagement

• Human rights

• Business ethics & integrity

Community involvement

• Diversity

• Employee health & safety

Fair labour conditions

• Inclusive workplace

• Business ethics & integrity

Fair labour conditions

Employee development

Customer engagement

• Human rights

• Resource extraction

• Responsible & innovative

product portfolio

• Responsible & innovative

product portfolio

• Resource extraction

• Responsible & innovative

product portfolio

• Mobility & logistics

management

• Energy management &

emissions

Resource price dynamics

• Mobility & logistics

management

Resource price dynamics

• Mobility & logistics

management

Data security

Regulation & Policies

Data security

Regulation & Policies

Data security

• Ecosystem preservation

Material & waste management

Climate change

Water management

• Sustainable procurement

• Pollution

• Ecosystem preservation

Material & waste management

• Ecosystem preservation

Material & waste management

Climate change

Water management

• Sustainable procurement

• Pollution

• Sustainable procurement

• Pollution

Integrated Annual Report 2025

Stakeholder engagement

In addition to stakeholder involvement as part of the DMA

(refreshment) process, we maintain an open and ongoing

dialogue with our stakeholders on sustainability topics to

deepen our understanding of their needs and expectations.

This recurring engagement supports the management, and

execution of our global ESG Program. Through these

interactions, we aim to build trust, identify emerging trends, and

address critical issues such as the implications of climate

change for our operations and products, as well as the broader

impact of our activities on the environment and society.

Through these dialogues we also aim to provide transparency

regarding our plans and actions to mitigate climate-related

impacts and tackle associated challenges. Stakeholder input is

consistently considered when developing strategies and

mitigation measures.

Our key stakeholder groups include customers, suppliers,

employees, shareholders, local communities, technical

universities, and institutions of higher technical education.

We improved the engagement with internal stakeholders

compared to our approach in the 2024 reporting year.

Additional information in this regard is disclosed on page 50

in the chapter “Stakeholder involvement”. Engagement

Engagement with these groups occurs through both formal

and informal channels, with varying frequency depending on

the group. The following section outlines our key stakeholder

groups, the communication resources and channels used,

and their relevance to Kendrion’s ESG Program.

Relevance

Communication sources

and channels Topics discussed

Relevance to Kendrion’s ESG

Program

Customers

Kendrion’s customer base comprises industrial

companies that use our components to manufacture

a range of industrial applications as well as Tier 1

suppliers and OEMs in the automotive sector.

Kendrion’s customers are increasingly implementing

sustainability requirements for their suppliers.

Kendrion focuses on consistent compliance with

these requirements.

Customer and sales meetings, Kendrion

websites, contract meetings, press releases.

Engagement with customers takes place at

regular intervals.

Quality of products and services, Kendrion’s

ESG Program and objectives, customer

satisfaction, waste, energy, water

use, use of rare earth materials, conflict

minerals, responsible business conduct, ISO

and IATF certification.

Obtain views and observations concerning

sustainability from the customer’s

perspective, further insight into customer

needs and expectations, sharing experiences

and best practices, continuous improvement,

and development of sustainability

contribution.

Suppliers

Kendrion is consistently looking for ways to increase

transparency in the supply chain and expects its

suppliers to adhere to the standards of the Kendrion

Supplier Code of Conduct and follows a consistent

approach towards the performance of supplier audits

to verify compliance. In addition, we have implemented

a sustainability questionnaire to gather more in-depth

information on the ESG commitment of our suppliers.

These efforts contribute to a continuous improvement

in compliance with the Supplier Code of Conduct.

Supplier Code of Conduct, supplier

sustainability and quality audits,

Kendrion websites, supplier, and contract

meetings.

Engagement with suppliers takes place at

regular intervals.

Quality of products and services, Kendrion’s

ESG Program and objectives, management

of supply chain risks (e.g.

material shortages) and joint pursuit of

improvements in the supply chain,

responsible business conduct, Supplier

Code of Conduct, waste, energy, water use,

use of rare earth materials, conflict minerals.

Obtain views and observations concerning

sustainability from the supplier’s perspective

(incl. the improvement of transparency in the

supply chain), further insight into supplier

needs and expectations, sharing experiences

and best practices, continuous improvement

and development of sustainability

contributions.

GENERAL

Integrated Annual Report 2025

Relevance

Communication sources

and channels Topics discussed

Relevance to Kendrion’s ESG

Program

Employees

Our talented and highly skilled employees play a crucial

role in the way in which Kendrion operates its business.

Kendrion fosters a culture that empowers its employees

to reach their full potential and to achieve the best

results. As reflected in ‘The Kendrion Way’ and the

Code of Conduct we create an open and inclusive

culture to recruit, motivate and retain a highly

diverse workforce that reflects the communities in

which we operate.

An engaged and committed workforce contributes to

the achievement of Kendrion’s financial and non-

financial targets.

Works Council meetings, meetings with

employee representatives, employee

satisfaction and culture surveys, workshops,

training courses, intranet, internal personnel

magazine, e-mail newsletters, feedback

meetings, staff and townhall meetings

Engagement with employees takes place

on a daily basis.

Kendrion’s ESG Program and objectives,

particularly regarding health and safety,

employability, training, and development,

employee satisfaction and company culture,

responsible business

conduct, compliance and ethical behavior.

Obtain views and observations concerning

sustainability from the employee’s

perspective, further insight into employees’

capabilities and motivations, strengthening

business sustainability culture, enhancing

employee commitment, participation, and

awarenes.

Shareholders

The endorsement of sustainable development and

addressing ESG related issues is becoming increasingly

important for Kendrion’s shareholders. Kendrion

engages with its major shareholders and financiers,

not only concerning Kendrion’s ESG Program and its

material topics and objectives, but also with respect to

the ESG policies and activities of its major shareholders

and financiers. Kendrion provides adequate

transparency towards its shareholders and financiers

about climate change and reducing the negative impact

of climate change and addressing other social issues,

strategy, and financial performance.

General Meeting of Shareholders, analyst,

and investor meetings, conferences, Capital

Markets Day, press releases, Kendrion’s

corporate website Engagement with

shareholders takes place at least on a

quarterly basis.

Kendrion’s ESG Program and objectives. Obtain views and observations concerning

sustainability from the investor’s perspective

(incl. climate change and reducing the

negative impact of climate change and

addressing other social issues), further

insight into shareholders needs and

expectations, sharing experiences and best

practices, continuous improvement, and

development of sustainability contributions.

Local

communities

Kendrion is making a positive contribution to the

reduction of social and economic gaps. Kendrion

appreciates the importance of maintaining constructive

and appropriate contacts with local communities and

authorities.

Local meetings, Kendrion websites, open

days Engagement with local communities

takes place at regular intervals.

Communities’ participations and

investments.

Community connection, involvement and

participation.

Technical

universities and

institutions of

higher technical

education

Active engagement with students is key to

understanding their views and observations on

sustainability and forms a valuable platform for the

exchange of knowledge and experiences. Dialogues

with students are often inspirational and stimulate the

formulation of innovative sustainability goals and

ambitions, including our ambition to encourage

young talented female students to take an interest in

Science, Technology, Engineering and Mathematics

(STEM) related studies. These dialogues also raise

awareness among students about sustainability and

its importance.

Presence at fairs, organization of student

events, projects and internships engagement

with universities, schools, and institutes

takes place at regular intervals.

Kendrion’s ESG Program and objectives

(incl. advancement of gender diversity), also

with a view to creating

awareness and stressing the importance and

relevance of sustainability.

Obtain

views and observations concerning

sustainability of new generation and raise

awareness.

GENERAL

Integrated Annual Report 2025

Key figures overview

This section offers a detailed overview of our ESG KPIs,

presenting figures for continued operations compared to the

previous year, alongside our targets. Our China-based

business, including the Chinese legal entity and site, was

divested in 2025. In accordance with ESRS 1, paragraph 62,

sustainability statements shall be prepared for the same

reporting undertaking as the financial statements. As the

financial disclosures focus on the continued business following

the divestment, the sustainability disclosures have been

prepared on the same basis. Consequently, the reported figures

reflect the continued operations of Kendrion. To ensure

comparability, prior-year values have been recalculated to

exclude the divested China-based business. Metrics for the

divested entity in 2025 are shown in a separate column, with an

additional combined total for both continued and divested

operations. It is presented as a discontinued operation in the

financial statements. Management considers continued

operations most relevant for sustainability reporting, as policies,

actions, targets, and metrics focus on the future of the

business. To provide transparency, we have included metrics

for the divested business up to the date of completion of the

divestment (21 October 2025), where possible in the KPI

Overview on page 60 to 63. The data largely followed the same

reporting processes as continued operations, and flow

information such as energy usage was primarily collected

during the year. Ratio information based on year-end data

relates to continued business. Following the completion of the

China Divestment, access to detailed information for the

divested business was no longer available. Where necessary,

certain figures have been estimated. Consequently, the metrics

related to the divested business are subject to a higher degree

of estimation uncertainty compared to those for continued

operations. Further details are provided below and in the

‘Reporting Definition & Scope’ section.

Divested KPIs

Environmental KPIs:

For the divested business, all figures presented in the

corresponding column were reported as actual data, except for

Scope 3 values, which were calculated based on the previous

year’s emissions and cost-based data reported by the divested

entity. Product-related hazardous waste was not reported as

actual data, and waste management figures were estimated

Sustainability matter Value chain Time horizon UoM 2025 2024 Target 2028

Divested

Business 2025

Divested +

Continued

Business 2025

Environment

E1 Direct Energy Consumption Own operations ST, MT, LT kWh 6,164,509 5,642,196 - 122,215 6,286,724

Indirect Energy Consumption Own operations kWh 6,879,574 7,577,712 - 3,223,666 10,103,240

Relative Direct Energy Consumption - Added value Own operations - 44,006 45,555 - 6,457 39,536

Relative Direct Energy Consumption - Revenue Own operations - 25,112 22,636 - 2,382 21,183

Relative Indirect Energy Consumption - Added value Own operations - 49,110 61,183 - 170,311 57,081

Relative Indirect Energy Consumption - Revenue Own operations - 28,025 30,401 - 62,827 34,042

Self-generated renewable energy - solar energy Own operations kWh 666,673 540,583 - 586,674 1,253,347

GENERAL

using reported 2025 data and estimated based on added value

developments between 2024 and 2025. All values shown

under E1 represent consumption recorded from January

through September 2025.

Social KPIs:

For the divested business, the information pertains to former

Kendrion employees. All figures shown in the divested business

column are based on actual data up to and including Q3 2025.

For continued operations, workforce ratio metrics are

calculated using headcount figures as of 31 December 2025.

Certain data related to the workforce of the divested business

could not be included due to the manual collection process at

year-end, by which time the divested business had already

been sold. For S1, all numbers in the divested column reflect

values as of 30 September 2025, except for illness, accidents,

LTI (Days Lost), employee departures, family leave, and supplier

audits, which represent cumulative values from January up to

and including September 2025.

Governance KPIs:

These KPIs remain independent of the continued or divested

business and are therefore only reported under the continued

business.

Integrated Annual Report 2025

Sustainability matter Value chain Time horizon UoM 2025 2024 Target 2028

Divested

Business 2025

Divested +

Continued

Business 2025

Self-generated non-renewable energy - fossil sources Own operations kWh 1,479,124 1,621,879 - 0 1,479,124

Renewable electricity Own operations % 92 83 - 100 95

Scope 1 Own operations t CO

e 1,406 1,224 - 61 1,467

Biogenic emissions in Own operations t CO

e 33 33 - 0 33

Scope 2 location-based Own operations t CO

e 3,149 3,456 - 2,315 5,464

Scope 2 market-based Own operations t CO

e 303 667 305 0 303

Total Gross indirect Scope 3 Upstream t CO

e 70,195 109,932 - 20,669 90,864

3.1 Purchased Goods Upstream t CO

e 62,686 99,385 - 17,690 80,376

3.2 Capital Goods Upstream t CO

e 1,314 3,755 - 256 1,570

3.3 Fuel- and Energy Related Activities Upstream t CO

e 467 484 - 122 589

3.4 Upstream Transportation and Distribution Upstream t CO

e 3,149 3,430 - 2,097 5,246

3.5 Waste generated in Operations Upstream t CO

e 225 204 - 46 271

3.6 Business Travel Upstream t CO

e 474 622 - 85 559

3.7 Employee Commuting Upstream t CO

e 1,802 1,924 - 373 2,175

3.8 Upstream Leased Assets Upstream t CO

e 78 128 - 0 78

Relative Scope 1 Emission - Added value Own operations - 10.0 9.9 - 3.2 9.2

Relative Scope 1 Emission - Revenue Own operations - 5.7 4.8 - 1.2 4.9

Relative Scope 2 Emission - Added value Own operations - 2.2 5.4 - 0 1.9

Relative Scope 2 Emission - Revenue Own operations - 1.2 2.7 - 0 1.0

Total GHG (location-based) per net revenue (tCO

e/EUR

1,000)

Own operations - 305 460 - 449 330

Total GHG (market-based) per net revenue (tCO

e/EUR

1,000)

Own operations - 293 449 - 404 312

E5 Copper inflow Own operations t 556 637 - 318 874

Waste total in t Own operations t 607.4 567 - 111.1 718.5

Hazardous waste in t Own operations t 76.3 69.3 - 23.2 99.5

Non-hazardous waste in t Own operations t 531.0 497.7 - 87.9 619.0

Waste recycling rate in % Own operations % 77.0 76.8 - 79.2 77.3

GENERAL

Integrated Annual Report 2025

Sustainability matter Value chain Time horizon UoM 2025 2024 Target 2028

Divested

Business 2025

Divested +

Continued

Business 2025

Social

S1 % Male / Female employee Own operations ST, MT % 56 / 44 57 / 43 - 51 / 49 55 / 45

% Male / Female employee Leadership team Own operations % 81 / 19 84 / 16 67 /33 100 / 0 81 / 19

Employees represented by works´council Own operations % 89.6 86.9 - 2.1 78.9

Employees covered by collective bargaining agreements Own operations % 73.0 69.5 - 100 76.3

Permanent employee Own operations FTE 1,199 1,270 - 73 1,272

Fixed term employee Own operations FTE 58 69 - 117 175

Temporary employee Own operations FTE 12 18 - 73 85

Total FTE Own operations FTE 1,269 1,359 - 263 1,532

Headcount by age - Under 30 years Own operations Headcount 201 232 - 23 224

Headcount by age - 30 - 50 years Own operations Headcount 683 717 - 162 845

Headcount by age - Over 50 years Own operations Headcount 486 514 - 5 491

Number of Accidents (Own criteria) Own operations 11 15 - 0 11

Lost Time Injuries (Days Lost) (Own criteria) Own operations Days 172 248 - 0 172

Number of Accidents (2) (ESRS) Own operations 23 - - - 23

Days Lost (2) (ESRS) Own operations Days 225 - - - 225

Illness rate Own operations % 5.9 5.9 - 0.8 5.3

Number of nationalities Own operations 33 37 - 1 34

Total remuneration pay ratio Own operations 19 21 - N/A 19

Gender Pay Gap Total in % Own operations % 41.7 40.7 - N/A 41.7

Gender Pay Gap adjusted Direct / Indirect in % Own operations % 14 / 13 - - N/A 14 / 13

Gender Pay Gap Leadership Team in % Own operations % 45 - - - 45

Male Employees that took family related leave Own operations FTE 64 24 - 16 80

Female Employees that took family related leave Own operations FTE 34 19 - 16 50

Employees with disabilities Own operations % 3.3 3.6 - 0 3.3

Overall employee turnover rate Own operations % 12 20 - 12 12

Employees who left the company Own operations Headcount 162 305 - 22 184

Employee at top management level % Own operations % 2.3 2 - 0.05 2.0

Wage cost per FTE Own operations x1.000 € 67.6 61.3 - 24.1 60.1

S2 Number of Supplier CSR audits Upstream 13 16 15 0 13

S4 Responsible product portfolio (% of revenue) Own operations,

Downstream

% 42.8 >40.0 - N/A 42.8

GENERAL

Integrated Annual Report 2025

Sustainability matter Value chain Time horizon UoM 2025 2024 Target 2028

Divested

Business 2025

Divested +

Continued

Business 2025

Governance

G1 Reports Speak-Up line Own operations ST, MT 4 2 - 1 5

Legend ST: Short term, MT: Medium Term, LT: Long Term KPIs in scope of limited assurance engagement

GENERAL

Integrated Annual Report 2025

ENVIRONMENT

Climate Scenario Analysis

As our climate scenario analysis has a long-term

outlook, the findings from our 2024 analysis

remain relevant. We did not update or expand

this assessment in 2025, as the results continue

to provide meaningful guidance for

understanding potential long-range climate-

related risks across our operations. The

information below therefore summarizes our

initial conclusions, still being accurate for our

current perspective on climate-related

exposures.

In line with the Intergovernmental Panel on Climate Change

(IPCC) scenario framework, we examined possible climate

developments for the regions in which we operate in 2024. The

analysis considered projected shifts in temperature,

precipitation patterns, sea-level rise, and other physical climate

indicators across key locations. The intention was to build an

early understanding of potential climate vulnerabilities and to

consider how our assets, operations, and employees may be

affected over the long term.

To develop these insights, we drew on established resources

such as the IPCC’s CMIP6 Interactive Atlas for climate

projections and Climate Central’s Coastal Risk Screening Tool

for sea-level rise. Our assessment was based on the high-

emissions SSP5-8.5 pathway, using a 2°C warming threshold

as a reference point. Time horizons included sea-level

projections for 2050, and median temperature and precipitation

changes through to 2100. While this work enabled us to identify

overarching physical risks, we did not evaluate the likelihood or

Integrated Annual Report 2025

duration of individual hazards, nor did we integrate geospatial

coordinates, supply-chain exposure, or transition-related risks

into this stage of the assessment. These areas may remain part

of our future development roadmap.

Western, Eastern, and Central Europe

In the Netherlands, our headquarters in Amsterdam and our

location in Drachten are expected to experience significant

vulnerabilities due to sea-level rise, even with minimal increases

(starting at 0.1 meters from 2030 onward) representing a

potential flooding risk due to the country’s low-lying topography.

Posing challenges to infrastructure resilience and continuity of

operations. For our sites in Eindhoven and Enschede, no risks

were identified.

Our German and Austrian locations (in Villingen,

Donaueschingen, Malente, Aerzen, and Linz, respectively) were

projected to experience moderate annual temperature

increases (median 2.7°C) and slight changes in precipitation,

conditions that may contribute to more frequent heatwaves,

pressure on water systems, and operational inefficiencies.

For Romania, the assessment did not identify material climate-

related risks.

Northern Europe

For our Swedish facility in Kristianstad, projected temperature

rises of about 2.7°C, together with an estimated 5.9% increase

in precipitation, may affect snowfall patterns in winter and lead

to more rainfall in summer. Without improvements to drainage

capacity or supportive infrastructure, these conditions could

challenge water management and seasonal operations.

ENVIRONMENT

United States of America

In Atlanta, projections indicate an approximate 2.5°C increase

in average annual temperatures accompanied by a 3.9% rise in

precipitation. These trends could intensify heavy rainfall events,

increase flooding risks, and raise cooling demands. At this

stage, no specific adaptation measures, such as flood

management enhancements or dedicated heat resilience

initiatives, have been implemented at our local site.

South Asia

In Pune, projected changes include a 1.8°C rise in mean

temperatures and a 5.6% increase in precipitation, potentially

contributing to increased heat stress and heightened risks of

urban flooding.

Outlook

The insights gained from our scenario analysis continue to

shape our understanding of long-term physical climate risks,

particularly regarding sea-level rise, higher temperatures, and

shifting precipitation patterns across our locations. Although we

have not yet initiated specific adaptation measures or

undertaken a detailed transition-risk assessment, we recognize

the importance of these insights and are committed to

incorporating them into our future planning if necessary. As part

of this, we intend to explore site-level adaptation needs, invest

in climate-resilient infrastructure where appropriate, and

collaborate with local stakeholders to enhance preparedness.

Our intention is to refine and expand our climate scenario

capabilities in the coming years as we continue to respond to

the evolving climate landscape and support the resilience and

sustainability of our business in the future.

Integrated Annual Report 2025

ESRS E1 - Climate Change

At Kendrion, we are dedicated to limiting our contribution to

climate change and supporting the global shift toward cleaner

energy systems. We continue to take steps to lower the

environmental footprint of our operations, with a strong

emphasis on improving energy efficiency, expanding the use of

renewable energy, and reducing CO

e emissions across the

design and manufacturing of our products.

Strategy

Limiting our environmental footprint remains an important

objective, and we have introduced measures to reduce our

carbon emissions and improve energy efficiency. These efforts

include a broad transition to renewable energy sources and the

implementation of energy-efficiency initiatives over the past

years, e.g. transition to LED lighting, and heat recovery

systems. The main reduction measures currently focus on

emissions from our own entities, which remain the primary area

of attention within our climate-change commitment.

As part of our ongoing climate-related work, we have reviewed

the requirements and expectations associated with transition

plans and assessed their relevance to our current emission

profile. Following significant reductions in Scope 2 emissions in

recent years, mainly through the increased use of renewable

electricity, our focus has shifted toward opportunities to further

reduce our Scope 1 emissions. These emissions are primarily

linked to the use of fuel oil for heating at several of our entities.

We closed a building at our Aerzen site in Q2 2025, eliminating

its fuel-oil consumption. For the remaining locations that still rely

on fuel oil, the evaluation of potential alternatives is still ongoing,

as the suitability of replacement technologies depends on local

infrastructure, investment requirements, and operational

conditions.

The assessment also examined the broader feasibility of

developing a transition plan aligned with the 1.5°C target of the

Paris Agreement. Based on the current technological,

infrastructural, and economic constraints, particularly regarding

Scope 1 reductions, such a plan is not presently achievable for

Kendrion. Nevertheless, the insights gained through this

process will inform our future planning, and we will continue to

monitor emerging solutions that could support further

decarbonization across our operations.

The ongoing energy transition is transforming the markets in

which we operate, with sustainable technologies increasingly

becoming the preferred option. As a developer and producer of

advanced actuator systems, we are well positioned to support

global electrification efforts and the move toward cleaner

energy solutions.

Our broad portfolio plays a direct role in meeting the rising

demand for clean energy applications and the growing

electrification of industrial operations and mobility.

Developments in wind energy, industrial automation, and

induction heating technology are key drivers of this shift, and

our solutions enable the replacement of fossil fuel–based

systems with electric alternatives. Our strategic priorities are

aligned to further strengthen our presence in these areas.

Within our Industrial Brakes Business Group, growth is driven

by sectors such as wind power, intralogistics, and robotics.

Industrial Actuators and Controls supports the increasing need

for sustainable technologies through electrified induction

heating systems, circuit breakers for electricity distribution, and

safety actuators for nuclear power facilities. In addition, within

3T we develop embedded solutions for smart buildings that

control and measure heating and the CO

e emissions of

buildings.

Impact Opportunity

Product portfolio that enables a clean energy transition

GHG emissions through own production facilities

GHG emissions through production of raw materi-als and

component in up-stream supply chain

Business travel & company cars

Transport & logistics of acquired and sold products

GHG emissions in the product use phase & end of life treatment

Increase revenue by retaining and attracting customers who are

increasingly demanding low-carbon products

ENVIRONMENT

Integrated Annual Report 2025

Impacts, Risks and Opportunities

To ensure a robust and up-to-date identification of climate-

related IROs, we established two dedicated stakeholder groups

(as specified in the chapter “Stakeholder involvement” on page

50 of this Integrated Annual Report) validating our existing

IROs. The refreshment of the DMA led to a consolidation and

refinement of several IROs and provides a more accurate

reflection of our current organizational structure, strategic

priorities, and evolving climate-related context, and forms the

basis for the updates to our IROs outlined in the following

section.

As part of the refreshed 2025 DMA, we reviewed all climate-

related IROs ensuring continued alignment with our business

structure, stakeholder expectations and ESRS requirements.

On the impact side, several upstream climate impacts

stipulated in our Integrated Annual Report for financial year

2024, being purchase and consumption of raw materials such

as steel, copper and aluminium and GHG emissions from the

acquisition of pre-processed parts, have been consolidated into

a single, broader IRO on GHG emissions associated with the

production of raw materials and components. This merged IRO

provides a better reflection on how these upstream Scope 3

impacts are managed within our sustainable procurement

approach.

Other impact IROs remain unchanged because of their

continued relevance in Kendrion´s climate footprint. This

concerns IRO such as GHG emissions through own production

facilities, business travel and company car fleet, transport and

logistics of acquired and sold products, and GHG emissions in

the product use phase and end-of-life treatment.

On the opportunity side, low-carbon products remain a key

area for financial materiality. For the growing market demand for

environmentally friendly products, the materiality score was

updated.

For risks, certain climate-related financial risks identified in

2024, such as rising energy market prices, extreme weather

events affecting the upstream supply chain, and increased

costs of raw materials, fell below the updated materiality

threshold in our 2025 DMA. We will continue monitoring these

risks, due to their potential relevance in the longer term.

In summary, the 2025 DMA provides a further developed IRO

landscape providing an improved reflection of Kendrion’s

climate impacts, strategic priorities and value chain realities.

The next sections outline these updated IROs in detail,

including which areas are being actively addressed and how

they influence our climate-related actions.

The IRO related to our product portfolio that enables a clean

energy transition is addressed through our corporate strategy.

The IROs concerning GHG emissions from our own production

facilities, GHG emissions in the product use phase and end-of-

92%

renewable

electricity

Global Sites with renewable electricity

renewable electricity

grey electricity

ENVIRONMENT

Integrated Annual Report 2025

life treatment, as well as GHG emissions arising from the

production of raw materials and components in the upstream

supply chain will be further detailed under ‘Actions’ The

remaining IROs are reflected in our Scope 3 GHG emission

calculations but have not yet been addressed through

dedicated actions or measures.

The opportunity to increase revenue by retaining and attracting

customers who are increasingly demanding low-carbon

products was revalidated in 2025. Due to current limitations in

producing low-carbon products at scale, this opportunity is

presently constrained; however, it will remain under observation

for future strategic development.

Policies

We are still exploring the feasibility and added relevance of

developing an environmental policy that incorporates climate

change considerations and aligns with our broader

sustainability strategy. At present, no policy exists specifically

addressing the ESRS Climate Change requirements.

Actions

Reducing Operational Emissions

We prioritize reducing CO

e emissions and optimizing resource

use across our production processes, aligning our initiatives

with the United Nations Sustainable Development Goal (SDG)

13: Climate Action. By integrating sustainability into our

business operations, we aim to contribute to a more

responsible and climate-conscious future.

At our Romanian site in Sibiu, solar panels supply

approximately 68.5% of the plant’s electricity needs, while our

facility in Aerzen, Germany, covers around 20.0% of its energy

consumption through photovoltaic systems. For the remaining

energy demand, we have committed to purchasing green

electricity via Renewable Energy Certificates (RECs), further

reducing reliance on non-renewable sources in Romania.

Our German and Dutch operations are already fully supplied

with renewable electricity through the acquisition of RECs.

Our ESG Program will continue to guide our progress in

embedding sustainability across our operations. In 2025, we

enhanced our energy reporting processes, enabling more

detailed analysis of Scope 1 and Scope 2 emissions. To

measure the effectiveness of our initiatives, we monitor energy

reductions achieved through renewable energy measures. As

we further strengthen our data foundation, we will evaluate how

it can support the assessment of future climate-related actions.

Implementing an effective sustainability strategy requires

significant time and resource commitments, particularly when

addressing impacts across the broader value chain. While we

remain committed to funding our planned climate mitigation

and adaptation measures, we have not yet allocated dedicated

resources upfront. To advance progress, we intend to

collaborate closely with customers and suppliers who share

our commitment to climate action, aiming to drive emissions

reductions throughout the supply chains in which we operate.

As referenced on page 52, a resilience analysis has not yet

been conducted.

In 2025, we also examined the topic of transition planning.

Transition-related climate risks are recognized as material, and

initial assessments have initiated to identify further opportunities

to reduce Scope 1 emissions and raise the share of renewable

electricity. Scope 3 emissions are likewise essential for

developing a meaningful transition plan. Establishing a reliable

data foundation remains a priority, as the planned shift to an

average-based calculation method for Scope 3 reporting was

postponed in 2025 due to other priorities. Strengthening the

accuracy of our Scope 3 reporting is therefore the next step.

With improved data quality, we intend to ex-plore potential

transition planning options in future years ensuring our actions

are both informed and impactful.

At the end of 2025, our employees were invited to select a

project for the company to make a Christmas gift donation.

The projects involved all reflected our values in sustainability,

human right, and global health. One of the pre-selected

organizations focuses on safeguarding wetlands worldwide

through restoration, policy advocacy, and community

engagement, thereby contributing to climate mitigation and

ecosystem protection. In total, an amount of EUR 4,800 was

donated to this initiative, based on 32% of participating

employees selecting the initiative.

Strengthening Sustainable Procurement

As outlined in our strategy on page 48, we continue to collect

information from our suppliers through a dedicated

sustainability questionnaire to strengthen our understanding

of their climate-related practices. The questionnaire includes

requests for information on the use of renewable energy, the

measurement of Scope 1, Scope 2, and Scope 3 emissions,

initiatives to reduce GHG emissions associated with their

products, and the application of the waste hierarchy. By the

end of 2025, approximately 30% of the initially 100 suppliers

contacted have responded. Nearly half of these respondents

indicated that they use renewable electricity and measure their

GHG emissions. Suppliers with lower performance in the

questionnaire results are prioritised for more detailed on-site

CSR audits. However, on-site CSR audits are only conducted

by companies with more than 50 employees.

ENVIRONMENT

Integrated Annual Report 2025

Improving Product Sustainability Beyond Our Operations

To reduce the climate impact of our products, Kendrion

develops, where possible, solutions that lower energy use and

emissions across their lifecycle. A key example is the Slim PM

Line, a compact and lightweight permanent-magnet brake,

which was introduced in Q4 2025 and added to Kendrion’s

product portfolio. By lowering material intensity while delivering

higher performance than comparable brake systems, the Slim

PM Line helps reduce downstream GHG emissions, including

those associated with end-of-life treatment. This development

supports our strategy to offer energy-efficient, low-impact

products and represents a tangible action addressing our

climate-related IROs in the use phase and end-of-life stage.

Sustainability Rating & Environmental Certification

For many years, we have actively worked to reduce our

environmental impact, utilizing a systematic reporting system to

monitor CO

e emissions and energy use across all production

facilities. Our dedication to sustainable improvement continues

to enhance our processes, lowering the environmental footprint

of our operations. Building on the progress reported in 2024,

we received again an improved sustainability rating from

EcoVadis in 2025, marking the fourth consecutive year of

advancement and placing us in the 91st percentile with a silver

medal. Our CDP score improved as well, from B– to B,

demonstrating continued progress in the effectiveness of our

environmental management efforts. Our commitment to

sustainability is further reinforced through global certifications:

ISO 50001 supports our energy management, guiding facilities

to optimize energy efficiency, while ISO 14001 sets the

standard for enhancing environmental performance. Currently,

our locations in Donaueschingen / Engelswies and Malente are

ISO 50001 certified, and all our largest production sites are ISO

14001 certified, underscoring our proactive approach to

sustainable and responsible operations.

Metrics & targets

We have achieved meaningful progress in reducing our Scope

1 and 2 CO

e emissions. Since 2015, we have realized a

relative reduction of 60% and a further 27% reduction

compared to the 2024 reporting year. These reductions have

primarily been driven by the procurement of RECs, the

implementation of energy-efficiency measures, and the

installation of photovoltaic systems. In 2025, approximately

92% of the electricity consumed was sourced from renewable

energy (2024: 83%). As a result of this progress, our largest

production entities are now fully powered by renewable

electricity.

Relative emissions are calculated against the company´s

group’s added value. In 2025, added value increased because

of improved margins and strict cost control. This development

contributed to a more favourable emissions intensity, despite

only a slight decrease in absolute emission.

We aim to increase the share of renewable electricity to 96% by

2028 for the Scope 2 market-based KPI, and reduce Scope 1

and 2 emissions by 12% compared to 2023, which represents

the highest feasible level under the current conditions. This

target was adjusted following the China Divestment and is

intended to be achieved through additional REC acquisitions

without reliance on emerging technologies. The target was

established independently of any scenario analysis.

A significant reduction in total Scope 3 emissions of 36.1 %

was recorded in 2025, primarily driven by cost reductions

during the year. As Scope 3 emissions are calculated using a

cost-based methodology, the full effect of these cost changes

is reflected in the reported KPI. Regarding the readjusted

Scope 3 values for 2024, it should be noted that the

extrapolation was also performed using a cost-based

approach. The divestment of our business in China, where

conversion factors are comparatively high could not be fully

reflected in the results because the Scope 3 Analyzer previously

used for emissions calculations is out of commission.

Consequently, the adjusted Scope 3 emissions for 2024 are

higher than they would have been if this effect had been fully

reflected.

The baseline year for measuring progress toward this target is

2023. This aligns with our phased target framework, which has

been structured across three periods: 2015–2018, 2019–2023,

and now the current phase using 2023 values. This approach

ensures consistency in tracking emissions reductions over time

while maintaining a continued focus on lowering Scope 1 and

Scope 2 emissions. At present, no baselines or targets have

been set for Scope 3 emissions, and no 2030 targets have

been established for any scope.

Our target-setting process has been driven by our commitment

to minimizing environmental impact and further supported by

stakeholder expectations encouraging reductions in

greenhouse gas emissions. However, the planned target does

not meet the reductions required to align with the 1.5°C target

of the Paris Agreement and has not been validated by a third

party. No science-based methodology, sectoral decarbonization

pathway, or climate and policy scenario has been applied in its

development. Instead, the target is based on an assessment

of our current energy consumption and greenhouse gas

emissions, with the long-term ambition to reduce Scope 1 and

Scope 2 emissions to zero - an aspiration that is not currently

attainable. In addition, no assessment has yet been conducted

on potential future developments such as regulatory changes,

shifts in customer expectations, or technological

advancements. Our current approach largely relies on

transitioning our electricity supply entirely to renewable sources,

independent of consumption levels.

ENVIRONMENT

Integrated Annual Report 2025

In line with our sustainability commitments and the

requirements of ESRS E1, we recognize the importance of

addressing climate change comprehensively. We will further

evaluate the potential development of mitigation targets,

associated actions, and the financial implications of such

measures in the future. This evaluation will examine our current

strategy and determine the most appropriate next steps. Going

forward, we intend to place greater emphasis on reducing

Scope 1 emissions and exploring additional approaches to

lower these emissions as part of our ongoing environmental

efforts. At present, we are not yet able to report on specific

actions or the resources required for their implementation.

This following section presents and explains our energy

consumption as well GHG emissions for the reporting year

2025 compared to 2024.

Please note that comparative data of 2024 has been

re-presented to exclude the divested China-business, including

our site in Suzhou, China. Where additional adjustments to the

prior-year figures have been made, a corresponding notification

is provided.

ENVIRONMENT

Integrated Annual Report 2025

Energy consumption

Direct Energy

Country

Consumed kWh

2025 2024 Diff. %

Germany 5,202,651 4,724,145 10.1%

Austria 43,472 60,831 -28.5%

India 191,055 188,748 1.2%

Romania 328,986 282,851 16.3%

Netherlands 135,038 138,168 -2.3%

Sweden 13,113 10,131 29.4%

USA 250,195 237,322 5.4%

Total 6,164,509 5,642,196 9.3%

Relative Direct Energy Consumption – Added value 44,006 45,555 -3.4%

Relative Direct Energy Consumption - Revenue 25,112 22,636 10.9%

Indirect Energy

Country

Consumed kWh

2025 2024 Diff. %

Germany 4,198,004 4,871,293

-13.8%

India 212,351 218,852 -3.0%

Romania 2,039,830 2,059,563 -1.0%

Netherlands 123,114 129,187 -4.7%

USA 306,275 298,817 2.5%

Total 6,879,574 7,577,712 -9.2%

Relative Indirect Energy Consumption – Added value 49,110 61,183 -19.7%

Relative Indirect Energy Consumption - Revenue 28,025 30,401 -7.8%

In addition to the adjustments of the divestment of our China-based business, the figure has been corrected due to a wrong reported energy

consumption number in 2024. The indirect consumption value for Germany increased by 4.773 and the energy related to the vehicle fleet is also

added in direct energy.

Reporting definition & scope

Energy Consumption & Source

The information on energy consumption is based on the consumption

of Kendrion´s production facilities and office locations (with a workforce

exceeding 5% of the Kendrion group´s total FTEs) with electricity, natural

gas, fuel oil and biogas. The consumed values derive from the invoices

supplied from the energy provider and are centrally reported as energy

consumption values.

Direct Energy The disclosed direct energy figures include the

consumption (converted to kWh) of the vehicle fleet and natural gas,

biogas, as well as fuel oil for heating our buildings. Our organization

sources direct energy primarily from natural gas, fuel oil, and biogas.

The comparative figures of the Netherlands, including natural gas

consumption, have been estimated based on developments in added

value.

Indirect Energy For the indirect energy we rely on a diversified

energy mix that includes electricity sourced from solar, wind, water, coal,

and nuclear sources. Renewable energy is secured through both on-site

solar panels and REC provided by our energy suppliers. This information

is sourced directly from entities with solar installations

and from our general energy provider. The comparative figures of the

Netherlands, including electricity consumption, have been estimated

based on developments in added value.

REC are acquired as bundled certificates in Germany, the Netherlands

and Romania that cover 82.8% of our consumed electricity. Kendrion has

not sold any REC.

Further information on relative energy consumption is provided on

page 72 under the Scope 1 & 2 definition.

In line with our commitment to sustainability, we are actively working

to reduce reliance on grey (non-renewable) energy sources, as well as

nuclear energy, in favour of renewables. Our global strategy prioritizes

the shift toward renewable energy sources, which undergo continuous

assessment to maximize renewable input wherever possible across our

operations.

ENVIRONMENT

Integrated Annual Report 2025

Self-generated renewable energy

Energy source

Self-generated

kWh

Self-consumed

kWh

Solar energy 666,673 500,417

Scope 1 & 2

Kendrion applies the reporting scope for energy consumption to

greenhouse gas emissions too, covering production facilities and office

locations representing more than 5% of the Kendrion Group’s total FTEs.

In our calculations we included CO

e emissions.

Scope 1 The gross Scope 1 emissions values represent the natural

gas emissions, as well as fuel oil for heating our owned buildings and

gasoline / diesel for the owned vehicle fleet. The emissions from the

Netherlands have been estimated based on added value developments.

We aim to continue to compensate the consumption of natural gas

through compensation certificates. Exact quantities cannot be quantified

as of now, as it depends on the consumed resources.

Scope 2 The Scope 2 emissions values represent the electricity

consumed to power our buildings.

The absolute and relative energy consumption and CO

e emissions are

reported for a 12-month period. Where information is timely available, the

absolute and relative energy consumption and CO

e emissions are

reported for the period 1 January 2025 up to and including 31 December

2025. Comparative figures for previous years are calculated based on

identical timeframes. Calculation of the CO

e emissions is based on the

following conversion factors:

Scope 1

■ Natural gas for other plants (average):

0.219 kg/kWh (2024: 0.212 kg/kWh)

■ Fuel oil (average): 0.325 kg/kWh (2024: 0.322 kg/kWh)

Scope 2

■ Electricity generated from renewable sources: 0 (market-based)

■ Electricity generated from non-renewable sources (average):

0.585 kg/kWh (2024: 0.259 kg/kWh) (market-based)

■ Electricity generated from renewable and non-renewable sources: 0.458 kg/kWh

(2024: 0.457 kh/kWh) (location-based)

Internal Carbon Pricing Internal carbon pricing is not applied at Kendrion.

Relative Added value The relative energy consumption and CO

emissions are calculated based on the direct or indirect energy

consumption, or Scope 1 and 2 emissions, divided by the added value of

the relevant production facilities. Added value is defined as revenue plus

other income, minus the changes in inventory and work in progress, raw

materials and subcontracted work. The added value used cannot be

directly compared to the financial statements, as it reflects only the added

value of the entities included in the energy reporting scope.

Self-generated non-renewable energy

Energy source

Self-generated

kWh

Self-consumed

kWh

Fossil sources 1,479,124 1,117,014

Energy Source

Direct Energy in kWh

(in %)

Natural Gas

Fuel Oil

Biogas

0 10% 20% 30% 50%40% 70%60%

10%

11%

13%

76%

Non-renewable energy Renewable energy

Indirect Energy in kWh

(in %)

Water

Solar

Wind

Coal

Nuclear

0% 10% 40%20% 50%30%

35%

50%

Non-renewable energy Renewable energy

ENVIRONMENT

Integrated Annual Report 2025

Relative Revenue The relative energy consumption and CO

e emissions

are calculated based on the revenue of the relevant production facilities.

Revenue figures are disclosed in the financial statements on page 130.

The conversion factors applied for Scope 1 and Scope 2 market-

based emissions are primarily sourced from the relevant energy providers.

In cases where provider-specific emission factors are unavailable,

secondary data from publicly available databases is applied, including the

VDA emission factors for electricity, district heating, and fuels, and the

IGES grid emission factor list. For the application of VDA emission factors,

the gross generation conversion factor was used, reflecting a more

conservative approach and ensuring consistency with the methodologies

applied by energy reporting entities. For Scope 2 location-based

emissions, the conversion factors are derived from the aforementioned

VDA database.

Scope 3

Scope 3 emissions are calculated using a cost-based method with the

Scope 3 Analyzer, a tool provided by the Ministry of the Environment in

Baden-Württemberg, Germany. This tool, accessible through the

Umwelttechnik BW website, allows organizations to estimate their

emissions by inputting specific operational data, though the underlying

emissions data remain invisible to users. The tool is free of costs and can

be used by all types of companies. We have validated the reliability of the

tool through its approval by the Science Based Targets initiative (SBTi), the

Greenhouse Gas Protocol, and the CDP sustainability rating system.

For these calculations, several data types are required, including

purchasing revenue by commodity and country, energy consumption for

electricity, gas, fuel oil across different countries, and upstream

transportation data taken from financial transportation accounts. Since the

Scope 3 Analyzer was decommissioned by 31 December 2025, we have

calculated the values for January through October in advance and will

extrapolate the year-end values based on cost developments observed in

the final two months.

Waste management emissions are calculated separately based on the

organization’s primary data from the waste hierarchy management, using

average emission factors provided by the United Nations Framework on

Climate Change (UNFCCC). As mentioned in chapter E5 our waste

hierarchy is reported retrospectively due to data availability and reporting

cycle mismatches.

As a result, the provided waste emission value is an estimation of the

2025 waste hierarchy based on the waste quantities of 2024 and the

development of the added value between those years.

GHG Emissions

Scope 1 by country and relative emissions

(in tonnes)

Country 2025 2024 Diff. Diff. %

Germany 1,155 1,015 140 13.8%

India 49 43 6 14.0%

Romania 79 53 26 49.1%

Netherlands 33 34 -1 -2.9%

Austria 11 12 -1 -8.3%

Sweden 3 3 0 0.0%

USA 77 63 14 22.2%

Total 1,406 1,224 184 15.0%

Relative Scope 1 CO

e Emission - Added value 10.0 9.9 0.1 0.0%

Relative Scope 1 CO

e Emission - Revenue 5.7 4.8 0.9 18.8%

Scope 2 by country and relative emissions (market-based)

(in tonnes)

Country 2025 2024 Diff. Diff. %

Germany 0 0 0 0%

India 161 201 -40 -19.9%

Romania 0 330 -330 -100

Netherlands 0 0 0 0%

USA 143 136 7 5.1%

Total 303 667 -364 -54.6%

Relative Scope 2 CO

e Emission - Added value 2.2 5.4 -3.2 -59.3%

Relative Scope 2 CO

e Emission - Revenue 1.2 2.7 -1.5 -55.6%

Total GHG emissions intensity

Country 2025 2024 Diff. Diff. %

Total GHG (location-based) per net revenue

(tCO

e/EUR 1,000) 305 460 -155 -33.7%

Total GHG (market-based) per net revenue

(tCO

e/EUR 1,000) 293 449 -156 -34.7%

ENVIRONMENT

Integrated Annual Report 2025

Scope 1, 2 & 3

Retrospective Milestones and target years

2024 2025 Diff. Diff. % 2025 2030

Annual %

target /

Base year

Scope 1 GHG emissions

Gross Scope 1 GHG emissions (tCO

eq) 1,224

1,406 182 15.9% - - 0%/2023

Percentage of Scope 1

GHG emissions from regulated emission trading

schemes (%) 0% 0% 0% 0% - - -

Biogenic emissions in (tCO

eq)

33 33 0 0% - - -

Gross location-based Scope 2 GHG emissions

(tCO

eq) 3,456

3,149 -307 -8.9% - - -

Gross market-based Scope 2 GHG emissions

(tCO

eq) 667 303 -364 -54.6% - 305 12%/2023

Total Gross indirect (Scope 3) GHG emissions

(tCO

eq) 109,932 70,195 -39,737 -36.1% - - -

3.1 Purchased Goods and Services 99,385

62,686 -36,699 -36.9% - - -

3.2 Capital Goods 3,755 1,314 -2,441 -65.0% - - -

3.3 Fuel- and Energy Related Activities 484 467 -17 -3.5% - - -

3.4 Upstream Transportation and Distribution 3,430 3,149 -281 -8.2 % - - -

3.5 Waste generated in Operations 204 225 21 10.3% - - -

3.6 Business Travel 622 474 -148 -23.8% - - -

3.7 Employee Commuting 1,924 1,802 -122 -6.3% - - -

3.8 Upstream Leased Assets 128 78 -50 -39.1% - - -

Total GHG emissions 111,823 71,904 -31,919 -35.7% - - -

Total GHG emissions (location-based) (tCO

eq) 114,612 74,750 -39,862 -34.8% - - -

Total GHG emissions (market-based) (tCO

eq) 111,823 71,904 -31,919 -35.7% - - -

In addition to divestment-related adjustments, the figure was corrected due to an incorrect refrigerant value reported in 2024.

Gross Scope 1 emissions decreased by 164, while emissions from upstream leased assets (Scope 3.8) were reduced by 586.

Also, Scope 1 emissions from the Netherlands were estimated based on added value developments and increased by 25.

Scope 2 location-based emissions from the Netherlands were estimated based on added value developments and increased by 55. Scope 2

market-based emissions are estimated based on renewable electricity in the Netherlands in 2025; therefore, the value remains unchanged.

In addition to divestment-related adjustments, the figure was corrected to account for unexcluded intercompany values in 2024.

Emission from Purchased Goods and Services (Scope 3.1) was reduced by 32.065.

ENVIRONMENT

Additional data include travel expenses categorized by type, such as

flights, train travel, hotel stays, car use, and other categories, along with

commuting information, for which the number of employees is entered

directly into the Scope 3 Analyzer. The annual fuel consumption of leased

and owned vehicles is also considered. Once entered, the results from

these various inputs are processed in the Scope 3 Analyzer and

subsequently visualized in a report.

0.4% of the disclosed Scope 3 emissions are calculated using primary

data. Those include emissions from Scope 3.5 Waste generated in

Operations and Scope 3.8 Upstream Leased Assets containing leased

company cars and air conditioning emissions from leased buildings.

As an intermediate product manufacturer, we serve a diverse range of

industries and end-use applications, each with unique greenhouse gas

(GHG) emissions profiles. Given the wide variety of potential downstream

uses, it is not feasible to accurately estimate the emissions associated

with each possible application of our products. Therefore, in alignment

with the guidance provided in the GHG Protocol’s Scope 3 Standard, we

have excluded the reporting of Scope 3, categories 9 to 12 (downstream

transportation and distribution, processing of sold products, use of sold

products, and end-of-life treatment of sold products) from our GHG

emissions disclosures. This approach allows us to maintain transparency

and accuracy in our reporting by focusing on emissions sources we can

reasonably quantify. Scope 3 categories 3.9 to 3.12 are currently

considered out of scope.

Currently, our Scope 3 emissions are calculated primarily using a cost-

based method. We aim to enhance our calculation approach by

transitioning to, at least, the average data method. This improvement will

provide a more accurate and comparable understanding of our Scope 3

emissions, laying the groundwork for identifying reduction opportunities.

Integrated Annual Report 2025

ENVIRONMENT

INDUSTRIAL ACTUATORS AND CONTROLS INDUSTRIAL BRAKES MOBILITY RETAINED

Products that reduce climate impactProducts that keep you safeProducts that keep you healthy

Inductive heating and energy distribution Windpower and automated warehouses Electric vehicles

Products that keep you healthy • Products that keep you safe • Products that reduce climate impact

ENVIRONMENTALLY SUSTAINABLE ECONOMIC ACTIVITIES

Integrated Annual Report 2025

ENVIRONMENT

Total Mio. €

Proportion of Taxonomy

eligible activities %

Taxonomy aligned

activities Mio. €

Proportion of Taxonomy

aligned activities %

Proportion of enabling

activities %

Proportion of transitional

activities %

Not assessed activities

considered non-material %

Taxonomy aligned activities

in 2024 Mio. €

Proportion of Taxonomy

aligned activities in 2024 %

EU Taxonomy

The EU Taxonomy Regulation (Regulation (EU) 2020/852)

provides a common framework for identifying which economic

activities can be considered environmentally sustainable. Its aim

is to support transparency by clarifying the conditions under

which an activity contributes meaningfully to one or more of the

EU’s six environmental objectives, without causing significant

harm to other objectives and meeting applicable minimum

social safeguard requirements.

As part of the Sustainability Omnibus, the European

Commission has adopted an amended EU Taxonomy

Delegated Act 2026/73 of 4 July 2025 (the “Omnibus

Delegated Act”), which has been published in the Official

Journal of the European Union and has entered into force on

28 January 2026. Kendrion has chosen to early adopt the

Omnibus Delegated Act for the 2025 reporting year, as

permitted under Article 4 of this Omnibus Delegated Act. This

includes the use of the updated simplified reporting templates

and the application of the materiality threshold, enabling

proportionate and decision-useful disclosure.

Based on Kendrion’s assessment, only a limited number of

economic activities were identified as EU Taxonomy-eligible.

However, the shares of EU Taxonomy-aligned revenue, CapEx

and OpEx each remained below the 10% materiality threshold.

In addition, none of the identified activities met all applicable

technical screening criteria, including DNSH and minimum

safeguards, to be classified as aligned.

Turnover

The revenue is generated by the manufacturing and sale of

electromagnetic brakes for wind power turbines, components

for electric vehicles, components and subsystems for induction

heating, and embedded electronic solutions. As per the

assessment performed, these products fall within the scope of

the relevant Omnibus Delegated Act. Moreover, the

technologies relevant to these products contribute to the

reduction of CO

e emission. The amount of taxonomy eligible

turnover does not qualify as taxonomy aligned. The total

revenue used for the calculation of the taxonomy revenue

performance indicator can be reconciled with to our

consolidated financial statements on page 130 of this

Integrated Annual Report.

CapEx and OpEx

Kendrion performed an assessment of its CapEx in accordance

with the EU Taxonomy Regulation. Based on this analysis, 0%

of the company’s total CapEx was identified as EU Taxonomy-

eligible.

Taxonomy eligible OpEx relate to costs relevant to research and

development of components and subsystems for inductive

heating. The amount of taxonomy eligible operating

expenditures does not qualify as taxonomy aligned. Total

operational expenditures consist of direct non capitalized costs

related to research and development, repair and maintenance

and any other direct expenditure relating to the day-to-day

servicing of assets of property, plant and equipment as further

specified in note 21 of the financial statements in this Integrated

Annual Report.

Kendrion will continue to monitor regulatory developments and

further refinements of the EU Taxonomy technical screening

criteria. As technologies, products and reporting methodologies

evolve, Kendrion aims to further enhance the transparency,

robustness and consistency of its EU Taxonomy disclosures in

future reporting periods.

FINANCIAL YEAR 2025

KPI

Breakdown by environmental objectives of Taxonomy aligned activities %

Climate change

mitigation

Climate change

adaption Water Pollution

Circular

Economy Biodiversity

TURNOVER 22.8 9.3 0 0

CAPEX 0 0 0 0

OPEX 0.6 4.0 0 0

Integrated Annual Report 2025

ESRS E2 – Pollution

Impacts, Risks & Opportunities

To ensure a robust and up-to-date identification of climate-

related IROs, the IRO Stakeholders and the Materiality

Stakeholders reviewed all existing IROs and validated their

significance. This process, together with additional interviews

with selected external stakeholders, refreshed the initial DMA

conducted in 2023/2024. The result hereof provides a more

accurate reflection of our current organizational structure,

strategic priorities, and evolving pollution-related context, and

forms the basis for the updates to our IROs outlined below.

In 2025, our assessment of pollution-related impacts highlights

several areas of continued material relevance as well as

targeted changes introduced through the stakeholder-driven

reassessment. One of the most notable updates is the

re-evaluation of our product portfolio, which is now recognized

as having a positive actual impact in terms of enabling reduced

pollution for customers and end-users. While previously

classified as a less negative impact, improvements in product

performance and innovation have strengthened our contribution

to pollution reduction. This represents both a confirmed

material impact and a strategic opportunity, as it reinforces the

role of cleaner and more sustainable solutions within our

product offering.

At the same time, several negative pollution-related impacts

remain materially relevant and consistent with 2024

conclusions. Resource extraction and processing continue to

generate pollution across upstream value chain activities,

reflecting the ongoing environmental pressure associated with

the sourcing of raw materials. Similarly, microplastic creation

during transport remains a negative actual impact, although its

significance now has a slightly lower score compared to 2024.

Pollution generated during the use phase of certain products

also persists as a material impact, underlining the importance of

ongoing product redesign, user guidance, and end-of-life

considerations.

Another notable change concerns the assessment of mining-

related impacts within the supply chain. Previously classified as

a potential impact, mining is now recognized as an actual

negative pollution impact in 2025, driven by a clearer

understanding of environmental conditions at extraction sites

and the potential for contamination of land, air, and water. This

update reflects an enhanced visibility of upstream risks and the

outcome of our improved and refreshed DMA.

Conversely, the topic of nuclear waste, earlier identified as a

negative impact, is no longer part of our list of IROs. Following

a detailed review, stakeholders now concluded that nuclear

waste should not be considered a pollution-related impact for

our organization. Its removal ensures that the IRO list more

accurately reflects our operational reality and the pollution

issues genuinely associated with our value chain.

Regarding financial materiality, regulatory and policy changes

continue to represent a pollution-related risk. While the risk has

shifted from a potential to an actual financial impact in 2025, it

is no longer considered material due to our updated materiality

thresholds. Despite its non-material classification, we continue

to monitor regulatory developments closely, given the dynamic

nature of environmental legislation and the potential implications

for product compliance, production processes, and reporting

requirements.

Overall, the updated list of IROs for ESRS E2-Pollution reflects

a more precise and stakeholder-aligned understanding of how

our business interacts with pollution-related issues. The

identification of a strengthened positive impact associated with

our product portfolio, the elevation of certain upstream impacts,

and the removal of irrelevant topics such as nuclear waste all

contribute to a more meaningful and actionable evaluation and

will further guide our pollution-related priorities, risk

management activities, and opportunity-driven innovation

efforts.

Policies

As part of our initial DMA, we identified a potential need for a

more targeted approach to managing pollution-related issues

across our operations and value chain. While we considered

implementing a dedicated environmental policy in 2025, we

decided to postpone this decision due to other internal

priorities. In the coming years, we will reassess the feasibility

and added relevance of establishing such a policy, considering

our evolving strategic focus, resource allocation, and the

current outcome of our DMA.

Impact

Product portfolio enables less pollution

Resource extraction and processing

Pollution in the use phase

Mining of raw materials

ENVIRONMENT

Integrated Annual Report 2025

Actions

Low-Pollution Product Portfolio

Our most significant positive contribution to pollution reduction

results from our responsible product portfolio, particularly

components used in wind turbines that support renewable

energy generation. This directly aligns with our strategic

ambition to maintain a strong presence in responsible product

applications (see page 47).

These products help reduce pollution at a systemic level by

supporting clean energy production. While no additional

pollution-specific actions were initiated in 2025, we remain

committed to strengthening our contribution to low-pollution

value chains through innovation and product development.

Use-Phase Impacts in a Changing Portfolio

Pollution risks associated with the use phase of our products

are limited to our retained automotive activities in Romania. In

September 2025, Kendrion entered into a long-term

cooperation with Knorr-Bremse, securing a phased capacity

sharing and agreed future ownership transfer. As such, these

use-phase–related pollution considerations will no longer be a

priority area for us, and we did not initiate new use-phase

pollution actions in 2025 due to this future transfer.

Upstream Resource Extraction

Pollution impacts linked to resource extraction, processing, and

mining occur primarily in our upstream supply chain. In line with

our sustainability strategy (see page 47), we introduced a

supplier sustainability questionnaire to improve visibility into

how suppliers manage environmental impacts, including

pollution arising from extraction activities.

Approximately 30% of suppliers have responded by the end of

2025. Responses indicate that most participating suppliers

have implemented measures such as environmental policies

and ISO 14001 certification to mitigate pollution impacts at

extraction and processing sites. After collecting and reviewing

the full set of questionnaire results, we will evaluate what

potential next steps may be feasible in future years.

Microplastic Creation During Transport

Microplastic creation during transport remains one of our

identified negative pollution impacts. At present, no specific

actions have been implemented, as the potential microplastic

generation occurs at minimum, trace levels and cannot be

reliably quantified with current methods. In addition, there are

currently no viable alternatives to the transport solutions

required for our products, which limits our ability to influence

this impact at this stage.

Pollution Assessment of Own Operations

Although pollution has not been identified as a material topic for

our own operations under ESRS E2, our largest production

entities undergo internal assessments covering key

environmental and energy-related aspects, including emissions,

exhaust gases, noise, discharges into sewer systems, potential

soil contamination, use of input materials, energy consumption,

release of heat and other forms of energy, waste and

by-products, and energy-saving potential. These assessments

are conducted by qualified internal quality personnel and are

aligned with the processes established under our ISO 14001

environmental management systems. They are performed

without the involvement of external third parties, and no

dedicated financial resources are specifically allocated to these

activities. Until the end of 2025, these assessments have not

revealed any major findings, and where minor issues are

identified, appropriate countermeasures are implemented.

Metrics & targets

At this stage, we have not defined pollution-related targets

under ESRS E2. Our relevant IROs, particularly those occurring

in upstream extraction processes or during product use, are

difficult to quantify reliably, which limits the feasibility of setting

outcome-oriented targets. As our methodologies evolve and

more robust measurement approaches become available, we

will continue to evaluate whether target-setting in this area may

be appropriate in the future.

Although no targets are currently in place, we continue to apply

a range of measures ensuring responsible pollution

management within our own operations and across our Tier-1

supply chain. Although hazardous substances are listed an IRO

in our overview and are not assessed as material under the

ESRS framework, we nevertheless recognise the importance of

maintaining strict internal controls. Our production sites

continue to follow established processes for the safe handling

and management of hazardous substances, ensuring

compliance with relevant regulations and internal safety

standards. We do not have any products or services that are,

or contain, substances of concern or substances of very high

concern. Once our product is finalized, the substances within

the product are in a solid state and therefore are not considered

substances of concern or very high concern. As a result, the

percentage of net revenue made with such products or services

is 0%.

In parallel, our CSR audits for Tier-1 suppliers include checks

on pollution-related management practices, including

responsible handling of hazardous substances where relevant.

These measures allow us to uphold high expectations for

environmental management within our direct supply chain, even

in the absence of materiality under ESRS E2.

ENVIRONMENT

Integrated Annual Report 2025

At present, we do not allocate specific operating or capital

expenditures to pollution-related incidents, as no such incidents

occurred during the reporting period. The company has not

incurred any environmental protection or remediation costs

during the reporting period, nor are there any known obligations

or provisions required as of the reporting date. We considered

potential pollution-related effects, related impacts and relevant

time horizons; however, based on the current nature of our

operations, no material anticipated financial effects were

identified. Consequently, no critical assumptions or estimation

uncertainties were required, and no products or services were

assessed as being at risk. Additionally, we did not experience

any material pollution-related incidents or deposits during the

reporting period that resulted in negative environmental impacts

or are expected to adversely affect our financial position,

financial performance or cash flows.

ENVIRONMENT

Integrated Annual Report 2025

ESRS E5 – Resource use and circular economy

regulations, reputational risks and resource inefficiencies, while

accelerating our shift toward circularity presents opportunities

for cost savings, waste reduction, and new market potential,

albeit accompanied by challenges such as upfront investments,

limited access to recycled materials at scale, and the need for

deeper collaboration with partners to enable closed-loop

systems. At this stage, no financial effects related to the

identified IROs have been determined.

Policies

As part of our initial DMA, we identified a potential need for a

more targeted approach to managing resource use and

circularity across our operations and value chain. While we

considered implementing a dedicated circular economy and

resource efficiency policy in 2025, we decided to postpone this

decision due to other internal priorities. In the coming years, we

will reassess the feasibility and added relevance of establishing

such a policy, considering our evolving strategic focus, available

resources, and the current outcome of our DMA.

Actions

Resource-Efficient Innovation

To meet evolving market requirements, Kendrion introduced the

Slim PM Line — a compact and lightweight permanent-magnet

brake that additionally contributes to improved resource

efficiency by using approximately 30% less weight compared

with the previous line. This reduction in material demand

supports more efficient use of raw materials and decreases the

volume of materials ultimately entering end-of-life treatment.

The development also directly helps to mitigate our identified

negative impact IRO on natural resource depletion, as it lowers

the use of input materials such as steel, copper, and rare earth

metals.

Assessing Recycled Material Supply

Our facilities are supported by an extensive supplier network.

Frequently used materials are steel components, aluminium

components, copper wire, and plastic components. In many

cases, semi-finished products are purchased based on

specifications of Kendrion’s customers.

As part of our sustainability questionnaire to Tier-1 suppliers,

we assess which recycled materials are used in the

components they deliver to us. The questionnaire requests

information on whether suppliers incorporate recycled content

and the estimated share of recycled materials in their products.

Until the end of 2025, most respondents indicate either having

no visibility into the recycled content of their components or

using only minimal amounts of recycled materials. This limited

availability and traceability of recycled input materials presents

an additional challenge in addressing our identified negative

impact IRO on natural resource depletion, as advancing

circular-economy practices relies on access to secondary raw

materials. Strengthening data transparency and supplier

engagement on recycled content remains an important focus of

our ongoing actions under ESRS E5.

Waste Management

We continue to prioritize minimizing waste generation and

ensuring responsible waste handling across our operations,

Impacts, Risks & Opportunities

Climate-related IROs were updated through the refreshment of

our initial 2023/2024 DMA through internal and external

stakeholder validation. For a more detailed explanation of this

approach, please refer to the introduction of “Impacts, Risks

and Opportunities” under E2 on page 77.

Kendrion’s approach to evaluating resource use and circular

economy practices encompasses all production entities across

the organization, as outlined in our DMA process. This scope

covers not only internal resource management but also

collaboration with suppliers to better understand the recycled

materials incorporated in the components they supply.

Furthermore, we have reviewed customer requirements—

particularly for solenoid production—to identify potential internal

adjustments that align with evolving expectations regarding

sustainability and circularity.

Our assessment under ESRS E5 highlights two material actual

negative impacts that remain consistent across 2024 and

2025: the non-circular elements within our product portfolio

and the associated depletion of natural resources, both of

which underscore the continued relevance of responsible

product design and resource extraction as material topics.

Although a previously identified financial opportunity relating to

the use of sustainability criteria in strategic product

development is no longer deemed material after the 2025 DMA

refreshment, we continue to embed sustainability into decision-

making processes and ongoing product redesign initiatives,

pursuing circular practices with a long-term perspective to

extend product lifecycles, reduce waste and enhance value

chain sustainability. Maintaining traditional linear business

models could increase exposure to evolving environmental

Impact

Natural resource depletion

Non-circular product portfolio

ENVIRONMENT

Integrated Annual Report 2025

guided by the waste management hierarchy of prevention,

reuse, recycling, recovery, and landfill disposal. All ISO

14001-certified Kendrion manufacturing facilities systematically

monitor waste generation and processing, working with

certified waste handlers in accordance with local regulations.

As part of maintaining ISO 14001 certification, we implement

new waste-reduction measures supporting continuous

improvement each year.

To improve consistency in waste monitoring, we centralized

waste data collection using standardized registrations. This

harmonized reporting framework enables detailed reviews of

waste categories and helps us address variations in local waste

management practices arising from different production

processes or regulatory requirements.

Our waste management task force—consisting of specialists in

waste management and quality from the Business Groups—

continues to assess the feasibility of introducing new indicators

and monitoring parameters for zero landfill waste, recycling

(including Critical Raw Materials, or CRMs), and waste per unit

sale (kg). Kendrion also works to implement environmentally

responsible waste-disposal methods and maximize recycling

rates within our operations. Through these ongoing practices

and planned improvements, we aim to reduce environmental

impact and support our long-term sustainability ambitions.

Metrics & targets

At this stage, no specific targets have been set for ESRS E5 –

Resource Use and Circular Economy, as the measurability of

our identified negative impact remains challenging.

Consequently, establishing precise, quantifiable targets is not

yet feasible. We continue to focus on improving data collection

and monitoring processes to enable potential target-setting in

the future.

In 2025, our operations relied on 556 tons of copper (2024:

637), which continues to be the only raw material for which

exact consumption volumes are available.

Reporting criteria copper inflow

This KPI covers producing entities only and measures the total

volume of copper consumed (in tonnes) including acquired raw

material copper as well as copper contained in purchased coils,

during the reporting period.

Waste components in tonnes

Hazardous Non-hazardous

Iron and Steel

cardboard

commercial waste

cooling fluide, solvent

plastic

wood

others

copper

packaging of hazardous substances

permanent magnets

aluminum

dissolvent, flux

electrical appliances

old oil

workshop waste

batteries

paints and varnishes

spray cans

toner cartridges/ printer cartridges

fluorescent tubes

0 100 200

In addition to divestment-related adjustments, the figure was corrected due to an incorrect copper value reported in 2024. The value reduced by 124.

ENVIRONMENT

Integrated Annual Report 2025

Copper plays a central role in our products and is characterized

by substantial price fluctuation, which is why it remains the

primary focus of our material tracking. Other input materials are

sourced as pre-designed components rather than in raw form,

and suppliers typically do not provide detailed weight

information for such parts. As a result, we are currently unable

to calculate the total volume of all materials incorporated into

our products.

To enhance data completeness, we have initiated a systematic

effort to collect weight data for these purchased components.

This requires detailed, component-by-component verification

and is progressing in a phased manner. Improving the accuracy

of our material data and our related internal process remains a

priority.

Kendrion products are designed and tested for a target

durability of 20,000 hours, delivering long-lasting performance

under standard operating conditions. Actual lifetimes depend

on specific use cases and the environments in which products

operate. End-of-Line (EOL) testing remains a key cornerstone

of our quality approach, ensuring every product meets stringent

performance, durability, and safety criteria.

We also aim to enhance other sustainability aspects of our

products. A standardized returns process is in place addressing

customer issues efficiently and collecting insights that may

support improvements in reparability. However, we cannot

provide full recyclability information for our products or their

packaging. This is due to insufficient recyclability data from

Total waste in tonnes

76.3

(12.6%)

531.0

(87.4%)

Waste by disposal method in tonnes

400

300

200

100

Recycling Incineration

(mass burn)

Recovery,

including

enery

recovery

Not

provided

Reuse

412

Hazardous Non-hazardous

suppliers and the fact that some manufacturing processes,

such as moulding, result in products which cannot be easily

separated into recyclable components.

ENVIRONMENT

Reporting criteria waste hierarchy

Our KPIs for resource use and circular economy are primarily

based on waste hierarchy data. Due to the timing of external

data collection, our reporting inherently includes a lag: this

report contains waste figures for 2024, supplemented by

estimated values for 2025 derived from developments in added

value. This timing is consistent with our established reporting

cycle and data validation procedures.

The total waste quantity between the estimated value of 2024

and the final value of 2024 was adjusted by 9 tonnes.

The most recent analysis shows an increase in total waste

generation, resulting in an overall recycling rate of 77.0 %

(2024: 76.8 %). This corresponds to 467.5 tonnes of recycled

waste and 139.9 tonnes of non-recycled waste. Hazardous

waste accounted for 12.6 % (2024: 12.2 %), while non-

hazardous waste represented 87.4 % (2024: 87.8 %). No

waste was disposed of in landfills, enabling us to maintain our

zero-landfill status. No radioactive waste was generated across

our operations.

To ensure comparability, last year’s KPIs have been represented

to reflect the China Divestment. Cooling fluids, solvents,

dissolvent, and packaging of hazardous waste make up the

largest hazardous waste categories, while iron and steel,

cardboard, and general commercial waste remain the dominant

non-hazardous waste streams.

Integrated Annual Report 2025

SOCIAL

materiality reflects consistently high impact scores, their

strategic relevance, and the significance of these issues for our

workforce and long-term business success.

A key driver behind the materiality of the occupational

accidents and injuries IRO is our strong focus on employee

health and safety. At Kendrion, health and safety have the

highest priority in every aspect of our operations, and we are

committed to full compliance with all applicable occupational

health and safety regulations. We apply stringent quality and

safety standards to minimize workplace risks and prevent

incidents, which is essential in our manufacturing environment.

Our continued focus on safe production processes has led to

strong safety performance across our plants. These efforts

directly reinforce the materiality of this IRO, as they address one

of the most significant potential negative impacts on our

workforce. In addition, our health and safety programs support

UN SDG 3 (Good Health and Well-being) and SDG 8 (Decent

Work and Economic Growth).

Similarly, the diversity-related IROs—covering both the

opportunity presented by a diverse workforce and the risk

associated with insufficient diversity in management roles—

remain material due to their strong influence on innovation,

organizational resilience, and long-term strategic performance.

Diversity is important for fostering a fair and inclusive

workplace, promoting equal opportunities, and countering

prejudice and unconscious bias. We recognize that

management diversity is linked to enhanced decision-making

and stronger business outcomes. These considerations also

underpin the continued materiality of the empowering women in

careers IRO, as gender diversity remains an important factor in

achieving balanced representation and unlocking talent

potential. We strive to create an environment in which all

employees—regardless of age, background, gender, nationality,

ethnicity, religion, or any other protected characteristic—have

equal opportunities to develop and contribute to the execution

of our strategy.

Through our DMA refreshment, we ensure that our most

significant IROs are accurately reflected and appropriately

managed, supporting transparent and consistent CSRD-

aligned reporting for 2025.

Policies

Code of Conduct

Our Code of Conduct supports the ongoing development and

implementation of our corporate norms and values, with a

particular emphasis on integrity. It sets guidance for our

business decisions and provides principles of ethical business

behavior. At Kendrion, we believe that, when taking business

ESRS S1 – Own workforce

Impacts, Risks & Opportunities

Social-related IROs were updated through the refreshment of

our initial 2023/2024 DMA through internal and external

stakeholder validation. For a more detailed explanation of this

approach, please refer to the introduction of “Impacts, Risks

and Opportunities” under E2 on page 77.

In the context of our transition toward greener and climate-

neutral operations, we found that no transitional risks are

expected to materially impact our workforce, and no specific

workforce groups are at heightened risk due to their

characteristics, roles, or working conditions.

The 2025 DMA refreshment resulted in adjustments to the

materiality of several social IROs under ESRS S1 due to revised

materiality thresholds and a correction applied to the scoring

formula. As a result, certain previous material IROs are no

longer defined as such in 2025.

Although IROs related to job creation and social prosperity,

equal opportunities at work, and international teams are no

longer considered material following the threshold adjustments,

they continue to have positive impacts on our workforce and

broader society.

Other IROs remained material and continue to be prioritized in

our management approach. These include empowering women

in careers, occupational accidents and injuries, and financial

materiality topics related to diversity—both the opportunity

created by a diverse workforce and the risk associated with

limited diversity in management roles. Their continued

Impact Opportunity Risk

Empower women in careers

Occupational accidents and injuries

Effectiveness through diversity

Diversity in management roles

Integrated Annual Report 2025

decisions, high ethical standards should be applied. Our Code

of Conduct describes the behavior we expect of our people.

Driven by the value integrity, the Code of Conduct contains

obvious and universal standards and expected behaviors, and

it contributes to a safe, respectful, and inclusive work

environment. We do not tolerate discrimination, harassment, or

misconduct of any kind, including discrimination based on

racial or ethnic origin, colour, sex, sexual orientation, gender

identity, disability, age, religion, political opinion, national or

social origin, or any other protected characteristic. We are

committed to conducting our business in a transparent and

responsible manner and will continue to review and update our

Code of Conduct to ensure its continued relevance and

effectiveness. The Code of Conduct is available on our

corporate website at www.kendrion.com.

Raising awareness through education, training, and practical

examples continues to be essential for embedding our values.

With the support from value teams, managers play a key role in

guiding employees in understanding how these values apply to

their work and the broader organization. A mix of interactive

trainings helps employees internalize the principles outlined in

the Kendrion Way and the Code of Conduct. It is essential that

every employee understands and adheres to the ethical

standards set out in our internal policies and procedures.

Our policies and procedures form the foundation of responsible

conduct throughout the company. Senior management is

responsible for leading by example and ensuring that

employees are aware of and act in the spirit of our policies and

procedures. Our Intranet page includes a dedicated Code of

Conduct page with additional explanations. The Code of

Conduct is also integrated into the onboarding process, where

employees are required to acknowledge and comply with it. To

further support ongoing awareness and compliance, employees

are obliged to complete an online training module covering

topics such as corruption, bribery, and conflicts of interest.

Fair Labour & Human Rights Policy

We are committed to endorse fair labour practices and

respecting human rights across all of our business operations.

This commitment is embedded in our Fair Labour and Human

Rights Policy. The policy covers key topics such as (the

prohibition of) forced labour and, child labour, and human

trafficking. In line with these commitments, we uphold the

highest standards of human rights and ethical conduct

throughout our value chain. We confirm that no entities within

our operations are at risk of engaging in, or being linked to,

incidents of child labour, forced labour, or human trafficking.

The Fair Labour and Human Rights Policy is available on our

corporate website at www.kendrion.com. No material human

rights or labour concerns were reported in connection with our

activities in 2025.

Health & Safety

While a global health and safety framework has not yet been

formalized, each site has implemented its own tailored policies

to align with local safety management systems. These

measures may include work instructions for production

environments, procedures for managing hazardous materials,

and protocols for emergency contacts, all designed to meet

local regulations and operational requirements.

Diversity

As part of the Social Capital and Human Capital value-creation

pillar within our ESG Program, we are committed to building

and sustaining a diverse and inclusive workforce in which every

employee feels welcomed and respected. This commitment is

reflected in our diversity policy for the Supervisory Board,

Executive Board, and Management Team. We actively promote

diversity throughout the entire employee lifecycle, using this

framework to address related challenges and the complexity of

(gender) diversity—particularly relevant for a company like

Kendrion, where the demand for technical and Science,

Technology, Engineering and Mathematics (STEM) expertise is

significant.

Speak-Up Policy

To foster a culture grounded in trust, transparency, and

accountability, it is essential that we ensure that employees

have a secure and anonymous channel to express their

concerns. Our Speak-Up Policy emphasizes our commitment

to creating an environment where individuals feel confident

raising issues without fear of retaliation.

The Speak-Up Policy outlines the value of open

communication, reflects our core principles of integrity and

respect, and establishes a clear, confidential process for

reporting concerns. By allowing anonymous submissions, the

company demonstrates its commitment to identifying and

resolving potential issues promptly, helping to maintain a

workplace where everyone can thrive. Further details on the

Speak-Up Procedure can be found on page 96.

Actions

Tracking and measuring specific actions related to employees,

human rights, health & safety, diversity, and workforce

engagement remains challenging, as these aspects are

inherently embedded in daily business operations. Due to their

integrated nature, allocating dedicated resources solely to

these topics and defining clear, standalone actions is complex.

While initiatives and policies are in place, we aim to explore the

feasibility of defining specific actions and planning targeted

further enhancing visibility and strategic alignment.

We believe in the importance of reporting comprehensively on

all initiatives that reflect our commitment to employees. As

such, the actions presented in this chapter go beyond those

required in connection with our material IROs.

SOCIAL

Integrated Annual Report 2025

Engaging with own workforce

Our culture and its underlying values underpin all we do. The

key values exemplifying our culture are articulated in The

Kendrion Way: ‘A global team of actuator specialists, with

courage to act, curiosity to learn from successes and mistakes,

confidence to share, and open to feedback’. The Kendrion Way

offers our employees guidance on ‘’how we do things” at our

company, irrespective of location, level of responsibility or

functional role. We are also committed to maintaining the

highest standards of conduct in all our business activities.

Kendrion respects freedom of association and the right to

collective bargaining. Works councils and employee

representatives operate within Kendrion’s major German

entities, as well as within organizations in the Netherlands and

Romania. In accordance with local labour regulations, these

groups take part in a wide range of matters related to

employment, health and safety, and social topics. Regular

dialogue and ongoing communication give employees the

opportunity to raise questions and share their perspectives.

We view constructive cooperation with our works councils and

employee representatives as an important factor in building an

engaged and satisfied workforce, which supports overall

productivity and morale. We value the contributions of these

corporate bodies in articulating and addressing the needs and

concerns of our employees.

At certain German locations, a dedicated representative body

supports employees with disabilities. Elected by employees

with disabilities, this group advocates for their interests and

ensures their needs are appropriately considered. In close

collaboration with management and the works council, it

contributes significantly to maintaining an inclusive and

supportive work environment.

Kendrion conducts regular employee satisfaction and culture

surveys to monitor developments within the organization and to

ensure we continue to foster a positive, engaging, and inclusive

company culture. As planned, we carried an employee survey

in 2025, achieving a participation rate of 68% across the

workforce, slightly higher than the results of the previous survey.

The results provide valuable insight into the current experiences

of our employees and support our ongoing efforts to further

strengthen the employee experience.

Overall, the outcomes indicate strong performance in several

key areas. Employees reported a clear understanding of their

roles and responsibilities, and the survey reflected a positive

perception of inclusion within the organization. Psychological

safety also emerged as a notable strength, with employees

expressing confidence in their ability to speak up, share ideas,

and raise concerns. Engagement, alignment with organizational

goals, and team leadership were likewise assessed positively,

with some areas showing improvement compared to the

previous survey.

ESG-related questions were introduced into the employee

survey in 2025. Results showed that employees consider

sustainability important to the company’s long-term success

and are interested in learning more about the company’s

sustainability commitments and actions.

At the same time, the results pointed two areas where we can

further strengthen our approach. Employees noted that change

processes could benefit from enhances support and that

providing additional resources or conditions would help them in

their daily work. Change management and enablement remain

therefore important areas for ongoing improvement.

The results reinforce the strengths of our organizational culture

while offering clear direction on where additional support and

focus can enhance the employee experience and overall

organizational performance. The results have been made

publicly available through our Intranet platform. Several

management meetings have taken place, addressing and

ensuring understanding with the results. The results together

with the management meetings provided a strong foundation

for further action. Plans for action have already been launched

at both global and local levels. The company´s CEO ultimately

remains the most senior role in the company overseeing and

ensuring effective engagement with the internal workforce, and

the follow up process for the 2025 employee survey.

Kendrion encourages employees to report any concerns

regarding potential violations of the Code of Conduct or related

policies. Our Speak-up Policy outlines the procedures for

raising concerns and explains how reports are handled.

Employees and external stakeholders can use our

independently managed global Speak-up line to report issues

confidentially or anonymously at any time via phone or web. Full

details of the Speak-Up line are available on page 96.

Human Rights

Respecting human rights is a cornerstone of a sustainable

society and a key element in fostering responsible business

practices across our organization. We support and adhere to

the human rights principles outlined in the United Nations

Global Compact.

We also recognize the compliance with the minimum

employment age and associated regulations. Kendrion strictly

prohibits any form of forced or involuntary labour and aligns its

practices with the UN Guiding Principles on Business and

Human Rights.

SOCIAL

Integrated Annual Report 2025

Ensuring fair labour practices and respect for human rights

remains central to our approach to promoting sustainable and

ethical business standards throughout the company.

We are committed to being a responsible corporate citizen.

We take responsibility for the living conditions and career

opportunities at our locations and maintain strong connections

with the communities in which we operate. Key areas of focus

for our corporate citizenship initiatives include intercultural

understanding and respect, fair working conditions, career

development, diversity and inclusion, and employee

representation. Through these efforts, we also contribute to the

advancement of selected UN Sustainable Development Goals,

particularly SDG 5 (Gender Equality) and SDG 8 (Decent Work

and Economic Growth).

Kendrion is committed to promoting human rights and

humanitarian values across all aspects of our business. At the

end of 2025, our employees were invited to select a project for

the company to make a Christmas gift donation. The projects

involved all reflected our values in sustainability, human rights,

and global health. One of the pre-selected organizations was

Doctors Without Borders to which 52% of employee´s votes

were allocated to resulting in EUR 7,800 of donations.

Through this initiative, we aim to support humanitarian efforts

and reinforce our dedication to ethical and responsible

corporate citizenship.

Health & Safety

At Kendrion, health and safety are a central responsibility within

our Business Groups, where they are managed systematically

and consistently through clear rules and procedures aligned

with recognized industry standards and best practices. These

are formalized in our Health, Safety & Environmental (HSE)

policies, which affect 100% of employees across the company.

Each production site also implements targeted initiatives to

enhance HSE standards based on plant-specific needs,

production lines, and technologies.

Regular HSE audits assess adherence to policies and help

identify areas for improvement. All employees follow local health

and safety procedures and participate in training programs

covering the proper use of machinery, protective equipment,

handling of substances, emergency procedures, and other safe

work practices. Employees in production areas, who face

higher inherent risks, are supported by comprehensive health

and safety management systems designed to proactively

mitigate hazards, ensure compliance, and promote a strong

culture of safety.

Recognizing that employee well-being extends beyond physical

health, Kendrion places a strong emphasis on mental health as

a key part of our workplace culture. Fostering cohesion within

an inclusive professional community, where all employees feel

valued and respected, supports engagement, innovation, and

overall performance. Initiatives such as partnerships with

psychological institutions provide timely access to

psychological consultation for employees.

Employees are encouraged to work on meaningful tasks and

innovative projects, while a variety of programs support a safe,

healthy, and sustainable workplace culture. These include

annual ‘Health Days,’ medical check-ups, sports activities and

gym memberships, and access to mental help. Raising

awareness of mental health and creating an environment of

respect and acceptance helps to remove barriers for

employees seeking support, contributing to a resilient and well-

supported workforce.

Our internal Health Task Force, chaired by the CEO, reviews

global health, illness rates and safety metrics on a monthly

basis. Sites with higher illness rates receive additional attention

with coordinated improvement measures if needed.

Diversity

Diverse and inclusive teams contribute to higher organizational

agility, creativity, and innovation. Kendrion embraces diversity in

its broadest sense, with a current strategic focus on improving

gender balance in leadership and technical roles. By engaging

managers and senior employees, implementing targeted

actions, and addressing potential barriers, we aim to strengthen

and sustain gender diversity across the organization.

Leadership commitment and shared responsibility underpin our

approach and guide the development of an inclusive working

environment. Key priorities within our diversity framework

include:

■ Recruitment of diverse employees: Ensuring that our

recruitment process is unbiased, signalling our interest in

a diverse candidate pool; supporting applications from a

diverse group; and clearly communicating these

expectations to our recruitment teams.

■ Developing and maintaining a robust pipeline of diverse

talent.

■ Retention and promotion of talents with diverse

backgrounds, nationalities, and genders: Covering various

aspects such as reward, recognition, benefits, work

allocation, performance management, and career

development.

■ Advancement into management roles: Preserving an

environment that fosters the growth of a diverse group of

talents into management, technical, and other leadership

roles.

Advancing gender equality and improving outcomes for female

employees remain important themes. Achieving meaningful

progress requires continuous commitment from both the

organization and its workforce. Strengthening our holistic

approach across employee well-being, Kendrion established

The Circle of Trust, providing female employees with access to

SOCIAL

Integrated Annual Report 2025

a trusted network and a confidential support line. Its primary

objective is to foster a safe and ethical working environment

and to promote female empowerment and well-being.

Kendrion participates in Girls’ Day, an initiative aimed at

increasing the interest and participation of young female

students in technical and traditionally male-dominated

professions. As part of this program, we host students at our

facilities to introduce them to a range of vocational and

technical career paths, provide hands-on insights into our

operations, and encourage awareness of opportunities within

STEM-related fields. Through Girls’ Day, we aim to contribute to

a more balanced talent pipeline and support long-term gender

diversity in roles where women have historically been

underrepresented.

Kendrion remains a committed signatory of the German Charta

der Vielfalt (Diversity Charter). The Charter, supported by the

German Commissioner of the Federal Government for

Migration, Refugees and Integration, promotes the recognition,

appreciation, and integration of diversity within corporate

culture. These principles continue to align with and reinforce

Kendrion’s own diversity and inclusion objectives.

Employee Development and Retention

Kendrion continues to invest in talent attraction and employer

branding to support the recruitment of qualified employees.

Our approach includes targeted advertising, participation in

networking events, and partnerships with technical universities

and institutions. Digital channels play an increasingly important

role, enabling targeted marketing campaigns through various

social media platforms and facilitating access to broader talent

pools. Attracting young and early-career professionals remains

a priority. Our cooperations—such as with the High Tech

Campus in Eindhoven—and our participation in job fairs in

Germany further strengthen our recruitment efforts. Career

development opportunities, international exchange programs,

workstyle flexibility, and an inclusive company culture are key

components of our employee value proposition.

We believe in the importance of fostering professional growth of

our employees. Our development programs are designed to

prepare talent for future leadership roles. Kendrion has

implemented a structured succession management process

that identifies successors for critical positions and monitors

their progress. Our talent management and succession-

planning tool supports performance reviews and the

identification of development needs. It integrates our

competency framework, which forms the basis of our

performance evaluation processes.

We aim to retain employees by providing an engaging and

supportive work environment. Flexible workstyles contribute to

employee performance, well-being, and satisfaction. Kendrion

offers competitive compensation and benefits to promote

fairness and transparency, including performance-based and

share-based components that align incentives with sustainable

long-term objectives. Through our focus on talent attraction,

development, and retention, we aim to create an environment

in which employees can grow, perform, and build sustainable

careers.

Metrics & targets

Health & safety

Specific and measurable performance targets for Kendrion’s

Business Groups and local management include health and

safety metrics, which are determined by the number of

accidents per 1,000 FTE, Lost Time Injury (LTI (Days Lost))

rates and illness rates. For accidents, LTI (Days Lost), and

illnesses, our objective is ensuring that these metrics do not

exceed the previous year’s figures, with the aim of achieving

consistent reductions over time. No additional targets have

been established at this stage for other workforce-related

topics. No work-related fatalities occurred in 2025.

Diversity

Kendrion is committed to reshaping the composition of

Kendrion´s Leadership Team with an ambition that at least 33%

of the team comprises women, and at least 33% comprises

men. To meet the minimum threshold requirement of 33%, our

ESG Program sets a current necessary improvement of 18.2%

in female FTE for our indirect staff within our Business Groups,

to be achieved over multiple years. According to Kendrion’s

diversity policy, at least 33% of the Supervisory Board shall

consist of women, and at least 33% shall consist of men. The

current composition of the Supervisory Board, with two female

members and two male members, meets this 33% gender

diversity target.

We developed our diversity targets through a detailed

assessment of the current state across business groups,

focusing on diversity within functional areas. The Management

Team then discussed and set ambitious yet achievable targets,

considering diversity metrics and staff turnover rates to gauge

feasibility. The HR Committee reviewed and aligned the

approach with Kendrion’s diversity objectives before the final

targets were presented to leadership, ensuring clarity and

commitment across the organization.

To track progress and effectiveness, the diversity figures are

reviewed regularly and reported to the Executive Board and

Supervisory Board. This allows us to monitor the progress of

the targets, assess trends, and adjust where necessary. While

the target-setting process was based on internal discussions

and data, it is an ongoing effort to continuously improve and

address any lessons learned or challenges along the way.

SOCIAL

Integrated Annual Report 2025

Kendrion has also established targets related to nationality.

According to the diversity policy, the Management Team should

include representatives from at least two regions where

Kendrion operates. Furthermore, Kendrion’s diversity policy

incorporates a background diversity objective. At least one

member of the Executive Board, and at least three members of

the Management Team, and 30% of the Leadership Team

should possess experience in international industrial and/or

automotive business or an industry adjacent thereto.

Kendrion’s workforce comprises 33 nationalities (2024: 37)

across 8 countries (2024: 8). Furthermore, 44% of our

workforce is female (2024: 43%), reflecting a healthy balance of

backgrounds, nationalities, and gender throughout the

organization. The Leadership Team consists of 19% women

and 81% men, thereby the identified gender diversity targets for

the Leadership Team have not yet been met. The composition

of the Executive Board, the Management Team and the

Supervisory Board align with their respective background

diversity objectives. The nationality diversity objective for the

Management Team has been met. In the Supervisory Board

one member holds German nationality, reflecting Kendrion’s

significant operations in Germany. For the background diversity

objective for the Supervisory Board, please refer to the

Supervisory Board ‘Profile outline’ which is available on

Kendrion’s corporate website.

Engaging with own workforce

Allowing employees to form unions and engage in collective

bargaining forms a part of fair labour practices and human

rights. Kendrion upholds freedom of association and the right

to collective bargaining. Works’ councils are established at

Kendrion’s major operating companies and a holding company

in Germany and at a subsidiary in the Netherlands and in

Romania. Approximately 89.6% (2024: 86.9%) of all Kendrion

SOCIAL

employees are represented by these works’ councils and

employee representatives. Moreover, approximately 73.0%

(2024: 69.5%) of employment contracts are governed by or

follow the collective bargaining agreements for the metal

industry. We do not have any agreements in place for employee

representation through a European Works Council (EWC), a

Societas Europaea (SE) Works Council, or a Societas

Cooperativa Europaea (SCE) Works Council. Reports of

potential or suspected misconduct or other issues can be

made by employees in their native language. In 2025, 4 (2024:

2) reports were made through the Speak-up line. These reports

were assessed by the Compliance Committee and, where

appropriate, further investigated or advised upon.

Violation of the Code of Conduct may lead to sanctions,

including termination of employment. None of the reports made

through the Speak-up line in 2025 resulted in a dismissal of

employees. In addition, no material fines or damages have

been reported, and no severe human rights cases have been

identified. No specific targets are set for the engaging with own

workforce metrics.

2025 TARGET

Diversity@Kendrion

33 nationalities

8 countries

44% female workforce

2025

2025 TARGET

5.9

2025

225

2025

172

2025

5.9

2025 TARGET

248

Illness rateDays Lost

(2) (ESRS)

Lost Time

Injuries

(Days Lost)

(Own criteria)

(in days)

Accidents

(Own criteria)

Accidents

(2) (ESRS)

Accident (2) (ESRS) and Days Lost (2) (ESRS) are the KPIs used to reflect the reporting disclosure requirement for reporting accidents and lost

time injuries starting from one day of Days Lost.

Target values are based on the previous year’s performance, with the objective of not deteriorating compared to the prior year.

Integrated Annual Report 2025

FTE per country and contract type

FTE Permanent Fixed Term Temporary Total FTE

 Male Female Male Female Male Female Male Female Total FTE

Netherlands 77 15 4 0 7 1 88 16 104

Germany 428 214 33 10 3 1 464 225 689

Sweden 1 1 0 0 0 0 1 1 2

Austria 5 3 0 0 0 0 5 3 8

Romania 90 284 0 0 0 0 80 284 364

India 38 5 8 2 0 0 46 7 53

China 0 0 0 1 0 0 0 1 1

USA 29 19 0 0 0 0 29 19 48

Total 658 541 45 13 10 2 713 556 1,269

Headcount per age group and country

Headcount Netherlands Germany Sweden Austria Romania India China USA Total

Under 30

years 16 133 0 0 21 24 0 7 201

30 – 50 years 59 358 0 4 214 28 1 19 683

Over 50 years 34 292 2 4 129 1 0 24 486

Total 109 783 2 8 364 53 1 50 1,370

Employee Headcount by Country (≥50 Employees / ≥10% Total Workforce)

Collective bargaining agreement Social dialogue

Coverage

Rate

Employees – EEA (for countries with

> 50 empl. Representing

> 10% total empl.)

Employees – Non-EEA (for countries

with > 50 empl. Representing

> 10% total empl.)

Workplace representation (EEA only)

(for countries with > 50 empl.

Representing > 10% total empl)

0 – 19% Germany

20 – 39%

40 – 59%

60 – 79%

80 – 100% Germany; Romania Germany; Romania

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Integrated Annual Report 2025

% Female / Male Employee Female and Male are gender categories

based on an employee´s self-identification or administrative record as male

or female. The percentage is calculated by dividing the number of females

to the total number of employees per FTE.

Illness The reported illness rate is based on the total illness hours.

The total illness hours with and without wage continuation is divided by

the total timetable hours.

Employee & Nonemployees An employee at Kendrion is defined as a

person who holds a direct employment contract with one of Kendrion’s

legal entities. Nonemployees at Kendrion sites are exclusively temporary

workers hired through third parties.

Remuneration & Gender pay gap The annual total remuneration ratio

is the annual total remuneration of the highest paid individual divided by

the median annual total remuneration minus the highest paid individual

remuneration. The pay ratio is influenced amongst others by the

geographical locations, type of business, part-time employees and

currency volatility.

The disclosure of gender pay gap contains the basic salary plus

remunerations for each entity, separated by direct and indirect employees.

Remuneration includes payment for overtime and bonuses. For part time

employees the regular monthly salary and remuneration is calculated to

1 full time equivalent (FTE), to have a common ground for comparison.

The gender pay gap is affected by the geographical areas and types of

business (such as manufacturing or developing) in which Kendrion

operates and consequently country differences exist. Kendrion will

continue to improve on its analysis and further alignment to ensure a good

basis for future actions. We calculate the gender pay gap as the difference

between the average hourly pay for men and the average hourly pay for

women, divided by the average hourly pay for men.

Disability & family-related leave Based on the country the regulation

for disability reporting can vary. Kendrion´ s CSR reporting is aimed to

achieve an aligned reporting standard for the disability KPI. Employees

with disabilities refers individuals employed by Kendrion who have a

documented physical or mental impairment that restricts their ability to

perform certain activities. These impairments can include but are not

limited to: 1. Physical disabilities, 2. Sensory disabilities, 3. Mental

disabilities, 4. Invisible disabilities. Kendrion distinguishes two criteria for

the determination of disabled employees:

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Reporting Definition & Scope

FTE & Headcount The reported figures for FTE and Headcount

represent the year-end numbers of the reporting period. An FTE (Full-Time

Equivalent) represents the hours worked by an employee as a proportion

of the standard full-time workload. As a headcount counts each employee

independent of the number of working hours hired through a Kendrion

legal entity.

Accidents & LTI (Days Lost) (Own criteria) Kendrion reports the

total number of work-related accidents during working time or on the way

to or from work for its own employees and independent contractors under

supervision of Kendrion. Only the accidents that the group entity had to

report to an external institution are reported. Kendrion reports accidents

from all group entities that caused an absence of more than three calendar

days, not including the day of the accident. This definition is based on

regulations applicable in Germany. This assessment is based on internally

developed criteria and therefore does not fully align with the requirements

and definitions set out in the ESRS. As such, we added the second Days

Lost KPI which fully aligned with the ESRS reporting criteria. Kendrion

reports the absence resulting from these work-related accidents.

The Lost Time Injury (LTI (Days Lost)) is time (‘scheduled working days’)

that could not be worked (and is thus ‘lost’) because of an employee

being unable to perform the usual work due to an occupational accident

(‘at work accident’ as well as ‘way-to work accident’) or disease. Kendrion

makes no difference in whether the salaries or wages were paid by

Kendrion or by an external institution during that time. A return to limited

duty or alternative work for the same organization does not count as ‘lost

days’. Counting of ‘lost days’ begins with the first scheduled working day

of full absence (e.g. the day after the accident). The count of ‘absent days’

due to a work-related accident ends when the employee either is fully

back to work or is absent from work for other reasons (e.g. vacation,

reduction in overtime, etc.). A lost day counts as one full day regardless of

whether the employee has a part-time or a full-time contract. Kendrion

does not specify LTI (Days Lost) data per region, worker type or gender as

Kendrion considers this information not relevant to its current operations.

No fatalities have taken place due to work related accidents or injuries.

Accidents (2) & Days Lost (2) (ESRS) The KPI Overview on page 60

also presents the Accident (2) and Days Lost (2) values in line with the

ESRS reporting criteria stating that days lost include the first full day and

last day of absence, and are counted as calendar days, including days

when the individual was not scheduled to work. At the same time, the

Company continues to disclose accidents and LTI (Days Lost) based on

its own definition to ensure better comparability with previous reporting

cycles.

1. The reporting of a disability indicator is relevant where the company

must adjust the workplace or the defined job description to adapt to

the circumstances of the employee. The adjustments in this relation

should be beyond the standard safe and healthy measures

implemented in the company.

2. As already mentioned, the disability regulations can vary based on

the country the company is located in. These specifications should

not be neglected in the CSR reporting and as well considered in the

calculation of the disability indicators.

Both definitions add up to a set of criteria to identify the disabled

employee and to report the indicator accordingly. 6.7% of the reported

people with disabilities are subject to legal restrictions on the collection

of data.

At Kendrion all employees are generally entitled to family-related leave.

Wages We are committed to fair and competitive wages that support

our employees’ well-being and reflect their valuable contributions. We

regularly review our pay structure to meet or exceed industry standards,

ensuring our team can thrive both inside and outside of work. We

believe that adequate wages are fundamental to building a resilient,

motivated workforce and, ultimately, to the success of our company.

The wage cost used to calculate the wage cost per FTE is calculated

based on the staff costs detailed in our financial statement on page 130

subtracted by other staff costs that is not specified in detail in the

financial statement but is displayed in the total value of staffed costs.

% Female in Leadership Team Our Leadership Team consists

of around 31 executives executives and managers of the company and

include the Executive Board (CEO and CFO) and the Management

Team (which in addition to the Executive Board members also consists

of the Business Group Managers of IAC, and IB, the CIO, and the

General Counsel), General Managers of each site, as well as additional

managers from the areas Sustainability, Controlling, HR, IT, Sales,

Purchasing, and R&D. The percentage is calculated by dividing the

number of leadership team members.

Integrated Annual Report 2025

SOCIAL

67.6

Wage costs per

FTE

(EUR 1,000)

2024 61.3

Overall employee

turnover rate

(%)

2024 20

1,000 (73%)

Employees covered

by collective

bargaining

(number)

2024 1,018 (69.5%)

162

Employee who

left the company

(number)

2024 305

31 (6 f / 25 m)

Employees at top

management

level (FTE)

2024 32

(5 f /27 m)

2.3

(19% f/ 81% m)

Employee at top

management

level (%)

2024 2.0%

(16% f/ 84% m)

98 (34 f / 64 m)

Employees that

took family

related leave

2024 43

(19 f/ 24 m

)

Employees with

disabilities

(headcount)

2024 52

601/769

(f/m)

Headcount

by gender

2024 643 f / 821 m

41.7

(%)

Gender pay gap

total

2024 40.7%

In addition to divestment-related adjustments, the figure was corrected due to an incorrect family-related leave value reported in 2024.

The value increased by 23.

Integrated Annual Report 2025

ESRS S2 – Workers in the value chain

metals sector, combined with the potential severity of these

human rights violations, supports the continued classification of

this topic as material.

The decision to maintain ESRS S2 as a material standard is

further reinforced by Kendrion’s ESG Program which defines

sustainable sourcing as a strategic priority. This focus aligns

with the outcomes of the DMA and underlines the relevance of

addressing social risks in the upstream value chain as part of

Kendrion’s broader sustainability ambitions.

Kendrion’s value chain spans multiple tiers and geographies.

Labour conditions in upstream supply chains can have a

significant influence on human rights outcomes, supply chain

stability and the ethical integrity of business operations. The

extraction and processing of metals often take place in

complex, multi-tier supply chains where transparency and

direct influence significantly decrease beyond Tier 1 and Tier 2

suppliers. As a result, workers at Tier 3 and Tier 4 levels are

potentially more exposed to adverse human rights risks, while

Kendrion’s direct control over labour practices is inherently

limited.

The potential presence of forced labour and child labour in

metal supply chains represents a material negative impact on

workers in the value chain. In certain regions and segments of

the global metals industry, these practices are documented

structural risks, driven inadequate regulation, informal labour

arrangements and limited oversight in upstream tiers. Although

no confirmed cases have been identified within Kendrion’s

direct supply chain, the potential scale and severity of these

impacts justify their inclusion as material impacts under

ESRS S2.

Policies

Responsible sourcing and respect for human rights in the

supply chain are underpinned in our Supplier Code of Conduct,

which sets clear requirements for ethical business practices

and worker protection. The policy was established with the

involvement and approval of General Counsel and Executive

Board and applies to all suppliers engaged in Kendrion’s value

chain. Through the Code of Conduct, Kendrion requires its

suppliers to respect fundamental human rights, including the

provision of fair wages, safe and healthy working conditions,

and the strict prohibition of child labour and forced labour. Our

Code of Conduct also addresses environmental protection

requirements, including the responsible management of

materials, and principles of non-discrimination and freely

chosen employment.

Kendrion’s Supplier Code of Conduct does not refer to human

trafficking, but this topic is covered by the risk-based approach

aligned with industry-specific human rights risks. The Code of

Conduct includes a prohibition on the forcible removal of

individuals from their land or region, which is relevant to the

sectors and geographies in Kendrion’s upstream supply chains.

Although the Code does not formally reference specific

international frameworks, it is inspired by the core principles of

the International Labour Organization (ILO) standards and the

Universal Declaration of Human Rights.

Impacts, Risks & Opportunities

Workers throughout the value chain play a crucial role in the

responsible, efficient and sustainable production of Kendrion’s

products. From raw material extraction to production,

distribution, and beyond, workers at every stage contribute to

the creation and delivery of goods and services. To ensure that

the identification of related IROs remains robust and up to date,

Kendrion conducted a targeted refresh of its DMA in 2025. This

refresh is built on the initial DMA and involved the establishment

of two dedicated internal stakeholder groups (as specified in

the Chapter “Stakeholder involvement” on page 50 of this

Integrated Annual Report) who reviewed all previously identified

IROs and reassessed their significance. The process was

informed by input from internal experts across Kendrion’s

business groups as well as selected external stakeholders and

was complemented by a benchmark analysis against industry

peers. The resulting assessment reflects Kendrion’s current

organizational structure, strategic priorities and evolving

sustainability context and forms the basis for the disclosures in

this chapter.

Our refreshed DMA validated that ESRS S2, Workers in the

Value Chain is a material topic for Kendrion for the 2025

reporting period. The materiality scores of the impacts and their

classifications remain unchanged. The potential negative

impacts related to forced labour and child labour in metal

supply chains continue to be considered material, which are

primarily associated with upstream value chain activities linked

to the extraction and processing of key raw materials such as

steel, copper and aluminium. While Kendrion has not identified

actual cases of forced or child labour within its own operations

or direct supplier base, the inherent risk profile of the global

Impact

Forced labour in metal supply chain

Child labour in metal supply chain

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Integrated Annual Report 2025

Kendrion’ requires all its suppliers to fully comply with the

Supplier Code of Conduct. We review our supplier base on an

ongoing basis engaging with any suppliers who have not yet

formally committed to the Code of Conduct to fosters

alignment with Kendrion’s expectations.

New suppliers are required to adhere to the standards and

principles set out in the Supplier Code of Conduct as part of

the onboarding process, and Kendrion reserves the right to

audit supplier sites to assess compliance with these

requirements.

In addition, Kendrion requires its Tier 1 suppliers to cascade the

principles of the Supplier Code of Conduct within their own

supply chains, thereby reinforcing responsible business

practices beyond direct contractual relationships and

strengthening the linkage to Kendrion’s identified IROs.

Through the consistent application, and improvement, when

necessary, of our policies, Kendrion aims to foster a responsible

and sustainable supply chain that reflects its core values and

long-term commitment to social responsibility.

Actions

Kendrion seeks to promote transparency and responsibility

across its supply chain by integrating social and environmental

considerations into its sourcing and supplier engagement

activities. While supplier selection remains an important element

of this approach, Kendrion’s current focus is on establishing

clear baseline expectations for suppliers and progressively

strengthening its sustainable sourcing practices over time. As a

minimum requirement, suppliers are expected to sign and

comply with Kendrion’s Supplier Code of Conduct, which sets

out standards relating to human rights, workplace safety,

environmental protection and ethical business conduct. In

addition to our Supplier Code of Conduct, Kendrion considers

the presence of an ISO 14001–certified environmental

management system as an important indicator of a supplier’s

environmental maturity. More comprehensive sustainability-

related assessments and controls are planned to be further

developed and implemented through Kendrion’s sustainable

sourcing program, which is embedded in the ESG Program.

As part of its ongoing engagement with suppliers, Kendrion

works primarily with Tier 1 suppliers to support the quality,

sustainability and reliability of materials and end products. The

Company engages with suppliers on a continuous basis to

better understand and, where possible, encourage

improvements in their environmental and social performance.

This engagement is intended to strengthen responsible

sourcing practices while considering the varying levels of

influence and transparency across different tiers of the supply

chain.

Concerns related to human rights or other misconduct affecting

workers in the value chain can be raised through Kendrion’s

Speak-Up Policy, which is described in chapter G1 – Business

Conduct on page 96. This underlying procedure is available to

internal and external stakeholders and is designed to allow

concerns to be reported in a confidential manner.

Kendrion has an internal supplier risk assessment process,

which draws on internationally recognised indices, including the

Country Risk Classification, Global Rights Index, Global Slavery

Index, Environmental Performance Index, Transparency

International Corruption Index, Human Freedom Index and

Human Development Index. By combining country- and sector-

based risk indicators, Kendrion can obtain a more structured

and differentiated view of potential social and environmental

risks within its Tier 1 supplier base. The implementation of this

process has contributed to a more robust risk-based

assessment of suppliers and supports Kendrion in focusing its

engagement efforts on higher-risk areas of the upstream value

chain.

Building on this risk assessment, Kendrion has expanded its

supplier sustainability questionnaire as part of the

implementation of its ESG Program. In addition to the

company’s top 50 suppliers by spend, an additional 50

suppliers were included in the questionnaire process which

were chosen through our supplier risk assessment. The

questionnaire contains targeted questions aligned with

Kendrion’s sustainable sourcing objectives and ESG metrics

and is intended to provide greater transparency on suppliers’

sustainability practices. This combined approach allows

Kendrion to assess both its most significant business partners

and those suppliers that may present elevated ESG risks,

thereby supporting more informed decision-making and

ongoing engagement.

In addition to desk-based assessments and supplier

questionnaires, Kendrion conducts on-site CSR supplier audits

as part of its supplier engagement and risk mitigation activities.

The selection of suppliers for these audits is carried out by

internal auditors based on the outcomes of the supplier risk

assessment process, with particular attention given to suppliers

identified as higher risk. These on-site audits are designed to

assess the supplier’s implementation of CSR-related practices,

including compliance with human rights, labour standards,

workplace health and safety, and relevant environmental and

ethical requirements. The audits provide Kendrion with deeper

insight into actual practices at supplier sites and support a

more comprehensive evaluation of suppliers’ CSR

performance. Findings from the audits are used to inform

further engagement with suppliers and, where necessary, to

define follow-up actions aimed at improving compliance and

strengthening responsible sourcing practices.

Certain minerals, including tantalum, tin, tungsten and gold, are

associated with heightened risks related to human rights and

conflict. Although Kendrion does not source these minerals

directly, the Company seeks to mitigate related risks by

requiring suppliers to provide appropriate documentation, such

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Integrated Annual Report 2025

recent years, the annual target for on-site supplier audits will

be reassessed and adjusted in 2026 to 15 to ensure that it

remains appropriate and proportionate to the revised scope

of operations.

Kendrion applies audit-related measures to monitor supplier

adherence to the requirements set out in its Supplier Code of

Conduct. These supplier audits are carried out by trained

internal employees in accordance with an established internal

procedure. As part of the audit process, all audited suppliers

are required to provide relevant corporate responsibility and

management system documentation, to support the

assessment of their social, environmental and ethical practices.

In addition, all suppliers selected for an on-site audit are

required to complete a standardized audit questionnaire.

This approach enables Kendrion to obtain a consistent and

structured assessment of suppliers’ compliance with the

expectations defined in the Supplier Code of Conduct.

During 2025, Kendrion conducted a total of 13 supplier

audits (2024: 16). The lower number of audits compared to

previous years is primarily attributable to our recent

divestments, including the China Divestment. Considering these

structural changes Kendrion intends to reassess the

appropriate scope and number of supplier audits for the future

ensuring continued effectiveness and proportionality of its audit

activities.

In parallel, Kendrion continues to use supplier sustainability

questionnaires as a key monitoring and engagement tool. In

2025, approximately 100 suppliers received the questionnaire,

covering both high-volume suppliers and suppliers identified

through the supplier risk assessment process. At the time of

reporting, responses have been received from approximately

30% of the suppliers contacted. The feedback received to date

indicates that the majority of responding suppliers report

adherence to safe and fair working conditions and confirm that

they have implemented their own supplier codes of conduct,

which are communicated within their respective supply chains.

Kendrion’s target remains to periodically collect sustainability-

related information from its material suppliers to maintain an

up-to-date understanding of supplier practices and to support

continuous improvement. The review of questionnaire

responses is ongoing, and any additional targets or measures

identified based on the outcomes of this process will be

disclosed in future reporting periods.

Through these audit, assessment and monitoring activities,

Kendrion seeks to encourage responsible behavior among its

suppliers and to promote the continuous improvement of social

and ethical standards across its supply chain.

as a conflict minerals reporting template, to demonstrate that

supplied materials are conflict-free. Compliance with these

requirements forms part of the mandatory adherence to

Kendrion’s Supplier Code of Conduct in which provisions aimed

at preventing links to unethical or conflict-related practices are

included.

Through these actions, Kendrion aims to progressively

strengthen responsible sourcing practices, improve the

identification and management of social risks in its supply chain

and contribute to positive social and environmental outcomes,

in line with regulatory expectations and the objectives of our

ESG Program.

At the end of 2025, our employees were invited to select a

project for the company to make a Christmas gift donation. The

projects involved all reflected our values in sustainability, human

right, and global health. One of the pre-selected organizations

is Human Rights Watch. This organization investigates and

reports on human rights violations worldwide, including those

linked to mining practices. In total, an amount of EUR 2,400

was donated to this initiative, based on 16% of participating

employees selecting the initiative.

Metrics & targets

At present, our only quantitative target under ESRS S2 relates

to the number of on-site supplier audits conducted each year.

This target is intended to support the monitoring of supplier

compliance with the Supplier Code of Conduct and to

strengthen oversight of social and environmental practices

within the supply chain. Following divestments completed in

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Reporting criteria number of supplier audits

We report supplier audits carried out by trained internal

employees in accordance with an established internal

procedure.

Where audits identify deviations from the requirements of the

Supplier Code of Conduct, Kendrion engages with the

respective supplier to request the development of a remediation

plan. The implementation of such plans is monitored, and

continued non-compliance may result in further measures,

which may, as last resort, result in the termination of the

business relationship.

Integrated Annual Report 2025

GOVERNANCE

ESRS G1 – Business conduct

essential to safeguarding its financial performance, reputation

and stakeholder trust.

The potential risk related to harassment and discrimination was

reassessed during the DMA refreshment. Based on the

updated materiality thresholds and stakeholder discussions,

this risk is no longer classified as material under ESRS G1 for

the 2025 reporting period. While the topic was discussed

among IRO Stakeholders and remains relevant from a broader

organizational and cultural perspective, it did not meet the

revised criteria for materiality under the CSRD framework.

Kendrion’s approach to business conduct is grounded in the

principle that ethical behavior is fundamental to long-term

success and responsible business practices. The Company

strives to conduct its business with integrity and transparency

and to uphold high standards of ethical conduct across all

activities. Clear guidance is provided to employees on expected

behaviors, and expectations are also communicated to external

stakeholders, including suppliers. Kendrion seeks to foster a

strong corporate culture in which ethical values are embedded

at all levels of the organization and are supported by

appropriate governance structures. The roles and expertise of

the Executive Board, Supervisory Board and Management

Team in relation to compliance and business conduct are

further described in ESRS 2.

Based on the refreshed DMA, Kendrion will continue to report

on Business Conduct as a material topic under ESRS G1, with

a focus on maintaining ethical business behavior and managing

risks related to business ethics and integrity in line with

regulatory expectations and stakeholder interests.

Policies

Corporate values and internal policies

Kendrion’s approach to ethical business conduct is guided by a

comprehensive set of internal policies and procedures that

define expected behavior and provide a framework for

responsible decision-making and ethical behavior. These

policies are designed to ensure compliance with applicable

laws and regulations while fostering a corporate culture in

which integrity and transparency are embedded across all

activities. Key policies include the Code of Conduct, Anti-

Bribery and Anti-Corruption Policy, Speak-Up Policy, Fair

Labour and Human Rights Policy, Competition Compliance

Manual, Insider Trading Code, Data Protection Governance

Guidelines, Personal Data Breach Reporting Procedure and the

Supplier Code of Conduct, among others. Our policies are

made available through various internal and external

communication channels, including our corporate website and

Intranet page.

These policies serve not only to establish clear standards but

also to align Kendrion’s business practices with legal

requirements and internationally recognised ethical principles.

The Code of Conduct forms the foundation of this policy

framework and reflects the values of The Kendrion Way, with

integrity positioned as a core guiding principle. With a

workforce comprising more than 1,269 employees representing

33 nationalities, Kendrion recognises the importance of

maintaining a consistent set of ethical standards that apply

across all locations and cultural contexts.

Impacts, Risks & Opportunities

In 2025, Kendrion carried out a refresh of its double materiality

assessment to ensure that the identification and prioritization of

impacts, risks and opportunities related to business conduct

remain robust, relevant and aligned with the Company’s current

organizational structure and strategic direction. As part of this

process, the IRO Stakeholders and the Materiality Stakeholders

reviewed all previously identified IROs and reassessed their

significance. The assessment was informed by contributions

from internal experts across Kendrion’s business groups as well

as selected external stakeholders. The revised outcome

provides an updated and more accurate reflection of Kendrion’s

business context and forms the basis for the G1 disclosures in

this report.

The refreshed assessment confirmed that Business Conduct

continues to be a material topic for Kendrion. Ethical business

behavior remains identified as an actual positive impact with a

consistently high materiality score, reflecting the Company’s

ongoing commitment to integrity, fairness and transparency

across its operations. This positive impact is considered a core

element of Kendrion’s corporate culture and underpins the way

the Company engages with employees, business partners and

other stakeholders.

The assessment also reconfirmed the potential financial risk

related to corruption and fraud as material, although the overall

materiality score was adjusted compared to the previous

reporting period. This change resulted from the reassessment

by the Materiality Stakeholder group and reflects updated

perceptions of likelihood and financial exposure rather than a

change in the nature of the risk itself. Kendrion continues to

recognise that effective prevention of corruption and fraud is

Impact

Ethical business behavior

Integrated Annual Report 2025

Anti-Bribery and Anti-Corruption Policy

Kendrion maintains a strict zero-tolerance approach to bribery

and corruption. Bribery is understood to include both the

offering, promising or giving of payments or benefits to

improperly influence business decisions, as well as the

acceptance of such advantages. Certain departments within

our organization, such as finance and sales, may be exposed

to higher inherent risks in this area. Kendrion’s Anti-Bribery and

Anti-Corruption Policy sets out clear principles and

requirements aimed at preventing unethical conduct and

safeguarding the integrity of financial reporting and business

transactions. Compliance with this policy is a shared

responsibility, and all employees are expected to act in

accordance with the highest ethical standards in their daily

activities.

Speak-Up Policy

Kendrion fosters an open culture where everybody should feel

safe and comfortable to speak up and raise their concerns. We

encourage our employees who have a concern about a

violation or suspected violations of our Code of Conduct or

related policies to speak up and express their concerns. The

Speak-Up Policy provides guidance on how to raise concerns

and the way in which those concerns are handled. Our

Speak-Up Policy holds a secure and confidential mechanism

for reporting ethical concerns, misconduct or other

irregularities, which may be reported in an anonymous manner.

The policy ensures appropriate protection for individuals who

submit reports in good faith. Kendrion’s Speak-Up Line is

compliant with applicable whistleblowing regulations and is

operated by an independent third party.

Kendrion Policies

Code of Conduct

Anti-Bribery and Anti-Corruption Policy

Speak-up Policy

Fair Labour and Human Rights Policy

Supplier Code of Conduct

Diversity Policy

The Speak-Up Line is available 24/7 via telephone and web-

based reporting channels and can be accessed in multiple

languages and is also accessible to external stakeholders.

Information about the Speak-Up Policy and how to contact the

Speak-Up Line is published on our corporate website to ensure

transparency and accessibility.

Responsible tax practices

Kendrion’s approach to taxation is aligned with the ethical

principles set out in its Code of Conduct and reflects the

Company’s commitment to responsible business conduct.

Kendrion reports taxable profits in the jurisdictions in which

value is created and complies with applicable local tax laws and

international standards, including the OECD Guidelines for

Multinational Enterprises. The Company does not engage in

aggressive tax planning or establish entities in tax haven

jurisdictions for the sole purpose of tax optimization.

Transparency and compliance form the basis of Kendrion’s tax

strategy, which is aligned with its broader sustainability and

governance objectives. Further information on Kendrion’s tax

policy is provided in the Corporate Governance Report on

page 38.

Leadership and accountability

Senior management plays a pivotal role in promoting ethical

behavior and ensuring adherence to the principles and

standards set out in Kendrion’s policies. We aim to hold

ourselves accountable to the highest standards of integrity and

strive to apply these principles consistently across all our

operations. Through this approach, Kendrion aims to maintain

the trust of its employees, customers, shareholders and other

stakeholders.

Actions

Kendrion continues to support ethical business conduct

through a combination of training, awareness-raising and

structured monitoring activities. The Code of Conduct remains

a key element of Kendrion’s governance framework and is

integrated into the onboarding process in all entities, where

employees are required to acknowledge and comply with its

principles. In addition to formal onboarding processes,

Kendrion reinforced awareness of the Code of Conduct in 2025

by sharing targeted communications through internal channels,

with the objective of keeping ethical expectations visible and up

to date across the organization.

In 2025 we enrolled an anti-bribery and anti-corruption training

for all our indirect employees, a total number of 816 employees,

including our senior management. At the end of 2025 around

41% of the targeted employee population had completed the

training. No dedicated human rights training sessions were

conducted during the reporting period, as such training is not

scheduled on an annual basis. Kendrion reassesses the scope

and timing of future human rights-related training on a recurring

basis.

To promote compliance with ethical standards, Kendrion

maintains a structured monitoring and accountability

framework. Adherence to the Code of Conduct and related

internal policies is reviewed through regular internal reporting

processes, which are discussed with senior management to

identify potential gaps and areas for improvement and to

support the consistent application of ethical principles across

the organization.

Oversight of Kendrion’s compliance framework is provided by

the Compliance Committee, which meets on a quarterly basis

or more frequently if required. The Compliance Committee is

composed of the Chief Financial Officer, the General Counsel,

who acts as Compliance Officer, and our Group Corporate

GOVERNANCE

Integrated Annual Report 2025

Controller. The Compliance Committee is responsible for setting

compliance priorities, monitoring their implementation and

reviewing reports raised through the Speak-Up Policy to ensure

that they are addressed appropriately and in a timely manner. In

cases where a reported concern involves a member of the

Executive Board or the Compliance Committee, the Audit

Committee is engaged to ensure an independent and impartial

review.

Through these actions, Kendrion aims to maintain a strong

culture of integrity, reinforce ethical awareness among

employees and ensure effective oversight of business conduct

in line with regulatory requirements and stakeholder

expectations.

Metrics & targets

At this stage, Kendrion has not defined specific quantitative

targets under ESRS G1 – Business Conduct. The Company

continues to focus on maintaining effective policies, controls

and reporting mechanisms to support ethical behavior and

compliance across its operations and will reassess the

appropriateness of setting targets as part of future reporting

cycles.

During the 2025 reporting period, Kendrion continued to

monitor and assess reports submitted through its Speak-Up

Line as part of its governance and compliance framework. In

2025, a total of 4 reports were received via the Speak-Up Line,

representing an increase compared to two reports submitted in

2024. All reports received were reviewed by the Compliance

Committee in accordance with established internal procedures,

and appropriate actions were taken where deemed necessary.

Apart from the 4 cases reported under the Speak-Up Policy, no

additional incidents were identified, and no further complaints

relating to business conduct were filed during the reporting

period. Kendrion considers the Speak-Up mechanism an

important element of its ethical governance system, providing

employees and external stakeholders with a secure and

confidential channel to raise concerns related to misconduct or

potential violations of company policies.

GOVERNANCE

Integrated Annual Report 2025

Reference Table

ESRS Description Disclosure Requirement Reference chapter in annual report Pages

ESRS 2 - GENERAL DISCLOSURES

BP-1 General basis for preparation of sustainability statements General -> ESRS 2 General disclosure requirements -> General basis for

preparation

44 - 47

BP-2 Disclosures in relation to specific circumstances General -> ESRS 2 General disclosure requirements -> General basis for

preparation

44 - 47

GOV-1 The role of the administrative, management and

supervisory bodies

Members of the Supervisory Board; Corporate Governance Report; General ->

ESRS 2 General disclo-sure requirements -> General basis for preparation

103 - 104; 44 - 47

GOV-2 Information provided to and sustainability matters

addressed by the undertaking’s administrative,

management and supervisory bodies

General -> ESRS 2 General disclosure requirements -> General basis for

preparation

44 - 47

GOV-3 Integration of sustainability-related performance in incentive

schemes

Remuneration Report 109 - 124

GOV-4 Statement on due diligence General -> ESRS 2 General disclosure requirements -> General basis for

preparation

44 - 47

GOV-5 Risk management and internal controls over sustainability

reporting

Risk Management; General -> ESRS 2 General disclosure requirements ->

General basis for preparation

31 - 37; 44 - 47

SBM-1 Strategy, business model and value chain Business Groups; General -> ESRS 2 General disclosure requirements ->

Strategy and ESG Program

13 - 24; 47 - 48

SBM-2 Interests and views of stakeholders General -> ESRS 2 General disclosure requirements -> Value Chain Overview 57

SBM-3 Material impacts, risks and opportunities and their

interaction with strategy and business model

General -> ESRS 2 General disclosure requirements -> Stakeholder engagement 58 - 59

IRO-1 Description of the process to identify and assess material

impacts, risks and opportunities

General -> ESRS 2 General disclosure requirements -> Impact, Risks and

Opportunities

52 - 56

IRO-2 Disclosure requirements in ESRS covered by the

undertaking’s sustainability statement

General -> ESRS 2 General disclosure requirements -> Double materiality

assessment

48 - 51

MDR-P Policies adopted to manage material sustainability matters Reference table 98 - 101

MDR-A Actions and resources in relation to material sustainability

matters

Environment -> ESRS E1 – Climate Change -> Actions; Environment -> ESRS

E2 – Pollution -> Actions; ESRS E5 – Resource use & circular economy ->

Actions; Social -> ESRS S1 – Own workforce -> Actions; Social -> ESRS S2 –

Workers in the value chain -> Actions; Governance -> ESRS G1 – Business

conduct -> Actions

68 - 69; 78; 80 - 81; 84 - 87; 93 - 94; 96 - 97

MDR-M Metrics in relation to material sustainability matters Environment -> ESRS E1 – Climate Change -> Metrics & targets; Environment

-> ESRS E2 – Pollution -> Metrics & targets; ESRS E5 – Resource use & circular

economy -> Metrics & targets; Social -> ESRS S1 – Own workforce -> Metrics &

targets; Social -> ESRS S2 – Workers in the value chain -> Metrics & targets;

Governance -> ESRS G1 – Business conduct -> Metrics & targets

69 - 74; 78 - 79; 81 - 82; 87 - 91; 94; 97

MDR-T Tracking effectiveness of policies and actions through

targets

Environment -> ESRS E1 – Climate Change -> Actions; Environment -> ESRS

E2 – Pollution -> Actions; ESRS E5 – Resource use & circular economy ->

Actions; Social -> ESRS S1 – Own workforce -> Actions; Social -> ESRS S2 –

Workers in the value chain -> Actions; Governance -> ESRS G1 – Business

conduct -> Actions

68 - 69; 78; 80 - 81; 84 - 87; 93 - 94; 96 - 97

GOVERNANCE

Integrated Annual Report 2025

ESRS Description Disclosure Requirement Reference chapter in annual report Pages

E1 - CLIMATE CHANGE

ESRS 2 GOV-3 Integration of sustainability-related performance in incentive

schemes

Remuneration Report 109 - 124

E1-1 Transition plan for climate change mitigation Environment -> ESRS E1 – Climate Change -> Actions 68 - 69

ESRS 2 SBM-3 Material impacts, risks and opportunities and their

interaction with strategy and business model

Environment -> ESRS E1 – Climate Change -> Impacts, Risks and Opportunities 67 - 68

ESRS 2 IRO-1 Description of the processes to identify and assess material

climate-related impacts, risks and opportunities

General -> ESRS 2 General disclosure requirements -> Double materiality

assessment; Environment -> ESRS E1 – Climate Change -> Impacts, Risks and

Opportunities

48 - 58; 67 - 68

E1-2 Policies related to climate change mitigation and

adaptation

Environment -> ESRS E1 – Climate Change -> Policies 68

E1-3 Actions and resources in relation to climate change policies Environment -> ESRS E1 – Climate Change -> Actions 68 - 69

E1-4 Targets related to climate change mitigation and adaptation Environment -> ESRS E1 – Climate Change -> Metrics & targets 69 - 74

E1-5 Energy consumption and mix Environment -> ESRS E1 – Climate Change -> Metrics & targets 69 - 74

E1-6 Gross Scopes 1, 2, 3 and Total GHG emissions Environment -> ESRS E1 – Climate Change -> Metrics & targets 69 - 74

E1-7 GHG removals and GHG mitigation projects financed

through carbon credits

Not applicable -

E1-8 Internal carbon pricing Not applicable -

E1-9 Anticipated financial effects from material physical and

transition risks and potential climate-related opportunities

Not applicable -

E2 - POLLUTION

ESRS 2 IRO-1 Description of the processes to identify and assess material

pollution-related impacts, risks and opportunities

General -> ESRS 2 General disclosure requirements -> Double materiality

assessment; Environment -> ESRS E2 – Pollution -> Impacts, Risks and

Opportunities

48 - 58; 77

E2-1 Policies related to pollution Environment -> ESRS E2 – Pollution -> Policies 77

E2-2 Actions and resources related to pollution Environment -> ESRS E2 – Pollution -> Actions 78

E2-3 Targets related to pollution Environment -> ESRS E2 – Pollution -> Metrics & targets 78 - 79

E2-4 Pollution of air, water and soil Environment -> ESRS E2 – Pollution -> Actions 78

E2-5 Substances of concern and substances of very high

concern

Environment -> ESRS E2 – Pollution -> Metrics & targets 78 - 79

E2-6 Anticipated financial effects from pollution-related impacts,

risks and opportunities

Environment -> ESRS E2 – Pollution -> Metrics & targets 78 - 79

GOVERNANCE

100

Integrated Annual Report 2025

ESRS Description Disclosure Requirement Reference chapter in annual report Pages

E5 - RESOURCE USE AND CIRCULAR ECONOMY

ESRS 2 IRO-1 Description of the processes to identify and assess material

resource use and circular economy-related impacts, risks

and opportunities

Environment -> ESRS E5 – Resource use & circular economy -> Impacts, Risks

& Opportunities

E5-1 Policies related to resource use and circular economy Environment -> ESRS E5 – Resource use & circular economy -> Policies 80

E5-2 Actions and resources related to resource use and circular

economy

Environment -> ESRS E5 – Resource use & circular economy -> Actions 80 - 81

E5-3 Targets related to resource use and circular economy Environment -> ESRS E5 – Resource use & circular economy -> Metrics &

targets

81 - 82

E5-4 Resource inflows Environment -> ESRS E5 – Resource use & circular economy -> Metrics &

targets

81 - 82

E5-5 Resource outflows Environment -> ESRS E5 – Resource use & circular economy -> Metrics &

targets

81 - 82

E5-6 Anticipated financial effects from resource use and circular

economy-related impacts, risks and opportunities

Environment -> ESRS E5 – Resource use & circular economy -> Impacts, Risks

& Opportunities

S1 - OWN WORKFORCE

ESRS 2 SBM-2 Interests and views of stakeholders General -> ESRS 2 General disclosure requirements -> Stakeholder engagement 58 - 59

ESRS 2 SBM-3 Material impacts, risks and opportunities and their

interaction with strategy and business model

Social -> ESRS S1 – Own workforce -> Impacts, Risks & Opportunities 83

S1-1 Policies related to own workforce Social -> ESRS S1 – Own workforce -> Policies 83 - 84

S1-2 Processes for engaging with own workforce and workers’

representatives about impacts

Social -> ESRS S1 – Own workforce -> Actions 84 - 87

S1-3 Processes to remediate negative impacts and channels for

own workforce to raise concerns

Social -> ESRS S1 – Own workforce -> Actions 84 - 87

S1-4 Taking action on material impacts on own workforce, and

approaches to managing material risks and pursuing

material opportunities related to own workforce, and

effectiveness of those actions

Social -> ESRS S1 – Own workforce -> Actions 84 - 87

S1-5 Targets related to managing material negative impacts,

advancing positive impacts, and managing material risks

and opportunities

Social -> ESRS S1 – Own workforce -> Metrics & targets 87 - 91

S1-6 Characteristics of the undertaking’s employees Social -> ESRS S1 – Own workforce -> Metrics & targets 87 - 91

S1-7 Characteristics of non-employees in the undertaking’s own

workforce

Social -> ESRS S1 – Own workforce -> Metrics & targets 87 - 91

S1-8 Collective bargaining coverage and social dialogue Social -> ESRS S1 – Own workforce -> Metrics & targets 87 - 91

S1-9 Diversity metrics Social -> ESRS S1 – Own workforce -> Metrics & targets 87 - 91

S1-10 Adequate wages Social -> ESRS S1 – Own workforce -> Metrics & targets 87 - 91

S1-12 Persons with disabilities Social -> ESRS S1 – Own workforce -> Metrics & targets 87 - 91

S1-14 Health and safety metrics Social -> ESRS S1 – Own workforce -> Metrics & targets 87 - 91

S1-15 Work-life balance metrics Social -> ESRS S1 – Own workforce -> Metrics & targets 87 - 91

S1-16 Remuneration metrics (pay gap and total remuneration) Social -> ESRS S1 – Own workforce -> Metrics & targets 87 - 91

S1-17 Incidents, complaints and severe human rights impacts Social -> ESRS S1 – Own workforce -> Metrics & targets 87 - 91

GOVERNANCE

101

Integrated Annual Report 2025

ESRS Description Disclosure Requirement Reference chapter in annual report Pages

S2 - WORKERS IN THE VALUE CHAIN

ESRS 2 SBM-2 Interests and views of stakeholders General -> ESRS 2 General disclosure requirements -> Stakeholder engagement 58 - 59

ESRS 2 SBM-

Material impacts, risks and opportunities and their

interaction with strategy and business model

Social -> ESRS S2 – Workers in the value chain -> Impacts, Risks &

Opportunities

S2-1 Policies related to value chain workers Social -> ESRS S2 – Workers in the value chain -> Policies 92 - 93

S2-2 Processes for engaging with value chain workers about

impacts

Social -> ESRS S2 – Workers in the value chain -> Actions 93 - 94

S2-3 Processes to remediate negative impacts and channels for

value chain workers to raise concerns

Social -> ESRS S2 – Workers in the value chain -> Actions 93 - 94

S2-4 Taking actions on material impacts on value chain workers,

and approaches to managing materials risks and pursuing

material opportunities related to value chain workers, and

effectiveness of those action

Social -> ESRS S2 – Workers in the value chain -> Actions 93 - 94

S2-5 Targets related to managing material negative impacts,

advancing positive impacts, and managing material risks

and opportunities

Social -> ESRS S2 – Workers in the value chain -> Metrics & targets 94

G1 - BUSINESS CONDUCT

ESRS 2 GOV-1 The role of the administrative, supervisory and

management bodies

General -> ESRS 2 General disclosure requirements -> General basis for

preparation

44 - 47

ESRS 2 IRO-1 Description of the processes to identify and assess material

impacts, risks and opportunities

General -> ESRS 2 General disclosure requirements -> Double materiality

assessment; Governance -> ESRS G1 – Business conduct -> Impacts, Risks &

Opportunities

48 - 51; 95

G1-1 Business conduct policies and corporate culture Governance -> ESRS G1 – Business conduct -> Policies 95 - 96

G1-3 Prevention and detection of corruption and bribery Governance -> ESRS G1 – Business conduct -> Actions 96 - 97

G1-4 Incidents of corruption or bribery Governance -> ESRS G1 – Business conduct -> Metrics & targets 97

GOVERNANCE

Looking back on the past year, I am proud to reflect on the

extraordinary transformation Kendrion has accomplished.

Undertaken in a period of global uncertainty, this strategic pivot

required vision, courage, and disciplined execution. The results

are clear: Kendrion is now a leaner, stronger, and focused

industrial company with a solid financial foundation.

The decision to pivot was taken after a comprehensive

strategic analysis of the automotive market, with close

involvement and support of the Supervisory Board. In the

Kendrion 2025: fully positioned for sustainable growth

achievement originally expected only in 2026. The much-

improved balance sheet and healthy cash flow have enabled

both a EUR 1.00 per share special dividend and a share

buyback program of up to EUR 10 million – clear evidence

of the company’s financial stability and its ability to create

shareholder value.

A transformation supported at every step

This strategic shift required exceptional commitment across the

organization. The Supervisory Board has been closely involved

throughout, providing oversight and guidance during each

phase of the transition. With strong positions in competitive

niche markets and deep technical expertise, we have full

confidence in Kendrion’s ability to deliver sustainable, profitable

growth as a focused industrial company.

Looking ahead

Kendrion enters 2026 in a significantly improved position:

leaner, more resilient, and fully aligned with markets offering

long-term potential.

On behalf of the Supervisory Board, I extend my sincere thanks

and congratulations to everyone at Kendrion. Your

commitment, professionalism, and trust in the strategy have

made this transformation possible. We now look ahead with

confidence.

Frits van Hout, Chairman of the Supervisory Board

capital-intensive and highly competitive automotive sector,

opportunities to deliver long-term shareholder value were

limited. By directing the company fully toward industrial

markets – where Kendrion holds meaningful market positions

across more than 30 sectors – we have aligned the business

with areas of greater stability, clearer visibility, and stronger

value creation.

Completing a multi-year transformation

In 2025, three major steps brought this long-term strategic shift

to completion: the sale of the European and USA automotive

operations to Solero Technologies, the sale of our China-based

business to local management, and a long-term cooperation

with Knorr-Bremse for our Sibiu mobility electronics operations.

Transitioning to a purely industrial company also enabled

Kendrion to simplify its infrastructure. The operational

improvements completed in 2025 – including a streamlined

corporate office, and related cost efficiencies – have resulted in

a more focused, agile organization with significantly reduced

complexity.

What stands out to me is how the entire organization embraced

this change. The willingness to move forward with trust,

confidence, and a shared sense of purpose has been pivotal in

making this transformation a success.

Financial resilience and shareholder value

The early financial results reinforce the strength of this strategy.

normalized EBITDA

over 2025 reached 15.5%, an

Non-IFRS financial measure. For the definition and reconciliation of the most directly comparable IFRS measures, refer to reconciliation of non-IFRS financial measures, starting on page 219.

102

Integrated Annual Report 2025PREFACE OF THE SUPERVISORY BOARD

F.J. (Frits) van Hout, male, 1960

Chairman /Member HR Committee

E.H. (Everien) Slijkhuis, female, 1968

Chair Audit Committee

Nationality Dutch Dutch

International expertise Yes Yes

Date of first appointment 12 April 2021 17 April 2023

Term of office 2025-2029 (second term) 2023-2027 (first term)

Current number of SB positions 7 2

Shares in Kendrion 26,500 3,500

Professional experience Semiconductors Finance/ IT, Industry

Other positions

Former positions

Member of the Investment Committee of the DeepTech Fonds (Dutch

Ministry of Economic Affairs and InvestNL); Vice-Chairman of the

Supervisory Board, Aixtron SE; Member of the Supervisory Board,

Bambi Belt Holding B.V.; Member of the Supervisory Board, Stichting

PhotonDelta; Member of the Supervisory Board, Smart Photonics

B.V.; Member of the Technical Advisory Board, BE Semi-conductors

Industries N.V.; Member of the Supervisory Board, Picterus AS

Executive Vice President and Member of the Board of Management,

ASML Holding N.V.; Other various functions, ASML; CEO, Beyeler

Blechbearbeitungsmaschinen GmbH; Chief Technology Officer,

Datacolor AG; Member of the Board of Management of Stichting

Continuïteit BESI

Co-CEO & CFO, Hydratec Industries N.V.; Member of the Supervisory

Board and member of the Audit Committee, Deventer Ziekenhuis

CFO Veco B.V.; Interim & Project Manager Finance & IT; Senior

Management function Aviko; Consultant Eiffel; Auditor Deloitte

103

Integrated Annual Report 2025MEMBERS OF THE SUPERVISORY BOARD

M.H.C. (Mirjam) Baijens, female, 1969

Chair HR Committee

E.M. (Erwin) Doll, male, 1959

Vice-Chairman/ Member Audit Committee

Nationality Dutch German

International expertise Yes Yes

Date of first appointment 15 April 2024 24 June 2020

Term of office 2024-2028 (first term) 2024-2028 (second term)

Current number of SB positions 1 2

Shares in Kendrion No No

Professional experience Human resources, Sales excellence & Sales development,

Leadership & Executive Development, Conference management

Automotive, plastics, industrial, medical, chemical

Other positions

Former positions

Member of the MSC in Management Practitioner Advisory Board at

Cranfield School of Management

Executive Vice President and Chief Human Resources Officer,

Grundfos Group; Global Head of Talent & Development, Schindler

Group; Head of Human Resources Europe North & East (EUN),

Schindler Group; Vice President Human Resources &

Communications, Amcor Flexibles Europe & Americas; Human

Resources Director, Masco Europe; Global Human Resources

Director Sales&Marketing, Hewlett Packard

Vice-chairrman of Supervisory Board, WITTE Automotive GmbH

Vice-Chairman of the Executive Board, Röchling Group; President & CEO,

Röchling Automotive SE; EVP, Plastic Omnium Auto Exterior; Managing

Director, Plastic Omnium GmbH; General Manager, Johnson Controls

GmbH; Business Manager, BASF SE; Non-Executive Director, Aeristech

Ltd.

104

Integrated Annual Report 2025

MEMBERS OF THE SUPERVISORY BOARD

The Supervisory Board provides oversight, evaluates progress

and performance, maintains a sound and transparent system of

checks and balances, and advises the Executive Board where

appropriate.

This Report of the Supervisory Board describes how the

Supervisory Board fulfilled its duties and responsibilities

in 2025.

Performance in 2025

2025 was a defining year as Kendrion transformed into a pure-

play industrial company. A transformation that positions the

company strongly for the future. Following a thorough strategic

review, and with the close involvement of the Supervisory

Board, Kendrion made the pivotal decision to step away from

the automotive sector and focus entirely on industrial markets,

where its strengths and long-term opportunities lie.

The automotive operations in Europe and the United States

were sold to Solero, the China-based business transitioned to

local management, and the company entered into a long-term

cooperation with Knorr-Bremse for its Sibiu mobility electronics

operations. These steps enabled Kendrion to simplify its

structure, reduce complexity, and create a leaner and more

agile organization ready to grow.

What made 2025 exceptional is that this strategic

transformation was matched by strong financial performance.

The company reported a normalized EBITDA margin of

15.5%—a target originally set for 2026. The strengthened

balance sheet and improved cash flow enabled a EUR 1.00 per

share special dividend and a share buyback program of up to

EUR 10 million, reflecting Kendrion’s confidence and delivering

tangible value to our shareholders.

As Kendrion enters 2026, the company stands as a focused

industrial company—stronger, more resilient, and primarly

aligned with markets offering stability and long-term potential.

Focus points in 2025

In coordination with the Executive Board, the Supervisory

Board identified several focus areas for 2025, placing particular

emphasis on the following four:

Execution of divestment of Automotive Core activities

As indicated above, Kendrion completed three defining steps in

its multi-year strategic transformation in 2025. First, the

company finalized the sale of its European and USA-based

automotive electromechanical business to Solero Technologies,

with the receipt of the final payment of EUR 8.6 million on 10

March 2025. This was followed by the divestment of our China-

based business to local management, completed on 23

October 2025, at an enterprise value of EUR 70 million. Finally,

as announced on 29 September 2025, the company entered

into a long term cooperation with Knorr-Bremse for its Sibiu

mobility electronics operations. This cooperation includes

approximately EUR 7 million in value transfer through milestone

payments and shared costs and provides a structured, phased

transfer of production capacity, ultimately leading to Knorr-

Bremse’s ownership of the facility. This approach secures

continuity, jobs, and strong cash generation throughout the

transition, while substantially reducing the risk of having to write

down assets.

Improving the operational performance of the two Business

Groups

In parallel with these strategic steps, the company streamlined

its organizational structure, reducing overhead to reflect the

smaller and more focused company following the divestments.

At the same time, management implemented a comprehensive

program to improve the added value margin across all business

units, supported by disciplined execution and clear

accountability. These initiatives strengthened the company’s

operational foundation and contributed directly to the strong

financial performance we delivered in 2025, resulting in

improved profitability, stronger cash generation, and a more

resilient cost base that positions Kendrion for sustainable

performance in the years ahead.

Optimizing Kendrion’s CSRD reporting and disclosures

Optimizing the CSRD disclosure gap in 2025 proved

challenging due to continued uncertainty regarding thresholds,

requirements and implementation timelines at both the

European and Dutch levels. Nevertheless, compared to 2024

reporting, the company further strengthened its sustainability

reporting and improved both the quality of its disclosures

and the underlying data collection processes, as detailed on

page 43 of this report.

The Supervisory Board commends and supports the

company’s strong commitment to ESG principles and

expresses its gratitude for the extensive efforts made to meet

the CSRD's sustainability reporting requirements for this year.

105

Integrated Annual Report 2025REPORT OF THE SUPERVISORY BOARD

Focus points for 2026

The Supervisory Board has identified the following attention

points for 2026:

■ Develop and implement a plan to improve R&D

effectiveness within Kendrion, with an explicit focus on

motion technology and control;

■ Finalize the implementation of the new, off-the-shelf and

cloud-based IT system;

■ Plan and implement a CO

e reduction roadmap, outlining

the actions required to achieve the re-presented reduction

target by the end of 2028;

■ Develop and implement a plan to strengthen Kendrion’s

diversity and inclusion initiatives.

Meetings and attendance

The Supervisory Board conducted eight regularly scheduled

meetings and three extraordinary sessions throughout 2025, for

a total of eleven sessions.

The regularly scheduled Supervisory Board meetings were

attended by the Executive Board, and, on occasion, by

members of the Management Team. In addition, pre-scheduled

meetings without the Executive Board and Management Team

were held before each regular Supervisory Board meeting. The

attendance rate for all eleven Supervisory Board meetings in

2025 was 95% (2024: 98%). Mrs. Baijens was unable to attend

two of the eleven meetings.

The Chairman of the Supervisory Board and the Chair of the

Audit Committee also held monthly meetings with the CEO and

CFO, respectively. The Supervisory Board emphasized direct

interaction with the Management Team and other senior

management, including presentations in the areas of

REPORT OF THE SUPERVISORY BOARD

responsibility and one-on-one meetings between the Chairman

and members of the Management Team.

The agenda for Supervisory Board meetings covered the focus

points outlined above, along with recurring topics routinely

addressed each year. These included discussions on

operational and financial performance, progress in the strategic

plan, principal risks associated with operations, milestone

achievements in special projects, fraud and risk management,

the internal control system, governance and compliance

matters, sustainability, and matters related to the General

Meeting of Shareholders.

Evaluation

As is customary, the Supervisory Board gave due consideration

to ongoing training on governance and compliance matters.

Each year, a comprehensive self-assessment is conducted,

covering the performance of the Supervisory Board as a whole,

its committees, and individual members. During a meeting held

without the presence of the Executive Board, the Supervisory

Board critically assessed its own performance, including

aspects such as team dynamics, competencies, and market

knowledge. In addition, a self-assessment questionnaire was

completed by both Supervisory Board and Executive Board

members. This questionnaire covered various aspects,

including the composition and expertise of the Supervisory

Board, the dynamics and functionality of both the Supervisory

Board and its committees, the performance of individual

Supervisory Board members, the interaction between the

Supervisory Board and the Executive Board, and the fulfilment

of the Supervisory Board’s tasks and responsibilities.

The outcomes of the evaluation confirm a positive and

constructive relationship between the Supervisory Board and

the Executive Board. The Supervisory Board operates with a

strong sense of responsibility, dedication, expertise, and

commitment. There is clear awareness of the respective roles

and responsibilities of the Supervisory Board and the Executive

Board, and these distinctions are duly observed.

During meetings held without the presence of the Executive

Board, the Supervisory Board also evaluated the performance

of the Executive Board members. Together with the CEO and

CFO, the Supervisory Board reflected on performance metrics

for the preceding year, strategic and operational priorities for

2025 and beyond, and relevant personal development topics.

Composition

The Supervisory Board consists of four members: Frits van

Hout (Chairman), Everien Slijkhuis (Chair of the Audit

Committee), Mirjam Baijens (Chair of the HR Committee) and

Erwin Doll (Vice-Chairman). All members of the Supervisory

Board are independent within the meaning of the Dutch

Corporate Governance Code.

The composition of the Supervisory Board is designed to

ensure that its members can act critically and independently,

free from influence by one another, the Executive Board, the

Management Team, or any other specific interests. Each

member has the required expertise, experience, and

background to fulfill their role. The Supervisory Board reflects a

balanced gender profile, consisting of two men and two

women.

The members of the Supervisory Board comply with the

statutory requirements regarding the maximum number of

supervisory or non-executive positions they may hold at large

enterprises.

106

Integrated Annual Report 2025

The composition of the Supervisory Board is in line with the

Profile for the Supervisory Board as established by the

Supervisory Board, as well as the diversity objectives set out in

the company’s Diversity Policy. Both the Profile and the

Diversity Policy are available on the corporate website at

www.kendrion.com.

Committees of the Supervisory Board

The Supervisory Board has established two committees: the

Audit Committee and the HR Committee. The primary task of

these committees is to advise and support the Supervisory

Board in fulfilling its responsibilities and to prepare decision-

making by the Supervisory Board. Each committee has its own

regulations, including a detailed description of its tasks and

responsibilities.

Audit Committee

The Audit Committee uses its knowledge and expertise to

advise and support the Supervisory Board’s decision-making,

particularly on matters relating to Kendrion’s financing, financial

statements, the integrity and quality of financial and non-

financial reporting, IT and information security, the effectiveness

of risk management and internal controls, and the design and

operation of the internal audit function and internal audit

program.

The Audit Committee consists of Everien Slijkhuis (Chair) and

Erwin Doll.

The Audit Committee held four meetings in 2025. Attendance

during 2025 was 100% (2024: 100%). The CFO and the

General Counsel attended all meetings.

REPORT OF THE SUPERVISORY BOARD

The external auditor, Forvis Mazars Accountants N.V., attended

the meetings of the Audit Committee during which the full-year

financial statements for 2025, the half-year financial statements

for 2025, and the management letter were discussed. The

Chair of the Audit Committee also met with the external auditor

without the CFO being present.

The Audit Committee monitored and reviewed recurring topics

including the quarterly financial results, the half-year and full-

year financial statements, the auditor’s report, the risk

management framework and internal control system, the

internal audit plan and key findings from internal audits

performed, the external audit plan and management letter,

transfer pricing, tax policy, treasury policy, the group insurance

program, the speak-up procedure, legal and compliance, the

annual evaluation of the external auditor and the annual

evaluation of the activities of the internal audit department,

which is managed by our finance function.

Supported by regular updates from management, the Audit

Committee also remained informed about relevant ESG

developments, including (potential changes to) CSRD legislation

and its implications for the company.

Regular updates were provided on the design, operation and

effectiveness of the risk management framework and internal

control systems in relation to strategic, operational, financial,

tax and compliance matters. Kendrion applies a structured and

systematic approach, supported by a robust risk management

framework and the internal audit program.

With reference to 1.3.6 of the Code, we believe that there is

currently no need to recommend the installation of a dedicated

internal audit function. Considering our company's size and

operational structure, we have determined that the

responsibilities typically assigned to an internal audit

department are effectively managed by our finance function.

This approach ensures robust internal controls and risk

management without the need for a separate internal audit

department. We will continue to assess this decision annually to

ensure it remains appropriate for our governance needs.

Kendrion monitors its internal controls through a systematic

approach, which is supported by a solid risk management

framework and the internal audit program. The effectiveness

of internal and external audit processes are assessed through

a qualitative rating system, evaluating key factors such as

technical skills, experience, communication, quality of findings,

availability of resources, and overall audit performance.

The Audit Committee also discussed insurance, tax and

treasury matters, including Kendrion’s policies relating to

transfer pricing. With respect to tax, the Audit Committee also

monitored and discussed the status of pending tax audits.

In addition to the above, the Audit Committee held a

comprehensive session on information security and information

security management.

At the General Meeting of Shareholders held on 14 April 2024,

Mazars Holding N.V. was appointed as the new external auditor

for a three-year term. Throughout 2025, the Audit Committee

engaged with the external auditor, overseeing its performance

and monitored the effectiveness of the external audit process.

The Audit Committee also reviewed and approved the 2025

external audit plan, including its scope and materiality

thresholds. Discussions were held regarding the findings

outlined in the auditor's management letter, and appropriate

actions were taken to address the auditor's recommendations

and observations.

107

Integrated Annual Report 2025

HR Committee

The HR Committee consists of Mirjam Baijens (Chair) and Frits

van Hout. The Committee held two meetings, with an

attendance rate of 100% (2024: 100%). The CEO and the

General Counsel attended both meetings.

Succession planning

At its meetings, the HR Committee regularly reviews the

composition of the company's organization, with particular

attention to succession planning. Following the HR

Committee's recommendation, the Supervisory Board

proposed the reappointment of Mr. Van Hout as member of the

Supervisory Board. Mr. Van Hout did not participate in the

deliberations or decision-making regarding his proposed

reappointment to avoid any potential conflict of interest. Mr. Van

Hout was subsequently reappointed as a member of the

Supervisory Board by the company’s shareholders at the

Annual General Meeting of Shareholders on 14 April 2025.

Performance management and remuneration of the

Executive Board

The HR Committee considered and prepared the performance

reviews of Executive Board members for discussion by

the Supervisory Board. The outcome of these reviews was

discussed in a meeting of the Supervisory Board without

the Executive Board present.

The HR Committee also defined the financial and non-financial

performance criteria for the short-term and long-term variable

remuneration of the Executive Board and monitored progress

against these criteria.

Additionally, the Executive Board provided the HR Committee

with information on the main components of the remuneration

structure for members of the Management Team who are not

on the Executive Board. The variable remuneration of the

REPORT OF THE SUPERVISORY BOARD

Management Team is aligned with the structure of the

Executive Board’s variable remuneration.

Financial statements and auditor’s opinion

The 2025 financial statements included in this Integrated

Annual Report have been audited, and Forvis Mazars

Accountants N.V. has issued an unqualified opinion. These

statements were discussed with the Supervisory Board and the

Audit Committee in the presence of the external auditor and the

Executive Board.

The Supervisory Board is of the opinion that the 2025 financial

statements meet all requirements for transparency and

correctness. Therefore, the Supervisory Board recommends

that the General Meeting of Shareholders, to be held on

13 April 2026, adopt the 2025 financial statements and the

proposed appropriation of net income.

This Integrated Annual Report furthermore contains a limited

assurance report from Forvis Mazars N.V. on selected

sustainability performance targets

Profit appropriation

Kendrion realized a net profit of EUR 19.5 million in 2025

(2024: a loss of EUR 4.5 million). Normalized net profit before

amortization

of intangibles amounted to EUR 17.9 million

(2024: EUR 11.8 million).

The Supervisory Board approved the Executive Board‘s

proposal to pay out 61% of normalized net profit before

amortization as dividend (2024: 59%), in line with the dividend

policy of the company.

The members of the Supervisory Board have signed the 2025

financial statements to comply with their statutory obligation

pursuant to article 2:101, paragraph 2, of the Dutch Civil Code.

Concluding remarks

The financial year 2025 was marked by the completion of

Kendrion’s strategic reorientation and its positioning as a pure-

play industrial company, driven primarily by the execution of

various projects related to the divestment of our automotive

activities. Despite persistently challenging market conditions,

the company delivered solid financial performance and

improved its financial position. The Supervisory Board wishes to

express sincere appreciation to the Executive Board, the

Management Team, and all employees of Kendrion for their

continued flexibility, dedication and commitment throughout

another demanding year. Gratitude is also extended to

shareholders for their ongoing trust and support. Looking

ahead with confidence, the Supervisory Board believes that

Kendrion is well-positioned for growth and sustained long-term

profitability.

Supervisory Board

Frits van Hout, Chairman

Mirjam Baijens

Erwin Doll

Everien Slijkhuis

27 February 2026

Non-IFRS financial measure. For the definition and reconciliation of the most directly comparable IFRS measures, refer to Reconciliation of Non-IFRS information, starting on page 219.

108

Integrated Annual Report 2025

REMUNERATION REPORT

Introduction

This Remuneration Report describes the application of the

Remuneration Policy for the Executive Board and the actual

performance in 2025 against the predefined performance

criteria. In addition, the Remuneration report provides an

overview of the remuneration of the Supervisory Board in 2025.

Performance in 2025

In 2025, Kendrion underwent a significant transformation,

marking a pivotal chapter in the company’s history. Following an

in-depth strategic review conducted with the close involvement

of the Supervisory Board, Kendrion made the critical decision

to shift its focus entirely from the automotive sector to the

industrial markets, where the company’s core strengths and

long-term opportunities are most pronounced. Kendrion

divested its automotive operations in Europe and the United

States of America to Solero, while business in China were

transitioned to local management. Additionally, the company

entered a long-term cooperation with Knorr-Bremse concerning

its Sibiu mobility electronics operations. These decisive actions

have enabled Kendrion to simplify its organizational structure,

reduce operational complexity, and establish a leaner, more

agile company. This streamlined foundation positions Kendrion

strongly for future growth within its chosen industrial markets.

What set 2025 apart was that our strategic transformation went

hand in hand with robust financial results. The Company

achieved a normalized EBITDA margin of 15.5%, reaching the

goal we had originally planned for 2026 a year early. Thanks to

a stronger financial position and solid cash flow, we were able

to issue a EUR 1.00 per share special dividend and launch a

share buyback program of up to EUR 10 million, demonstrating

Kendrion’s confidence and delivering real value to our

shareholders.

Remuneration Policy Executive Board

The Remuneration Policy for the Executive Board has been

developed by the Supervisory Board and adopted by the

General Meeting of Shareholders in April 2023. During the April

2024 General Meeting of Shareholders, an amendment has

been adopted, including a further adjustment to the share

ownership guideline included in the Remuneration Policy for the

Executive Board.

The Remuneration Policy is evaluated at least once every four

years by the Supervisory Board. The Remuneration Policy

adopted by the General Meeting of Shareholders in April 2023

is applicable to (i) remuneration granted in the years 2024 up to

and including 2027 – irrespective whether pay-outs and vesting

of performance shares become due, occur or are made after

2027; and to (ii) remuneration of Executive Board members

reappointed by the General Meeting of Shareholders in April

2023 as of the date on which the new term of office of the

relevant reappointed Executive Board member commences.

The HR Committee will continue to keep the Supervisory Board

informed about relevant market and legislative developments to

support the periodic evaluation of the Remuneration Policy and

related decision-making. For more information about Kendrion’s

Remuneration Policy, please visit the corporate website at

www.kendrion.com.

Remuneration objectives

The Remuneration Policy is designed to recruit and retain, and

motivate qualified, experienced, and diverse executives who are

capable of driving Kendrion's sustainable long-term value

creation. Specifically, the policy aims to: (i) maintain an

adequate link between pay and performance, (ii) align the

interests of the Executive Board with those of shareholders and

other key stakeholders, and (iii) focus on the sustainable

delivery of high performance over the long-term by stimulating

share ownership while ensuring adherence to high standards of

corporate governance.

Given Kendrion’s size (in terms of revenue, average market

capitalization, total assets, and number of FTEs), market

position, geographical scope, and the competitive labor

market, the companies included in the AScX Index on Euronext

Amsterdam are defined as relevant reference group.

Companies in the financial services, real estate, and

entertainment sectors are excluded from the reference group.

Within the defined reference group, Kendrion is positioned

around the median in terms of the average of the

aforementioned parameters revenues, average market

capitalization, total assets, and number of FTEs. The Executive

Board’s remuneration structure and levels are set to align with

the median of this reference group.

The Remuneration Policy excludes variable incentives that may

be detrimental to the Executive Board’s responsibility to define

and achieve Kendrion’s strategy for sustainable long-term value

creation.

Non-IFRS financial measure. For the definition and reconciliation of the most directly comparable IFRS measures, refer to reconciliation of non-IFRS financial measures, starting on page 219.

109

Integrated Annual Report 2025

Temporary deviations

In exceptional circumstances, the Supervisory Board can

decide to temporarily deviate from the Remuneration Policy for

members of the Executive Board. Exceptional circumstances

refer to circumstances where a deviation is considered

necessary to serve the long-term interests and sustainability of

Kendrion or to ensure its continued viability. Depending on the

exceptional circumstances, the Supervisory Board can resolve

to deviate from any or all the four remuneration components

included in the Remuneration Policy for the Executive Board.

When considering a temporary deviation from the

Remuneration Policy, the Supervisory Board shall consider

Kendrion’s sustainable long-term value creation strategy,

ongoing business, and operational requirements as well as the

financial situation of Kendrion. In addition, the temporary

deviation considered should be assessed in light of the

principles of reasonableness and fairness.

Upon having resolved a temporary deviation from the

Remuneration Policy, the Supervisory Board will (i) cancel and

withdraw all temporary deviations from the Remuneration Policy

prior to the first Annual General Meeting of Shareholders

following the effective date of the deviation; or (ii) propose the

necessary amendments to the Remuneration Policy for

adoption during the first Annual General Meeting of

Shareholders following the effective date of the deviation.

Deviations from the Remuneration Policy will be reported in

Kendrion’s remuneration report.

The Supervisory Board did not decide to deviate temporarily

from the Remuneration Policy for the members of the Executive

Board in 2025.

Remuneration components

The Remuneration Policy for the Executive Board members

consists of four components: a fixed base salary, a short-term

variable remuneration, a long-term variable remuneration and

other benefits such as a pension scheme and a car allowance

or lease budget.

The sum of the fixed base salary, the short-term variable

remuneration and the long-term variable remuneration for the

Executive Board members are considered appropriate in

relation to: (i) the identity, the purpose, and values of Kendrion,

(ii) the pay-ratios within Kendrion, (iii) the (international) context

in which Kendrion operates and (iv) reasonable views of

relevant stakeholder groups.

The variable remuneration components are subject to a

maximum value determined in advance in accordance with the

Remuneration Policy. The Supervisory Board will conduct

scenario analyses to assess whether the pay-out level of

variable remuneration components appropriately reflects

performance.

Fixed base salary

Members of the Executive Board receive a fixed base salary,

the amount of which is set around the median level relative to

the aforementioned reference group. The fixed base salary

levels can be adjusted, following a decision of the Supervisory

Board, based on general market movement and inflation

figures.

In addition, any increase of the annual fixed base salary up to

and around the prevailing median level relative to the

aforementioned reference group, can be decided upon by the

Supervisory Board and will not be regarded as an amendment

to the Remuneration Policy.

In 2025, the Executive Board members received the fixed gross

base salaries as indicated in the table below.

2025 Annual base salary (gross)

CEO (J.A.J. van Beurden) EUR 601,800

CFO (J.H. Hemmen) EUR 357,000

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Integrated Annual Report 2025

REMUNERATION REPORT

The table below provides an overview of the development of the annual gross base salary levels of the members of the Executive Board during previous financial years.

2025 gross

base salary

2024 gross

base salary

2023 annual

gross base salary

2022 annual

gross base salary

2021 annual

gross base salary

2020 annual

gross base salary

2019 annual

gross base salary

2018 annual

gross base salary

CEO (J.A.J. van Beurden) EUR 601,800 EUR 590,000 EUR 550,000

EUR 590,000

EUR 553,333.32 (actual) EUR 550,000 EUR 550,000 EUR 550,000 EUR 504,645

EUR 490,900

EUR 550,000

EUR 517,916.67

(actual)

EUR 508,424.58

(actual)

CFO (J.H. Hemmen) EUR 357,000 EUR 350,000 EUR 335,000

EUR 350,000

EUR 342,500 (actual) EUR 335,000 EUR 310,788 EUR 270,250 EUR 235,000

EUR 254,485.41

(actual)

EUR 117,500

(actual)

Effective until 1 December 2019.

Effective as of 1 December 2019 (i.e. the commencement date of the CEO’s second term).

The sum of EUR 462,591.25 (i.e. 11/12

of EUR 504,645) and EUR 45,833.33 (i.e. 1/12

of EUR 550,000).

Voluntary salary reduction of 15% during April through July 2020 inclusive and voluntary salary reduction of 10% for the month August 2020 in view of COVID-19 prompted cost measures.

Effective as of 1 July 2019 (i.e. the effective date of appointment to the Executive Board).

(CEO) As of 1 January 2023 until expiry 2nd term on 1 December 2023.

(CEO) As of commencement 3rd term on 1 December 2023.

(CFO) As of 1 January 2023 until expiry of 1st term on 1 July 2023.

(CFO) As of commencement 2nd term on 1 July 2023.

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REMUNERATION REPORT

Short-term variable remuneration

The short-term variable remuneration is payable in cash,

the amount of which is based on the achievement of

predetermined, specific, and measurable financial and non-

financial performance criteria.

The overview below describes the key elements of the short-

term variable remuneration as per the Executive Board’s

Remuneration Policy.

CEO

The short-term variable remuneration ranges from 0%

to 90% of the annual fixed gross base salary of the

CEO, with 60% being the target amount.

CFO

The short-term variable remuneration ranges from 0%

to 67.5% of the annual fixed gross base salary of the

CFO, with 45% being the target amount.

Performance criteria

The performance criteria for the short-term variable

remuneration are based on Kendrion’s strategic intent to

continuously grow revenue and profitability in a sustainable way,

with a lean and focused organization, and to provide a safe and

high-quality work environment to its employees. Supportive to

Kendrion’s strategic intent, the performance criteria for the

short-term variable remuneration include financial and non-

financial criteria.

The financial performance criteria determine 60% of the short-

term variable remuneration and reflect the financial priorities of

Kendrion. The remaining 40% of the short-term variable

remuneration is determined by non-financial performance

criteria and reflect sustainability/ESG ambitions and other

priorities directly linked to Kendrion’s strategic intent.

Financial performance criteria

The financial performance criteria determine 60% of the short-

term variable remuneration. Each year the Supervisory Board

selects at least three financial performance criteria from the list

below with a view to incentivise delivery of financial priorities

that support Kendrion’s strategic and operational spearheads.

The Supervisory Board may allocate different weight

percentages to the different financial performance criteria it

selects for a particular year, provided a minimum weight of 10%

shall apply to a financial performance criterion.

Financial performance criteria

■ Net profit

■ Return on sales (ROS)

■ Return on investment (ROI)

■ Organic growth

■ Free cash flow

■ Revenue

■ EBITA

■ EBITDA

Non-financial performance criteria

The non-financial performance criteria determine 40% of the

short-term variable remuneration. Each year the Supervisory

Board selects a certain number of non-financial performance

criteria derived from the strategic and operational spearheads

for the respective performance year, which will in any event

include performance criteria in the area of sustainability/ESG

(i.e. environmental, social and/or governance criteria).

Achievement of each individual non-financial performance

criterion will be measured by applying a binary scoring model.

The amount of the pay-out for the achievement of non-financial

performance criteria depends on the number of non-

performance criteria achieved. A predefined step curve will be

applied to calculate the pay-out between the achievement of

the minimum threshold number of selected non-financial

performance criteria and achievement of all selected non-

financial performance criteria. No pay-out will be made for

below threshold performance.

Investment

Members of the Executive Board must invest at least 50% of

the net amount of the pay-out of the short-term remuneration

earned until the required ownership level has been reached as

prescribed under the ‘Share ownership guideline’ described in

the Remuneration Policy.

In each case excluding items that are generated outside the ordinary course of business and the amortization of intangibles arising on acquisitions or similar corporate events.

The performance incentive zone (threshold, target and

maximum) for each financial performance criterion will be

determined in advance by the Supervisory Board by reference

to the strategic and operational spearheads for the respective

performance year. No pay-out will be made for below threshold

performance. In the case of performance equal to the threshold

performance of the relevant performance criterion, the pay-out

of the short-term incentive will be equal to 50% of the relevant

target amount. A linear curve will be applied to calculate the

pay-out between threshold performance and maximum

performance.

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REMUNERATION REPORT

2025 short-term variable remuneration

Within the framework of the Executive Board Remuneration

Policy, the Supervisory Board takes an informed decision

relevant to the variable remuneration of the Executive Board

members. In setting the financial and non-financial performance

criteria for the 2025 short-term incentive, the Supervisory Board

considered, among other factors, the Company’s strategic

priorities for 2025. These priorities included further

strengthening Kendrion as a focused industrial company,

advancing sustainability and regulatory readiness, progressing

the ERP system transformation, and addressing performance

gaps in parts of the organization. The 2025 focus areas

assessed by the Supervisory Board comprised: (i) improving

profitability and operational performance in underperforming

areas, (ii) execution of the enterprise systems transformation in

line with the approved roadmap, (iii) enhancement of the

efficiency and effectiveness of R&D activities within Industrial

Brakes, and (iv) continued advancement of sustainability

governance and reporting in line with the Company’s ESG

ambitions.

The Supervisory Board reported on the progression made and

the key points of attention relevant to the 2025 focus items in

the Report of the Supervisory Board included in this Integrated

Annual Report.

For the 2025 short-term variable remuneration, the Supervisory

Board followed the recommendations of the HR Committee

and selected four financial performance criteria, a non-financial

performance criterion in the area of sustainability/ESG and

other non-financial performance criteria that are linked to the

Supervisory Board’s 2025 focus items and Kendrion’s strategic

plan and operational spearheads. The 2025 financial and non-

financial performance criteria reflect the collective responsibility

of the Executive Board members and make no distinction

between the applicable performance criteria for the CEO and

CFO.

In 2025, the following short-term incentive target amounts

applied to the members of the Executive Board:

2025 short-term incentive

target amount

CEO (J.A.J. van Beurden) EUR 361,080 (= 60% of 2025

fixed gross base salary of EUR

601,800)

CFO (J.H. Hemmen) EUR 160,650 (= 45% of 2025

fixed gross base salary of EUR

357,000)

For the performance year 2025, the short-term incentive

performance criteria are allocated as follows:

Short-term remuneration as percentage of annual

gross base salary

Performance

criterion Weight Minimum At target Maximum

Financial performance criteria (60%)

ROI 15% CEO 0 9% 13.5%

CFO 6.75% 10.2%

ROS 15% CEO 0 9% 13.5%

CFO 6.75% 10.2%

EBITDA 10% CEO 0 6% 9%

CFO 4.5% 6.75%

Free cash flow 20% CEO 0 12% 18%

CFO 9% 13.5%

Non-financial performance criteria (40%)

0 CEO 24% 36%

CFO 18% 27%

TOTAL 100% 0 CEO 60% 90%

100% 0 CFO 45% 67.5%

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REMUNERATION REPORT

2025 short-term financial performance criteria

In 2025, the actual performance against the financial performance criteria was as follows:

2025 short-term incentive performance on financial performance criteria

Financial

performance

criterion

Pay-out as % of

short-term incentive

target amount

Pay-out as % of

2025 annual gross base salary (actual) Pay-out in EUR (gross)

CEO (J.A.J. van

Beurden)

CFO (J.H. Hemmen) CEO (J.A.J. van

Beurden)

CFO (J.H. Hemmen)

ROI 22.5% 13.5% 10.2% EUR 81,243 EUR 36,414

ROS 22.5% 13.5% 10.2% EUR 81,243 EUR 36,414

EBITDA 15% 9% 6.75% EUR 54,162 EUR 24,097.50

Free cash flow 30% 18% 13.5% EUR 108,324 EUR 48,195

TOTAL 90% 54% 40.65% EUR 324,972 EUR 145,120.50

2025 short-term non-financial performance criteria

The non-financial performance criteria for the 2025 short-term incentive reflect the collective responsibility of the Executive Board

and are aligned with the Supervisory Board’s 2025 focus items, as well as Kendrion’s strategic and operational spearheads. This

results in four targets applicable to both the CEO and CFO.

The table below provides a summary description of the non-financial performance criteria.

Summarized description 2025 non-financial performance criteria

Sustainability Advance sustainability reporting and governance in line with the Company’s ESG roadmap.

ERP transformation Progress the enterprise systems transformation in line with the approved implementation

roadmap.

Performance Deliver targeted profitability and operational performance improvements in underperforming

areas.

R&D of IB Enhance the efficiency, focus and effectiveness of R&D activities within Industrial Brakes.

Consistent with the Remuneration Policy, achievement of an

individual non-financial performance criterion will be measured

by applying a binary scoring model where a non-financial

performance criterion can either be achieved or not achieved.

The amount of the pay-out for the non-performance criteria

depends on the number of non-financial performance criteria

achieved. The following step curve is applicable for the 2025

non-financial performance criteria.

Number of non-financial

performance criteria achieved

Short-term

incentive pay-out

% of target amount

All 4 non-financial performance criteria achieved 150%

3 out of the 4 non-financial performance criteria achieved 100%

2 out of the 4 non-financial performance criteria achieved 50%

1 out of the 4 non-financial performance criteria achieved 0%

0 out of the 4 non-financial performance criteria achieved 0%

Throughout the year, the Supervisory Board reviewed progress

against the non-financial performance criteria and received

detailed updates about relevant developments and actions

taken. During the December 2025 Supervisory Board meeting,

the Executive Board presented the results and progress

realized for each of the performance criteria. During its

discussion at that meeting, the Supervisory Board and the

Executive Board also considered the persistent challenging

operating environment, the need for continued focus on

operational costs, the uncertainty about ESG reporting and the

complexity around the transition to a new ERP system.

With the divestment of the China-based business in October

2025 and the establishment of a long-term cooperation with

Knorr-Bremse for the Sibiu mobility electronics facility, Kendrion

has completed its transition into a pure-play industrial company.

The Executive Board has successfully executed both projects

and finalized the company’s strategic transition. At the same

time, maintaining a strong focus on costs control and

operational efficiency remains essential.

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REMUNERATION REPORT

In addition, the transition to renewable energy was completed

for the Company’s major production sites.

During the annual performance reviews, the Supervisory Board

paid specific attention to the individual performance and

development of the Executive Board members against the non-

financial performance criteria and their key competencies like

leadership and organizational alignment and strategic business

orientation.

Based on these reviews, the Supervisory Board resolved that

the Executive Board members realized three out of the four

non-financial performance criteria as set under the 2025 short-

term variable remuneration.

The implementation of the Company’s new enterprise resource

planning system has progressed during 2025, although

completion has taken longer than initially anticipated. The

organization continued to work intensively on the rollout, and

completing the implementation remains a key focus area in

2026.

Operational performance improved materially in selected parts

of the organization during 2025, resulting in strong financial

results with solid revenue development and a clear

improvement in profitability.

Within Industrial Brakes, the R&D organization was restructured

during 2025. The reorganization led to a leaner cost base and

enhanced effectiveness, supported by the introduction of more

agile, growth-oriented team structures.

Following the launch of the Company’s multi-year ESG

program, Kendrion further strengthened its sustainability

governance and reporting capabilities. During 2025, this

included enhancements to the double materiality assessment,

further automation of sustainability reporting processes, and

continued improvements in external sustainability ratings.

Consistent with the step-up curve, the score on the non-

financial performance criteria results in a pay-out of 100% of

the short-term target amount corresponding to a pay-out of

EUR 144,432 (gross) for the CEO and EUR 64,260 (gross) for

the CFO, representing 24% of the CEO’s 2025 annual gross

base salary of EUR 601,800 and 18% of the CFO’s 2025

annual gross base salary of EUR 357,000.

2025 pay-out short term incentive

Overall performance resulted in the following pay-out of the

short-term incentive in 2025:

Total pay-out 2025 short-term incentive (gross) Pay-out as % of 2025 annual gross base salary (actual)

CEO (J.A.J. van Beurden) EUR 469,404

(i.e. sum of EUR 324,972 and EUR 144,432)

78% of the gross annual base salary

of EUR 601,800

CFO (J.H. Hemmen) EUR 209,380.50

(i.e. sum of EUR 145,120.50 and EUR 64,260)

58.65% of the gross annual base salary

of EUR 357,000

The table below provides an overview of the development of the pay-out under the applicable short-term incentive scheme

of the members of the Executive Board during previous financial years.

Short-term incentive

2024

2023

2022

2021

2020

2019

2018

CEO (J.A.J. van Beurden) EUR 291,696

(gross)

EUR 269,584

(gross)

EUR 267,438

(gross)

EUR 429,000

(gross)

EUR 358,600

(gross)

EUR 191,282.90

(gross)

EUR 117,816 (gross)

CFO (J.H. Hemmen) EUR 129,815

(gross)

EUR 111,548

(gross)

EUR 95,023

(gross)

EUR 141,408.80

(gross)

EUR 102,965

(gross)

EUR 37,012.50

(gross)

Not applicable – effective date of

appointment to the Executive Board

1July 2019

Pay-out amounts calculated in accordance with the then prevailing remuneration policy.

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Long-term variable remuneration

The long-term variable remuneration component incentivizes

members of the Executive Board to focus on long-term

sustainable value for shareholders and other stakeholders, and

to align the interests of the members of the Executive Board

with the long-term interests of shareholders and other

stakeholder groups.

The Executive Board members annually receive conditional

performance shares. The conditional performance shares will

vest upon achievement of performance measured over a period

of three years, including the year in which the conditional

performance shares are granted. Vested performance shares

are restricted by a two-year holding period as of vesting.

The size of the award is defined as a percentage of the annual

fixed gross base salary of the relevant Executive Board member

as per the year in which the conditional performance shares are

granted. The actual grant (i.e. the number of conditional

performance shares) is determined by the percentage of the

annual fixed gross base salary and calculated based on the

average share price during the fourth quarter of the year

immediately preceding the year in which the conditional

performance shares are granted.

The target value as per the year in which conditional

performance shares are granted is as follows:

CEO 60% of the annual fixed gross base salary of the CEO

CFO 50% of the annual fixed gross base salary of the CFO

The maximum opportunity for the long-term variable

remuneration shall not exceed 150% of the target value.

Performance measure

The vesting percentage of the performance shares is

conditional upon the achievement of performance measured

as:

Weight Performance measure

40% Relative total shareholder return (relative TSR)

40% Basic earnings per share (EPS)

20% Sustainability/ESG (i.e. environmental, social and/or

governance)

116

Integrated Annual Report 2025

REMUNERATION REPORT

Relative TSR

To determine achievement of this performance measure, the relative TSR is measured, which

means share price movements, including dividends and assuming that dividends are reinvested.

For the calculation of the relative TSR position, the reinvestment of cash dividend in fixed-

income securities and the reinvestment of stock dividend in the relevant share are taken into

account. The TSR performance of Kendrion is measured against the performance of 20 selected

TSR peer companies included in the table below.

# Company Industry Country

Market value

(EUR x 1 mln)*

1. Schneider Electric SE Electrical components France 74,653

2. Eaton Corporation plc Diversified industrials USA 58,485

3. Sensata Technologies

Holding NV

Electronic equipment: gauges and

meters USA 5,787

4. Aalbers Industries NV Electronic equipment: control and filter Netherlands 4,006

5. Emerson Electric Co Electronic equipment: other USA 53,229

6. Continental AG Auto parts Germany 11,272

7. Schaeffler AG Auto parts Germany 1,057

8. TKH Group NV Electrical components Netherlands 1,568

9. Borg Warner Inc Auto parts USA 8,831

10. SKF AB Metal fabricating Sweden 6,096

11. Phoenix Mecano AG Machinery: industrial Switzerland 320

12. Grammar AG Auto parts Germany 158

13. Regal Beloit Electrical components USA 7,437

14. IMI Plc Electronic equipment: control and filter UK 3,786

15. Autoneum Holding AG Auto parts Switzerland 483

16. Akwel Auto parts France 465

17. Elringklinger AG Auto parts Germany 436

18. VBG Group publ AB Auto parts Sweden 299

19. Kongsberg Automotive

ASA

Auto parts Norway 253

20. Sogefi SpA Auto parts Italy 112

# Company Industry Country

Market value

(EUR x 1 mln)*

ABB Ltd Electrical components Switzerland 55,833

VAT Group AG

Electronic equipment: control and filter Switzerland

7,681

Addtech AB Electrical components Sweden 3,475

Incap Oyj Electrical components Finland 501

Katek SE Electrical components Germany 204

Freni Brembo SpA

Auto parts Italy

3,489

Vitesco Technologies

Group AG

Auto parts Germany 2,185

JOST Werke AG Auto parts Germany 788

hGears AG Auto parts Germany 75

Per reporting date 31 December 2022.

The position of Kendrion in the TSR performance peer group, upon expiry of the three-year

performance period, determines the score for the relative TSR measure in accordance with the

following performance incentive zone:

Ranking 1-3 4 5 6 7 8 9 10 11-21

Vesting 150% 137.5% 125% 112.5% 100% 83% 67% 50% 0%

The position of Kendrion in the ranking defines the vesting for this part of the conditional grant of

shares. The calculation to determine Kendrion’s ranking shall be conducted by an external

independent and reputable specialized firm.

Per reporting date 31 December 2022.

Identified possible replacements in case of delisting or other corporate events in respect

of any of the above selected TSR peer companies.

117

Integrated Annual Report 2025

REMUNERATION REPORT

118

Integrated Annual Report 2025

REMUNERATION REPORT

EPS

EPS is disclosed in Kendrion’s consolidated financial statements

and is calculated by dividing the profit or loss attributable to

shareholders of Kendrion by the weighted average number of

shares outstanding during the relevant period, excluding ordinary

shares purchased by Kendrion and held as treasury shares.

Earnings are adjusted for changes in accounting principles

during the performance period.

The Supervisory Board sets the performance incentive zone

(threshold, target and maximum) annually by reference to the

mid-term plan as approved by the Supervisory Board in the year

of the grant date. Given that these targets are considered

commercially sensitive, EPS targets and the achieved

performance are disclosed in the Integrated Annual Report after

the relevant performance period.

The following performance incentive zone will be used to define

the vesting for this part of the conditional grant of shares:

< Threshold Target Maximum

EPS 0 100% 150%

Vesting is linear between threshold performance and on target

performance and between on-target performance and

maximum performance.

Sustainability/ESG

The Supervisory Board sets annually a sustainability target that

is aligned with Kendrion’s sustainability ambitions. The

Supervisory Board also sets the performance incentive zone

(threshold, target and maximum) annually. The achieved

performance will be disclosed in the Integrated Annual Report

after expiry of the relevant three-year performance period.

The following performance incentive zone will be used to define

the vesting for this part of the conditional grant of shares:

< Threshold Target Maximum

Sustainability/

ESG

0 100% 150%

Vesting is linear between threshold performance and on-target

performance and between on-target performance and

maximum performance.

119

Integrated Annual Report 2025

2025 long-term variable remuneration

Consistent with the applicable Remuneration Policy as adopted

by the General Meeting of Shareholders on 16 April 2024, the

members of the Executive Board were granted conditional

performance shares as described in the table below.

2025 annual

gross base salary (actual) Target amount

Average share

price Q4 2024

Conditional

performance shares Performance period Expiry holding period

CEO (J.A.J. van Beurden) EUR 601,800 EUR 361,080 EUR 10.87 33,218 Performance period 2025-2027 End of 2029

(i.e. 60% of EUR 601,800)

CFO (J.H. Hemmen) EUR 357,000 EUR 178,500 EUR 10.87 16,421 Performance period 2025-2027 End of 2029

(i.e. 50% of EUR 357,000)

In accordance with the applicable Remuneration Policy, the

vesting percentage of the performance shares is conditional to

the realization of the performance criteria Relative TSR, EPS

and a non-financial measure relating to sustainability/ESG. The

sustainability/ESG performance criteria for the 2025 long-term

incentive are related to the development of a data-driven Scope

3 emissions reduction framework and strategy as well as the

achievement of targeted Scope 1 and Scope 2 emission

REMUNERATION REPORT

reduction on a pro rata basis ensuring consistency towards the

company’s ESG plan.

Based on the contents and quality of the actions taken and

strategies developed, the Supervisory Board shall determine

the actual performance at the end of the performance period

along the lines as described above.

2023 long-term variable remuneration

Pursuant to the 2023 long-term incentive scheme, 22,030

conditional performance shares have been granted to Mr. Van

Beurden and 11,363 conditional performance shares have

been granted to Mr. Hemmen. The number of conditional

performance shares has been calculated as follows:

2023 annual

gross base salary Target amount Target amount

Average share

price Q4 2022

Conditional

performance shares

CEO

(J.A.J. van Beurden)

EUR 550,000 (1 January to 30 November 2023, until reappointment for 3rd term

as of 1 December 2023)

EUR 330,000

(i.e. 60% of EUR 550,000)

EUR 302,500

(i.e. 11/12 of EUR 330,000)

EUR 15.07 22,030

EUR 590,000 (as of reappointment for 3rd term as per 1 December 2023) EUR 354,000

(i.e. 60% of EUR 590,000)

EUR 29,500

(i.e. 1/12 of EUR 354,000)

Total EUR 332,000

CFO (J.H. Hemmen) EUR 335,000 (1 January to 30 June 2023, until reappointment for 2nd term as of

1 July 2023)

EUR 167,500

(i.e. 50% of 335,000)

EUR 83,750

(i.e. 6/12 of EUR 167,500)

EUR 15.07 11,363

EUR 350,000 (as of reappointment for 2nd term as per 1 July 2023) EUR 175,000

(i.e. 50% of EUR 350,000)

EUR 87,500

(i.e. 6/12 of EUR 175,000)

Total EUR 171,250

120

Integrated Annual Report 2025

Consistent with the Remuneration Policy governing the 2023 long-term variable remuneration, the vesting percentage of the

performance shares is conditional upon the achievement (during the performance period 2023-2025) of performance measured as:

Weight Performance measure

40% Relative total shareholder return (relative TSR)

40% Basic earnings per share (EPS)

20% Sustainability (i.e. environmental, social and/or governance)

A summary description of the performance measure in the area of sustainability for the performance period 2023-2025 has been

included in the table below.

Summary description sustainability performance measure 2023-2025

Creation of a supplier database, standardize the

collection of supplier data, and expand the scope/

area of supplier data (where required) in support of

sustainable sourcing objectives.

■ On target performance (i.e. 100% vesting)

■ Max. performance (i.e. 150% vesting)

■ Min. threshold performance (i.e. 0% vesting)

REMUNERATION REPORT

This achievement results in a maximum performance under the

2023 long-term incentive scheme for the sustainability/ESG

performance measure and thereby results in 150% vesting of

the 20% of the target-value. As a result, 6,609 performance

shares have vested for Mr. Van Beurden, and 3,409

performance shares have vested for Mr. Hemmen for this

performance measure.

Summary 2023 long-term variable remuneration

This means that under the 2023 long-term incentive plan, a

total number of 6,609 shares have vested for Mr. Van Beurden

and a total number of 3,409 shares have vested for Mr.

Hemmen. The vested shares remain subject to a holding period

until the end of 2027.

In accordance with the long-term incentive plan, Mr. Van

Beurden and Mr. Hemmen will be entitled to accrued dividends

for each of the 6,609 and 3,409, respectively, vested shares.

Accrued dividends will be paid in cash.

Vesting is linear between min. threshold performance and

on-target performance and between on-target performance

and max. performance.

TSR and EPS

When measuring the relative TSR, the position of Kendrion

within the predefined TSR performance peer group, as

stipulated in the Remuneration Policy for the 2023 long-term

incentive plan, is 16. As per the Remuneration Policy governing

the 2023 long-term variable remuneration, the 16

position

leads to a 0% vesting.

Based on the EPS performance incentive zones determined by

the Supervisory Board by reference to the 2023 mid-term plan,

the actual 2025 EPS falls below the predetermined minimum

threshold performance level and therefore leads to a 0%

vesting.

Sustainability/ ESG

The sustainability / ESG performance measure entailed the

creation of a supplier database, the standardization of supplier

data collection, and the expansion of data scope where

needed, supported by supply-chain mapping and evaluation of

existing supplier data and processes.

As per the end of 2025, our approach with respect to supplier

data collection has been enhanced significantly. We moved

from obtaining high-level CSR information through on-site visits

only to operating a structured and comprehensive supplier-data

collection approach. A formal framework has been developed

over the past two years, defining the information to be collected

and the process for supplier engagement. This enables access

to significantly more detailed data, including but not limited to

data regarding greenhouse gas emissions and renewable

energy, social elements (including information on supplier’s

employees and subcontractors), materials and recyclability, and

the quality of supplier disclosures.

121

Integrated Annual Report 2025

Development long-term incentive

The table below provides an overview of the development of

the conditional share awards under the long-term incentive plan

for the Executive Board members during previous financial

years. The table also specifies the expiry of vesting periods and

holding periods for conditional shares awarded.

Long-term

incentive

2024

number

of shares

Expiry

vesting

period

holding

period

2023

number

of shares

Expiry

vesting

period

holding

period

2022

number

of shares

Expiry

vesting

period

holding

period

2021

number

of shares

Expiry

vesting

period

holding

period

2020

number

of shares

Expiry

vesting

period

holding

period

2019

number

of shares

Expiry

vesting

period

holding

period

2018*

number

of shares

Expiry

vesting

period

holding

period

CEO (J.A.J.

van Beurden)

30,596 End of

2026

End of

2028

22,030 End of

2025

End of

2027

16,144 End of

2024

End of

2026

20,245 End of

2023

End of

2025

16,533 End of

2022

End of

2024

11,559 End of

2021

End of

2023

6,960 End of

2020

End of

2022

CFO (J.H.

Hemmen)

15,125 End of

2026

End of

2028

11,363 End of

2025

End of

2027

8,194 End of

2024

End of

2026

9,533 End of

2023

End of

2025

6,769 End of

2022

End of

2024

2,409 End of

2021

End of

2023

2018: not applicable for the CFO, as his effective date of

appointment to the Executive Board was 1 July 2019.

Pension arrangement and other benefits

Members of the Executive Board participate in the defined

contribution pension scheme. Kendrion N.V. will pay: (i) the cost

of contributions for participation in the defined contribution

scheme; (ii) the risk premium for the surviving dependents’

pension (nabestaandenpensioen) and (iii) the cost of

contributions for participation in the occupational disability

insurance (including WIA excedentverzekering) (collectively

the “Pension and Disability Insurance Contribution”). In addition,

members of the Executive Board are entitled to an annual gross

allowance to compensate for the loss of accrual of pension

benefits because of the Dutch Wage Tax Act, provided that the

sum of the Pension and Disability Insurance Contribution and

such annual allowance shall annually not exceed an amount of

EUR 75,000. This amount may be adjusted based on market

developments.

REMUNERATION REPORT

No schemes have been agreed for the voluntary early

retirement of members of the Executive Board.

Kendrion maintains a car lease policy for members of the

Executive Board. The lease budget (including fuel) is EUR 2,000

per month. Alternatively, members of the Executive Board are

entitled to a monthly gross car allowance of EUR 2,000.

In addition, Kendrion pays a monthly expense allowance to

Executive Board members of up to EUR 450, to cover costs

that are not suitable for individual reimbursement.

The amount of the car allowance and the expense allowance

are not included as a basis for calculation of the Pension and

Disability Insurance Contribution, or any other (variable)

remuneration or allowance, severance amount or benefit.

Kendrion has arranged for a directors’ and officers’ liability

insurance. The costs for this insurance are for the account of

Kendrion.

The Executive Board participates in the defined contribution

plan of Kendrion. The pension contribution in 2025 was EUR

71,885 (2024: EUR 78,115) for the CEO and EUR 69,242

(2024: EUR 80,758) for the CFO. These pension contribution

amounts include the correction of overpayments from 2024.

In 2025, a monthly car allowance of EUR 2,000 gross was

provided to the CFO.

122

Integrated Annual Report 2025

Share ownership guideline

An objective of the Remuneration Policy is to appropriately align

the interests of the members of the Executive Board with the

interests of shareholders by encouraging share ownership. As

per the Remuneration Policy adopted by the General Meeting

of Shareholders on 15 April 2024, Kendrion applies a share

ownership guideline for Executive Board members of 200% of

the annual fixed gross base salary for the CEO and 100% of the

annual fixed gross base salary for the CFO. This shareholding

must be gradually built up with performance shares earned

under the long-term incentive plan, although it is permitted to

sell shares to finance taxes due at the date of vesting of the

performance shares, and by purchasing shares with at least

50% of the net amount of the pay-out of the short-term

incentive.

Policy in case of change of control

Unvested performance shares awarded shall be deemed

vested as per the date of the change of control assuming on

target performance, subject to: (i) pro rating to reflect the

proportion of the normal performance period that has elapsed

as per the date of the change of control, and (ii) the

discretionary authority of the Supervisory Board to determine

otherwise, should such deemed vesting of performance shares

result in unreasonable or unequitable remuneration.

Adjustment and claw back

The Supervisory Board is authorized to adjust the amount of

the short-term and long-term variable remuneration to an

appropriate level should payment thereof result in unreasonable

or unequitable remuneration. In addition, a so-called claw-back

provision applies pursuant to which the Supervisory Board has

the authority to recover in whole or in part short-term and long-

term variable remuneration awarded to members of the

Executive Board should it transpire that such variable

remuneration was unjustifiably awarded based on incorrect

information.

Other key elements

Term and termination

Management agreements with Executive Board members are

entered for a definite period of four years. The management

agreement may be terminated with due observance of a notice

period of six months. Kendrion is entitled to terminate the

management agreement with immediate effect for cause (i.e.

seriously culpable or negligent behavior on the part of the

Executive Board member).

Termination fee

In the event of termination of the management agreement on

Kendrion’s initiative, the termination fee for members of the

Executive Board shall not exceed 100% of the annual fixed

gross base salary (i.e. excluding short-term and long-term

incentive and other elements such as pension contributions).

The members of the Executive Board are not entitled to a

termination fee if the contract is terminated for cause on the

part of the Executive Board member or if the contract is

terminated at the initiative of the Executive Board member.

Pay ratio

The Executive Board to employee pay-ratio is approximately 19

(2024: 21). This pay ratio is based on the remuneration of the

CEO including pensions and other expenses and the average

wage costs per FTE in 2025 as disclosed on page 62 of this

Integrated Annual Report.

Remuneration Policy Supervisory Board

Objectives

The remuneration policy of the Supervisory Board serves to

recruit and retain diverse, qualified, and experienced members

to supervise the manner in which the Executive Board

implements Kendrion’s long-term value creation strategy.

Considering the nature of the supervisory responsibilities of the

Supervisory Board, the remuneration is not linked to Kendrion’s

performance, and therefore includes a fixed component only. In

line with good corporate governance, Supervisory Board

members will not receive a share-based incentive.

The annual remuneration levels of the Supervisory Board are

described in the table below. The base fee and committee fee

levels in the table below are the same as determined by the

General Meeting of Shareholders on 11 April 2022.

Base fee

Chairman Supervisory Board EUR 59,000

Member Supervisory Board EUR 41,800

Committee fee

Chair Audit Committee EUR 7,200

Member Audit Committee EUR 6,000

Chair HR Committee EUR 7,200

Member HR Committee EUR 6,000

REMUNERATION REPORT

123

Integrated Annual Report 2025

Expenses

All reasonable and documented expenses incurred by the

Supervisory Board members in the course of performing their

duties are reimbursed.

Benefits and loans

Members of the Supervisory Board are not eligible to participate

in any benefits scheme offered by Kendrion to its employees,

nor shall Kendrion provide loans.

The aggregate amount of the remuneration of the Supervisory

Board members in 2025 was EUR 210,800 (2024: EUR

212,850). The table below gives a breakdown of the

remuneration per Supervisory Board member.

Supervisory Board member 2025

F.J. van Hout (Chairman) EUR 65,000

M.H.C. Baijens EUR 49,000

E.M. Doll EUR 47,800

E.H. Slijkhuis EUR 49,000

Total EUR 210,800

Advisory vote remuneration report 2024

The remuneration report 2024 has been discussed with the

shareholders and put to the General Meeting of Shareholders

for an advisory vote during the Annual General Meeting of

Shareholders held on 14 April 2025. Of the votes cast, 99.93%

voted in favor of the 2024 remuneration report. Supported by

this advisory vote, the Executive Board and the Supervisory

Board considered that no substantive changes are needed

relevant to the application of the Remuneration Policy.

The voting results of the General Meeting of Shareholders held

on 14 April 2025 can be found on the corporate website at

www.kendrion.com.

Taking account of the content of this Remuneration Report

pertaining to financial year 2025, it is determined that the

aggregate amount of remuneration awarded is in line with the

Remuneration Policy and contributes to the performance of

Kendrion and the execution of its long-term value creation

strategy.

This 2025 Remuneration Report will be discussed with

shareholders and put to the General Meeting of Shareholders

for an advisory vote during the upcoming Annual General

Meeting of Shareholders to be held on 13 April 2026.

REMUNERATION REPORT

Remuneration components 2025

(in EUR) CEO % CFO %

Base salary 601,800 48.49 % 357,000 50.21 %

Short term incentive 469,404 37.82% 209,380.50 29.45 %

Long term incentive 92,526 7.46 % 47,726 6.71 %

Pension contribution 71,885* 5.79 % 69.242* 9.74 %

Other 5,400 0.44 % 27,600 3.88 %

Total compensation 1,241,015 100% 710,948.50 100%

These amounts include the correction of overpayments from 2024.

124

Integrated Annual Report 2025

Executive Board remuneration comparative

EUR Thousand 2025 2024 2023 2022 2021

J.A.J. van Beurden, CEO 1,241.0 998.8 951.4 1,153.0 1,118.0

J.H. Hemmen, CFO 710.9 605.2 555.0 632.0 565.8

Pay ratio 19 17 18 19 20

Company performance

Revenue (EUR million) 245.5 301.5 518.6 519.3 464.0

Normalized EBITDA (EUR million)

38.1 37.0 53.1 57.4 55.8

Normalized EBITDA margin 15.5% 12.3% 10.2% 11.1% 12.0%

Non-IFRS financial measure. For the definition and reconciliation of the most directly comparable IFRS measures, refer to reconciliation of

non-IFRS information, starting on page 219.

Supervisory Board remuneration comparative

2025 2024 2023 2022 2021

Base fee

Chairman Supervisory Board EUR 59,000 EUR 59,000 EUR 59,000 EUR 59,000 EUR 45,000

Member Supervisory Board EUR 41,800 EUR 41,800 EUR 41,800 EUR 41,800 EUR 35,000

Committee fee

Chair Committee EUR 7,200 EUR 7,200 EUR 7,200 EUR 7,200 EUR 6,000

Member Committee EUR 6,000 EUR 6,000 EUR 6,000 EUR 6,000 EUR 5,000

Total Supervisory Board remuneration EUR 210,800 EUR 210,800 EUR 210,800 EUR 210,800 EUR 172,000

REMUNERATION REPORT

SHARE AND SHAREHOLDER INFORMATION

Movements in the number of outstanding shares

Shares entitled

to dividend

Shares owned

by Kendrion

Total number of

issued shares

At 1 January 2025 15,500,057 - 15,500,057

Issued shares (share dividend) 300,467 - 300,467

Issued registered shares (share plan) 6,903 - 6,903

Repurchased shares (185,333) 185,333 -

At 31 December 2025 15,622,094 185,333 15,807,427

Other information

EUR, unless otherwise stated 2025 2024 2023

Number of shares x 1,000 at 31 December 15.807 15.500 15.276

Market capitalization at 31 December (EUR million) 221.3 161.2 184.5

Highest share price in the financial year 14.96 14.50 19.60

Lowest share price in the financial year 9.51 10.08 10.82

Share price on 31 December 14.00 10.40 12.08

Average daily ordinary share volume 29,163 22,730 15,260

Result per share 1.24 (0.29) 0.65

Normalized net profit before amortization per share

1.13 0.76 1.00

Major shareholders as at 31 December 2024

Interest in % Date of report

Teslin Participaties Coöperatief U.A. 20.07 At 5 June 2025

Van Lanschot Kempen Investment Management N.V. 15.33 At 11 April 2023

Cross Options Beheer B.V. 5.33 At 20 December 2023

Add Value Fund N.V. 3.22 At 13 July 2022

T.L. Kuo 3.17 At 21 June 2024

Midlin N.V. 3.08 At 11 December 2020

Total 50.2

Non-IFRS financial measure. For the definition and reconciliation of

the most directly comparable IFRS measures, refer to reconciliation

of non-IFRS information, starting on page 219.

On the basis of the information in the register of the AFM and listed

on the website at www.afm.nl.

Share capital

The authorized share capital of Kendrion N.V. as at 31

December 2025 amounts to EUR 80,000,000 and is divided

into 40,000,000 ordinary shares with a nominal value of EUR

2.00 each. At year-end 2025, the total number of ordinary

shares issued was 15,807,427. There is one class of ordinary

shares and no depositary receipts for shares have been issued.

Kendrion’s ordinary shares are listed on NYSE Euronext

Amsterdam Small Cap Index (AScX).

from 2 January 2025 to 31 December 2025

Kendrion N.V. share

AEX

ASCX

AMX

Treasury shares

As at 31 December 2025, Kendrion N.V. holds 185,333 shares

in its own capital, representing 1.17% of the total issued share

capital. The ordinary shares held by Kendrion N.V. in its own

capital are non-voting and do not have any dividend

entitlement. This means that, as per year-end 2025,

15,622,094 ordinary shares hold voting rights and dividend

entitlement.

Movements in the share price

125

Integrated Annual Report 2025

Dividend policy

Kendrion endeavours to realize an attractive return for

shareholders supported by a suitable dividend policy. In view of

safeguarding a healthy financial position, consideration is also

given to the amount of profit to be retained to support the

company’s medium and long-term strategic plans and to

maintaining a solvency ratio of at least 35%. Kendrion strives to

distribute dividends representing at least 50% of its normalized

net profit before amortization.

Kendrion will propose a dividend of EUR 0.70 per share,

representing a payment of dividend of 61% of normalized net

profit before amortization for 2025 at the Annual General

SHARE AND SHAREHOLDER INFORMATION

Participation

Kendrion maintains a share-based incentive plan for its senior

management and certain key employees.

Effective as of 2019, members of the Management Team

became eligible for a grant of conditional performance shares.

The conditional performance shares granted will vest upon

achievement of performance measured over a three-year

period. The actual number of shares that will be allocated upon

expiry of the three-year vesting period is subject to the

realization of predefined performance criteria. Under the 2022

long-term incentive plan for the Management Team (i.e.

performance period 2022 through 2024), 25,918 conditional

performance shares were granted. Of these conditional

performance shares granted to the Management Team and the

Leadership team, a total of 2,035 shares have vested in 2025.

In 2025, conditional performance shares have been granted to

the members of the Executive Board pursuant to the Executive

Board long-term incentive plan. More information about

(conditional performance) shares granted to the members of

the Executive Board is set out on page 119. A comprehensive

description of the long-term incentive plan is included in the

‘Remuneration Report’ section on page 109 and further of this

report.

Meeting of Shareholders on 13 April 2026. The total amount of

dividend is EUR 11 million. Payment of the dividend will be

made in cash.

Major shareholders

Any person holding or acquiring an interest of 3% or more in a

Dutch publicly listed company is bound, based on the Financial

Supervision Act (Wet op het Financieel Toezicht), to disclose

such a holding to the Dutch Authority for the Financial Markets

(AFM). The disclosure is recorded in the register of the AFM and

listed on the website at www.afm.nl/en.

126

Integrated Annual Report 2025

SHARE AND SHAREHOLDER INFORMATION

Investor relations

Kendrion attaches great importance to appropriate

communications with financial stakeholders such as investors,

debt capital providers and analysts, providing them with good

insights into recent developments. Transparency is intended to

lead to healthy pricing, and to support liquidity.

Regulations to prevent insider trading

Kendrion has regulations covering securities transactions by

members of the Executive Board, members of the Supervisory

Board, members of the Management Team and other

designated employees. The Insider Trading Code is published

on the corporate website at www.kendrion.com.

The Insider Trading Code is intended to ensure the avoidance

of insider trading or the appearance thereof, and any mixing of

business and private interests.

Analysts

The following stock exchange analysts actively monitor the Kendrion share:

ABN AMRO Oddo BHF Bank Martijn den Drijver

Degroof Petercam Frank Claassen

ING Bank Tijs Hollestelle

The Idea-Driven Equities Analyses Company Maarten Verbeek

Financial calendar

Friday, 27 February 2026 Publication annual results 2025

Monday, 16 March 2026 Record date General Meeting of Shareholders

Monday,13 April 2026 General Meeting of Shareholders

Wednesday, 15 April 2026 Ex-dividend date

Thursday, 16 April 2026 Dividend record date

Wednesday, 22 April 2026 Cash dividend made payable

Tuesday, 12 May 2026 Publication first quarter results 2026

Wednesday, 26 August 2026 Publication half-year results 2026

Tuesday, 10 November 2026 Publication third quarter results 2026

127

Integrated Annual Report 2025

128

FINANCIAL STATEMENTS - CONTENTS

128

129 Consolidated statement of financial position

as at 31 December

130 Consolidated statement of profit and loss and

other comprehensive income

131 Consolidated statement of changes in equity

133 Consolidated statement of cash flows

134 Notes to the consolidated financial statements

157 Property, plant and equipment

161 Intangible assets

164 Other investments and non-current assets

165 Deferred tax assets and liabilities

167 Inventories

168 Trade and other receivables

168 Cash and cash equivalents

168 Assets classified as held for sale and discontinued

operations

170 Capital and reserves

172 Earnings per share

173 Loans and borrowings

176 Employee benefits

180 Provisions

180 Trade and other payables

181 Financial instruments

187 Leases

187 Capital commitments

187 Contingent assets and liabilities

188 Operating segments

190 Staff costs

190 Other operating expenses

191 Net finance costs

191 Income tax

191 Reconciliation of effective tax rate

192

194

Related parties

Fees to the auditor

194 Other notes

194 Post-balance sheet events

195 Company balance sheet at 31 December

196 Company income statement

197 Notes to the company financial statements

197 General

197 Principles of valuation of assets and liabilities

and determination of results

197 Financial fixed assets

197 Receivables

198 Equity

199 Current liabilities

199 Financial instruments

200 Other income

200 Staff costs

200 Profit appropriation

200 Commitments not appearing on the balance sheet

201 Post-balance sheet events

201 Remuneration of and share ownership

by the Executive Board and Supervisory Board

FINANCIAL STATEMENTS

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129

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER

Note	EUR million	2025	2024	Note	EUR million	2025	2024
	Assets				Equity and liabilities
	Non-current assets			9,10	Equity
1	Property, plant and equipment	52.4	96.0		Share capital	31.6	31.0
2	Intangible assets	104.3	112.8		Share premium	36.5	37.1
3	Other investments and non-current				Reserves	65.8	94.9
	assets	4.3	3.9		Retained earnings	19.5	(4.5)
4	Deferred tax assets	12.3	21.4		Total equity A	153.4	158.5
	Total non-current assets	173.3	234.1
					Liabilities
	Current assets			11	Loans and borrowings	57.3	97.8
5	Inventories	44.5	58.5	12	Employee benefits	6.8	7.1
	Current tax assets	1.4	3.2	4	Deferred tax liabilities	11.3	14.7
6	Trade and other receivables	23.6	58.6	13	Provisions	2.6	0.9
7	Cash and cash equivalents	29.4	8.5		Total non-current liabilities	78.0	120.5
8	Assets classified as held for sale	−	1.9
	Total current assets	98.9	130.7	7	Bank overdraft	0.0	1.7
				11	Loans and borrowings	2.4	12.4
				13	Provisions	0.0	5.2
					Current tax liabilities	4.7	7.6
				14	Trade and other payables	33.7	58.9
					Total current liabilities	40.8	85.8
					Total liabilities	118.8	206.3
	Total assets	272.2	364.8		Total equity and liabilities	272.2	364.8

Equity is attributable to owners of the company as non-controlling interests are not applicable.

FINANCIAL STATEMENTS

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130

This item will never be reclassified to profit or loss.

These items may be reclassified to profit or loss.

All profits are attributable to owners of the company as non-controlling interests are not applicable.

2024 numbers were re-presented to present the continuing operations only in accordance with IFRS 5. Reference is made to note 8 for more details on results from discontinued operations.

CONSOLIDATED STATEMENT OF PROFIT AND LOSS AND OTHER COMPREHENSIVE INCOME

			D
Note	EUR million	2025	2024
	Other comprehensive income
12	Remeasurements of defined benefit plans A	0.0	(0.8)
9	Foreign currency translation differences for	(2.7)	(3.4)
	foreign operations B
9	Net change in fair value of cash flow hedges,	0.1	(0.5)
	net of income tax B
	Other comprehensive income for the period,
	net of income tax	(2.6)	(4.7)
	Total comprehensive income for the period C	16.9	(9.2)

10	Basic earnings per share (EUR),
	based on weighted average	1.24	(0.29)
10	Basic earnings per share (EUR),
	based on weighted average (diluted)	1.24	(0.29)
	Earnings per share for continuing operations
	Basic earnings per share (EUR) from continuing
	operations, based on weighted average	0.87	0.55
	Basic earnings per share (EUR) from continuing
	operations, based on weighted average (diluted)	0.86	0.54

			D
Note	EUR million	2025	2024
19	Revenue	245.5	247.5
	Other income	4.4	1.7
	Total revenue and other income	249.9	249.2
	Changes in inventories of finished goods and work
	in progress	0.4	(0.9)
	Raw materials and subcontracted work	106.6	114.3
20	Staff costs	87.6	86.3
1, 2	Depreciation and amortization	15.0	16.0
1, 2	Impairments of fixed assets	0.0	1.0
21	Other operating expenses	19.0	17.9
	Result before net finance costs	21.3	14.6
22	Finance income	0.1	0.1
22	Finance expense	(3.8)	(4.0)
	Share profit or loss of an associate	(0.3)	(0.1)
	Profit before income tax	17.3	10.6
23, 24	Income tax expense	(3.7)	(2.2)
	Profit for the period continuing operations	13.6	8.4
8	Profit/ (Loss) after tax from discontinued operations	5.9	(12.9)
	Profit/ (Loss) for the period	19.5	(4.5)

FINANCIAL STATEMENTS

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131

		Share	Share	Translation	Hedge	Reserve for	Other	Retained	Total
Note	EUR million	capital	premium	reserve	reserve	own shares	reserves	earnings	equity
	Balance as at 1 January 2024	30.6	37.3	4.6	0.3	–	89.3	9.9	172.0
	Total comprehensive income for the period
	Loss for the period	–	–	–	–	–	–	(4.5)	(4.5)
	Other comprehensive income
12	Remeasurements of defined benefit plans	–	–	–	–	–	(0.8)	–	(0.8)
9	Foreign currency translation differences	–	–	(3.4)	–	–	–	–	(3.4)
	for foreign operations
9	Net change in fair value of cash flow hedges,
	net of income tax	–	–	–	(0.5)	–	–	–	(0.5)
	Other comprehensive income for the period,	–	–	(3.4)	(0.5)	–	(0.8)	–	(4.7)
	net of income tax
	Total comprehensive income for the period	–	–	(3.4)	(0.5)	–	(0.8)	(4.5)	(9.2)
	Transactions with owners, recorded
	directly in equity
9	Issue of ordinary shares	0.4	2.5	–	–	–	(0.2)	–	2.7
	Share-based payment transactions	–	–	–	–	–	(0.2)	–	(0.2)
9	Dividends to equity holders	–	(2.7)	–	–	–	(4.1)	–	(6.8)
9	Appropriation of retained earnings	–	–	–	–	–	9.9	(9.9)	–
	Balance as at 31 December 2024	31.0	37.1	1.2	(0.2)	–	93.9	(4.5)	158.5

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FINANCIAL STATEMENTS

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132

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (CONTINUED)
		Share	Share	Translation	Hedge	Reserve for	Other	Retained	Total
Note	EUR million	capital	premium	reserve	reserve	own shares	reserves	earnings	equity
	Balance as at 1 January 2025	31.0	37.1	1.2	(0.2)	–	93.9	(4.5)	158.5
	Total comprehensive income for the period
	Profit for the period	–	–	–	–	–	–	19.5	19.5
	Other comprehensive income
12	Remeasurements of defined benefit plans	–	–	–	–	–	0.0	–	0.0
9	Foreign currency translation differences
	for foreign operations	–	–	(2.7)	–	–	–	–	(2.7)
9	Net change in fair value of cash flow hedges,
	net of income tax	–	–	–	0.1	–	–	–	0.1
	Other comprehensive income for the period,	–	−	(2.7)	0.1	−	0.0	−	(2.6)
	net of income tax
	Total comprehensive income for the period	–	–	(2.7)	0.1	–	0.0	19.5	16.9
	Transactions with owners, recorded
	directly in equity
9	Issue of ordinary shares	0.6	2.5	–	–	–	(0.1)	–	3.0
9	Own shares repurchased	–	–	–	–	(2.5)	–	–	(2.5)
	Share-based payment transactions	–	–	–	–	–	0.3	–	0.3
9	Dividends to equity holders	–	(3.1)	–	–	–	(19.7)	–	(22.8)
9	Appropriation of retained earnings	–	–	–	–	–	(4.5)	4.5	-
	Balance as at 31 December 2025	31.6	36.5	(1.5)	(0.1)	(2.5)	69.9	19.5	153.4

FINANCIAL STATEMENTS

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133

	FLOWS A
Note	EUR million	2025	2024	Note	EUR million	2025	2024
	Cash flows from operating activities				Cash flows from investing activities
	Profit/ (Loss) for the period	19.5	(4.5)	8	Sale of subsidiaries, net of cash	64.5	52.5
	Adjustments for:			1	Purchase of property, plant and equipment	(6.2)	(17.6)
22	Net finance costs	5.3	8.9	1	Disposal of property, plant and equipment	1.0	0.2
	Share profit or loss of an associate	0.3	0.1	2	Purchase of intangible fixed assets	(4.1)	(6.0)
8	Result on sale of subsidiaries before tax, non cash	(4.0)	(1.7)	2	Disposal of intangible fixed assets	−	0.2
23	Income tax expense	4.7	0.8	3	Investments in other investments	(1.7)	(3.5)
1, 2	Depreciation of property, plant and equipment and				Net cash from investing activities	53.5	25.8
	software	15.3	18.2
2	Amortization of other intangible assets	2.3	3.2		Cash flows from financing activities
1, 2	Impairments of fixed assets	0.2	6.2	11	Payments of lease liabilities	(2.4)	(3.0)
	Share-based payments	0.1	(0.0)	11	Repayments of borrowings	(56.4)	(51.7)
	Cash flows used in operations before changes			11	Proceeds from borrowings	20.0	7.7
	in working capital	43.7	31.2	9	Own shares repurchased	(2.5)	−
				9	Dividends paid	(19.7)	(4.2)
	Change in trade and other receivables	(2.5)	(20.9)		Net cash from financing activities	(61.0)	(51.2)
	Change in inventories	3.7	3.2
	Change in trade and other payables	(0.0)	11.3		Change in cash and cash equivalents	22.9	(6.9)
	Change in provisions	(5.1)	5.0
	Cash flows used in operations	39.8	29.8	7	Cash and cash equivalents as at 1 January	6.8	13.5
					Effect of exchange rate fluctuations on cash held	(0.3)	0.2
	Interest paid	(4.8)	(8.4)	7	Cash and cash equivalents as at 31 December	29.4	6.8
	Interest received	0.1	0.3
	Tax paid	(4.7)	(3.2)
	Net cash flows from operating activities	30.4	18.5

The statement of cash flows includes the cash flows of discontinued operations. The notes of the

Consolidated financial statements referred to include information excluding discontinued operations.

The total net cash flows from discontinued operations have been disclosed in note 8.

FINANCIAL STATEMENTS

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134

Reporting entity

Kendrion N.V. (the ‘Company’) is domiciled in the Netherlands. The Company’s registered office is at Herikerbergweg 213, 1101 CN Amsterdam.

The consolidated financial statements of the Company as at and for the year ended 31 December 2025 comprise the Company and its subsidiaries

(together also referred to as the ‘Group’). The Group is involved in the design and manufacture of advanced actuators and control systems for a wide

range of industrial applications, including wind energy, robotics, medical devices, factory automation, energy distribution and industrial heating

processes. These solutions enhance efficiency, precision and performance in complex industrial environments.

Basis of preparation

Statement of compliance

The consolidated financial statements as of 31 December 2025 have been prepared in accordance with International Financial Reporting Standards

(IFRS Accounting Standards) and IFRS IC interpretations (IFRIC), published by the International Accounting Standards Board (IASB) as adopted by

the European Union (hereinafter referred to as EU-IFRS) and in accordance with the legal requirements of Part 9, Book 2 of the Dutch Civil Code.

The Company financial statements are integrated part of the 2025 financial statements of Kendrion N.V.

The financial statements were authorized for issue by the Executive Board on 27 February 2026.

Basis of measurement

The financial statements are presented in millions of euros, the euro also being the Company’s functional currency.

The financial statements have been prepared on a historical cost basis except that:

■ derivative financial instruments are stated at fair value;

■ the defined benefit liability is recognized as net total of plan assets and present value of the defined benefit obligations.

The Executive Board had, at the time of approving the financial statements, a reasonable expectation that the Group have adequate resources to

continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the financial

statements.

The methods used to measure the fair values are disclosed in note r. In preparing these consolidated financial statements, the Executive Board has

made judgements and estimates that affect the application of the Group’s accounting policies and the reported amounts of assets, liabilities, income

and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to

estimates are recognized prospectively.

Executive Board made critical judgements in the process of applying Group’s accounting policies and have the most significant effect on the amounts

recognized in the consolidated financial statements, see notes:

■ note 2 – determination of groups of CGUs for goodwill impairment testing;

■ note 5 – selection of valuation method for inventories.

(a)

(b)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FINANCIAL STATEMENTS

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135

In preparing these consolidated financial statements, the Executive Board has made judgements and estimates that affect the application of the Group’s

accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and

underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognized prospectively.

■ note 8 – Assets classified as held for sale and discontinued operations.

Executive Board made estimations concerning the future, and other key sources of estimation uncertainty at the end of the reporting period,

that may have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.

■ note 2 – management forecast and growth rate of each cash-generating unit to determine whether goodwill is impaired;

■ note 2 – management forecast of cashflows to determine whether customer relations are impaired;

■ note 4 – management forecast of profit before tax for utilisation of tax losses;

■ note 4 – outcome of tax audits;

■ note 5 – valuation of inventories;

■ note 6 – valuation of customer claims and other receivables;

■ note 12 – valuation of defined benefit obligations;

■ note 13 – provisions;

■ note 16 – leases.

Due to the impact on climate change supported by various legislative initiatives, the automotive industry is transitioning from combustion engine vehicles

to electric and hybrid vehicles, which impacts the Groups Automotive business. The imminent phase out of existing technologies has impacted the

accounting estimates around the valuation of goodwill. The economic life and valuation of the tangible fixed assets is not impacted by this changed

outlook. On the other hand the transition towards electrification in automotive and the broader energy transition poses opportunities for the Group to

develop new strategically relevant products and secure profitable growth for the future.

Significant accounting policies

The accounting policies set out below have been applied consistently to all periods presented in these consolidated financial statements

and by the entities within the Group.

Basis of consolidation

Business combinations

No business combination occurred in 2025.

Business combinations are accounted for using the acquisition method at the acquisition date, which is the date on which control is transferred

to the Group. Control refers to the authority to govern the financial and operating policies of an entity to obtain benefits from its activities.

When assessing control, the Group takes into consideration potential voting rights that are currently exercisable.

(a)

(i)

FINANCIAL STATEMENTS

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136

The Group measures goodwill at the acquisition date as:

■ the fair value of the consideration transferred; plus

■ the recognized amount of any non-controlling interests in the acquiree; plus

■ if the business combination is realized in stages, the fair value of the pre-existing equity interest in the acquiree; less

■ the net recognized amount (generally fair value) of the identifiable assets acquired and liabilities assumed.

If the excess is negative, a bargain purchase gain is recognized immediately in comprehensive income (hereafter also referred to as ‘profit

or loss’). The consideration transferred does not include amounts relating to the settlement of pre-existing relationships. Such amounts

are generally recognized in profit or loss.

Transactions costs, other than those associated with the issue of debt or equity securities that the Group incurs in connection with a business

combination are expensed as incurred.

Any contingent consideration payable is measured at fair value at the acquisition date. If the contingent consideration is classified as equity, then

it is not remeasured and settlement is accounted for within equity. Otherwise, subsequent changes in the fair value of the contingent consideration

are recognized in profit or loss.

When share-based payment awards (replacement awards) are required to be exchanged for awards held by the acquirees employees (acquirees

awards) and relate to past services, then all or part of the amount of the acquirer’s replacement awards is included when measuring the consideration

transferred in the business combination. This determination is based on the market-based value of the replacement awards as compared to the market-

based value of the acquirees awards and the extent to which the replacement awards relate to past and/or future service .

Subsidiaries

Subsidiaries are entities controlled by the Company. The Company controls an entity if it is exposed to, or has rights to, variable returns from

its involvement with the entity and has the ability to affect those returns through its power over the entity. The financial statements of subsidiaries are

included in the consolidated financial statements from the date that control commences, until the date that control ceases. The shares of third parties

in shareholders’ equity and results are stated separately. The accounting policies of subsidiaries are changed, where necessary, to align them with the

policies adopted by the Company.

Transactions eliminated on consolidation

Intragroup balances and transactions, as well as any unrealized gains and losses or income and expenses arising from intragroup transactions,

are eliminated when preparing the consolidated financial statements .

(ii)

(iii)

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137

Foreign currency

Foreign currency transactions

Transactions expressed in non-euro zone currencies are translated into euros at exchange rates at the date of the transaction. Monetary assets

and liabilities denominated in non-euro zone currencies at the reporting date are translated into euros at the exchange rate at that date.

Non-monetary assets and liabilities denominated in non-euro zone currencies that are measured at historical cost are translated at the exchange rate

at the date of the transaction. Non-monetary assets and liabilities denominated in non-euro zone currencies that are measured at fair value are

translated in euros at the exchange rates when the fair value was determined. Currency differences on foreign currency transactions are recognized

in profit or loss, except loans considered to be part of the net investment, or qualifying cash flow hedges to the extent the hedges are effective.

Translation of foreign currency financial statements

Translation of foreign currency financial statements depends on the functional currency of the company concerned. The closing rate method is applied

if the functional currency of the company is other than the euro. With this method, assets and liabilities of non-euro zone operations, including goodwill

and fair value adjustments arising at the time of acquisition, are translated into euros at exchange rates at the reporting date. The income and expenses

of non-euro zone operations are translated into euros at rates approximating the exchange rates at the date of the transaction. Foreign currency

translation differences are recognized in other comprehensive income and accumulated in the translation reserve, which is a component of equity.

On the partial or complete sale of a foreign operation, the related amount is transferred from the translation reserve to profit or loss.

Foreign exchange gains and losses arising from a monetary item receivable from or payable to a non-euro zone operation, of which the settlement

is neither planned nor likely in the foreseeable future, are considered to form part of a net investment in a non-euro zone operation and are recognized

directly in equity, in the translation reserve.

Property, plant and equipment

Owned assets

Items of property, plant and equipment are measured at cost or assumed cost less accumulated depreciation and accumulated impairment losses

(see accounting policy g). The cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of self-constructed assets

includes the cost of materials, direct labour, the initial estimate, where relevant, of the costs of dismantling and removing the items and reinstating

the site on which they are located, a reasonable proportion of production overheads, and capitalized borrowing costs.

Where parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items of property, plant

and equipment.

Lease

The Group assesses whether a contract is, or contains, a lease, at inception of the contract. The group recognizes a right-of-use asset and a

corresponding lease liability with respect to all lease arrangements in which it is the lessee, except for short-term leases (defined as leases with a lease

term of 12 months or less) and leases of low value assets (such as tablets and personal computers, small items of office furniture and telephones.

(b)

(i)

(ii)

(c)

(i)

(ii)

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138

For these leases, the group recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease unless another

systematic basis is more representative of the time pattern in which economic benefits from the leased assets are consumed.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the

interest rate implicit in the lease or, if that rate cannot be readily determined, the Group’s incremental borrowing rate. Generally, the Group uses its

incremental borrowing rate as the discount rate. The Group determines its incremental borrowing rate by obtaining interest rates from various external

financing sources and makes certain adjustments to reflect the terms of the lease and type of the asset leased.

Lease liability included in the measurement of the lease liability comprise:

■ Fixed lease payments (include in-substance fixed payments), less any lease incentive receivable;

■ Amounts expected to be payable under a residual value guarantee;

■ Exercise price under a purchase option that the Group is reasonably certain to exercise, lease payments in an optional renewal period if the Group

is reasonably certain to exercise an extension option;

■ Payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to terminate the lease.

The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method)

and by reducing the carrying amount to reflect the lease payments made. The Group remeasures the lease liability (and makes a corresponding

adjustment to the related right-of-use asset) whenever:

■ The lease term has changed or there is a significant event or change in circumstances resulting in a change in the assessment of exercise of

a purchase option, in which cases the lease liability is remeasured by discounting the revised lease payment using a revised discount rate;

■ The lease payments change due to changes in an index or rate or a change in expected payment under a guaranteed residual value, in which cases

the lease liability is remeasured by discounting the revised lease payments using an unchanged discount rate;

■ A lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease liability is remeasured

based on the lease term of the modified lease by discounting the revised lease payments using a revised discount rate at the effective date of

the modification.

The right-of-use asset comprise the initial measurement of the corresponding lease liability, lease payments made at or before the commencement date,

less any lease incentives received and any initial direct costs. They are subsequently measured at costs less accumulated depreciation and impairment

losses.

Whenever the group incurs an obligation for costs to dismantle and remove a leased asset, restore the site on which it is located or restore the

underlying asset to the condition required by the terms and conditions of the lease, a provision is recognized and measured under IAS 37. To the extent

that the costs relate to a right-of-use asset, the costs are included in the related right-of-use asset, unless those costs are incurred to produce

inventories.

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139

Right-of-use assets are depreciated over the shorter period of lease term and useful life of the right-of-use asset. If a lease transfers ownership of the

underlying asset or the cost of the right-of-use asset reflects that the group expects to exercise a purchase option, the related right-of-use asset is

depreciated over the useful life of the underlying asset. The depreciation starts at the commencement date of the lease.

The group applies IAS 36 to determine whether a right-of-use asset is impaired and accounts for any identified impairment loss as described in the

‘Property, Plant and Equipment’ policy.

Subsequent costs

The cost of replacing part of an item of property, plant and equipment is recognized in the carrying amount of the item if it is probable that the future

economic benefits embodied within the part will flow to the Group, and its cost can be reliably measured. The carrying amount of the replaced part

is derecognized. The costs of the day-to-day servicing of property, plant and equipment are recognized as an incurred charge in profit or loss.

Depreciation

Depreciation is charged to profit or loss on a straight-line basis over the estimated useful life of each component of property, plant and equipment.

Land is not depreciated.

Leased assets are depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life or the end

of the lease term.

Depreciation methods, useful lives and residual values are reviewed annually.

Recognition of transaction results

Gains and losses on the disposal of property, plant and equipment are accounted for in other operating income/other expenses in the statement

of comprehensive income.

Intangible assets

Goodwill

Goodwill that arises upon acquisition of a subsidiary is included in intangible assets. For the measurement of goodwill at initial recognition, see note a.

Goodwill is carried at cost less any accumulated impairment losses. Goodwill is allocated to cash-generating units and is not amortized but is tested

annually for impairment (see note g).

Negative goodwill arising on an acquisition is recognized directly in profit or loss.

(iii)

(iv)

(v)

(d)

(i)

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140

Research and development

Research and development expenses comprise expenditure on research and development and expenses for customer-specific applications, prototypes

and testing.

Expenditure on research activities undertaken with the prospect of gaining new scientific or technical knowledge and understanding is recognized

in profit or loss as incurred. Development activities involve a plan or design for the production of new or substantially improved products and processes.

Development expenditure is capitalized only if the development costs can be measured reliably, the product or process is technically and commercially

feasible, future economic benefits are probable, and the Group intends to and has sufficient resources to complete the development and to use or sell

the asset. The expenditure capitalized includes the cost of materials, direct labour, overhead costs that are directly attributable to preparing the asset for

its intended use, and capitalized borrowing costs. Other development expenditure is recognized in profit or loss when incurred.

Capitalized development expenditure is measured at cost less accumulated amortization and accumulated impairment losses.

Other intangible assets

Other intangible assets that are acquired by the Group and have finite useful lives are stated at cost less accumulated amortization and accumulated

impairment losses (see note g). Based on the purchase price allocation of acquisitions, intangible assets that are part of the other intangible assets

and relate to, for example, valued customer relations, trade names and technologies are also recognized.

Subsequent expenditure

Subsequent expenditure on capitalized intangible assets is capitalized only if it increases the future economic benefits embodied in the specific

asset to which it relates. All other expenditure is expensed when incurred.

Amortization

Amortization is recognized in profit or loss on a straight-line basis over the estimated useful lives of the intangible assets unless such lives are indefinite.

Goodwill and other intangible assets with an indefinite useful life are systematically tested for impairment at each reporting date. Other intangible assets

are amortized from the date they are available for use. Amortization methods, useful lives and residual values are reviewed at each reporting date and

adjusted if appropriate.

Financial instruments and other investments

Financial instruments

Non-derivative financial instruments

Recognition and initial measurement

Trade receivables are initially recognized when they are originated. All other financial assets and financial liabilities are initially recognized when the Group

becomes a party to the contractual provisions of the instrument. A financial asset (unless it is a trade receivable without a significant financing

component) or financial liability is initially measured at fair value plus, for an item not at Fair value through P&L (‘FVTPL’), transaction costs that are

directly attributable to its acquisition or issue. A trade receivable without a significant financing component is initially measured at the transaction price.

(ii)

(iii)

(iv)

(v)

(e)

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Classification and subsequent measurement

Financial assets are not reclassified subsequent to their initial recognition unless the Group changes its business model for managing financial assets,

in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in the business model.

A financial asset is measured at amortized cost if it meets both of the following conditions and is not designated as at FVTPL:

■ it is held within a business model whose objective is to hold assets to collect contractual cash flows; and

■ its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount

outstanding.

A debt investment is measured at Fair value through OCI (‘FVOCI’) if it meets both of the following conditions and is not designated as at FVTPL:

■ it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and

■ its contractual terms give rise on specified dates to cash flows.

On initial recognition of an equity investment that is not held for trading, the Group may irrevocably elect to present subsequent changes in the

investment’s fair value in OCI. This election is made on an investment-by-investment basis.

All financial assets not classified as measured at amortized cost as described above are measured at FVTPL. This includes all derivative financial assets.

On initial recognition, the Group may irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortized cost or

at FVOCI as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

The Group makes an assessment of the objective of the business model in which a financial asset is held at a portfolio level because this best reflects

the way the business is managed, and information is provided to management. Financial assets that are held for trading or are managed and whose

performance is evaluated on a fair value basis are measured at FVTPL.

Assessment whether contractual cash flows are solely payments of principal and interest

For the purposes of this assessment, ‘principal’ is defined as the fair value of the financial asset on initial recognition. ‘Interest’ is defined as

consideration for the time value of money and for the credit risk associated with the principal amount outstanding during a particular period

of time and for other basic lending risks and costs (e.g. liquidity risk and administrative costs), as well as a profit margin.

In assessing whether the contractual cash flows are solely payments of principal and interest, the Group considers the contractual terms of the

instrument. This includes assessing whether the financial asset contains a contractual term that could change the timing or amount of contractual

cash flows such that it would not meet this condition. In making this assessment, the Group considers:

■ contingent events that would change the amount or timing of cash flows;

■ terms that may adjust the contractual coupon rate, including variable-rate features;

■ prepayment and extension features; and

■ terms that limit the Group’s claim to cash flows from specified assets (e.g. non-recourse features).

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Financial liabilities

Financial liabilities are classified as measured at amortized cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held-for-trading,

it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses,

including any interest expense, are recognized in profit or loss. Other financial liabilities are subsequently measured at amortized cost using the effective

interest method. Interest expense and foreign exchange gains and losses are recognized in profit or loss. Any gain or loss on derecognition is also

recognized in profit or loss.

Derecognition

The Group derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive

the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in

which the Group neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset.

The Group derecognizes a financial liability when its contractual obligations are discharged or cancelled, or expire. The Group also derecognizes a

financial liability when its terms are modified, and the cash flows of the modified liability are substantially different, in which case a new financial liability

based on the modified terms is recognized at fair value. On derecognition of a financial liability, the difference between the carrying amount extinguished

and the consideration paid (including any non-cash assets transferred or liabilities assumed) is recognized in profit or loss .

Offsetting

Financial assets and financial liabilities are offset and the net amount presented in the statement of financial position when, and only when, the Group

currently has a legally enforceable right to set off the amounts, it intends either to settle them on a net basis or to realize the asset and settle the liability

simultaneously and the financial assets and financial liabilities are with the same party.

Other investments

Associates are those entities in which the Group has significant influence, but not control or joint control, over the financial and operating policies.

Interests in associates and the joint venture are accounted for using the equity method. They are initially recognized at cost, which includes transaction

costs. Subsequent to initial recognition, the consolidated financial statements include the Group’s share of the profit or loss and OCI of equity-

accounted investees, until the date on which significant influence or joint control ceases.

Trade and other receivables

Trade and other receivables represent the Group’s right to an amount of consideration that is unconditional. Trade and other receivables are carried

at amortized cost, less impairment losses (see note g). An exception is made for trade receivables of designated customers of a limited number of

subsidiaries of the Group, which are sold to a factoring company, with limited recourse. These trade debtors are measured at fair value through profit

and loss, until they are derecognized at the moment that the invoices are sold to the factoring company.

Recognized interest-bearing loans and borrowings

After initial recognition, interest-bearing loans and borrowings are carried at amortized cost with any difference between the initial carrying amount

and the redemption amount, based on the effective interest method, taken to profit or loss over the respective terms of the loans .

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Trade and other payables

Trade and other payables are carried at amortized cost.

Cash and cash equivalents

Cash and cash equivalents comprise cash and bank balances and other call deposits payable on demand. Bank overdrafts that are repayable on

demand and form an integral part of the Group’s cash management, are included as a component of cash and cash equivalents in the statement

of cash flows. Cash and cash equivalents are measured at amortized cost.

Other non-derivative financial instruments

Other non-derivative financial instruments are measured at amortized cost using the effective interest method, less any impairment losses.

Derivative financial instruments, including hedge accounting

The Group holds derivative financial instruments to hedge its foreign currency and interest rate exposures. Embedded derivatives are separated from

the host contract and accounted for separately if the host contract is not a financial asset and certain criteria are met. As at 31 December 2025,

no embedded derivatives existed.

Derivatives are initially measured at fair value, with attributable transaction costs recognized in the statement of comprehensive income when they

are incurred. Subsequent to initial recognition, derivatives are carried at fair value. Any changes are taken to profit or loss.

The Group designates certain derivatives as hedging instruments to hedge the variability in cash flows associated with highly probable forecast

transactions arising from changes in foreign exchange rates and interest rates and certain derivatives and non-derivative financial liabilities as hedges

of foreign exchange risk on a net investment in a foreign operation. At inception of designated hedging relationships, the Group documents the risk

management objective and strategy for undertaking the hedge. The Group also documents the economic relationship between the hedged item and

the hedging instrument, including whether the changes in cash flows of the hedged item and hedging instrument are expected to offset each other.

Changes in the fair value of a derivative hedging instrument designated as a cash flow hedge are recognized in other comprehensive income and

presented in the hedging reserve.

The effective portion of changes in the fair value of the derivative that is recognized in OCI is limited to the cumulative change in fair value of the hedged

item, determined on a present value basis, from inception of the hedge. Any ineffective portion of changes in the fair value of the derivative is recognized

immediately in profit or loss. The Group designates only the change in fair value of the spot element of forward exchange contracts as the hedging

instrument in cash flow hedging relationships. The change in fair value of the forward element of forward exchange contracts (‘forward points’) is

separately accounted for as a cost of hedging.

When the hedged forecast transaction subsequently results in the recognition of a non-financial item such as inventory, the amount accumulated in

the hedging reserve and the cost of hedging reserve is included directly in the initial cost of the non-financial item when it is recognized.

For all other hedged forecast transactions, the amount accumulated in the hedging reserve and the cost of hedging reserve is reclassified to profit or

loss in the same period or periods during which the hedged expected future cash flows affect profit or loss.

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If the hedge no longer meets the criteria for hedge accounting or the hedging instrument is sold, expires, is terminated or is exercised, then hedge

accounting is discontinued prospectively. When hedge accounting for cash flow hedges is discontinued, the amount that has been accumulated in the

hedging reserve remains in equity until, for a hedge of a transaction resulting in the recognition of a non-financial item, it is included in the non-financial

item’s cost on its initial recognition or, for other cash flow hedges, it is reclassified to profit or loss in the same period or periods as the hedged expected

future cash flows affect profit or loss.

If the hedged future cash flows are no longer expected to occur, then the amounts that have been accumulated in the hedging reserve and the cost

of hedging reserve are immediately reclassified to profit or loss.

Inventories

Inventories are measured at the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of

business, less the estimated costs of completion and the estimated costs to sell. The cost of inventories of the Group is based on the weighted

average cost, and includes expenditure incurred in acquiring the inventories, production or conversion costs, and other costs incurred in bringing

them to their current location and condition. The cost of inventories includes an appropriate share of overheads based on normal operating capacity.

Impairment

Financial assets

The Group recognizes impairments for financial assets based on the ‘expected credit loss’ model. The Group measures loss allowances at an amount

equal to the lifetime expected credit losses.

Expected credit losses are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls,

being the difference between the cash flows due to the entity in accordance to the contract and the cash flows that the Group expects to receive.

The Group makes use of the simplified method for trade receivables and contracts assets as set out in IFRS 9.

The expected credit losses for significant financial assets are determined on an individual basis. The remaining financial assets are assessed collectively

in groups of assets that have similar credit risk characteristics.

All impairment losses are recognized in the consolidated statement of comprehensive income.

An impairment loss is reversed if the reversal can be related objectively to an event occurring after the impairment loss was recognized.

For financial assets measured at amortized cost, the reversal is recognized in profit or loss.

Non-financial assets

The carrying amounts of the Group’s non-financial assets, other than inventories and deferred tax assets, are reviewed at each reporting date

to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated.

For goodwill and intangible assets that have indefinite lives or that are not yet available for use, the recoverable amount is estimated at each

reporting date.

(f)

(g)

(i)

(ii)

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145

The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use,

the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time

value of money and the risks specific to the asset. For the purpose of impairment testing, assets are grouped together into the smallest group of assets

that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the ‘cash-

generating unit’). For the purpose of impairment testing, the goodwill acquired in a business combination is allocated to cash-generating units that are

expected to benefit from the synergies of the combination.

An impairment loss is recognized if the carrying amount of an asset or its cash-generating unit exceeds its estimated recoverable amount. Impairment

losses are recognized in profit or loss. Impairment losses recognized in respect of cash-generating units are first allocated to reduce the carrying amount

of any goodwill allocated to the units and then to reduce the carrying amount of the other assets in the unit (group of units) on a pro rata basis.

Reversal of impairment losses

Impairment losses in respect of goodwill are not reversed. Impairment losses in respect of other assets are reversed if there has been a change in

the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not

exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.

Reversals of impairment losses are recognized in profit or loss .

Calculation of recoverable amount

The recoverable amount of the Group’s receivables carried at amortized cost is calculated as the present value of estimated future cash flows,

discounted at the original effective interest rate (i.e. the effective interest rate computed on initial recognition of these financial assets). Receivables

with a short remaining term are not discounted . The recoverable amount of other assets is the greater of their net selling price and value in use .

In determining value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current

market assessments of the time value of money and the risks specific to the asset. For an asset that does not generate largely independent cash

inflows, the recoverable amount is determined for the cash-generating unit to which the asset belongs.

Share capital

Ordinary shares

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares are recognized as a deduction

from equity, net of any tax effect.

Repurchase, disposal and reissue of share capital (treasury shares)

When own shares recognized as equity are repurchased, the amount of the consideration paid, including directly attributable costs and net of any tax

effects, is recognized as a deduction from equity. Repurchased shares are presented in the reserve for own shares as a deduction from total equity. If

treasury shares are sold or reissued subsequently, the amount received is recognized as an increase in equity, and the resulting surplus or deficit on the

transaction is transferred respectively to or from other reserves.

(iii)

(iv)

(h)

(i)

(ii)

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146

Dividends

The holders of ordinary shares are entitled to receive dividends as determined from time to time by the General Meeting of Shareholders.

The Executive Board has the authority to decide, with the approval of the Supervisory Board, what portion of the profit will be allocated to the reserves.

If applicable, the declared but unpaid dividends are recognized as a liability.

Employee benefits

Defined contribution plans

A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and will have

no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution pension plans are recognized

as an employee benefit expense in profit or loss when incurred. Prepaid contributions are recognized as an asset to the extent that a cash refund

or reduction in future payments will occur.

Defined benefit plans

A defined benefit plan is a post-employment benefit plan other than a defined contribution plan. The Group’s net obligation in respect of defined benefit

plans is calculated separately for each plan by estimating the amount of future benefit that employees have earned in return for their service in the

current and prior periods; that benefit is discounted to determine its present value. The fair value of any plan assets is deducted. The Group determines

the net interest expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate used to measure the defined

benefit obligation at the beginning of the annual period to the net defined benefit liability (asset). The discount rate is the yield at the reporting date

on Corporate bonds that have maturity dates approximating the terms of the Group’s obligations and that are denominated in the same currency

in which the benefits are expected to be paid.

The calculation is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a benefit to the

Group, the recognized asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions

in future contributions to the plan. In order to calculate the present value of economic benefits, consideration is given to any minimum funding

requirements that apply to any plan in the Group. An economic benefit is available to the Group if it is realisable during the life of the plan, or on

settlement of the plan liabilities.

Remeasurements arising from defined benefit plans comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect

of the asset ceiling (if any, excluding interest). The Group recognizes them immediately in other comprehensive income, and all other expenses related

to defined benefit plans as employee benefit expenses in profit or loss. When the benefits of a plan are changed, or when a plan is curtailed, the portion

of the changed benefit relating to past service by employees, or the gain or loss on curtailment, is recognized immediately in profit or loss when the plan

amendment or curtailment occurs. The Group recognizes gains and losses on the settlement of a defined benefit plan when the settlement occurs.

The gain or loss on a settlement is the difference between the present value of the defined benefit obligation being settled as determined on the

date of settlement and the settlement price, including any plan assets transferred and any payments made directly by the Group in connection with

the settlement.

(iii)

(i)

(ii)

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147

Other long-term service benefits

The Group’s net obligation in respect of long-term service benefits other than pension plans is the amount of future benefit that employees have earned

in return for their service in the current and prior periods. The obligation is calculated using the projected unit credit method, discounted to its present

value and net of the fair value of any related assets. The discount rate is the yield at the financial position date on corporate bonds that have maturity

dates approximating the terms of the Group’s obligations. Any actuarial gains and losses are recognized in profit or loss in the period in which they arise.

Share-based payment transactions

As only equity settled share-based payments are applicable only the accounting policy for these transactions has been included.

The fair value on the grant date of share-based payment awards made to employees and the Executive Board is recognized as an employee expense,

with a corresponding increase in equity, over the period that the employees unconditionally become entitled to the awards. The amount recognized

as an expense is adjusted to reflect the number of awards for which the related service and non-market vesting conditions are expected to be met,

so that the amount ultimately recognized as an expense is based on the number of awards that meet the related service and non-market performance

conditions at the vesting date. For share-based payment awards with non-vesting conditions, the fair value on the grant date of the share-based

payment is measured to reflect such conditions, with no true-up for differences between expected and actual outcomes.

Short-term employee benefits

A liability is recognized for the amount expected to be paid if the Group has a present legal or constructive obligation to pay this amount as a result

of past service provided by the employee and the obligation can be estimated reliably. Short-term employee benefits are expensed as the related

service is provided.

Termination benefits

Termination benefits are expensed at the earlier of when the Group can no longer withdraw the offer of those benefits and when the Group recognized

costs for a restructuring. If benefits are not expected to be settled wholly within 12 months of the reporting date, then they are discounted.

Provisions

A provision is recognized in the statement of financial position if the Group has a present legal or constructive obligation as a result of a past event,

that can be estimated reliably and it is probable that settlement of the obligation will involve an outflow of funds. If the effect is material, provisions are

determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and,

where appropriate, the risks specific to the liability. The unwinding of the discount is recognized as finance cost.

Restructuring provisions

A provision for restructuring is recognized when the Group has approved a detailed and formal restructuring plan, and the restructuring either has

commenced or has been announced publicly. Future operating losses are not provided for.

(iii)

(iv)

(v)

(vi)

(j)

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Assets classified as held for sale and discontinued operations

Assets classified as held for sale are measured at the lower of carrying amount and fair value less costs to sell.

Assets are classified as held for sale if their carrying amount will be recovered through a sale transaction rather than through continuing use.

This condition is regarded as met only when the sale is highly probable and the asset (or disposal group) is available for immediate sale in its present

condition. Management must be committed to the sale which should be expected to qualify for recognition as a completed sale within one year from

the date of classification.

Discontinued operations, which are described in note 8, are excluded from the results of continuing operations and are presented as a single amount

as profit or loss after tax from discontinued operations in the statement of profit or loss. Additional disclosures are provided in note 8. All other notes to

the Consolidated statement of profit and loss and other comprehensive income include amounts for continuing operations, unless indicated otherwise .

Revenue

Revenue from contracts with customers

Revenue from contracts with customers is recognized when control of the goods or services are transferred to the customer at an amount that reflects

the consideration (net of discounts, rebates, returns and excluding VAT) to which the Group expects to be entitled in exchange for those goods or

services. The Group has generally concluded that it is the principal in its revenue arrangements because it typically controls the goods or services before

transferring them to the customer.

Sale of goods

Revenue from sale of goods is recognized at the point in time when control of the asset is transferred to the customer, generally on delivery

of the goods. The normal credit term is 15 up to 90 days upon delivery.

The Group considers whether there are other promises in the contract that are separate performance obligations to which a portion of the

transaction price needs to be allocated (e.g. warranties). In determining the transaction price for the sale of equipment, the Group considers

the effects of variable consideration (e.g. early payment discount, volume rebates), the existence of significant financing components, noncash

consideration, and consideration payable to the customer (if any).

If the consideration in a contract includes a variable amount, the Group estimates the amount of consideration to which it will be entitled in exchange

for transferring the goods to the customer. The variable consideration is estimated at contract inception and constrained until it is highly probable

that a significant revenue reversal in the amount of cumulative revenue recognized will not occur when the associated uncertainty with the variable

consideration is subsequently resolved. Some contracts for the sale of goods provide customers with a right of return and or volume rebates and

or early payment discount. These conditions might give rise to variable consideration.

(k)

(l)

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149

Certain contracts provide a customer the right to apply an early payment discount when the consideration to which the Group is entitled is transferred

to the Group before the contractual agreed credit terms. Those rebates are offset against amounts payable by the customer. To estimate the variable

consideration for the expected future early payment rebates, the Group applies the most likely amount method for contracts with a single-volume

threshold and the expected value method for contracts with more than one volume threshold. The selected method that best predicts the amount

of variable consideration is primarily driven by the payment behavior in the past and or any agreement with the customer when the consideration

will be transferred.

The related costs are recognized in profit or loss when they are incurred. Advances received are included in contract liabilities.

Services

Apart from sales of goods the Group provides limited services such as repairs and engineering/development services. Revenues from services

are recognized in proportion to the services rendered, based on the cost incurred in respect of the services performed up to balance sheet date,

in proportion to the estimated costs of the aggregate services to be performed. The cost price of these services is allocated to the same period.

Contract assets

The Group recognizes incremental costs of obtaining a contract and certain costs to fulfil a contract as an asset if the Group expects to recover those

costs. Any capitalized contract costs assets will be amortized on a systematic basis that is consistent with the entity’s transfer of the related goods

or services to the customer.

Contract liabilities

A contract liability is the obligation to transfer goods or services to a customer for which the Group has received consideration (or an amount of

consideration is due) from the customer. If a customer pays consideration before the Group transfers goods or services to the customer, a contract

liability is recognized when the payment is made, or the payment is due (whichever is earlier). Contract liabilities are recognized as revenue when

the Group performs under the contract.

Expenses

Lease expenses – short-term leases and leases of low-value assets

The Group has elected not to recognize right-of-use assets and lease liabilities for short-term leases of machinery that have a lease terms of

12 months or less and lease of low-value assets. Individual lease assets with a new value of EUR 5,000 or less (or any other foreign currency equivalent)

are considered to be low value assets. The Group recognizes the lease payments associated with these leases as an expense on straight-line basis

over the lease term.

(m)

(i)

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Net finance costs

Finance income comprises interest income on funds invested, and financial assets held to maturity. Interest income is recognized in profit or loss

as it accrues, using the effective interest method.

Finance expense comprises interest expense on borrowings, commitment fees, accrued interest on provisions, interest on pension liabilities, impairment

losses recognized on financial assets and losses on interest rate hedge instruments to the extent they are recognized in profit or loss. All borrowing

costs are recognized in profit or loss using the effective interest method.

Realized and unrealized foreign currency gains and losses on monetary assets and liabilities, including changes in fair value of currency hedge

instruments that are not qualified as cash flow hedges, are reported on a net basis .

Income tax

Income tax for the year comprises current and deferred tax. Income tax is recognized in profit or loss unless it relates to items recognized directly in

equity, in which case it is recognized in equity. The Group has determined that interest and penalties related to income taxes, including uncertain tax

treatments, do not meet the definition of income taxes, and therefore accounted for them under IAS 37 Provisions, Contingent Liabilities and Contingent

Assets.

Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or

receivable in respect of previous years. The amount of current tax payable or receivable is the best estimate of the tax amount expected to be paid or

received that reflects uncertainty related to income taxes, if any. It is measured using tax rates enacted or substantively enacted at the reporting date.

Current tax also includes any tax arising from dividends.

Current tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when

they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.

Deferred tax is recognized using the balance sheet method, providing for temporary differences between the carrying amounts of assets and liabilities

for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognized for the following temporary differences:

■ a transaction that is not a business combination, at the time of the transaction, affects neither accounting nor taxable profit and, at the time of the

transaction, does not give rise to equal taxable and deductible temporary differences;

■ relating to investments in subsidiaries and jointly controlled entities to the extent that it is probable that they will not be reversed in the foreseeable

future;

■ arising on the initial recognition of goodwill.

Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, using tax rates enacted

or substantively enacted at the reporting date, and reflects uncertainty related to income taxes, if any.

Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax assets and liabilities, and they relate to income taxes

levied by the same tax authority on the same taxable entity; or on different tax entities, but the intention is to settle current tax liabilities and assets on

a net basis or their tax assets and liabilities will be realized simultaneously.

(ii)

(n)

FINANCIAL STATEMENTS

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A deferred tax asset is recognized to the extent that it is probable that future taxable profits will be available against which the asset can be applied.

Deferred tax assets are reduced if it is no longer probable that the related tax benefit will be realized.

Additional income taxes that arise from the distribution of a dividend are recognized at the same time as the liability to pay the related dividend

is recognized.

Uncertain tax items for which a provision is made relate principally to the interpretation of tax legislation regarding arrangements entered into by the

Group. Due to the uncertainty associated with such tax items, there is a possibility that, on conclusion of open tax matters at a future date, the final

outcome may differ significantly.

Earnings per share

The Company presents basic and diluted earnings per share data for its ordinary shares. Basic earnings per share is calculated by dividing the profit or

loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the reporting period.

Diluted earnings per share is determined by adjusting profit or loss attributable to ordinary shareholders and the weighted average number of ordinary

shares outstanding, for the effects of all dilutive potential ordinary shares.

Segment reporting

The Group defines and presents operating segments based on the information that is provided internally to the Executive Board, the Group’s chief

operating decision-maker. This is in conformity with IFRS 8 – Operating segments.

On the basis of the criteria of IFRS 8, Kendrion has three operating segments, the business groups Industrial Brakes and Industrial Actuators and

Controls, and Mobility. An operating segment is a part of the Group engaging in business activities that may result in revenue and expenses, including

the revenue and expenses relating to transactions with any of the Group’s other segments. The Executive Board conducts regular reviews of the

operating segment’s results to reach decisions on the resources to be allocated to the segment and to assess its performance, whereby separate

financial information for each operating segment is available.

In accordance with IFRS 8, the Company also discloses general and entity-wide information, including information about geographical areas and major

customers of the Group as a whole. More information on the reportable segments is provided in note 19.

New standards and interpretations

The following amendment to standards became effective, and have been endorsed by the European Union, for annual periods beginning on or after 1

January 2025 and therefore apply to the year ended 31 December 2025:

■ Amendments to IAS 21 - Lack of exchangeability

This amendment does not have a significant impact on the Group’s consolidated financial statements.

The following standards or interpretations published by the International Accounting Standards Board (IASB) and the International Financial Reporting

Interpretations Committee (IFRIC) are not effective at 31 December 2025:

(o)

(p)

(q)

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152

■ IFRS 18 - Presentation and disclosure in financial statements;

■ IFRS 19 - Subsidiaries without Public Accountability;

■ Amendments to IFRS 9 and IFRS 7- Classification and Measurement of Financial Instruments;

■ Amendments to IFRS 10 and IAS 28 - Sale or Contribution of Assets between an Investor and its Associate or Joint Venture.

■ Amendments to IAS 21 - Translation to a Hyperinflationary Presentation Currency

The new standards and amendments to standards that are not yet effective are expected to have no significant impact on the Group’s consolidated

financial statements, except for IFRS 18. This standard provides additional requirements for the classification of the income statement as well as

additional disclosure requirements for management-defined performance measures. The classification of the income statement will be amended in

2027. The Company is currently in the process of assessing the impact.

Fair values

Measurement of fair value

Several of the Group’s accounting policies, as well as the information supplied by the Group, require the fair value of both financial and non-financial

assets and liabilities to be determined. For valuation and information supplied, the fair value is measured using the methods below. Where applicable,

more detailed information on the basis of the fair value measurement is disclosed in the specific notes on the asset or liability in question. The principal

methods and assumptions used in estimating the fair value of financial instruments included in the summary are given below.

Property, plant and equipment

The fair value of property, plant and equipment recognized as a result of a business combination is based on market value in use. The market value of

property is the estimated amount for which the property in question could be exchanged on the valuation date between a buyer and seller in an arm’s

length transaction, in which both parties have acted knowledgeably, prudently and without compulsion. The market value of other items of property,

plant and equipment is based on the quoted market prices of comparable assets and goods.

Intangible assets

The fair value of patents and trademarks acquired as part of a business combination is measured on the basis of the discounted estimated royalties that

have been avoided through ownership of the patent or trademark. The fair value of customer relationships acquired in a business combination is based

on the excess earnings method over multiple periods, valuing the asset in question by deducting a real return on all other assets which in total create

the related cash flows. The fair value of other intangible assets is based on the expected discounted value of the cash flows from the use and ultimate

sale of these assets.

Lease liabilities

The fair value is estimated on the basis of the present value of future cash flows, discounted at the interest rate for lease contracts of a similar nature.

The estimated fair value reflects movements in interest rates.

(r)

(i)

(ii)

(iii)

(iv)

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Inventories

The fair value of inventories acquired as part of a business combination is determined on the basis of the estimated selling price as part of normal

business operations, less the estimated costs of completion and the selling costs, plus a reasonable profit margin that reflects the completion and sales

effort.

Trade and other receivables/trade and other payables

The face value of receivables and liabilities falling due within one year is regarded as a reflection of their fair value. The fair value of all other receivables

and liabilities is measured on the basis of present value. The discount factor is based on the risk-free interest rate of the same duration as the receivable

and/or payable, plus a credit mark-up reflecting the credit worthiness of the Group.

Interest-bearing loans

The fair value is calculated on the basis of the present value of future repayments of principal and interest at the prevailing market rate of interest,

supplemented by a credit mark-up reflecting the credit worthiness of the Group.

Derivatives

The fair value of derivatives is based on the present value of the contractual cash flows for the remaining term based on a risk-free interest rate.

Non-derivative financial liabilities

The fair value of non-derivative financial liabilities is determined from information supplied and is based on the present value of future repayments

of principal and interest, discounted at a risk-free rate, and a margin based on the credit worthiness of the Group on the reporting date.

Contingent consideration

The fair value of contingent considerations arising in a business combination is calculated using the income approach based on the expected payment

amounts and their associated probabilities. If appropriate, it is discounted to present value.

Financial risk management

The Group has exposure to the following risks from its use of financial instruments:

■ credit risk;

■ liquidity risk;

■ market risk.

This section provides general information about the Group’s exposure to each of the above risks in the course of its normal business operations,

the Group’s objectives, policies and processes for measuring and managing risk, and the Group’s management of capital. Further quantitative

disclosures are included in the financial instrument section in these consolidated financial statements.

The Executive Board bears the ultimate responsibility for the organization and control of the Group’s risk management framework. The Group’s risk

policy is designed to identify and analyse the risks confronting the Group, implement appropriate risk limits and control measures, and monitor the risks

and compliance with the limits. The risk management policy and systems are evaluated at regular intervals and, if necessary, adapted to accommodate

changes in market conditions and the Group’s operations.

(v)

(vi)

(vii)

(viii)

(ix)

(x)

(s)

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The Company’s Supervisory Board supervises compliance with the Group’s risk management policy and procedures.

For a more detailed description of risk management and the position of financial risk management in the Group’s framework, see the ‘‘Risk

Management’’ section on page 31.

Credit risk

Credit risk is the risk of financial loss to the Group in the event that a customer or counterparty to a financial instrument fails to meet its contractual

obligations. Credit risks arise primarily from accounts receivable, derivative transactions concluded with banks, and cash positions and deposits held

with banks. The Group continually monitors the credit risk within the Group. The Group does not normally require collateral for trade and other

receivables or financial assets.

The credit policy includes an assessment of the creditworthiness of every new major customer before offering payment and delivery terms.

This assessment includes external credit ratings or reports if they are available. The creditworthiness of major customers is actively monitored

on an ongoing basis.

The Group recognizes impairment provisions of an amount equal to the estimated losses on trade and other receivables and other investments.

The main component of this provision comprises specific provisions for losses on individual accounts of material significance.

Credit concentration risk

The geographical credit risk from the Group’s direct customers is largely concentrated in Germany. However, as the Group’s most important customers

in the various segments of the German market are multinational or global players, this reduces the Group’s dependency on the German market.

More details on credit concentration risk can be found in note 15.

Investments and financial instruments

The Group currently does not invest in debt securities. Cash positions and exposure to the financial instruments of financial counterparties are

monitored actively. The Group’s main financial counterparties are well-established banks with good creditworthiness. The cash in bank accounts

at other than the core-relationship banks is maintained at the minimum level required for the operations of the Group’s companies.

Liquidity risk

The liquidity risk is the risk that the Group is unable to meet its financial obligations at the required time. Liquidity risk management is based on the

maintenance of sufficient liquidity in the form of unused (committed) credit facilities or cash to meet present and future financial obligations in normal

and adverse circumstances.

A summary of the credit lines available to the Group is disclosed in note 11 of these consolidated financial statements. The majority of the available

facilities are provided by a syndicate of lenders consisting of HSBC and ING Bank on an equal basis. The Group had approximately EUR 109 million

available in cash and undrawn facilities on the financial position date.

(i)

(ii)

(iii)

(iv)

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Market risk

The market risk is the risk of the deterioration of the Group’s income due to movements in market prices, such as those relating to exchange rates

and interest rates. The management of market risk exposure is intended to keep the market risk position within acceptable limits.

Derivatives are used to manage specific market risks. These transactions are carried out within the treasury framework adopted by the Executive Board.

If necessary, the Group uses hedge accounting to manage volatility in the statement of comprehensive income.

Interest rate risk

Pursuant to the Group’s policy more than 50% of the exposure to changes in interest rates on borrowings is maintained on a fixed rate basis, taking into

account any assets with exposure to changes in interest rates and expected short-term free cash flows. The policy is implemented by making use of

derivative financial instruments such as interest rate swaps and interest rate options.

The Group has currently outstanding interest swap contracts with a total underlying notional value of EUR 50 million in order to reduce interest rate risk

exposure to increasing market rates. EUR 25 million matures in 2026 and EUR 25 million in 2027.

Currency risk

The Group is exposed to exchange rate risks on sales, purchases, equity positions and loans expressed in currencies other than the euro. The Group

companies are primarily financed in their own currency. The majority of the revenues and costs of the Group companies are realized in the euro zone.

Sales outside the euro zone are partly generated locally and partly through exports from the euro zone. Most of these exports are realized in euros.

Other currencies are actively monitored and where needed exposure is hedged, however less structural exposure is identified.

The Group also actively hedges intercompany loans in foreign currencies with currency forwards, swaps or back-to-back loans in the same foreign

currency.

Pursuant to the Group’s policy for other monetary assets and liabilities denominated in a foreign currency, net exposure is maintained at an acceptable

level by buying or selling foreign currencies at spot rates as required to correct short-term imbalances.

The Group’s policy stipulates that, in principle, equity investments and other translation exposures are not hedged.

Other price risks

Steel, copper and rare earth metals used in permanent magnets are the most important commodities for the Group.

Copper constitutes the Group’s main direct exposure to raw material price risks, since copper wire is an important component of electromagnets.

Pursuant to the Group’s policy, the sensitivity to copper prices is actively reduced both by concluding fixed-price purchase contracts in the normal

course of business with copper wire suppliers and by including raw material clauses in sales contracts. As the need arises the Group can also conclude

derivative financial instrument contracts with financial counterparties to hedge the copper risk. No financial derivative contracts for raw materials were

outstanding at the balance sheet date.

(v)

(vi)

(vii)

(viii)

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The Group is also exposed to risks associated with rare earth metals such as neodymium, a component of permanent magnets, which are used

in some of the Group’s products. Prices of these commodities have shown significant volatility in the past. The Group closely monitors developments

in this market and has increased stock levels and the number of supply sources for these permanent magnets.

Furthermore, agreements have been made with customers representing the majority of the sales volume in this context, to link sales prices

to movements in permanent magnet prices.

The Group is mainly indirectly exposed to raw material price risks relating to oil and steel, primarily as part of the purchase prices of machined

components. This exposure is monitored and, if feasible, reduced by means of raw material clauses with customers and by concluding fixed-price

agreements with suppliers for periods of between six and twelve months. The Kendrion steel contracts also partly govern the purchasing from

component suppliers.

Raw materials are purchased separately by each business unit, but in accordance with the group policy reviewed periodically with the objective

of further increasing and sharing knowledge on commodities and commodity markets between business units, reducing risks and/or prices.

Capital management

The Executive Board’s policy is designed to maintain a strong capital gearing to retain the confidence of investors, creditors and the markets,

and to safeguard the future development of the business activities. The Executive Board monitors the return on equity, which the Group defines

as the net operating result divided by shareholders’ equity, excluding minority interests. The Executive Board also monitors the level of dividend

distributed to ordinary shareholders.

The Executive Board seeks to strike a balance between a higher return that would be achievable with a higher level of borrowed capital and

the benefits and security of sound capital gearing.

Kendrion intends to distribute an annual dividend of at least 50% of normalized net profit before amortization, taking into consideration the amount of

net profit to be retained to support the medium and long-term strategic plans of the company and to maintain a minimum solvency of 35%.

Neither the Company nor its subsidiaries are subject to any externally imposed capital requirements beyond those stipulated by law.

Government Grants

Grants that compensate the Group for expenses incurred are recognized in profit or loss as deduction on the related expense on a systematic basis

in the periods in which the expenses are recognized, unless the conditions for receiving the grant are met after the related expenses have been

recognized. In this case, the grant is recognized when it becomes receivable.

(ix)

(t)

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Property, plant and equipment

EUR million	2025	2024
Property plant and equipment owned	46.6	89.0
Property plant and equipment right-of-use assets	5.8	7.0
Total	52.4	96.0

Property, plant and equipment owned	Land and	Plant and	Other fixed	Under
EUR million	buildings	equipment	assets	construction	Total
Balance as at 1 January 2024
Costs	95.7	181.6	74.6	15.9	367.8
Accumulated depreciation and impairment losses	(39.9)	(141.7)	(59.8)	(4.4)	(245.8)
Carrying amount as at 1 January 2024	55.8	39.9	14.8	11.5	122.0
Purchases	0.3	2.0	2.6	4.8	9.7
Disposals	(0.0)	(0.0)	(0.0)	(0.0)	(0.0)
Transfers	0.0	6.0	0.7	(6.7)	–
Currency translation differences	0.9	0.2	0.1	0.2	1.4
Divestments cost value A	(8.7)	(129.9)	(20.5)	(0.9)	(160.0)
Depreciation for the year	(3.1)	(6.6)	(3.6)	(0.1)	(13.4)
Impairments	–	–	(0.0)	(0.1)	(0.1)
Divestments accumulated amortization and impairment losses A	0.7	110.4	18.3	0.0	129.4
Carrying amount as at 31 December 2024	45.9	22.0	12.4	8.7	89.0
Costs	88.2	59.9	57.5	13.3	218.9
Accumulated depreciation and impairment losses	(42.3)	(37.9)	(45.1)	(4.6)	(129.9)
Carrying amount as at 31 December 2024	45.9	22.0	12.4	8.7	89.0

Refer to note 8 Assets held for sale and discontinued operations for more information on the divestment .

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158

Property, plant and equipment owned	Land and	Plant and	Other fixed	Under
EUR million	buildings	equipment	assets	construction	Total
Balance as at 1 January 2025
Costs	88.2	59.9	57.5	13.3	218.9
Accumulated depreciation and impairment losses	(42.3)	(37.9)	(45.1)	(4.6)	(129.9)
Carrying amount as at 1 January 2025	45.9	22.0	12.4	8.7	89.0
Purchases	0.8	1.9	1.8	1.7	6.2
Disposals	(0.0)	(0.8)	(0.1)	(0.1)	(1.0)
Transfers A	1.6	0.9	1.3	(1.9)	1.9
Currency translation differences	(2.2)	(0.8)	(0.2)	(0.4)	(3.6)
Divestments cost value A	(26.8)	(12.3)	(5.6)	(7.4)	(52.1)
Depreciation for the year	(1.8)	(5.3)	(3.7)	(0.0)	(10.8)
Impairments	(0.0)	(0.0)	(0.0)	-	(0.0)
Divestments accumulated amortization and impairment losses A	3.6	6.3	3.1	4.0	17.0
Carrying amount as at 31 December 2025	21.1	11.9	9.0	4.6	46.6
Costs	56.4	50.3	50.9	6.1	163.7
Accumulated depreciation and impairment losses	(35.3)	(38.4)	(41.9)	(1.5)	(117.1)
Carrying amount as at 31 December 2025	21.1	11.9	9.0	4.6	46.6

Refer to note 8 Assets held for sale and discontinued operations for more information on the divestment and the transfer of assets from held for sale to property. plant

and equipment.

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159

Right-of-use assets	Land and	Plant and	Other fixed	Under
EUR million	buildings	equipment	assets	construction	Total
Balance as at 1 January 2024
Costs	24.7	0.2	5.1	–	30.0
Accumulated depreciation and impairment losses	(13.2)	(0.2)	(4.1)	–	(17.5)
Carrying amount as at 1 January 2024	11.5	0.0	1.0	–	12.5
Purchases	0.1	–	0.3	–	0.4
Disposals	(0.5)	–	(0.0)	–	(0.5)
Currency translation differences	0.0	–	0.0	–	0.0
Divestments cost value A	(15.2)	(0.2)	(4.6)	–	(20.0)
Depreciation for the year	(1.7)	–	(0.3)	–	(2.0)
Divestments accumulated amortization and impairment losses A	12.3	0.2	4.1	–	16.6
Carrying amount as at 31 December 2024	6.5	–	0.5	–	7.0
Costs	9.1	–	0.8	–	9.9
Accumulated depreciation and impairment losses	(2.6)	–	(0.3)	–	(2.9)
Carrying amount as at 31 December 2024	6.5	–	0.5	–	7.0
Balance as at 1 January 2025
Costs	9.1	-	0.8	-	9.9
Accumulated depreciation and impairment losses	(2.6)	-	(0.3)	-	(2.9)
Carrying amount as at 1 January 2025	6.5	-	0.5	-	7.0
Purchases	0.5	-	1.0	-	1.5
Disposals	(0.2)	-	(0.0)	-	(0.2)
Currency translation differences	(0.1)	-	(0.0)	-	(0.1)
Depreciation for the year	(1.6)	-	(0.8)	-	(2.4)
Carrying amount as at 31 December 2025	5.1	-	0.7	-	5.8
Costs	9.3	-	1.8	-	11.1
Accumulated depreciation and impairment losses	(4.2)	-	(1.1)	-	(5.3)
Carrying amount as at 31 December 2025	5.1	-	0.7	-	5.8

Refer to note 8 Assets held for sale and discontinued operations for more information on the divestment .

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The estimated useful lives of the property. plant and equipment are as follows:

Buildings 10 – 30 years

Plant and equipment 5 – 10 years

Other fixed assets 3 – 7 years

The Executive Board reviews at each reporting period the estimated useful lives of each asset with a definite useful life. Depreciation of EUR 10.9 million

(2024: EUR 10.0 million) is recognized in Depreciation and amortization and EUR 2.3 million (2024: EUR 5.4 million) is included in Profit/ Loss after tax

from discontinued operations in the consolidated statement of profit and loss and other comprehensive income. Impairments of EUR 0.0 million

(2024: EUR 0.1 million) are recorded in Impairments of fixed assets in the consolidated statement of profit and loss and other comprehensive income .

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Intangible assets

		Development
EUR million	Goodwill	costs	Software	Concessions	Other	Total
Balance as at 1 January 2024
Costs	135.2	16.3	36.0	1.0	75.4	263.9
Accumulated amortization and impairment losses	(54.7)	(7.0)	(28.2)	(0.1)	(48.1)	(138.1)
Carrying amount as at 1 January 2024	80.5	9.3	7.8	0.9	27.3	125.8
Purchases	–	0.7	3.4	–	–	4.1
Disposals	–	–	(0.2)	–	–	(0.2)
Currency translation differences	0.4	0.0	0.0	0.0	–	0.4
Divestments cost value A	(59.1)	(5.7)	(2.4)	–	(28.9)	(96.1)
Amortization for the year	–	(1.1)	(1.7)	(0.0)	(3.2)	(6.0)
Impairment	–	(3.4)	(2.6)	–	–	(6.0)
Divestments accumulated amortization and impairment losses A	54.7	4.9	2.3	–	28.9	90.8
Carrying amount as at 31 December 2024	76.5	4.7	6.6	0.9	24.1	112.8
Costs	76.5	11.3	36.8	1.0	46.5	172.1
Accumulated amortization and impairment losses	–	(6.6)	(30.2)	(0.1)	(22.4)	(59.3)
Carrying amount as at 31 December 2024	76.5	4.7	6.6	0.9	24.1	112.8
Balance as at 1 January 2025
Costs	76.5	11.3	36.8	1.0	46.5	172.1
Accumulated amortization and impairment losses	–	(6.6)	(30.2)	(0.1)	(22.4)	(59.3)
Carrying amount as at 1 January 2025	76.5	4.7	6.6	0.9	24.1	112.8
Purchases	–	0.5	3.6	–	–	4.0
Disposals	–	–	–	–	–	–
Currency translation differences	(0.9)	(0.1)	(0.0)	(0.1)	–	(1.1)
Divestments cost value A	(4.5)	(6.0)	(0.3)	(0.9)	–	(11.7)
Amortization for the year	–	(0.5)	(1.5)	(0.0)	(2.3)	(4.3)
Impairment	–	–	–	–	–	–
Divestments accumulated amortization and impairment losses A	–	4.2	0.2	0.1	–	4.5
Carrying amount as at 31 December 2025	71.1	2.8	8.6	–	21.8	104.3
Costs	71.1	4.0	36.9	–	34.7	146.7
Accumulated amortization and impairment losses	–	(1.2)	(28.3)	–	(12.9)	(42.4)
Carrying amount as at 31 December 2025	71.1	2.8	8.6	–	21.8	104.3

Refer to note 8 Assets held for sale and discontinued operations for more information on the divestment .

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Goodwill has an indefinite estimated useful life. The estimated useful life of software is between three and eight years. The estimated useful life of other

intangible assets is between eight and nineteen years. The Executive Board reviews at each reporting period the estimated useful lives

of each intangible asset with a definite useful life.

The investments in software during 2025 of EUR 3.6 million (2024: EUR 3.4 million) mainly relate to investments related to the implementation

of a new ERP system and various software upgrades. The other intangible assets mainly comprise the carrying amount of customer relationships

of EUR 21.5 million (2024: EUR 23.6 million). These customer relationships were acquired through business combinations.

Amortization of EUR 4.1 million (2024: EUR 6.0 million) is recognized in Depreciation and amortization and EUR 0.2 million is included in Profit/ Loss

after tax from discontinued operations in the consolidated statement of profit and loss and other comprehensive income (2024: EUR 0.5 million). Note

that for Cash Flow Statement purposes the amortization of software, capitalized development costs and concessions is added to the line ‘Depreciation

of property, plant and equipment and software’.

Impairment testing for groups of cash-generating units containing goodwill

For the purposes of impairment testing, goodwill has been allocated to groups of CGUs, which reflect the level on which goodwill is monitored.

Goodwill EUR million	2025	2024
Industrial Actuators and Controls (IAC)	37.7	39.8
Industrial Brakes (IB)	32.4	33.8
Mobility	1.0	2.9
	71.1	76.5

Goodwill was allocated to the divested business using the relative value approach, whereby goodwill is apportioned on a pro rata basis on fair value.

Accordingly, goodwill of EUR 4.5 million was allocated to the divested business. Refer to Note 8 for further details on the divestment of the Chinese

business.

Key assumptions and method of quantification

Pursuant to IAS 36, the Group has performed an impairment test with reference to the goodwill allocated to each group of cash-generating units.

This test was carried out by discounting future cash flows (‘value in use’) to be generated from the continuing use of the cash-generating unit to

which the goodwill applies and on the assumption of an indefinite life. Impairment tests were performed as of 30 September this year, consistent with

the prior year.

For all groups of CGUs, the cash flows for the first five years were based on budgets and mid-term plans drawn up by the local management and

approved by the Executive Board and Supervisory Board. For the subsequent years, the residual value was calculated on the basis of the results

in the last year of relevant forecasts, with a terminal growth rate of 1.5% for IAC and IB and negative growth rate for Mobility taken into account.

The forecasts were based on pre-tax cash flow. The weighted average cost of capital (WACC) based on the Capital Asset Pricing Model was also

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pre-tax. Expansion investments were excluded from the calculations in the residual value. The expected growth in cash flows as a result of expansion

investments was also excluded. This is particularly relevant for the goodwill CGUs where significant growth is expected and strategic investments are

planned.

Key assumptions used in the calculation of recoverable amounts concern discount rates, terminal value growth rates, EBITDA margin growth and

revenue growth. Key assumptions are based on past experience, management assessment of revenue and external sources.

Key assumptions		Pre-tax discount rate		Terminal value growth rate
	2025	2024	2025	2024
Industrial Actuators and Controls (IAC)	12.9%	12.3%	1.5%	1.5%
Industrial Brakes (IB)	12.9%	12.3%	1.5%	1.5%
Mobility	17.5%	11.0%	n/a	1.0%

Discount rate

In determining the pre-tax discount rate, first the post-tax average costs of capital were calculated of all cash generating units containing goodwill.

The post-tax rate is based on debt leveraging compared to the market value of equity of 25%. The post-tax weighted average cost of capital rates

of cash generating units amount to 10.0% to 10.1% and these rates was used for calculating the post-tax cash flows.

Terminal value growth rate

All cash-generating units are valued using discounted cash flow models based on five-year cash flow projections. A terminal value is calculated using a

long-term growth rate in perpetuity of 1.5% for IAC and IB. The negative growth rate in Mobility relates to the gradual phase out of the existing Mobility

programs that run in the Romanian electronics plant following the group’s exit out of the automotive market .

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Revenue and EBITDA margin

development for the cash generating units is based on the strategic business plans for the coming 5 years. The growth

rates are based on the expectation of market developments and management’s assessment of the project pipeline of the cash generating units.

The average annual growth rates for revenue in the first 5 years for IB and IAC range between 5% and 6%, the total development of the EBITDA margin

is in line with the long-term group target of at least 15%.

Sensitivity to changes in assumptions

The recoverable amounts of all cash-generating units with goodwill exceed their carrying amounts. Management has carried out an analysis of sensitivity

to changes in the key assumptions. Sensitivity analyses are performed based on a change in an assumption while holding other assumptions constant.

The following changes in assumptions are assessed:

■ Increase of the discount rate (post-tax) by 1.0%;

■ Decrease of terminal value growth rate by 1.5% for IAC and IB;

■ Decrease of average revenues growth by 3.0%.

Based on the sensitivity analyses performed it is concluded that any reasonable changes in the key assumptions would not require an impairment for

IAC, IB and Mobility.

Other investments and non-current assets

In July 2024 Kendrion Holding USA Inc. acquired a 30% interest in CFV Innovations, Inc. for an amount of EUR 3.7 million. The movement of this

investment in 2025 is due to EUR -0.3 million share of Kendrion in the loss for the year 2025 and EUR -0.3 million currency translation adjustment.

CFV Innovations, Inc. is a USA based company that develops precise fluid control and dosing systems for fertigation, industrial cleaning and medical

applications. All acquired shares are preferred shares whereas Kendrion Holding USA Inc. is entitled to receive dividend in preference to holders of

ordinary shares. The proportion voting rights held by Kendrion Holding USA Inc. is 30%. Kendrion Holding USA Inc. is entitled to convert the preferred

shares into ordinary shares at an agreed upon conversion rate .

EUR million	2025	2024
Equity-accounted investee	3.1	3.7
Other	1.2	0.2
	4.3	3.9

Non-IFRS financial measure. For the definition and reconciliation of the most directly comparable IFRS measure, refer to reconciliation of non-IFRS information,

starting on page 219.

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Deferred tax assets and liabilities

The Group has recognized deferred tax assets for tax loss carry-forwards in the following jurisdictions:

Germany

As at 31 December 2025, the tax loss carry forwards amounted to EUR 23.1 million (2024: EUR 29.1 million) (Trade Tax) and EUR 21.0 million

(Corporate Income Tax) (2024: EUR 25.6 million).The losses are recognized in full, resulting in deferred tax assets of EUR 6.1 million

(2024: EUR 7.6 million).

United States of America

As at 31 December 2025, the tax loss carry forwards amounted to EUR 15.2 million (2024: EUR 17.6 million) (Federal Tax) and EUR 4.8 million

(2024: EUR 5.6 million) (State Tax). EUR 10.6 million of Federal Tax carry-forward losses are not recognized, these losses can be carried forward

indefinitely. A deferred tax asset is recorded for EUR 4.8 million of Federal and all of the State Tax carry-forward losses resulting in a deferred tax assets

of EUR 1.3 million (2024: EUR 1.4 million).

China

As at 31 December 2024, the deferred tax asset for loss carry-forwards amounted to EUR 5.9 million. Following the divestment

of the Chinese business, no deferred tax asset relating to loss carry-forwards in China remains.

The Netherlands

As at 31 December 2025, the tax loss carry-forwards amounted to EUR 0.5 million (2024: EUR 0.6 million). These are recognized in full, resulting

in a deferred tax asset of EUR 0.1 million (2024: EUR 0.2 million).

Deferred tax assets and liabilities included in the financial position

The deferred tax assets and liabilities can be specified as follows:

		Assets		Liabilities		Net
EUR million	2025	2024	2025	2024	2025	2024
Property, plant and equipment	0.7	1.0	2.2	2.4	(1.5)	(1.4)
Intangible assets	1.3	1.3	8.4	11.3	(7.1)	(10.0)
Inventories	0.6	1.2	0.3	0.4	0.3	0.8
Employee benefits	0.5	0.4	0.1	0.0	0.4	0.4
Provisions	0.4	0.0	0.0	0.0	0.4	(0.0)
Other items	1.3	2.5	0.3	0.6	1.0	1.9
Tax value of recognized loss carry-forwards	7.5	15.0	–	0.0	7.5	15.0
Deferred tax assets/liabilities	12.3	21.4	11.3	14.7	1.0	6.7

FINANCIAL STATEMENTS

Integrated Annual Report 2025

166

The deferred tax liabilities relate largely to temporary differences between the carrying amount and tax base of property, plant and equipment and

intangible assets. These are of a relatively long-term nature, mostly longer than five years. Other deferred tax assets relate mainly to deferred revenues

and accruals.

During the financial year, legislation was enacted in Germany providing for a reduction in corporate income tax rates applicable in future periods.

As deferred tax assets and liabilities are measured using the tax rates expected to apply when the related temporary differences reverse, the

remeasurement of deferred taxes reflects this change in tax legislation resulting in an increse in the net deferred tax position of EUR 0.5 million.

Deferred tax assets are recognized for unused tax losses to the extent that it is probable that future taxable profits will be available against which they

can be set off. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax

benefit will be realized; such reductions are reversed if the probability of future taxable profits improves. Whether Kendrion is able to realize its deferred

tax assets is an estimate that has an element of inherent uncertainty to it. Both the budget 2026 and mid-term plan, which include the projections for

the upcoming years, are based upon expectations of the market, contracts that have been signed and negotiations currently ongoing for new contracts.

Tax loss carry forward limitation rules apply in certain jurisdictions in which Kendrion has carry forward tax losses. These rules might under certain

circumstances lead to a (proportional) forfeiture of recognized and unrecognized carry forward tax losses in case of a direct or indirect change in

ownership.

The tax losses carry forward for which no deferred tax assets are recognized in the statement of financial position are reviewed each reporting date.

These tax losses carry forward for which no deferred tax assets are recognized in the statement of financial position amount to EUR 10.6 million

(2024: EUR 16.1 million).

Movement in temporary differences during the financial year

					2024
			Recognized
			in other
		Recognized	comprehensive		At 31
				A
Net, EUR million	At 1 January	in profit and loss	income	Divested	December
Property, plant and equipment	(2.4)	(0.4)	–	1.4	(1,4)
Intangible assets	(10.0)	(0.4)	–	0.4	(10.0)
Inventories	1.0	(0.1)	–	(0.1)	0.8
Employee benefits	0.2	0.1	0.1	0.0	0.4
Provisions	(0.0)	(0.0)	–	0.0	(0.0)
Other items	2.7	1.0	(0.3)	(1.5)	1.9
Tax value of loss carry-forwards	9.6	5.4	–	–	15.0
	1.1	5.6	(0.2)	0.2	6.7

Refer to note 8 Assets held for sale and discontinued operations for more information on the divestment.

FINANCIAL STATEMENTS

Integrated Annual Report 2025

167

					2025
			Recognized
			in other
		Recognized	comprehensive		At 31
				A
Net, EUR million	At 1 January	in profit and loss	income	Divested	December
Property, plant and equipment	(1.4)	(0.2)	0.0	–	(1.6)
Intangible assets	(10.0)	2.5	0.3	–	(7.2)
Inventories	0.8	(0.3)	(0.0)	(0.2)	0.3
Employee benefits	0.4	0.0	–	–	0.4
Provisions	(0.0)	0.4	–	–	0.4
Other items	1.9	(0.2)	(0.1)	(0.4)	1.2
Tax value of loss carry-forwards	15.0	(2.6)	(0.7)	(4.2)	7.5
	6.7	(0.4)	(0.5)	(4.8)	1.0

Inventories

EUR million	2025	2024
Raw materials, consumables, technical materials and packing materials	28.8	37.0
Work in progress	7.9	9.2
Finished goods	7.3	10.6
Goods for resale	0.5	1.7
	44.5	58.5

The value of inventory recorded as an expense in 2025 amounts to EUR 103.3 million (2024: EUR 116.8 million). The inventories are presented after

accounting for a provision of EUR 6.6 million (2024: EUR 6.2 million) for obsolescence. In 2025, the release of the write-down to net realisable value

of the inventories in earlier years was EUR 0.4 million (2024: EUR 0.8 million release). The write-down and reversals are included in Raw material and

subcontracted work. The decrease is mainly attributable to the sale of the China business, refer to note 8.

Refer to note 8 Assets held for sale and discontinued operations for more information on the divestment.

FINANCIAL STATEMENTS

Integrated Annual Report 2025

168

Trade and other receivables

EUR million	2025	2024
Trade receivables	19.0	40.3
Other taxes and social security	1.2	1.9
Other receivables	2.9	15.0
Derivatives used for hedging	−	0.2
Prepayments	0.5	1.2
	23.6	58.6

The decrease in trade receivables and other receivables is largely attributable to the divestment of the Chinese business. In 2024, other receivables

included a receivable from Solero Technologies LLC, which was settled in 2025.

The credit and currency risks associated with trade and other receivables are disclosed in note 15, and in the financial risk management paragraph of

note s. The provision for doubtful debts amounts to EUR 0.5 million (2024: EUR 0.3 million). The r eceivables are mainly held according to the ‘held-to-

collect’ business model. At the end of 2025, an amount of EUR 3.2 million (2024: nil) was sold to a factoring company and was derecognized.

Cash and cash equivalents

EUR million	2025	2024
Cash and cash equivalents	29.4	8.5
Bank overdrafts	0.0	(1.7)
Cash and cash equivalents in the statement of cash flows	29.4	6.8

The cash and cash equivalents include EUR 1.1 million (2024: EUR 0.2 million) of cash that is held in countries where the Group faces cross-border

foreign exchange controls and/or other legal restrictions that inhibit the Groups ability to make these balances available for general use by the Group.

The other bank balances are freely available. The interest rate risk for the Group and a sensitivity analysis for financial assets and liabilities are disclosed

in notes 15 and accounting policies.

Assets classified as held for sale and discontinued operations

In October 2025, the sale of our China-based business to local management, was finalized. With growth opportunities in China primarily linked to the

automotive sector, the divestment enables Kendrion to fully focus on its industrial business groups and marks the completion of Kendrion’s strategic

transformation into a pure-play industrial company.

In October 2024, the sale of automotive activities in Europe and USA to Solero Technologies LLC was finalized, supporting the same strategic

transformation into a pure play industrial company .

FINANCIAL STATEMENTS

Integrated Annual Report 2025

169

The results from discontinued operations include the divested China-based business, the divested European and USA automotive business and the

outcome from discontinuing the R&D activities of the automotive sound business. These R&D activities were not sold but were part of a single,

coordinated strategic plan to focus on industrial activities. The results from the discontinued operations are presented below:

		A
EUR million	2025	2024
Revenues	55.3	210.8
Expenses	52.0	213.2
Result before remeasurements, finance costs and tax	3.3	(2.4)
Remeasurement of assets to fair value less cost to sell	(0.2)	(5.1)
Financial income and expenses	(1.5)	(4.3)
Income tax	(1.0)	2.9
Profit/ (loss) before result on sale	0.6	(8.9)
Result on sale after tax	5.3	(4.0)
Profit/ (loss) after tax from discontinued operations	5.9	(12.9)

I n total an amount of EUR -4.0 million was recycled from the translation reserve to consolidated statement of profit and loss upon disposals of the

subsidiaries outside the euro zone and is included in the result on sale after tax.

Net cash flows incurred by the discontinued businesses are as follows:

		A
EUR million	2025	2024
Cash flows from operating activities	1.1	(11.6)
Cash flows from investing activities	(0.9)	(13.3)
Cash flows from financing activities	(2.4)	13.9
Net cash flows from discontinued operations	(2.2)	(11.0)

The net cashflow from the sale of our China-based business amounted to EUR 57.0 million in 2025 (net of cash amounting to EUR 55.9 million). The net

cashflow from the sale of the automotive business in Europe and USA amounted to EUR 8.6 million in 2025 (2024: EUR 52.5 million, net of cash

amounting to EUR 9.8 million).

The assets classified as held for sale in 2024 of EUR 1.9 million relate to a building where Kendrion OG GmbH conducted its business. These assets are

presented in fixed assets in 2025 pending the cleaning of the soil contamination. Reference is made to note 13.

Earnings per share from discontinued operations are as follows:

		A
EUR million	2025	2024
Basic earnings per share from discontinued operations (in euro)	0.38	(0.84)
Diluted earnings per share from discontinued operations (in euro)	0.37	(0.84)

2024 numbers were re-presented to present the continuing operations only in accordance with IFRS 5. Reference is made to note 8 for more details on results from

FINANCIAL STATEMENTS

Integrated Annual Report 2025

170

Capital and reserves

Capital and share premium
		Shares entitled to dividend		Shares owned by Kendrion		Total number of issued shares
	2025	2024	2025	2024	2025	2024
As at 1 January	15,500,057	15,276,014	−	−	15,500,057	15,276,014
Issued shares (share dividend)	300,467	211,787	−	−	300,467	211,787
Issued shares (share plan)	6,903	12,256	−	−	6,903	12,256
Repurchased shares	(185,333)	−	185,333	−	−	−
As at 31 December	15,622,094	15,500,057	185,333	−	15,807,427	15,500,057

Issuance of ordinary shares

In 2025, in total 307,370 new shares were issued (2024: 224,043).

Ordinary shares

The authorized share capital consists of:

EUR million	2025	2024
40,000,000 ordinary shares of EUR 2.00	80.0	80.0
Issued share capital
Balance at 1 January 2025: 15,500,057 ordinary shares (2024: 15,276,014)	31.0	30.6
Balance at 31 December 2025: 15,807,427 ordinary shares (2024: 15,500,057)	31.6	31.0

Share premium
EUR million	2025	2024
Balance as at 1 January	37.1	37.3
Dividend payment	(3.1)	(2.7)
Share premium on issued shares	2.5	2.5
Balance as at 31 December	36.5	37.1

Translation reserve

The translation reserve comprises all foreign currency differences arising from the translation of the financial statements of subsidiaries outside the euro

zone. Gains and losses relating to the translation risk are recognized in equity. The build-up of the cumulative figure commenced on 1 January 2004.

In 2025, the translation reserve pertaining to the divested Chinese business was recycled to the consolidated statement of profit and loss. In total an

amount of EUR -4.0 million was recycled from the translation reserve to consolidated statement of profit and loss upon disposals of the subsidiaries

outside the euro zone and is included in the profit after tax from discontinued operations. Refer to note 8 .

FINANCIAL STATEMENTS

Integrated Annual Report 2025

171

Hedge reserve

The hedge reserve comprises the effective portion of the cumulative net movement in the fair value of cash flow hedging instruments relating to hedged

transactions that have not yet occurred, net of tax.

The hedge reserve increased by EUR 0.1 million due to the realisation of hedged transactions (2024: EUR 0.7 million decrease). The hedge reserve

increased by EUR 0.0 million due to valuation effects (2024: EUR 0.2 million increase). There was no hedge ineffectiveness in 2025 (2024: no hedge

ineffectiveness).

Reserve for own shares (treasury shares)

On 11 November 2025, the Company announced a EUR 10 million share buyback program, which commenced on 26 November 2025. In total

185,333 shares were repurchased under the program until 31 December 2025 at a total cost of EUR 2.5 million. The reserve for the Company’s own

shares comprises the shares held by the Company that were repurchased under the share buyback program. The Company intends to use a portion of

these shares for the Executive Board remuneration packages, while it is intended to propose to the company’s shareholders to cancel the remainder of

the repurchased shares. At 31 December 2025, the Company held 185,333 of its own shares (2024: nil).

Other reserves

Other reserves are all the reserves other than those shown separately and primarily represent the accumulated, undistributed profits from previous

financial years.

Retained earnings

In 2025, the result for 2024 was fully transferred to other reserves. Retained earnings in the 2025 financial statements consequently consist solely of the

result for 2025.

Dividends

The following dividends were paid by the Company for the year:

EUR million	2025	2024
1.45 euro per qualifying ordinary share (2024: 0.45 euro)	22.8	6.8

After the reporting date, the following dividends were proposed by the Executive Board. The dividends have not been recognized as liabilities and there

are no tax consequences in 2025.

EUR million	2025	2024
0.70 euro per qualifying ordinary share (2024: 0.45 euro)	11.0	7.0

FINANCIAL STATEMENTS

Integrated Annual Report 2025

172

Earnings per share

Basic earnings per share

The calculation of the basic earnings per share as at 31 December 2025 is based on the profit for the period of EUR 19.5 million (2024: EUR -4.5

million) attributable to the holders of ordinary shares and the weighted average number of shares outstanding during the year 2025: 15,690,000 (2024:

15,425,000).

EUR million	2025	2024
Net result attributable to ordinary shareholders	19.5	(4.5)

Weighted average number of ordinary shares

In thousands of shares	2025	2024
Issued ordinary shares at 1 January	15.500	15,276
Effect of shares issued as share dividend	300	212
Effect of shares issued as share plan	7	12
Ordinary shares outstanding at 31 December	15.807	15,500
Weighted average number of ordinary shares entitled to dividend	15.690	15,425
Basic earnings per share (EUR), based on ordinary shares outstanding at 31 December	1.24	(0.29)
Basic earnings per share (EUR), based on weighted average	1.24	(0.29)

Diluted earnings per share

The calculation of the diluted earnings per share at 31 December 2025 is based on the profit of EUR 19.5 million (2024: EUR -4.5 million) attributable

to the holders of ordinary shares and the weighted average numbers of shares during the year after adjustment for the effects of all dilutive potential

ordinary shares of 15,787,000 (2024: 15,631,000)

EUR million	2025	2024
Net profit attributable to ordinary shareholders	19.5	(4.5)
Effect of dilution	(0.0)	(0.0)
Net profit attributable to ordinary shareholders (diluted)	19.5	(4.5)

Weighted average number of ordinary shares (diluted)

In thousands of shares	2025	2024
Weighted average number of ordinary shares entitled to dividend	15,690	15,425
Weighted average numbers of ordinary shares (diluted)	15,787	15,631
Basic earnings per share (EUR), based on weighted average (diluted)	1.24	(0.29)

FINANCIAL STATEMENTS

Integrated Annual Report 2025

173

Loans and borrowings

This note contains information on the contractual provisions of the Group’s interest-bearing loans and borrowings, which are carried at amortized cost.

For further information on the interest rates, and the currency and liquidity risks borne by the Group, see note 15 and accounting policies.

EUR million	2025	2024
Non-current liabilities
Bank syndicate loans	−	13.1
Schuldschein loans	52.4	72.2
Lease liabilities	4.9	5.7
Other loans	−	6.8
	57.3	97.8

EUR million	2025	2024
Current liabilities
Current portion lease liabilities	1.8	2.2
Current portion loans	0.6	10.2
	2.4	12.4

	Bank syndicate	Schuldschein	Lease
EUR million	loans	loans	liabilities	Other loans	Total 2024
Carrying amount as at 1 January 2024	62.0	72.2	13.5	10.8	158.5
New liabilities	–	–	1.3	8.4	9.7
Repayments	(49.0)	–	(3.0)	(2.7)	(54.7)
Foreign currency translation differences for foreign operations	–	–	0.0	0.5	0.5
Divestments A	–	–	(3.8)	–	(3.8)
Other movements	0.1	–	(0.1)	–	(0.0)
Carrying amount as at 31 December 2024	13.1	72.2	7.9	17.0	110.2

Refer to note 8 Assets held for sale and discontinued operations for more information on the divestment .

FINANCIAL STATEMENTS

Integrated Annual Report 2025

174

	Bank syndicate	Schuldschein	Lease
EUR million	loans	loans	liabilities	Other loans	Total 2025
Carrying amount as at 1 January 2025	13.1	72.2	7.9	17.0	110.2
New liabilities	20.0	−	1.5	−	21.5
Repayments	(33.1)	(20.0)	(2.4)	(3.3)	(58.8)
Foreign currency translation differences for foreign operations	−	−	(0.1)	(1.2)	(1.3)
Divestments A	−	−	−	(11.9)	(11.9)
Other movements	−	0.2	(0.2)	−	0.0
Carrying amount as at 31 December 2025	−	52.4	6.7	0.6	59.7

Schuldschein loans

In April 2025, a Schuldschein loan with a nominal value of EUR 20.0 million was repaid upon maturity. As at 31 December 2025, a Schuldschein loan

with a nominal value of EUR 52.5 million was outstanding. This loan matures in April 2027. The interest rate on this loan is based on 6-month Euribor

plus a 1.2% margin. The margin is linked to the ESG score of the Kendrion Group as rated by Ecovadis. An increase in ESG rating of 10 percent points

or more results in a 5 basis point decrease of the margin. Vice versa, a 5 percent point decrease in ESG score, results in a 5 basis points margin

increase. In 2025, the ESG rating of the Group improved to 71 out of 100. The initial ESG score of the Group was 58 out of 100 at the inception of

the loans in 2022. As a consequence of the 13 percent point improvement of ESG rating, the margin on the loans decreased by 5 basis points. With

this continuous improvement in ESG rating, the group is in the top 15% of ESG rated general manufacturing companies. The loans include a financial

covenant relating to the leverage ratio. The leverage ratio (calculated as interest bearing debt / normalized EBITDA) should remain below 3.25, which

under certain circumstances can be temporarily increased to a maximum of 3.75. This covenant is tested quarterly on a 12-month rolling basis.

The actual leverage ratio at year-end was 0.8 (2024: 2.7). A reconciliation of normalized EBITDA can be found on page 222.

Revolving credit facility agreement

Kendrion has a revolving credit facility agreement with ING Bank and HSBC of EUR 75 million. As of 31 December 2025, no amount was drawn from

the facility. In February 2026, the facility was reduced from EUR 75 million to EUR 50 million. The agreement matures in April 2027.

The interest rates on the loans are based on Euribor plus a margin (between 1.2% and 2.35%). The margin is based on the leverage ratio of the Group.

In addition, the interest rates are linked to the ESG score of the Kendrion Group, via the same mechanism as the Schuldschein loans.

The facility agreement includes an option for Kendrion to request to increase the facility of maximum EUR 50 million (incremental facility). In case

Kendrion requests an incremental facility, the terms and conditions of this facility are agreed upon separately between Kendrion and the lenders.

In addition, the facility agreement allows the Group to attract designated additional alternative sources of debt funding. The leverage ratio covenant

is the same as for the Schuldschein loans .

Refer to note 8 Assets held for sale and discontinued operations for more information on the divestment .

FINANCIAL STATEMENTS

Integrated Annual Report 2025

175

Credit lines

As at 31 December 2025, the Group had the following credit lines available:

■ EUR 75 million revolving credit facility with a syndicate of two banks consisting of HSBC and ING Bank. The credit facility is committed until April

2027 and includes an option (accordion option) to increase the facility by a maximum of EUR 50 million;

■ EUR 52.5 million Schuldschein private placement loan;

■ EUR 6.7 million in leases for buildings, various equipment and vehicles;

■ EUR 6.1 million other loans and overdraft facilities.

As at 31 December 2025, the total unutilised amount of the revolving credit facility and overdraft facilities combined was approximately EUR 79 million,

excluding accordion option.

Security provided

A positive pledge is in place for the EUR 75 million Revolving Credit Facility.

Interest-rate sensitivity

Interest amounts payable on the revolving credit facility and Schuldschein loans are based on short-term interest rate (three and six months).

The other loans of EUR 0.6 million and leases of EUR 6.7 million both have fixed interest rates. The interest sensitivity is disclosed on page 184.

Lease liabilities

The lease liabilities are payable as follows:

EUR million	2025	2024
< 1 year	1.8	2.2
1 - 5 years	4.9	5.6
> 5 years	−	0.1
	6.7	7.9

The lease liabilities mostly relate to leases for various buildings & vehicles.

Buildings

The Group leases properties for its offices and manufacturing facilities. Some lease arrangements contain conditions to revise the rentals based on

changes of indices. The leases have an initial term between 3 and 15 years. Majority of the leases include an option to renew the lease for an additional

period after the contract term. Key assumption as applied by the Group is that all renewal options, which can be exercised within the mid-term plan

period of five years and reasonably certain to be exercised, are taken into consideration on top of the non-cancellable period of the lease.

Vehicles and equipment

The Group leases equipment with terms of two to five years. Based on experience the likelihood that these lease arrangements are extended for

a substantial period (> three months) is remote. Due to this no periods after the non-cancellable period of the lease are taken into consideration.

FINANCIAL STATEMENTS

Integrated Annual Report 2025

176

Employee benefits

EUR million	2025	2024
Present value of unfunded obligations	4.7	5.0
Present value of funded obligations	0.7	0.8
Fair value of plan assets	(0.2)	(0.2)
Recognized net liability for defined benefit obligations	5.2	5.6
Liability for long-service leave and anniversaries	2.3	2.3
Total employee benefits	7.5	7.9
Non current portion	6.8	7.1
Current portion A	0.7	0.8

The total employee benefit provision as of 31 December 2025 amounts to EUR 7.5 million (2024: EUR 7.9 million). An amount of EUR 6.8 million is presented as non-

current employee benefits in the statement of financial position. The remainder of EUR 0.7 million is presented under trade and other payables.

FINANCIAL STATEMENTS

Integrated Annual Report 2025

177

The table shows a reconciliation from the opening to the closing balances for the net defined benefit liability and its components:

	Defined benefit obligation		Fair value of plan assets			Net defined benefit liability
EUR million	2025	2024	2025	2024	2025	2024
Balance as at 1 January	5.8	8.2	0.2	0.8	5.6	7.4
Included in statement
of comprehensive income
Current service cost	−	–	−	–	−	–
Past service cost	−	–	−	–	−	–
Interest cost (income)	0.2	0.2	0.0	0.0	0.2	0.2
	0.2	0.2	0.0	0.0	0.2	0.2
Included in OCI
Remeasurement loss (gain):
- Actuarial loss (gain) arising from:
- Demographic assumptions	0.0	0.0	−	0.0	0.0	0
- Financial assumptions	(0.1)	0.3	−	–	(0.1)	0.3
- Experience adjustment	0.0	0.1	−	–	0.0	0.1
- Return on plan assets excluding
interest income	−	–	0.0	–	0.0	–
Effect of movements in exchange rates	−	–	0.0	–	0.0	–
	(0.1)	0.4	0.0	0.0	(0.1)	0.4
Other Contributions paid by the employer	−	–	−	–	−	–
Divestments A	−	(2.6)	−	(0.6)	−	(2.0)
Benefits paid	(0.5)	(0.4)	−	0.0	(0.5)	(0.4)
	(0.5)	(3.0)	−	(0.6)	(0.5)	(2.4)
Balance as at 31 December	5.4	5.8	0.2	0.2	5.2	5.6

Actuarial calculations of employee benefits have not been materially influenced by amendments based on historical experience or by variable

assumptions.

Refer to note 8 Assets held for sale and discontinued operations for more information on the divestment.

FINANCIAL STATEMENTS

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178

The Group contributes to the following post-employment defined benefits plans in several countries, mainly in Germany. Below the characteristics

of the major plans are included.

■ A direct commitment in the form of capital has been agreed upon with the employees, who directly receive this commitment as an one-off payment

upon retirement. An alternative version is a plan where the employees receive monthly payments instead of an one-off payment. The plans are

reviewed on periodic basis;

■ The Defined-Benefit plan entitles a retired employee to receive a monthly pension payment. The amount of these payments is based on individual

contracts with the respective employee. The person has to be employed for a certain time. Each further year of employment the employee receives

an amount in addition to the contractual fixed amount.

The defined benefit plans are administered by multiple pension funds which are legally separated from the Group. The board of the pension fund is

required to act in the best interest of the plan participants and is responsible for setting certain policies (e.g. investment, contribution and indexation

policies) of the fund. The defined benefit plans expose the Group to actuarial risks, such as longevity risk, interest rate risk and market (investment) risk.

The expenses relating to the defined benefit pension arrangements are included in the following line items of the statement of comprehensive income:

Expense recognized in the consolidated statement of comprehensive income regarding defined benefit arrangements

EUR million	2025	2024
Staff costs	0.0	0.0
Net finance costs	0.2	0.2
	0.2	0.2

Principal actuarial assumptions (expressed as weighted averages)

	2025	2024
Discount rate as at 31 December	3.0%	3.3%
Future pension increases	1.9%	2.2%

Composition plan assets

EUR million	2025	2024
Bonds	0.2	0.2
Equity	0.0	0.0
Real estate	0.0	0.0
Government loans	0.0	0.0
Total	0.2	0.2

FINANCIAL STATEMENTS

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179

Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, would have

affected the defined benefit obligation by the amounts shown below.

Sensitivity analysis		Defined benefit obligation
EUR million	Increase	Decrease
Discount rate (0.5 percent)	(0.2)	0.2
Future salary growth (1.0 percent)	0.0	0.0
Future pension (1.0 percent)	0.3	(0.2)
Future mortality (1.0 percent)	(0.0)	0.0

Although the analysis does not take account of the full distribution of cash flows expected under the plans, it does provide an approximation of the

sensitivity of the assumptions shown. The method for preparing the sensitivity analyses did not changed from prior year.

Assumptions regarding future longevity have been based on published statistics and mortality tables.

As at 31 December 2025, the weighted-average duration of the defined benefit obligation was 4.4 years (2024: 5.7 years). The expected payment for

2026 amounts to EUR 0.7 million (prior year: EUR 0.8 million).

Liabilities arising from employee benefits

The pension plans included defined contribution plans as well as defined benefit plans. In the case of defined contribution plans, the contribution is

charged to the year to which it relates. With defined benefit plans, benefit obligations are calculated using the projected unit credit method. Calculations

are made by qualified actuaries. The pension liability shown in the statement of financial position represents the present value of the defined benefit

obligation at the financial position date minus the fair value of the plan assets at this date. The discount rate methodology for accounting long-term

employee benefits in accordance with IAS 19 is determined by the Executive Board. Significant judgement is required when setting the criteria for bonds

to be included in the population from which the yield curve is derived. The most significant criteria considered for the selection of bonds include the

issue size of the corporate bonds, quality of the bonds and the identification of outliers which are excluded. The discount rate used to calculate the

defined benefit obligation is based on the yield on corporate bonds issued in euros.

Since the pension arrangements involve long-term obligations and uncertainties, it is necessary to make assumptions in order to estimate the amount

that the Group needs to invest to fund its pension obligations. External actuaries calculate the obligation for defined benefit plans partly on the basis

of information provided by the Executive Board, such as future pay rises, the return on plan assets, mortality tables and the probable extent to which

pension scheme members will leave the scheme because they have reached retirement age, become incapacitated or left the Group.

FINANCIAL STATEMENTS

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180

The greater part of the defined benefit obligation at year-end 2025 relates to post employment arrangements in Germany. The group companies

account individually for the pension schemes. The individual group company is fully liable for its benefit obligation. A portion for the German group

companies is reinsured. All pension arrangements accounted for as defined benefit obligations are not open for new participants (< 15% active

participants).

Liabilities arising from employee benefits also include liabilities relating to long-service, early retirement and service anniversaries of EUR 2.3 million

(2024: EUR 2.3 million) mainly in Germany.

Provisions

EUR million	2025	2024
Balance as at 1 January	6.1	0.7
Provisions made during the period	1.8	5.5
Provisions transferred/used during the period	(4.7)	(0.1)
Provisions released during the period	(0.6)	(0.0)
Balance as at 31 December	2.6	6.1
Non-current portion	2.6	0.9

The addition to the provision in 2025 includes an amount recognized for the remediation of soil contamination by Kendrion OG GmbH . The total costs

of the remediation measures are expected to amount to EUR 1.5 million. Kendrion OG GmbH is eligible for a subsidy equal to 80% of the remediation

costs, which is presented separately as other non-current asset. The net cost of EUR 0.3 million are included in the profit after tax from discontinued

operations in the consolidated statement of profit and loss.

Trade and other payables

EUR million	2025	2024
Trade payables	14.3	35.4
Other taxes and social security contributions	2.0	2.8
Derivatives used for hedging	0.2	0.5
Non-trade payables	7.5	8.5
Contract liabilities	0.2	0.2
Accrued expenses	9.5	11.5
	33.7	58.9

The decrease of trade payables and accrued expenses is mainly attributable to the sale of the China and automotive business, refer to note 8. Non-

trade payables relate to various other liabilities such as personnel-related liabilities (social charges, holiday allowance, bonus accruals, vacation days)

while accrued expenses relate to other invoices that are expected but not yet received.

FINANCIAL STATEMENTS

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181

Financial instruments

Credit risk

The carrying amount of the financial assets represents the maximum credit risk. The maximum credit risk on the reporting date was as follows:

EUR million	2025	2024
Cash and cash equivalents	29.4	8.5
Other long-term investments	1.2	0.2
Trade and other receivables	23.6	58.6
Total	54.2	67.3

Impairment losses

Aging analysis of the trade receivables

		2025		2024
EUR million	Gross	Provision	Gross	Provision
Within the term of payment	15.8	−	33.9	–
0 – 30 days due	2.9	−	4.1	–
31 – 60 days due	0.2	−	0.8	–
> 60 days due	0.6	(0.5)	1.8	(0.3)
Total trade receivables	19.5	(0.5)	40.6	(0.3)

The provision for trade receivables is used to absorb impairment losses, unless the Group is certain that collection of the amount owed is impossible,

in which case the amount is treated as a bad debt and written off against the financial asset in question.

At 31 December 2025, the provision for impairment losses on trade receivables relates to several customer invoices that the Group

believes to be non-collectible, in whole or in part. Based on historic payment behavior and financial information currently known all receivables that

are not impaired as at 31 December 2025 are collectible. This system gives the same outcome as the cash shortfall model as described in IFRS 9.

EUR 0.8 million of trade receivables are more than 30 days overdue (2024: EUR 2.6 million), of which EUR 0.5 million is provided for (2024:

EUR 0.3 million). The Group has written off EUR 0.3 million receivables in 2025 (2024: EUR 0.7 million), which are recognized under other operating

expenses in the statement of comprehensive income.

The customer with the largest trade receivables outstanding accounted for 9% of the trade and other receivables as at 31 December 2025 (2024: 8%).

The geographical credit risk from the Group’s direct customers is largely concentrated in Germany. However, as the Group’s most important customers

in the various segments of the German market are multinational or global players this reduces the Group’s dependency on the German market.

FINANCIAL STATEMENTS

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182

Credit risk rating grades

The credit quality of the Group’s financial assets, as well as the Group’s maximum exposure to credit risk by credit risk rating grades on the reporting

date was as follows:

31 December 2025							2025
		External	Internal	12-month	Gross carrying	Loss	Net carrying
	Note	credit rating	credit rating	or lifetime ECL	amount	allowance	amount
Trade receivables	6	N/A	Low risk A	Lifetime ECL	19.5	(0.5)	19.0
31 December 2024							2024
		External	Internal	12-month	Gross carrying	Loss	Net carrying
	Note	credit rating	credit rating	or lifetime ECL	amount	allowance	amount
Trade receivables	6	N/A	Low risk A	Lifetime ECL	40.6	(0.3)	40.3

Liquidity risk

The liquidity risk is the risk that the Group is unable to meet its financial obligations at the required time. Liquidity risk management is based on the

maintenance of sufficient liquidity in the form of unused (committed) credit facilities or cash to meet present and future financial obligations in normal and

adverse circumstances.

The contractual terms of the financial obligations, including the estimated interest payments and repayment obligations, are set out on the next page.

31 December 2025	Carrying	Contractual
EUR million	amount	cash flows	0 – 6 months	6 – 12 months	1 – 2 years	2 – 5 years	› 5 years
Non-derivative financial liabilities
Bank syndicate loans	–	–	–	–	–	–	–
Schuldschein loans	(52.4)	(54.9)	(0.9)	(0.9)	(53.1)	–	–
Lease liabilities	(6.7)	(7.4)	(1.0)	(1.0)	(1.6)	(3.5)	(0.3)
Bank overdrafts	0.0	0.0	–	–	–	–	–
Other loans and borrowings	(0.6)	(0.6)	(0.3)	(0.3)	–	–	–
Trade and other payables	(33.7)	(33.7)	(33.7)	–	–	–	–
Derivative financial assets / liabilities
Interest rate swap contracts	(0.2)	(0.3)	(0.3)	(0.0)	(0.0)	–	–
Forward exchange contracts	–	–	–	–	–	–	–
Total	(93.6)	(96.9)	(36.2)	(2.2)	(54.7)	(3.5)	(0.3)

FINANCIAL STATEMENTS

Integrated Annual Report 2025

183

31 December 2024	Carrying	Contractual
EUR million	amount	cash flows	0 – 6 months	6 – 12 months	1 – 2 years	2 – 5 years	› 5 years
Non-derivative financial liabilities
Bank syndicate loans	(13.1)	(14.4)	(0.3)	(0.3)	(0.6)	(13.2)	–
Schuldschein loans	(72.2)	(80.2)	(21.3)	(1.0)	(2.0)	(55.9)	–
Lease liabilities	(7.9)	(9.1)	(1.1)	(1.1)	(2.0)	(4.2)	(0.7)
Bank overdrafts	(1.7)	(1.7)	(1.7)	–	–	–	–
Other loans and borrowings	(17.0)	(17.7)	(2.2)	(8.5)	(2.5)	(3.9)	(0.6)
Trade and other payables	(58.9)	(58.9)	(58.9)	–	–	–	–
Derivative financial assets / liabilities
Interest rate swap contracts	0.2	(0.0)	0.1	(0.1)	(0.0)	0.0	–
Forward exchange contracts	0.0	0.0	0.0	–	–	–	–
Total	(170.6)	(182.0)	(85.4)	(11.0)	(7.1)	(77.2)	(1.3)

It is not expected that the cash flows included in the maturity analysis should occur significantly earlier, or at significantly different amounts.

Within the scope of the Group’s risk management the Group has hedged the currency and interest risks with derivatives. The interest rate swaps have

been designated as cash flow hedges.

Interest-rate risk

Part of the Group’s loans is governed by a floating interest rate (usually 6-month EURIBOR). In view of the Treasury Policy, the Group hedges at least

50% of the floating interest rate exposure for the coming year. To this extent the Group has outstanding interest rate swaps with a notional amount of in

total EUR 50 million (2024: EUR 50 million), of which EUR 25 million matures within one year. The aggregate fair value of the outstanding interest rate

swaps as at 31 December 2025 was EUR 0.2 million negative (2024: EUR 0.2 million negative).

The following table shows the interest rates prevailing at the financial position date for interest-bearing financial liabilities. The majority of all interest

expenses relate to senior bank loans. The effective interest rate of these loans equalises the nominal interest rate.

					2025		2024
		Nominal	Year of		Carrying		Carrying
	Currency	interest	redemption	Fair value	amount	Fair value	amount
Bank syndicate loans	EUR	IBOR + 1.6%	2027	–	–	13.1	13.1
Schuldschein	EUR	IBOR + 1.2%	2027	52.4	52.4	72.2	72.2
Other loans	EUR	1.40%	2026	0.6	0.6	17.0	17.0
Bank overdrafts	EUR	IBOR + 1.6%	2027	0.0	0.0	1.7	1.7
Lease liabilities	Various	0.9% - 8.3%	Various	6.7	6.7	7.9	7.9
Total interest-bearing debt				59.7	59.7	111.9	111.9

FINANCIAL STATEMENTS

Integrated Annual Report 2025

184

Sensitivity analysis interest

Financial assets and liabilities with a fixed interest rate are not recognized at fair value by processing the value changes in profit or loss. For this reason,

a movement in interest rates across the yield curve at 1 January 2025 would not have had a material effect on the 2025 profit for the period.

The Group has hedged a considerable part of the floating interest rate exposure by means of interest rate swaps. When taking into account these

swaps and the loans with a fixed rate, in total EUR 25.6 million of the EUR 53.0 million long-term and short-term loans, excluding lease liabilities, at

financial year-end have an interest rate which is fixed for one year or longer. Based on the interest-bearing debt levels at year-end and expected cash

flow development, a 1%-point increase in the interest rate across the yield curve as from 1 January 2026, will have an increasing effect on interest

expenses in 2026 of maximum EUR 0.3 million.

Exchange rate risk

A 10%-point appreciation of the currencies listed hereafter against the euro would increase shareholders’ equity as at 31 December 2025 and the result

for 2025 by the amounts shown in the following table. A 10%-point depreciation of the listed currencies against the euro would have had the opposite

effect on the result and equity.

31 December 2025	Equity	Result
US dollar	1.6	0.1
Chinese yuan	(0.1)	(0.0)
Romanian lei	1.5	0.3
Indian rupee	0.3	0.1
31 December 2024	Equity	Result
US dollar	1.1	(0.3)
Chinese yuan	4.8	0.1
Romanian lei	1.2	(0.1)
Indian rupee	0.2	(0.1)

Principal exchange rates during the reporting period were as follows:

Applicable currency rates

Value of EUR	At 31 December 2025	At 31 December 2024	Average over 2025
Chinese yuan	8.2262	7.5833	8.0576
US dollar	1.1750	1.0389	1.1218
Romanian lei	5.0968	4.9743	5.0399
Swedish krona	10.8215	11.4590	11.0692
Indian rupee	105.5966	88.9363	97.7422

FINANCIAL STATEMENTS

Integrated Annual Report 2025

185

Fair values of financial instruments

The following table shows the fair values and carrying amounts of the financial instruments:

		2025		2024
EUR million	Carrying amount	Fair value	Carrying amount	Fair value
Assets carried at amortized costs
Receivables	23.0	23.0	61.8	61.8
Cash and cash equivalents	29.4	29.4	8.5	8.5
Held to maturity investments	–	–	0.2	0.2
	52.4	52.4	70.5	70.5
Liabilities carried at amortized costs
Bank syndicate loans	–	–	(13.1)	(13.1)
Schuldschein loans	(52.4)	(52.4)	(72.2)	(72.2)
Other loans	(0.6)	(0.6)	(17.0)	(17.0)
Lease liabilities	(6.7)	(6.7)	(7.9)	(7.9)
Bank overdraft	0.0	0.0	(1.7)	(1.7)
Trade and other payables (excluding current tax liabilities)	(33.7)	(33.7)	(58.9)	(58.9)
	(93.4)	(93.4)	(170.8)	(170.8)
Assets / (Liabilities) carried at fair value
Interest derivatives	(0.2)	(0.2)	0.2	0.2
Forward exchange contracts	–	–	0.0	0.0
	(0.2)	(0.2)	0.2	0.2

The Group has no available for sale financial assets and all liabilities at fair value were designated as such upon initial recognition.

The forward exchange contracts and interest derivatives are included in the trade and other payables in the statement of financial position.

FINANCIAL STATEMENTS

Integrated Annual Report 2025

186

Interest rate used in measuring fair value

The interest rate used for discounting estimated cash flows, where applicable, is based on the swap curve as at 31 December, augmented by the

prevailing credit mark-up, and is as follows:

	2025	2024
Derivatives	2.1%	2.7%
Leases	5.0%	5.0%
Bank syndicate loans	3.7%	4.5%
Schulschein loans	3.4%	3.6%
Other loans	1.4%	3.1%

Fair value hierarchy

In estimating the fair value of an asset or a liability, the Group uses market-observable data to the extent it is available. The fair value calculation method

of all assets and liabilities carried at amortized costs is categorised in level 2 of the fair value hierarchy. The table below analyses financial instruments

carried at fair value, by valuation method. The different levels have been defined as follows:

level 1 quoted prices (unadjusted in active markets for identical assets or liabilities);

level 2 inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly

(i.e. derived from prices);

level 3 inputs for the asset or liability that are not based on observable market data (unobservable inputs).

	Level 1	Level 2	Level 3	Total
31 December 2025
Derivative contracts used for hedging	–	(0.2)	–	(0.2)
Total	–	(0.2)	–	(0.2)
31 December 2024
Derivative contracts used for hedging	–	(0.2)	–	(0.2)
Total	–	(0.2)	–	(0.2)

Master netting

The Company has no master netting agreement in place. All derivative instruments are presented individually as either an asset or liability.

FINANCIAL STATEMENTS

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187

Leases

The Group leases buildings, cars, office equipment and forklifts. The lease term varies between 3 to 15 years. For buildings an option to renew the lease

after the lease period is customary. Information about leases for which the Group is a lessee is presented on several places throughout the financial

statements:

■ total cash outflow for leases is included in the consolidated statement of cash flows for repayments of lease liabilities EUR 2.4 million

(2024: EUR 3.0 million) for interest EUR 0.5 million (2024: EUR 0.5 million);

■ the carrying amount of right-of-use assets at the end of the reporting period by class of underlying assets, additions to these assets and

the depreciation charge for these assets are included in note 1;

■ lease liabilities are included in note 11 and interest expense on lease liabilities are included in note 23;

■ expenses relating to short-term leases or low-value assets amount to EUR 0.1 million (2024: EUR 0.2 million).

Capital commitments

As at 31 December 2025 the Group had capital commitments totaling to EUR 0.9 million (2024: EUR 1.3 million).

Contingent assets and liabilities

The Group had guarantees in particular with regard to rentals, financing facilities and post employee benefits totaling to EUR 1.5 million

(2024: EUR 1.8 million).

On 29 September 2025, Kendrion Automotive (Sibiu) SRL and Knorr-Bremse announced that they have entered into a long-term cooperation

agreement. The agreement secures phased capacity sharing and agreed future ownership transfer of the plant of Kendrion Automotive (Sibiu) SRL to

Knorr-Bremse by the end of 2028 latest. This transaction is part of Kendrion’s strategic repositioning to a pure-play Industrial company focusing entirely

on industrial growth opportunities. As part of the agreement, Knorr-Bremse will make phased financial contributions to Kendrion for capacity sharing

and assumes a portion of the fixed costs associated with Sibiu’s electronics operations. In addition, Kendrion will receive a cash consideration of

EUR 4 million. This amount is dependent on certain predefined milestones. In 2025, an amount of EUR 0.9 million is recognized in the consolidated

statement of profit and loss. The remaining EUR 3.1 million will be recognized in the upcoming years, based on achievements of future milestones, and

is therefore presented as a contingent asset.

The Group has divested itself of a number of companies in the past. The customary representations and warranties for transactions of this nature are

included in the relevant share or asset purchase agreements. The Group, as is customary for transactions of this nature, also issued representations

and warranties for potential (tax) claims relating to periods prior to the various divestment dates.

The agreement relating to the divestment of Automotive activities in Europe and USA includes guarantees from Kendrion. The buyer is obliged to

undertake a warranty and indemnity insurance under an insurance policy (the “W&I Insurance”) covering the majority of Kendrion’s guarantees.

Except for cases of willful misconduct or fraud, any liability of Kendrion arising from unsecured claims not covered by the W&I Insurance shall be limited

to EUR 1.00.

FINANCIAL STATEMENTS

Integrated Annual Report 2025

188

Operating segments

The Group, in accordance with IFRS 8, has included general and entity-wide disclosures in these consolidated financial statements.

Geographical segments based on physical location of the Group operating companies

The revenue and non-current assets per geographic area are specified below.

		The Netherlands		Germany	Other	European countries
EUR million	2025	2024	2025	2024	2025	2024
Revenue from transactions with third parties	14.2	15.5	164.3	175.4	49.2	39.3
Other non-current assets	21.6	22.5	115.3	125.9	11.2	7.8
Deferred tax assets	0.6	1.0	9.1	11.3	0.8	0.2
Net liability for defined benefit obligations	−	−	4.3	4.6	0.2	0.2
		Asia		The Americas		Consolidated
		A				A
EUR million	2025	2024	2025	2024	2025	2024
Revenue from transactions with third parties	3.0	2.7	14.8	14.6	245.5	247.5
Other non-current assets	1.5	43.2	11.4	13.3	161.0	212.7
Deferred tax assets	−	6.5	1.8	2.4	12.3	21.4
Net liability for defined benefit obligations	−	−	−	−	4.5	4.8

Revenue segmented by customer location

		A
EUR million	2025	2024
Germany	120.6	116.0
Other European countries	87.6	91.6
Asia	16.6	18.9
The Americas	18.7	19.1
Other countries	2.0	1.9
Total	245.5	247.5
A

The 2024 revenue from transactions with third parties were re-presented to present the continuing operations only in accordance with IFRS 5.

Reference is made to note 8 for more details on results from discontinued operations .

FINANCIAL STATEMENTS

Integrated Annual Report 2025

189

Information about reportable segments

In 2024 and 2025, Kendrion sold its Automotive business in Europe, China and the USA. Through these transactions, Kendrion completed its strategic

repositioning by focusing entirely on industrial growth opportunities in Europe and the USA. The European Automotive Sound and Electronics business

(Mobility) remains with Kendrion, and has been organizationally integrated into IAC, but are reported on separately.

After the transactions, these activities have been considered a separate operating segment, Mobility (previously named Other business). The business

groups Industrial brakes (IB) and Industrial Actuators and Controls (IAC) remain unchanged. As part of the strategic repositioning, Kendrion will focus

its product development resources entirely on the industrial segments. With the Knorr-Bremse phased capacity sharing and future owenrship transfer,

Mobility activities will be phased-out in the future, refer to note 18 for more details.

Thus based on the structure of the Group and the criteria of IFRS 8, Kendrion has concluded it has three operating segments, the business groups

“Industrial Brakes’ and ‘Industrial Actuators and Controls’, and ‘Mobility’.

Based on the aggregation criteria of IFRS 8, Industrial Brakes and Industrial Actuators and Controls have been aggregated into one reportable

segment. The industrial activities of the business units Industrial Brakes and Industrial Actuators and Controls focus on developing and manufacturing

electromagnetic systems and components for industrial applications. These business units also have similar economic characteristics and display a

number of similarities with respect to their technology, production processes, equipment and customers.

		Industrial		Mobility		Consolidated
		B		B		B
EUR million	2025	2024	2025	2024	2025	2024
Revenue from transactions with third parties	204.1	207.6	41.4	39.9	245.5	247.5
Inter-segment revenue	0.0	0.0	0.0	0.0	0.0	0.0
EBITDA A	29.9	29.6	6.4	1.0	36.3	30.6
EBITDA as a % of revenue A	14.6%	14.3%	15.4%	2.5%	14.8%	12.4%
Normalized EBITDA A	31.6	30.3	6.5	2.9	38.1	33.2
Normalized EBITDA as a % of revenue A	15.5%	14.6%	15.7%	7.3%	15.5%	13.4%
Reportable segment assets	214.1	261.7	58.1	103.1	272.2	364.8
Reportable segment employees (FTE)	1,068	1,101	201	258	1,269	1,359

Disaggregation revenue

		B
EUR million	2025	2024
Revenue from serial produced goods	243.3	245.2
Revenue from engineering and samples	2.2	2.3
Total	245.5	247.5

Non-IFRS financial measure. For the definition and reconciliation of the most directly comparable IFRS measure, refer to reconciliation of non-IFRS information, starting on page 219.

2024 numbers were re-presented to present the continuing operations only in accordance with IFRS 5.

Reference is made to note 8 for more details on results from discontinued operations.

FINANCIAL STATEMENTS

Integrated Annual Report 2025

190

Staff costs

		A
EUR million	2025	2024
Wages and salaries	69.9	68.0
Social security charges	12.0	11.9
Temporary personnel	2.3	2.8
Contributions to defined contribution plans	1.0	1.2
Expenses related to defined benefit plans	0.0	0.0
Increase in liability for long-service leave	0.0	(0.1)
Other costs of personnel	2.4	2.5
	87.6	86.3

Total number of employees and temporary workers at 31 December (FTE) 1,269 1,359

The number of employees and temporary workers as at 31 December 2025 (FTE) working in the Netherlands is 104 (2024: 111). The staff costs 2025

include EUR 1.9 million costs related to restructuring measures (2024: EUR 0.6 million). The staff costs 2025 include a EUR 0.4 million government

grant for R&D activities (2024: EUR 0.4 million).

Other operating expenses

		A
EUR million	2025	2024
Increase/(Decrease) in provision for doubtful debts	0.2	0.5
Premises costs	5.1	4.9
Maintenance expenses	4.6	4.1
Transport expenses	1.4	1.3
Consultancy expenses	3.2	2.8
Sales and promotion expenses	0.8	0.7
Car, travel and representation costs	1.4	1.3
Insurance	1.3	1.7
Other	1.0	0.6
	19.0	17.9

Research & Development expenses (including staff and other operating expenses) for 2025 totaled EUR 11.1 million (2024: EUR 11.3 million).

2024 numbers were re-presented to present the continuing operations only in accordance with IFRS 5. Reference is made to note 8 for more details on results from

discontinued operations.

FINANCIAL STATEMENTS

Integrated Annual Report 2025

191

Net finance costs

		A
EUR million	2025	2024
Interest income	0.1	0.1
Net exchange gain	0.0	–
Finance income	0.1	0.1
Interest expenses	(3.1)	(2.8)
Interest expenses related to lease liabilities	(0.5)	(0.5)
Interest expenses related to employee benefits	(0.2)	(0.2)
Net exchange loss	−	(0.5)
Finance expense	(3.8)	(4.0)
Net financing costs	(3.7)	(3.9)

Income tax

		A
EUR million	2025	2024
Current tax charge	4.3	4.6
Deferred tax charge	(0.6)	(2.4)
Total corporation tax expenses in the income statement	3.7	2.2

Reconciliation of effective tax rate

	Reconciliation effective tax rate				Reconciliation in EUR million
	A				A
		2025	2024	2025	2024
Profit before income tax				17.3	10.6
Income tax expense at local corporation tax rate	25.8%	25.8%		4.5	2.7
Effect of tax rates in foreign jurisdictions	(3.8)%	(2.9)%		(0.5)	(0.4)
Non-deductible expenses	2.7%	2.3%		0.3	0.3
Tax exempt income	(0.1)%	0.0%		0.0	0.0
Changes in tax rate	–	(4.6)%		(0.8)	–
Changes in estimates related to prior years	(5.2)%	0.3%		0.1	(0.5)
Current-year losses for which no deferred tax asset is recognized	(1.0)%	–		–	(0.1)
Other movements	1.8%	0.5%		0.1	0.2
	20.4%	21.4%		3.7	2.2

Non-deductible expenses include the effect of partially deductible interest cost. During the financial year, legislation was enacted in Germany providing

for a reduction in corporate income tax rates applicable in future periods. As deferred tax assets and liabilities are measured using the tax rates expected

to apply when the related temporary differences reverse, the remeasurement of deferred taxes results in a tax benefit of EUR 0.8 million.

2024 numbers were re-presented to present the continuing operations only in accordance with IFRS 5. Reference is made to note 8 for more details on results from discontinued operations.

FINANCIAL STATEMENTS

Integrated Annual Report 2025

192

Related parties

Identity of related parties

A related-party relationship exists between the Company and its subsidiaries, the Executive Board, the Supervisory Board and shareholders of the

Company with an interest of more than 20%. The Company has a number of agreements with its subsidiaries relating to the charging of central costs to

and from the business units, including management, development, information technology and marketing costs, as well as agreements in respect of

Group financing and use of intellectual property. Internal supplies are also obtained within the business units. Intercompany transactions are effectuated

at arm’s length market prices. As all subsidiaries are fully consolidated and reflected in these financial statements, the amounts of these transactions are

not further specified. For a list of the subsidiaries, see page 217.

Compensations of key management personnel

The remuneration of the Executive Board and Supervisory Board is as follows:

EUR thousand	2025	2024
Short-term benefits	1,881.4	1,607.4
Post-employment benefits	141.1	158.9
Other long-term benefits	−	−
Share-based payments	140.3	50.6
Termination benefits	−	−
	2,162.8	1,816.9

The total remuneration is included in staff costs (see note 20). For a description of the remuneration policy of the members of the Executive Board,

see pages 109-124.

The CEO will, based on this performance, receive a variable remuneration of 78.00% of his gross fixed remuneration. The CEO’s gross variable

remuneration amounts to EUR 469,404 (2024: EUR 291,696) which will be paid in cash.

The CFO will, based on this performance, receive a variable remuneration of 58,65% of his gross fixed remuneration. The CFO’s gross variable

remuneration amounts to EUR 209,381 (2024: EUR 129,815) which will be paid in cash.

Kendrion applies a share ownership guideline for members of the Executive Board of 100% of the annual fixed gross base salary for the CEO and 50%

of the annual fixed gross salary of the CFO. This shareholding has to be gradually built up with performance shares earned under the long-term share

incentive, subject to the sell-to-cover concept as prescribed by the ‘Share ownership guideline’.

The amount charged to the profit or loss regarding the long-term variable remuneration policy, for Executive Board and Management Team, was EUR

0.3 million (2024: EUR 0.1 million).

FINANCIAL STATEMENTS

Integrated Annual Report 2025

193

The vesting and holding periods for (conditional) shares awarded to the CEO are specified as follows:

CEO (J.A.J. van Beurden)	Number of shares	Expiry vesting period	Expiry holding period
2025	33,218	Expiry performance period 2025-2027	End of 2029
2024	30,596	Expiry performance period 2024-2026	End of 2028
2023	4,406	Expiry performance period 2023-2025	End of 2027
2022	3,229	Expiry performance period 2022-2024	End of 2026
2021	4,049	Expiry performance period 2021-2023	End of 2025
CFO (J.H. Hemmen)	Number of shares	Expiry vesting period	Expiry holding period
2025	16,421	Expiry performance period 2025-2027	End of 2029
2024	15,126	Expiry performance period 2024-2026	End of 2028
2023	2,273	Expiry performance period 2023-2025	End of 2027
2022	1,639	Expiry performance period 2022-2024	End of 2026
2021	1,906	Expiry performance period 2021-2023	End of 2025

Pensions

The Executive Board participates in the defined contribution plan of the Company. For 2025, the contribution to the pension insurer was EUR 53,072

(2024: EUR 44,508) for the CEO and EUR 40,218 (2024: EUR 35,559) for the CFO.

Transactions with shareholders

There were no transactions with shareholders, except for the dividend payments, which is disclosed under note 9.

Other related party transactions

There were no transactions with other related parties.

FINANCIAL STATEMENTS

Integrated Annual Report 2025

194

Other notes

The following German legal entities are consolidated in these consolidated financial statements: Kendrion Holding Germany GmbH, Kendrion (Villingen)

GmbH, Kendrion (Donaueschingen/Engelswies) GmbH, Kendrion Kuhnke GmbH, Kendrion Kuhnke Automation GmbH, Kendrion Kuhnke Automotive

GmbH, Kendrion INTORQ GmbH, INTORQ Beteiligungs-GmbH and Kendrion IP Management GmbH. All of the above entities make use of the

exemption under § 264(3) of the German Commercial Code (HGB). In accordance with this provision, separate annual financial statements of these

entities as at 31 December 2025 have not been and will not be published. A list of the subsidiaries benefiting from this disclosure exemption is available

from the Commercial Register at the Local Court (Amtsgericht) in Freiburg im Breisgau under registration number HRB 704749.

Post-balance sheet events

There were no post-balance sheet events that have to be taken into account in the consolidated financial statements for the year ended

31 December 2025.

Fees to the auditor

With reference to Section 2:382a of the Netherlands Civil Code, the following fees have been charged by Forvis Mazars Accountants N.V. and its

member firms and affiliates to the Company, its subsidiaries and other consolidated entities:

			2025				2024
		Other Forvis			Other Forvis
	Forvis Mazars	Mazars member		Forvis Mazars	Mazars member	Deloitte
EUR thousand	Accountants N.V.	firms and affiliates	Total	Accountants N.V.	firms and affiliates	Accountants B.V.	Total
Audit of financial statements	618.7	250.5	869.2	389.5	406.3	72.2	868.0
Other assurance services	65.0	−	65.0	100.0	–	–	100.0
Tax advisory services	−	−	−	–	–	–	–
Other non-audit services	−	−	−	–	–	–	–
Total	683.7	250.5	934.2	489.5	406.3	72.2	968.0

FINANCIAL STATEMENTS

Integrated Annual Report 2025

195

Note EUR million 2025 2024

Fixed assets

Property. plant and equipment 0.7 0.7

Other investments. including derivatives 0.0 0.2

1.3 Financial fixed assets 120.9 180.1

Total non-current assets 121.6 181.0

Current assets

1.4 Receivables 34.2 3.0

Cash and cash equivalents 0.5 0.0

Total current assets 34.7 3.0

Total assets 156.3 184.0

1.5 Equity

Share capital 31.6 31.0

Share premium 36.5 37.1

Legal reserves 1.2 5.7

Other reserves 64.6 89.2

Net profit/ (loss) for the period 19.5 (4.5)

Total equity 153.4 158.5

1.6 Current liabilities

Loans and borrowings 0.9 23.2

Payables 2.0 2.3

Total current liabilities 2.9 25.5

Total equity and liabilities 156.3 184.0

COMPANY BALANCE SHEET AT 31 DECEMBER

(before profit appropriation)

FINANCIAL STATEMENTS

Integrated Annual Report 2025

196

COMPANY INCOME STATEMENT

Note EUR million 2025 2024

Revenue – –

1.8 Other income 4.1 4.5

Total revenue and other income 4.1 4.5

1.9 Staff costs 4.8 5.0

Depreciation and amortization 0.2 0.1

Other operating expenses 1.0 1.2

Result before net finance costs (1.9) (1.8)

Finance income – –

Finance expense (0.5) (0.8)

Profit/(loss) before income tax (2.4) (2.6)

Income tax expense (0.2) (0.8)

Profit/(loss) for the period (2.6) (3.4)

Share in results of Group companies after tax 22.1 (1.1)

1.10 Net profit/(loss) for the period 19.5 (4.5)

FINANCIAL STATEMENTS

Integrated Annual Report 2025

197

Notes to the company financial statements

General

The Company financial statements are part of the 2025 financial statements of Kendrion N.V. (the ‘Company’). The Company is registered

at the Chamber of Commerce in the Netherlands under number: 30113646.

Principles of valuation of assets and liabilities and determination of results

In selecting the principles employed in the company financial statements for the valuation of assets and liabilities and determination of results,

Kendrion N.V. has made use of the option provided by Section 362, subsection 8, of Book 2 of the Netherlands Civil Code. Consequently, the principles

employed in the Company financial statements of Kendrion N.V. for the valuation of assets and liabilities and determination of results (the ‘accounting

policies’) are identical to those employed in the consolidated EU-IFRS financial statements. Interests in entities in which Kendrion N.V. has significant

influence are measured using the equity method. The consolidated EU-IFRS financial statements have been prepared in accordance with the standards

adopted by the International Accounting Standards Board as endorsed for use in the European Union (hereinafter referred to as ‘EU-IFRS’).

These policies are discussed in notes a – t.

Financial fixed assets

EUR million

Interest in Group

companies Deferred tax Total 2025 Total 2024

Carrying amount at 1 January 179.9 0.2 180.1 228.4

Results of Group companies 22.1 − 22.1 (1.1)

Movements in deferred tax assets − (0.0) (0.0) (0.4)

Foreign currency translation differences for foreign operations (2.7) − (2.7) (3.4)

Dividends received (3.0) − (3.0) (42.0)

Capital distribution (75.8) − (75.8) −

Other movements 0.2 − 0.2 (1.4)

Carrying amount at 31 December 120.7 0.2 120.9 180.1

The capital distribution reflects a return of capital and reserves, effected through the transfer and settlement of receivables from Group companies.

Receivables

EUR million 2025 2024

Receivables from Group companies 33.7 2.4

Prepayments and accrued income 0.5 0.6

34.2 3.0

Receivables from Group companies include receivables from Kendrion Finance B.V. of EUR 32.6 million.

1.1

1.2

1.3

1.4

NOTES TO THE COMPANY FINANCIAL STATEMENTS

FINANCIAL STATEMENTS

Integrated Annual Report 2025

198

Equity

EUR million

capital

premium

Translation

reserve

Hedge

reserve

Reserve for

participations

Reserve for

own shares

Other

reserves

Result for the

year Total 2025 Total 2024

Balance as at 1 January 31.0 37.1 1.2 (0.2) 4.7 – 89.2 (4.5) 158.5 172.0

Appropriation of retained earnings – – – – – – (4.5) 4.5 – –

Foreign currency translation differences

for foreign operations – – (2.7) – – – – – (2.7) (3.4)

Net change in fair value of cash flow hedges,

net of income tax – – – 0.1 – – – – 0.1 (0.5)

Issue of ordinary shares 0.6 2.5 – – – – (0.1) – 3.0 2.7

Own shares repurchased – – – – – (2.5) - – (2.5) –

Share-based payment transactions – – – – – – 0.3 – 0.3 (0.2)

Dividends to equity holders – (3.1) – – – – (19.7) – (22.8) (6.8)

Other – – – – (1.9) – 1.9 – – (0.8)

Net profit/(loss) for the period – – – – - – - 19.5 19.5 (4.5)

Balance as at 31 December 31.6 36.5 (1.5) (0.1) 2.8 (2.5) 67.1 19.5 153.4 158.5

Share capital

The authorized capital of the Company amounts to EUR 80 million, divided into 40 million ordinary shares of EUR 2.00 each, of which 15,807,427

ordinary shares have been issued (2024: 15,500,057).

Share premium

The share premium represents revenue from shares issued at more than their nominal value (issued above par). The issued and paid share capital,

including share premium, is fiscally recognized capital.

Translation reserve (Legal reserve)

The translation reserve comprises all foreign currency differences arising from the translation of the financial statements of subsidiaries outside the euro

zone. Gains and losses relating to the translation risk are recognized in equity. The build-up of the cumulative figure commenced on 1 January 2004.

1.5

1.5.1

1.5.2

1.5.3

FINANCIAL STATEMENTS

Integrated Annual Report 2025

199

Hedge reserve

The hedge reserve comprises the effective share of the cumulative net movement in the fair value of cash-flow hedging instruments relating to hedged

transactions that have not yet been executed.

Statutory reserve for participations (Legal reserve)

This reserve pertains to participating interests that are accounted for according to the equity accounting method. The reserve represents the difference

between the participating interests’ retained profit and direct changes in equity, as determined on the basis of the Company’s accounting policies, and

the share thereof that the Company may distribute. It is shown as the share in the undistributed results of the subsidiaries since they were first valued

using the equity method. The amount of any dividend – from these subsidiaries – to which there is an entitlement on adoption of the financial statements

is deducted from this reserve.

Reserve for own shares

The reserve for the Company’s own shares comprises the cost of the Company shares that are held by the Company for the remuneration package for

the Executive Board. As at 31 December 2025, the Company held 185,333 of it’s own shares, see note 9 in the consolidated financial statements for

details

Other reserves

Other reserves are all the reserves other than those shown separately and comprise primarily the cumulative, undistributed profits from previous financial

years.

Current liabilities

EUR million 2025 2024

Debts to Group companies 0.4 22.8

Lease liability 0.5 0.4

Trade payables 0.2 1.1

Other payables and accrued expenses 1.8 1.2

2.9 25.5

An amount of EUR 0.4 million is included on the line lease liability that is due after 2026 (2024: EUR 0.3 million).

Financial instruments

See note 15 to the consolidated financial statements for details on financial instruments.

1.5.4

1.5.5

1.5.6

1.5.7

1.6

1.7

FINANCIAL STATEMENTS

Integrated Annual Report 2025

200

Other income

EUR million 2025 2024

Management fee 4.1 4.5

4.1 4.5

Staff costs

EUR million 2025 2024

Wages and salaries 4.0 3.9

Social security charge 0.2 0.2

Pension costs 0.4 0.6

Other costs of personnel 0.2 0.3

4.8 5.0

Total average number of FTE 17 20

All employees were posted in the Netherlands. The Company has only defined contribution plans for its employees.

Profit appropriation

Appropriation of net result

EUR million 2025 2024

Net profit / (loss) 19.5 (4.5)

The Executive Board has decided, with the approval of the Supervisory Board, with the approval of the Supervisory Board, that the net profit

of EUR 19.5 million will be added to the other reserves.

Commitments not appearing on the balance sheet

Joint and several liability and guarantees

The Company and its Group companies have issued guarantees mainly in the context of the financing by financial institutions.

The Company has issued declarations of joint and several liability, as referred to in Section 403 of Book 2 of the Netherlands Civil Code, for:

■ Combattant Holding B.V., De Bilt;

■ Kendrion Finance B.V., Zeist;

■ 3T B.V., Enschede;

■ Kendrion Marketing B.V., Zeist.

1.8

1.9

1.10

1.11

1.11.1

FINANCIAL STATEMENTS

Integrated Annual Report 2025

201

Fiscal unity

The Company and its Dutch subsidiaries excluding 3T B.V. form a tax group for corporation tax purposes.

According to the standard terms, each of the companies is jointly and severally liable for corporation tax payable by all the members of the fiscal unity.

Post-balance sheet events

There were no post-balance sheet events that have to be taken into account in the consolidated financial statements for the year ended

31 December 2025.

Remuneration of and share ownership by the Executive Board and Supervisory Board

Remuneration of the Executive Board

The remuneration of current Executive Board members charged to the Company and Group companies, including pension expenses as referred to

in Section 383, subsection 1, of Book 2 of the Netherlands Civil Code, amounted to EUR 1,952,000 (2024: EUR 1,604,000). This remuneration is as

follows:

2025 2024

EUR thousand

J.A.J. van

Beurden J.H. Hemmen Total

J.A.J. van

Beurden J.H. Hemmen Total

Short-term fixed remuneration 601.8 357.0 958.8 590.0 350.0 940.0

Short-term variable remuneration 469.4 209.4 678.8 291.7 129.8 421.5

Long-term variable remuneration 92.5 47.8 140.3 33.6 17.0 50.6

Post-employment benefits and other expenses 77.3 96.8 174.1 83.5 108.4 191.9

Total 1,241.0 711.0 1.952.0 998.8 605.2 1,604.0

The 2025 short-term variable remuneration will be paid in cash after income tax.

For more information on the long-term variable remuneration see page 116.

1.11.2

1.12

1.13

FINANCIAL STATEMENTS

Integrated Annual Report 2025

202

Remuneration of the Supervisory Board

The total remuneration of current and former Supervisory Board members in 2025 amounts to EUR 211 thousand (2024: EUR 213 thousand).

This remuneration is as follows:

EUR thousand 2025 2024

Supervisory Board Members:

F.J. van Hout 65 65

E.H. Slijkhuis 49 49

M.H.C. Baijens 49 37

E.M. Doll 48 48

M.J.G. Mestrom (stepped down as from 15 April 2024) − 14

211 213

No loans, advances or related guarantees have been given to the Executive Board or Supervisory Board members.

Share ownership by the Executive Board and the Supervisory Board

31 December 2025 31 December 2024

Executive Board J.A.J. van Beurden 76,148 66,990

J.H. Hemmen 24,955 18,283

Supervisory Board F.J. van Hout 26,500 26,500

E.H. Slijkhuis 3,500 3,500

Amsterdam, 27 February, 2026

Executive Board Supervisory Board

J.A.J. van Beurden F.J. van Hout

J.H. Hemmen M.H.C. Baijens

E.H. Slijkhuis

E.M. Doll

Integrated Annual Report 2025

203

Provisions in the Articles of Association governing the appropriation of profit

Under article 35.1 and 35.2 of the Articles of Association of the Company, the Executive Board shall, with the approval of the Supervisory Board,

determine which part of the profit is added to the reserves. The profit remaining after transfer to the reserves is available to the General Meeting

of Shareholders. The Company can only make payments to the shareholders and other parties entitled to the distributable result insofar as

the shareholders’ equity exceeds the paid-up and called-up part of the capital plus the statutory reserves and exceeds the amounts resulting from

the distribution test, performed by the Executive Board at the date of each dividend payment.

OTHER INFORMATION

Integrated Annual Report 2025

204

INDEPENDENT AUDITOR’S REPORT FINANCIAL STATEMENTS

To the shareholders and Supervisory Board of Kendrion N.V.

Report on the audit of the financial statements 2025 included in the Integrated Annual Report

Our opinion

We have audited the accompanying financial statements for the year ended 31 December 2025 (hereafter “financial statements”) of Kendrion N.V.

(hereafter “Company”) refers to the legal entity, and “Group” refers to the company and its subsidiaries, based in Amsterdam, the Netherlands. The

Company is the head of a group of entities (“components”). The financial information of this group is included in the 2025 consolidated financial

statements of the Group. The financial statements include the 2025 consolidated financial statements and the 2025 company financial statements.

In our opinion:

■ the accompanying consolidated financial statements give a true and fair view of the financial position of the Group as at 31 December 2025 and of

its result and its cash flows for 2025 in accordance with IFRS Accounting Standards as adopted by the European Union (‘EU’) and with Part 9 of

Book 2 of the Dutch Civil Code;

■ the accompanying company financial statements give a true and fair view of the financial position of the Company as at 31 December 2025 and of

its result for 2025 in accordance with IFRS Accounting Standards as adopted by the European Union (‘EU’) and with Part 9 of Book 2 of the Dutch

Civil Code.

The consolidated financial statements comprise:

1. the consolidated statement of financial position as at 31 December 2025;

2. the following statements for 2025: the consolidated statement of profit and loss and other comprehensive income, the consolidated statement of

changes in equity and the consolidated statement of cash flows; and

3. the notes comprising a summary of the material accounting policies and other explanatory information.

The company financial statements comprise:

1. the company balance sheet as at 31 December 2025;

2. the company income statement for 2025; and

3. the notes comprising a summary of the accounting policies and other explanatory information.

Basis for our opinion

We conducted our audit in accordance with Dutch law, including the Dutch Standards on Auditing. Our responsibilities under those standards are

further described in the ‘Our responsibilities for the audit of the financial statements’ section of our report.

Integrated Annual Report 2025

205

INDEPENDENT AUDITOR’S REPORT FINANCIAL STATEMENTS

We are independent of the Group and the Company in accordance with the EU Regulation on specific requirements regarding statutory audit of public-

interest entities, the Wet toezicht accountantsorganisaties (Wta, Audit firms supervision act), the Verordening inzake de onafhankelijkheid van

accountants bij assurance-opdrachten (ViO, Code of Ethics for Professional Accountants, a regulation with respect to independence) and other relevant

independence regulations in the Netherlands. Furthermore, we have complied with the Verordening gedrags- en beroepsregels accountants (VGBA,

Dutch Code of Ethics).

We believe the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Information in support of our opinion

We designed our audit procedures in the context of our audit of the financial statements as a whole and in forming our opinion thereon. The following

information in support of our opinion was addressed in this context, and we do not provide a separate opinion or conclusion on these matters.

Materiality

Based on our professional judgement we determined the materiality for the financial statements as a whole at € 2.9 million. The materiality is based on

1.2% of revenues from continuing operations. We have also taken into account misstatements and/or possible misstatements that in our opinion are

material for the users of the financial statements for qualitative reasons..

Audits of group entities (components) were performed using materiality levels determined by the judgement of the group audit team.

We communicated with the Audit Committee that misstatements in excess of € 88,000, which are identified during the audit, would be reported to

them, as well as smaller misstatements that in our view must be reported on qualitative grounds.

Scope of the group audit

The Company is at the head of a group of entities (“components”). The financial information of this group is included in the 2025 consolidated financial

statements of the Group.

We tailored the scope of our audit to ensure that we performed sufficient work to be able to give an opinion on the financial statements as a whole. We

used the outputs of our risk assessment, our understanding of the Group, its environment, controls and critical process, to consider qualitative factors in

order to ensure that we obtained sufficient audit evidence.

As part of designing our audit, we assessed the risk of material misstatement in the financial statements whether due to fraud or error and then

designed and performed audit procedures responsive to those risks. In particular, we looked at where management made subjective judgement such as

making assumptions on significant accounting estimates.

Because we are ultimately responsible for the opinion, we are also responsible for directing, supervising and performing the group audit. In this respect

we have determined the nature and extent of the audit procedures to be carried out on the components. Our group audit is focusing on components in

terms of audit risk and or where significant risks or complex activities were present, leading to full scope audits and specific scope audits having been

performed on the components in Germany, Austria, China, Romania, USA and the Netherlands.

Integrated Annual Report 2025

206

INDEPENDENT AUDITOR’S REPORT FINANCIAL STATEMENTS

We performed audit procedures at group level on areas such as consolidation, financial statement disclosures and impairment testing for intangible

assets (including goodwill). Specialists were involved amongst others in the areas of information technology and forensic. We have used experts for

valuation purposes.

We also involved component auditors from the Forvis Mazars Network and other audit firms, who are familiar with local laws and regulations. For these

component auditors, the group audit team provided detailed written instructions, which include the requirements for component audit teams, the audit

approach for significant audit areas, other information obtained centrally and the need for awareness for fraud risks. Our oversight procedures also

included a combination of remote and on-site reviews of working papers of the auditors of the material components, (virtual) meetings with component

auditors and management of the components, and reviewing deliverables supplied by the component auditors to gain sufficient understanding of the

work performed. We varied the nature, timing and extent of these procedures based on both quantitative and qualitative considerations. For smaller

components, we performed substantive audit procedures on material but non-significant financial statement line items, along with analytical procedures,

to corroborate our assessment that there are no remaining risks of material misstatements.

By performing the procedures mentioned above we have been able to obtain sufficient and appropriate audit evidence about the consolidated and

company financial information and to provide an opinion on the financial statements as a whole.

Audit approach fraud risks

We refer to section ‘Risk management’ of the Executive Board Report for management’s fraud risk assessment. We note that management regularly

updates its risk assessment including fraud and updates its risk and control framework.

Integrated Annual Report 2025

207

INDEPENDENT AUDITOR’S REPORT FINANCIAL STATEMENTS

As part of our procedures of identifying fraud risks, we evaluated fraud risks factors with respect to financial reporting fraud, misappropriation of assets

and corruption. We identified the following fraud risks and performed the following specific procedures:

Fraud risk 1 Our audit work performed

Risk of fraud in revenue recognition

The accounting principles in relation to revenue recognition are

included in the basis of accounting paragraph (l) of the

consolidated financial statements

The risk of fraud in revenue recognition is a presumed audit risk.

For the Company this has been assessed as a risk for

overstatement of revenue through the occurrence of inappropriate

manual transactions (non-standard transactions).

Amongst others we have performed the following audit procedures:

■ an update of our understanding of the Group’s revenue recognition policies where relevant to our audit;

■ we assessed the internal control framework and evaluated the design and implementation of the relevant controls in the

financial closing process, revenue reporting process and in the processes for generating and processing manual journal

entries related to the revenue;

■ we assessed the IT environment and relevant systems;

■ we performed audit procedures on non-standard journal entries made within the operational cycles of revenue (classified

as unexpected journals).

Integrated Annual Report 2025

208

INDEPENDENT AUDITOR’S REPORT FINANCIAL STATEMENTS

Fraud risk 2 Our audit work performed

Management override of controls

Management is ordinarily in a unique position to adjust the

financial statements by overriding controls that otherwise appear

to be operating effectively.

In this context, we paid attention to:

■ the appropriateness of journal entries and other adjustments

made in the preparation of the financial statements, such as

manual journal entries related to revenue that are made during

the year; journal entries made close to the year-end date and

consolidation adjustments and reclassifications;

■ potential biases in estimates, such as impairment of intangible

assets (goodwill and other intangible assets);

■ significant transactions, if any, outside the normal course of

business.

Amongst others we have performed the following audit procedures:

■ an understanding of the internal control framework and evaluated the design and implementation of the relevant controls

in the financial closing process;

■ with regard to the Executive Board’s key accounting estimates, we have evaluated judgements and decisions for bias of

the Executive Board. This is mainly related to the key accounting estimates in the management forecast used for the

impairment analysis of the cash-generating units, the management forecast of lows to determine whether customer

relations are impaired and the management forecast to determine the future utilisation of tax losses;

■ we made enquiries of individuals with various levels of responsibility involved in the financial reporting process about

inappropriate or unusual activity relating to the processing of journal entries and other adjustments;

■ we performed analyses of high-risk journals within the consolidation with a pre assessed risk of material misstatements,

as part of our audit approach to address fraud risks which could have a risk of material misstatement on the financial

statements;

■ we performed audit procedures on journal entries in the various processes, amongst other the closing and consolidation

process, based on fraud selection criteria in which at least the following criteria have been applied:

■ material adjustments made during the course of preparing the financial statements;

■ manual journal entries on the operational related revenue ledgers;

■ adjustments on group level which relate to regular activities on component level.

For these journal entries we have tested the appropriateness by obtained supporting documentation:

■ for significant and risk-related transactions we evaluated whether the business rationale of the transactions suggested

that they may have been entered into to engage in fraudulent financial reporting or to conceal misappropriation of assets.

In addition, we also performed the following more general procedures:

■ we assessed the speak-up and compliance matters followed up by management;

■ we have incorporated an element of unpredictability in the selection of the nature, timing and extent of our audit procedures;

■ we evaluated whether the selection and application of accounting policies by the entity, particularly those related to subjective measurements and

complex transactions, may be indicative of fraudulent financial reporting.

In performing these procedures, we used the support of our component auditors and IT-specialists. Our forensic specialists participated in the planning

of the audit and aided to identify areas where the Group’s financial statements may be susceptible to material misstatement due to fraud and reviewed

our fraud risk assessment.

Integrated Annual Report 2025

209

INDEPENDENT AUDITOR’S REPORT FINANCIAL STATEMENTS

Our response to the risk of non-compliance of laws and regulations

We have obtained an understanding of the relevant laws and regulations. We have identified the following laws and regulations that have an indirect

effect on the financial statements: anti-bribery and corruption laws & regulations, competition and data privacy laws, and human rights laws and

regulations.

We held enquiries with management and the Audit Committee if the entity is compliant with laws and regulations which directly or indirectly have a

material impact on the financial statements. We also inspected lawyers’ letters and remained alert to indications of identified and suspected non-

compliance throughout the audit, held enquiries with legal counsel, and obtained a written representation from management that all known instances of

identified and suspected non-compliance with laws and regulations were disclosed to us.

Observations

The aforementioned audit procedures have been performed in the context of the audit of the financial statements. Consequently, they are not planned

and performed as a specific investigation regarding fraud and non-compliance with laws and regulations. Our audit procedures have not led to any

findings.

Audit approach going concern

Our responsibilities, as well as the responsibilities of the Executive Board, related to going concern under the prevailing accounting standards are

outlined in the “Description of responsibilities regarding the financial statements” section below. The Executive Board has performed its going concern

assessment and has not identified any going concern risks. Our main procedures to assess the Executive Board assessment were:

■ We considered whether the Executive Board assessment of the going concern risks includes all relevant information of which we are aware as a

result of our audit.

■ We evaluated the consistency of information used in the Executive Board going concern assessment (including cash flow projection, the budget for

the coming year and the mid-term plan) and information obtained through auditing other areas such as impairment assessments.

■ We read through the terms of debt covenants and determined whether any have been breached.

■ We inquired the entity’s Legal Counsel regarding the existence of litigation and claims and the reasonableness of management’s assessments of

their outcome and the estimate of their financial implications.

■ We performed audit procedures regarding subsequent events to identify those that either mitigate or otherwise affect the entity’s ability to continue

as a going concern.

■ We analysed the Company’s financial position as at year-end and compared it to the previous financial year in terms of indicators that could identify

going concern risks.

■ We read minutes of the Executive Board, Supervisory Board and relevant committees for reference to financing difficulties.

■ We discussed with component auditors about facts and circumstances which might be relevant for the going concern assessment at group level.

■ We analysed the Company’s assessment on the impact of the current market developments (i.e. demand volatility and increasing raw material

prices.

■ We inquired with the Executive Board on the key assumptions and principles underlying the Executive Board assessment of the going concern risks.

■ We inspected agreements in terms of conditions that could lead to going concern risks.

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INDEPENDENT AUDITOR’S REPORT FINANCIAL STATEMENTS

Observations

Based on these procedures, we did not identify any reportable findings related to the Company’s ability to continue as going concern.

Our key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements. We have

communicated the key audit matter to the Executive Board. The key audit matter is not a comprehensive reflection of all matters discussed.

This matter was addressed in the context of the audit of the financial statements as a whole and in forming our opinion thereon, and we do not provide

a separate opinion on this matter.

Key Audit Matter How our scope addressed this matter

Impairment testing of goodwill

The group accounting policies in respect of goodwill and

impairment are set out in the accounting policy notes of the

consolidat-ed financial statements. For further finan-cial

information on the goodwill and related impairment test, we refer

to Note 2 of the consolidated financial statements.

For purposes of impairment testing, good-will is allocated and

monitored on a (group of) Cash Generating Unit (‘CGU’) level.

Other intangibles and property, plant, and equipment are grouped

to CGUs.

For goodwill, management is required to assess the recoverable

amount of the re-spective CGUs.

In view of the inherent uncertainties, in-cluding those related to the

current macro-economic environment, the projection of sales

volumes, revenues, margins, and discount rates in management’s

impairment tests, involved an increased level of judgement for

CGUs. As a result of impair-ment testing for the current year, no

im-pairment loss has been identified.

Given the high level of judgement made by management to

estimate the recoverable amounts used in management’s impair-

ment tests for intangible assets (including goodwill) and property,

plant and equip-ment, the impairment testing was a key audit

matter.

We involved our valuation specialists during our audit procedures.

Our audit procedures included the following:

■ we evaluated the design effectiveness of controls related to the impairment assessment including the appropriateness of

management’s assessment of the CGUs, indicators of impairment, discount rates and forecasts;

■ we assessed and evaluated the reasonableness of key assumptions in the fair value less cost of disposal and value in use

calculations supporting the fair value less cost of disposal and the projected revenue growth, operating margin, discount

rates and growth rates used in the value in use model;

■ we assessed and evaluated the key assumptions of the calculation related to the allocation of goodwill regarding the

disposal of the business in China supporting the projected revenue growth, operating margin, discount rates and growth

rates used;

■ we benchmarked key assumptions against external data and challenged management by comparing the assumptions to

historic performance of the company and local economic developments, considering the sensitivity test of the goodwill

balances for any changes in the respective assumptions;

■ we engaged with our internal valuation experts to assist us in evaluating the appropriateness of the fair value less cost of

disposal and value in use impairment models, including the key assumptions and supporting documentation, and

conclude on the overall reasonableness;

■ we audited management‘s sensitivity analysis to assess the impact of potential changes in assumptions;

■ we verified the mathematical accuracy of the models and agreed these models with relevant data;

■ we evaluated the reasonableness of the disclosures made in the financial statements in relation to the carrying value of

goodwill.

Our observation

Applying the materiality, we did not identify any reportable findings in management’s assessment of the recoverability of

intangible assets (including goodwill) and property, plant and equipment.

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INDEPENDENT AUDITOR’S REPORT FINANCIAL STATEMENTS

Report on the other information included in the Integrated Annual Report 2025

In addition to the financial statements and our auditor’s report thereon, the Integrated Annual Report 2025 contains other information that consist of:

■ report of the Executive Board;

■ report of the Supervisory Board;

■ remuneration report;

■ other information as included in the report;

■ other information as required by Part 9 of Book 2 of the Dutch Civil Code.

The Integrated Annual Report contains other information, in addition to the financial statements and our auditor’s report thereon.

Based on the following procedures performed, we conclude that the other information:

■ is consistent with the financial statements and does not contain material misstatements; and

■ contains all the information regarding the management report and the other information as required by Part 9 of Book 2 of the Dutch Civil Code.

We have read the other information. Based on our knowledge and understanding obtained through our audit of the financial statements or otherwise,

we have considered whether the other information contains material misstatements.

By performing these procedures, we comply with the requirements of Part 9 of Book 2 of the Dutch Civil Code and the Dutch Standard 720. The scope

of the procedures performed is substantially less than the scope of those performed in our audit of the financial statements.

Management is responsible for the preparation of the other information, including the management report in accordance with Part 9 of Book 2 of the

Dutch Civil Code and other information as required by Part 9 of Book 2 of the Dutch Civil Code.

Report on other legal and regulatory requirements and ESEF

Engagement

We were engaged by the general meeting as auditor of Kendrion N.V. on 15 April 2023, as of the audit for the year 2024 and have operated as statutory

auditor since that date.

No prohibited non-audit services

We have not provided prohibited non-audit services as referred to in Article 5(1) of the EU Regulation on specific requirements regarding statutory audit

of public-interest entities.

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INDEPENDENT AUDITOR’S REPORT FINANCIAL STATEMENTS

European Single Electronic Format (ESEF)

The Company has prepared its Integrated Annual Report in ESEF. The requirements for this are set out in the Delegated Regulation (EU) 2019/815 with

regard to regulatory technical standards on the specification of a single electronic reporting format (hereinafter: the RTS on ESEF).

In our opinion the Integrated Annual Report prepared in XHTML format, including the (partly) marked-up consolidated financial statements as included in

the reporting package by the Group, complies in all material respects with the RTS on ESEF.

The Executive Board is responsible for preparing the Integrated Annual Report including the financial statements in accordance with the RTS on ESEF,

whereby management combines the various components into one single reporting package.

Our responsibility is to obtain reasonable assurance for our opinion whether the Integrated Annual Report in this reporting package complies with the

RTS on ESEF.

We performed our examination in accordance with Dutch law, including Dutch Standard 3950N ‘Assurance-opdrachten inzake het voldoen aan de

criteria voor het opstellen van een digitaal verantwoordingsdocument’ (assurance engagements relating to compliance with criteria for digital reporting).

Our examination included among others:

■ obtaining an understanding of the Group’s financial reporting process, including the preparation of the reporting package;

■ identifying and assessing the risks that the Integrated Annual Report does not comply in all material respects with the RTS on ESEF and

designing and performing further assurance procedures responsive to those risks to provide a basis for our opinion, including:

■ obtaining the reporting package and performing validations to determine whether the reporting package containing the Inline XBRL instance

document and the XBRL extension taxonomy files have been prepared in accordance with the technical specifications as included in the

RTS on ESEF;

■ examining the information related to the 2025 consolidated financial statements in the reporting package to determine whether all required

mark-ups have been applied and whether these are in accordance with the RTS on ESEF.

Description of responsibilities regarding the financial statements

The Executive Board is responsible for the preparation and fair presentation of the financial statements in accordance with IFRS Accounting Standards

as adopted by the European Union (‘EU’) and with Part 9 of Book 2 of the Dutch Civil Code. Furthermore, the Executive Board is responsible for

such internal control as the Executive Board determine is necessary to enable the preparation of the financial statements that are free from material

misstatement, whether due to fraud or error.

As part of the preparation of the financial statements, the Executive Board is responsible for assessing the Group’s and the Company’s ability to

continue as a going concern. Based on the financial reporting frameworks mentioned, the Executive Board should prepare the financial statements

using the going concern basis of accounting, unless the Executive Board either intends to liquidate the Company or to cease operations or has no

realistic alternative but to do so.

Integrated Annual Report 2025

213

INDEPENDENT AUDITOR’S REPORT FINANCIAL STATEMENTS

The Executive Board should disclose events and circumstances that may cast significant doubt on the Company’s ability to continue as a going

concern in the financial statements.

The Supervisory Board is responsible for overseeing the Company’s financial reporting process.

Our responsibilities for the audit of the financial statements

Our objective is to plan and perform the audit engagement in a manner that allows us to obtain sufficient and appropriate audit evidence for our opinion.

Our audit has been performed with a high, but not absolute, level of assurance, which means we may not detect all material errors and fraud during our

audit.

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. The materiality affects the nature, timing and extent of our

audit procedures and the evaluation of the effect of identified misstatements on our opinion.

We have exercised professional judgement and have maintained professional scepticism throughout the audit, in accordance with Dutch Standards on

Auditing, ethical requirements and independence requirements. Our audit included among others:

■ identifying and assessing the risks of material misstatement of the financial statements, whether due to fraud or error, designing and performing

audit procedures responsive to those risks, and obtaining 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;

■ obtaining 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 Company’s internal control;

■ evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the

Executive Board;

■ ● concluding on the appropriateness of the Executive Board use of the going concern basis of accounting, 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 Company’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 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 a company to cease to continue as a

going concern.

■ evaluating the overall presentation, structure and content of the financial statements, including the disclosures; and

■ evaluating whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

Integrated Annual Report 2025

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INDEPENDENT AUDITOR’S REPORT FINANCIAL STATEMENTS

We communicate with the Audit Committee regarding, among other matters, the planned scope and timing of the audit and significant audit findings,

including any significant findings in internal control that we identify during our audit. In this respect we also submit an additional report to the Audit

Committee in accordance with Article 11 of the EU Regulation on specific requirements regarding statutory audit of public-interest entities. The

information included in this additional report is consistent with our audit opinion in this auditor’s report.

We provide the Audit Committee with a statement that we have complied with relevant ethical requirements regarding independence, and to

communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related

safeguards.

From the matters communicated with the Audit Committee, we determine the key audit matters: those matters that were of most significance in the

audit of the financial statements. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter

or when, in extremely rare circumstances, not communicating the matter is in the public interest.

Rotterdam, 27 February 2026

Forvis Mazars Accountants N.V.

M. Vazel RA

Integrated Annual Report 2025

215

LIMITED ASSURANCE REPORT OF THE INDEPENDENT AUDITOR ON THE SUSTAINABILITY STATEMENTS

To: the shareholders and Supervisory Board of Kendrion N.V.

Our conclusion

We have examined the 2025 sustainability indicators of the continued business, as included in the 2025 sustainability statement in the tables and

reporting criteria marked with a symbol (hereinafter: sustainability indicators), of Kendrion N.V. based in Amsterdam, The Netherlands (hereafter

Kendrion).

Based on the procedures performed and assurance evidence obtained nothing has come to our attention that causes us to believe that the 2025

sustainability indicators included in the 2025 sustainability statements of Kendrion N.V. are not prepared, in all material respects, in accordance with

Kendrion’s own reporting criteria.

Basis for our conclusion

We performed our examination in accordance with Dutch law, including Dutch Standard 3000A, “Assurance-opdrachten anders dan opdrachten tot

controle of beoordeling van historische financiële informatie (attest-opdrachten) (assurance engagements other than audits or reviews of historical

financial information (attestation engagements)). This engagement is aimed to obtain limited assurance. Our responsibilities in this regard are further

described in the ‘Our responsibilities for the examination of the 2025 sustainability indicators of Kendrions continued business’ section of our assurance

report.

We are independent of Kendrion in accordance with, the Verordening inzake de onafhankelijkheid van accountants bij assurance-opdrachten (ViO, Code

of Ethics for Professional Accountants, a regulation with respect to independence) and other relevant independence regulations in the Netherlands.

Furthermore, we have complied with the Verordening gedrags- en beroepsregels accountants (VGBA, Dutch Code of Ethics for Professional

Accountants).

We believe that the assurance evidence we have obtained is sufficient and appropriate to provide a basis for our conclusion.

Applicable criteria

The sustainability indicators of Kendrion, as included in the 2025 sustainability statement in the tables marked with a symbol , need to be read and

understood together with the reporting criteria.

The reporting criteria used for the preparation of the sustainability indicators of the continued business are Kendrion N.V.’s own reporting criteria, as

included in the relevant sections of the report of the sustainability report 2025.

Responsibilities of the Executive Board and the Supervisory Board for the 2025 sustainability indicators of Kendrion

The Executive Board is responsible for the preparation of the 2025 sustainability indicators of the continued business in accordance with the applicable

criteria. In this context, the Executive Board is responsible for such internal control as it determines is necessary to enable the preparation,

measurement or evaluation of the 2025 sustainability indicators of continued business that are free from material misstatement, whether due to fraud or

error.

The Supervisory Board is responsible for overseeing the sustainability reporting process carried out by Kendrion.

Integrated Annual Report 2025

216

LIMITED ASSURANCE REPORT OF THE INDEPENDENT AUDITOR ON THE SUSTAINABILITY STATEMENTS

Our responsibilities for the examination of the 2025 sustainability indicators of Kendrion’s continued business

Our responsibility is to plan and perform our examination in a manner that allows us to obtain sufficient appropriate assurance evidence for our

conclusion.

Our assurance engagement is aimed to obtain a limited level of assurance that the selected sustainability indicators are free from material

misstatements.

The procedures performed in this context differ in nature and timing and are less in extent as compared to reasonable assurance engagements. The

level of assurance obtained in a limited assurance engagement is therefore substantially lower than the assurance that would have been obtained had a

reasonable assurance engagement been performed.

We apply the ‘Nadere voorschriften kwaliteitsmanagement’ (NVKM, Regulations for quality management systems) and accordingly maintain a

comprehensive system of quality management including documented policies and procedures regarding compliance with ethical requirements,

professional standards and applicable legal and regulatory requirements.

Our limited assurance engagement included among others:

■ identifying areas where a material misstatement of sustainability indicators of the continued business is likely to arise, designing and performing

procedures to address the areas identified and to obtain limited assurance to support our conclusion;

■ considering internal control relevant to the examination on order to design assurance procedures that are appropriate in the circumstances, but not

for the purpose of expressing an opinion on the effectiveness of Kendrion’s internal control;

■ obtaining inquiries from management and other relevant personnel within the entity;

■ performing an analysis on the external environment and gaining an understanding of the industry, relevant societal trends and issues, applicable

laws and regulations, and the characteristics of the entity;

■ evaluating the suitability of the reporting criteria and their consistent application, including evaluating the reasonableness of estimates made by

management;

■ evaluating the process for collecting the selected sustainability indicators and the aggregation of this data as presented in the tables marked with a

symbol in the sustainability report;

■ performing analytical review procedures and reviewing the internal consistency of the data; ancorroborating the collected data with substantive

documentation and if needed, selective sampling.

Rotterdam, 27 February 2026

Forvis Mazars N.V.

M. Vazel RA

Integrated Annual Report 2025

217

Industrial

Industrial Actuators and Controls (Robert Lewin) Managing Director

Kendrion (Donaueschingen/Engelswies) GmbH, Donaueschingen, Germany Robert Lewin

Kendrion (Mishawaka) LLC, Mishawaka, USA Corey Hurcomb

Kendrion Industrial (Sibiu) S.R.L., Sibiu, Romania Mihai Petculescu

Kendrion (Linz) GmbH, Linz, Austria Christian Edelmaier

Kendrion Kuhnke Automation GmbH, Malente, Germany Robert Lewin

Kendrion Kuhnke (Sweden) AB, Kristianstad, Sweden Niklas Sjöström

3 T B.V., Enschede, the Netherlands Michiel Bloemen

Industrial Brakes (Olaf Detlef) Managing Director

Kendrion (Villingen) GmbH, Villingen-Schwenningen, Germany Olaf Detlef

Kendrion (Mishawaka) LLC, Mishawaka, USA Corey Hurcomb

Kendrion INTORQ GmbH, Aerzen, Germany Lars Knoke

INTORQ (Shanghai) Co. Ltd, Shanghai, P.R. China Telly Kuo

Kendrion (Atlanta) Inc., Atlanta, USA Olaf Detlef

INTORQ India Private Limited, Pune, India Aniket Gujrathi

Mobility (Robert Lewin) Managing Director

Kendrion Automotive (Sibiu) S.R.L, Sibiu, Romania Christian Fritz

Kendrion Kuhnke Automotive GmbH, Malente, Germany Robert Lewin

Kendrion N.V. has, directly or indirectly, a 100% interest in all subsidiaries.

PRINCIPAL SUBSIDIARIES

As at 31 December 2025

Integrated Annual Report 2025

218

Combattant Holding B.V., De Bilt, the Netherlands

Kendrion OG GmbH, Linz, Austria

INTORQ Beteiligungs GmbH, Aerzen, Germany

Kendrion Finance B.V., Zeist, the Netherlands

Kendrion Holding Germany GmbH, Markdorf, Germany

Kendrion Holding USA Inc., Indianapolis, USA

Kendrion IP Management GmbH, Malente, Germany

Kendrion Kuhnke GmbH, Malente, Germany

Kendrion Marketing B.V., Zeist, the Netherlands

Kendrion Toluca, SA de CV, Mexicaltzingo, Mexico

Kendrion (UK) Ltd., Bradford, United Kingdom

Landfort I B.V., Zeist, the Netherlands

Kendrion N.V. has, directly or indirectly, a 100% interest in all subsidiaries.

Other Holding and dormant entities

As at 31 December 2025

PRINCIPAL SUBSIDIARIES

Integrated Annual Report 2025

219

GLOSSARY – DEFINITIONS OF NON-IFRS FINANCIAL MEASURES

Added value is a non-IFRS financial measure, which is defined

as total revenue and other income plus changes in inventory

of finished goods and work in progress and subtracted by raw

materials and subcontracted work. Added value is a measure

of the group’s ability to generate a variable profit contribution

on its revenue that is sufficient to absorb the total staff and

other operating expenses. It is an important factor is assessing

to what extent increasing or decreasing revenue volumes will

contribute to the group’s profit.

EBITA is a non IFRS financial measure, which is defined

as profit for the period before income tax expense, finance

income, finance expense, share of profit or loss of an associate

and amortization of other intangible fixed assets. EBITA is a

measure of the group’s ability to realize a positive return on the

group’s operations and continue to provide shareholder returns.

EBITDA is a non IFRS financial measure which is defined

as profit for the period before income tax expense, finance

income, finance expense, share of profit or loss of an associate,

depreciation and amortization. EBITDA is a measure of the

group’s ability to continue to invest in the group’s operations

and provide shareholder returns.

Free cash flow is a non IFRS financial measure that is defined

as cash from operating activities less cash from investing

activities. Free cash flow is a measure of cash flow which is

available for repayment of outstanding interest-bearing debt or

dividend to the shareholders.

Invested capital is a non IFRS financial measure that is defined

as the sum of property plant and equipment, intangible assets,

other fixed assets and net working capital. Invested capital is

a measure to assess the amount of equity and interest-bearing

debt the company has invested in assets and is an important

measure for investors to assess how well a company is using

its financial resources to generate shareholder returns. Invested

capital is a measure widely used by investors and security

analysts to evaluate a group’s profitability relative to other

investment opportunities.

Leverage ratio is a non IFRS financial measure that is defined

as net debt divided by EBITDA. The leverage ratio is a measure

to evaluate the credit worthiness of the group and the ability

of the group to continue to fund its operations with debt.

The leverage ratio is widely used by investors, analysts,

lenders and others to assess the groups credit worthiness in

comparison to other industrial and automotive manufacturing

companies and in relation to the financial covenant agreed in

the group’s financing arrangement which its main lenders.

Net debt is a non IFRS financial measure that is defined as

bank overdraft, current and non-current loans and borrowings

subtracted by cash and cash equivalents. Net debt is a

measure in determining the group’s financial position.

In comparison to the available credit facilities, the total net debt

is an important factor in assessing the group’s liquidity and

in combination which the group’s EBITDA, the net debt is an

important factor in determining the group’s credit worthiness

and ability to fund future investments.

Normalized EBITA is non IFRS financial measures, which is

defined as EBITA before restructuring expense and other

adjustments not related to the group’s normal course of

business including but not limited to gains or losses on

divestitures, transaction costs related to business combinations

and impairments. Normalized EBITA is a measure of the group’s

ability to realize a positive return on the core operations and

continue to provide shareholder returns. We use normalized

EBITA in assessing the effectiveness of business strategies.

In addition to its use by management, we also believe

normalized EBITA is a measure widely used by securities

analysts, investors and others to evaluate financial performance

of the group relative to other industrial and automotive suppliers.

Normalized EBITDA is a non IFRS financial measure which

is defined as EBITDA before restructuring expense and

other adjustments not related to the group’s normal course

of business including but not limited to gains or losses on

divestitures, transaction costs related to business combinations

and impairments. Normalized EBITDA is a measure of the

group’s ability to continue to invest in the operations and provide

shareholder returns based on the core operations. We use

normalized EBITDA in assessing the effectiveness of business

strategies, evaluating and pricing potential acquisitions and as

a factor in management incentive decisions. In addition to its

use by management, we also believe normalized EBITDA is

a measure widely used by securities analysts, investors and

others to evaluate financial performance of the group relative to

other industrial and automotive suppliers.

Normalized effective tax rate is a non IFRS measure that is

defined as reported income tax expenses before adjustments

not related to the group’s normal course of business, including

but not limited to income tax expense on restructuring costs

and impairments, divided by normalized profit before tax which

is defined as profit before tax before adjustments not related to

core operations, including but not limited to restructuring costs

and impairments. Normalized effective tax rate is used to assess

the group’s tax expense in relation to the profit before tax from

its core activities. The normalized effective tax rate is used to

evaluate the effective tax rate relative to previous periods and

other companies.

Normalized free cash flow is a non IFRS financial measure that

is defined as free cash flow before cash flow related to

restructuring expense and other adjustments that are not related

to the group’s core operations, including but not limited to

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220

acquisitions and divestitures. Normalized free cash flow is

a measure of cash flow from the group’s core activities which is

available for repayment of outstanding interest-bearing debt or

dividend to the shareholders. We use normalized free cash flow

as a factor in management incentive decisions. In addition to its

use by management, we also believe normalized free cash flow

is a measure widely used by securities analysts and investors

and others to evaluate the value of the group.

Normalized invested capital is a non IFRS measure that is

defined as invested capital adjusted for items in the statement

of financial position that are considered not to be part of the

group’s normal course of business, including but not limited

to provisions or liabilities related to restructurings. Normalized

invested capital is used to assess the return the company

generates on the amount the company has invested in assets

related to its core operations and is a measure for investors

to assess how well a company is using its financial resources

to generate shareholder returns.

Normalized interest charges is a non IFRS measure that is

defined as financing costs before adjustments not related to

the group’s normal course of business including but not limited

to gains or losses on the recycling of currency translation

results previously recorded in equity upon the liquidation of

a legal entity. Normalized interest charges is used to assess

the amount of net financing costs recognized related to the

core operations of the group. Normalized interest charges

is used to be able to compare interest charges to previous

reporting periods and other companies.

Normalized net profit before amortization is a non IFRS

measure that is defined as profit for the period before

amortization and restructuring expense and other adjustments

not related to the group’s core operations including but not

limited to gains or losses on divestitures, transaction costs

related to business combinations and impairments. Normalized

net profit before amortization is a measure of the group’s ability

to realize a positive return on core operations and continue to

provide shareholder returns when excluding any profit impact

from amortizing intangibles arising from business combinations.

The measure is used by management, investors and security

analysts in order to evaluate the shareholder return relative to

companies that do not include business combinations.

Normalized staff and other operating expense is a non

IFRS measure that is defined as operating expense before

restructuring expense and other adjustments not related to

the group’s normal course of business including but not limited

to gains or losses on divestitures, transaction costs related to

business combinations and impairments. Normalized operating

expense is used to assess the amount of operating expense

recognized related to the core operations of the group.

Normalized operating expense is used to be able to evaluate

expenses to previous reporting periods and other companies.

Normalized working capital is a non IFRS measure that is

defined as working capital adjusted for items in the statement

of financial position that are considered not to be part of the

group’s core operations, including but not limited to provisions

or liabilities related to restructurings. Normalized working

capital is used to assess the amount of cash the company has

invested in short term and non-interest-bearing assets and

liabilities in order to run its core operations.

Organic growth is a non IFRS financial measure that is defined

as revenue in the period under review divided by the revenue

in the previous period, excluding revenue that is attributable

to a business combination in one of both periods and/or

the revenue contribution that attributable to a divestiture in one

of both periods. Organic growth is a measure to which extent

the group has been able to increase its revenue compared

to the previous period on a comparable basis and therefore

excluding the impact from acquisitions. Organic growth is

one of the groups long term financial targets. We use organic

growth in assessing the effectiveness of business strategies.

In addition to its use by management, we also believe organic

growth is a measure widely used by securities analysts,

investors and others to evaluate the success of the company’s

commercial strategies and effectiveness relative to other

industrial and automotive suppliers.

ROI or Return On Invested Capital is a non IFRS financial

measure that is defined as EBITA dividend by the sum of

property plant and equipment, intangible assets, other fixed

assets and net working capital subtracted with the amount

of goodwill and other intangible assets arising from business

combinations. ROIC is a measure that assesses the result

from operations is generated per currency equivalent that the

group has invested in property plant and equipment and other

net assets that are part of the group’s operations. ROIC is an

important factor in assessing relative profitability and used as

a factor in management incentive decisions. Besides the use by

management, we believe ROIC is widely use by investors and

securities analysts to assess the performance of the group in

comparison to other manufacturing companies or alternative

investment propositions.

Solvency is a non IFRS financial measure that is defined as total

equity divided by the sum of total equity and total liabilities.

Solvency is a measure that assesses the portion of the total

assets that is funded by equity. We use solvency as a measure

of financial position and credit worthiness. In addition to its use

by management we believe solvency is a measure widely use

by lenders and analysts to evaluate the credit worthiness of

the group.

GLOSSARY – DEFINITIONS OF NON-IFRS FINANCIAL MEASURES

Integrated Annual Report 2025

221

RECONCILIATION OF NON-IFRS FINANCIAL MEASURES

Measures related to the statement of profit and loss

Organic growth (revenue)

EUR million - unless stated otherwise 2025 2024

Reported revenue 245.5 247.5

Exclude: currency effects on revenue 0.7 -

Normalized revenue (excl. currency effects) 246.2 247.5

Organic growth -0.5%

Added value

EUR million 2025 2024

Reported total revenue and other income 249.9 249.2

less: Reported changes in inventories of finished goods and

work in progress (0.4) 0.9

less: Reported raw materials and subcontracted work (106.6) (114.3)

Reported added value 142.9 135.8

Reported added value margin % 57.3% 54.3%

Normalization of restructuring charges − (0.1)

Normalization of other costs outside the normal course of business 0.1 (0.9)

Added value 142.8 136.8

Added value margin % 57.2% 54.7%

Normalized staff. impairments and other operating expenses

EUR million 2025 2024

Reported staff costs 87.6 86.3

Reported impairments of fixed assets 0.0 1.0

Reported other operating expenses 19.0 17.9

Reported staff. impairments and other operating expenses 106.6 105.2

Normalization of restructuring charges (1.9) (0.6)

Normalization of impairments PP&E. goodwill and other intangibles − (1.0)

Normalized staff. impairments and other operating expenses 104.7 103.6

Currency effects 0.4 0.1

Normalized staff. impairments and other operating expenses

(excl. currency effects)

105.1 103.7

2024 numbers were re-presented to present the continuing operations only in accordance with IFRS 5.

Reference is made to note 8 in the Financial Statements for more details on results from discontinued

operations.

Integrated Annual Report 2025

222

Bridge from EBITDA to normalized net profit before amortization

EUR million 2025 2024

Reported result before net finance costs 21.3 14.6

Reported depreciation and amortization 15.0 16.0

Reported operating result before depreciation and

amortization (EBITDA) 36.3 30.6

less: Depreciation on PP&E and amortization on non-PPA

related intangibles (12.8) (12.8)

Reported operating result before amortization (EBITA) 23.5 17.8

Normalization of costs and (benefits) related to:

Restructuring measures - Industrial 1.7 0.7

Restructuring measures - Other 0.2 −

Impairments other intangbles - Other − 1.0

Other costs / (benefits) outside the normal course of business

- Other (0.1) 0.9

Total Normalizations 1.8 2.6

Normalized EBITDA 38.1 33.2

Normalized EBITDA margin % 15.5% 13.4%

Normalized EBITA 25.3 20.4

Normalized EBITA margin % 10.3% 8.2%

Reported amortization on PPA related intangibles (2.2) (3.2)

Reported net finance costs (3.7) (3.9)

Reported share profit or loss of an associate (0.3) (0.1)

Normalized profit before income tax 19.1 13.2

EUR million 2025 2024

Reported income tax expense (3.7) (2.2)

Normalization related to tax audits − 0.7

Normalization related to deferred income tax adjustment (0.8) (1.1)

Impact costs / (benefits) outside the normal course

of business on income tax expense (0.5) (0.7)

Amortization after tax 1.6 2.4

Net profit before amortization from discontinued operations 2.2 (0.5)

Normalized net profit for the period before amortization 17.9 11.8

Measures related to the Statement of financial position

Invested capital at 31 December

EUR million 2025 2024

Property. plant and equipment 52.4 96.0

Intangible assets 104.3 112.8

Net working capital 31.1 50.5

Other fixed assets 4.3 3.9

Invested capital 192.1 263.2

Goodwill and other intangibles related to acquisitions (92.9) (100.6)

Operating invested capital 99.2 162.6

Impact costs / (benefits) outside the normal course

of business on invested capital 3.7 13.1

Normalized invested capital 102.9 175.7

2024 numbers were re-presented to present the continuing operations only in accordance with IFRS 5. Reference is made to note 8 in the Financial Statements for more details on results from

discontinued operations.

RECONCILIATION OF NON-IFRS FINANCIAL MEASURES

Integrated Annual Report 2025

223

Net Debt

EUR million 2025 2024

Total interest bearing loans 59.7 111.9

less: Cash and cash equivalents (29.4) (8.5)

Net Debt 30.3 103.4

Net working capital at 31 December

EUR million - unless stated otherwise 2025 2024

Inventories 44.5 58.5

Trade and other receivables. tax receivable and

assets clasified as held for sale 25.0 63.7

Less: Trade and other payables, tax payables,

current provision (38.4) (71.7)

Net working capital 31.1 50.5

Impact one-off costs and benefits on working capital 3.8 1.1

Normalized working capital 34.9 51.6

As % of revenue 14.2% 20.8%

Measures related to the Statement of cash flows

Free cash flow

EUR million 2025 2024

Net cash flow from operating activities 30.4 18.5

Net cash flow from investing activities 53.5 25.8

Free cash flow 83.9 44.3

Proceeds from the sale of subsidiaries (64.5) (52.5)

Normalizations 6.2 5.2

Normalized free cash flow 25.6 (3.0)

Ratios

Return on Investment % (ROI)

EUR million - unless stated otherwise 2025 2024

Normalized EBITA 25.3 21.1

Normalized Invested capital 102.9 175.7

Return on Investment % (ROI) 24.6% 12.0%

Solvency

EUR million - unless stated otherwise 2025 2024

Total equity 153.4 158.5

Total assets 272.2 364.8

Solvency % 56.4% 43.4%

Normalized effective tax rate

EUR million - unless stated otherwise 2025 2024

Reported income tax expense (3.7) (2.2)

Normalization related to tax audits - 0.7

Normalization related to deferred income tax adjustment (0.8) (1.1)

Impact costs / (benefits) outside the normal course

of business on income tax expense (0.5) (0.7)

Normalized income tax expense (5.0) (3.3)

Normalized profit before tax 19.1 13.2

Normalized effective tax rate % 26.1% 25.0%

2024 numbers were re-presented to present the continuing operations only in accordance with IFRS 5. Reference is made to

note 8 in the Financial Statements for more details on results from discontinued operations.

2024 numbers include the discontinued China based business

RECONCILIATION OF NON-IFRS FINANCIAL MEASURES

Contact information

Any questions or comments about this Integrated Annual Report

or Kendrion’s activities can be raised with:

Investor Relations

Vesta Building - 5

floor

Herikerbergweg 213

1101 CN Amsterdam, the Netherlands

Phone: + 31 85 073 15 00

Email: ir@kendrion.com

www.kendrion.com

Kendrion N.V.

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ISIN code: NL0000852531

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