1.2 Our strategy

At Nedap, we aim for market leadership in Healthcare, Livestock, Retail, and Security. We have chosen these markets for their long-term value potential. Our markets offer a sustainable competitive edge, attractive financial returns, and sufficient opportunities for organic growth.

We foster an entrepreneurial culture that facilitates innovation. Our strength lies in maintaining our market focus while leveraging our collective knowledge and capabilities to deliver value through technology. We invest in research and development and the commercial capabilities needed to fulfill our markets’ growth potential.

Digital Twin Technology

With our Digital Twin Technology, we bridge the physical and digital worlds. Our solutions create digital representations of healthcare delivery, dairy farm operations, retail environments, and security infrastructure. These digital twins help unlock the power of advanced technologies such as deep learning, AI, and big data, making them key elements of our strategy.

Step Up!

Always in motion is our promise to our customers. It means that what works today gets even better tomorrow. It also represents our commitment to continuously improving our own way of working under Step Up! We do this by creating focus and reducing complexity. Our Step Up! efforts have ranged from making strategic decisions about our markets and solutions to creating opportunities for sharing technical and commercial know-how across our organization.

Step Up! today is about increasing our impact. We do this by encouraging entrepreneurial thinking and innovation while assessing the business impact of our ideas. This ensures we focus on activities that deliver financial results and long-term stakeholder value. As we move forward, we stay true to our values: Radically clear, Always deliver, and Full Nedap power.

Create & Scale growth strategy

Create & Scale is our strategy for achieving organic growth. It guides us in developing innovative solutions and scaling them to market-leading positions, delivering lasting value. It also keeps us agile and ready to adapt. Create & Scale is built on three pillars: the Create, Scale, Core (CSC) methodology, scaling by surfing, and driving growth through market leadership.

• CSC methodology
  Our structured approach to developing innovations while gaining market share with our existing solutions, clearly defining when to take what steps.

• Scaling by surfing
  The way we navigate the wave of changing market dynamics, from new customer needs to emerging technologies. We leverage our technological and market experience to identify these paradigm shifts, catching and surfing the right wave, and leading transformations rather than adapting to market changes. We follow this approach to achieve market share, and when we have achieved it, we leverage our credibility and customer references to strengthen our position.

• Driving growth through market leadership
  Expanding our customer base to new sectors and regions, while simultaneously growing our value per customer with new applications and features.

Value creation model

Our value creation model shows how we use resources to create value for our people and organization, customers and end-users, and partners throughout the value chain. It also connects our purpose, strategy, and CSC methodology to our sustainable impact. In this annual report, we provide insight into the financial and non-financial results of our value creation process.

1.3 Our people

People are Nedap’s competitive advantage – our primary value creators. We drive meaningful change in our markets by finding, growing, and retaining the best talent, then equipping them to excel. By planning for and investing in future capabilities, leadership development, and performance enablement, we position ourselves to deliver on our ambitions and sustain our growth.

People at the heart of value creation

We have selectively grown our workforce in recent years and invested in Nedap-wide and market-specific expertise and capabilities. This has strengthened our ability to create and scale solutions that deliver measurable value for customers.

Our people strategy focuses on enabling our talent to excel and deliver impact rather than pursuing significant headcount growth. We harness our entrepreneurial culture, build an inclusive environment, and create the systems that allow people to turn their potential into performance. We aim for higher added value per employee as an indicator that our people strategy is enabling greater impact for our customers and Nedap.

Our emphasis on added value per employee reflects our approach to compensation and benefits. We engage in profit sharing to reward contributions and incentivize entrepreneurial thinking and innovation that drive long-term value.

People strategy

Our people strategy centers around five pillars: getting the basics right, connecting the dots, accelerating leadership, stepping up performance, and a future-proof talent ecosystem. Within the people strategy, we focus on three strategic initiatives:

1. Advancing talents and building capabilities
   We take a focused approach to talent acquisition, ensuring we attract the best people in a competitive labor market. We develop and retain our talent with more and clearer opportunities for career progression within the entire Nedap organization and supported by learning and development programs. Through strategic workforce planning, we anticipate the capabilities needed to grow and remain competitive, including deep expertise in core and emerging technologies and AI readiness across all roles.
   
   We empower people to take the lead in their personal and professional development. The Nedap Learning Platform promotes self-directed learning by providing easy access to e-learning, internal and external training programs, mentoring, and coaching. The Nedap Academies consist of professional and leadership development programs that are aligned with our company strategy and Step Up! ambitions. Onboarding programs prepare new Nedap employees for a successful start to their careers.
   
   

2. Accelerating leadership
   We develop leadership capabilities by establishing clear and explicit expectations. The Nedap Leadership Framework articulates our vision of what good leadership entails. Leadership profiles outline the skills, behaviors, and sense of ownership needed to lead others successfully. We support leaders through tailored training programs and content and through standardized, digitized HR processes. Additionally, we continue to emphasize personal leadership because leading yourself well is the foundation of effective leadership, regardless of your formal role.
   
   Succession planning is a deliberate part of our approach. We conduct leadership reviews to identify key positions and prepare potential successors for future growth. This builds continuity and reduces dependency on individuals, ensuring we have the right leadership capabilities in place as our business evolves.
   
   

3. Performance enablement
   We support employee engagement and performance by being clear about expectations and by providing regular feedback and recognition. We offer clear pathways for career and reward progression. We equip and motivate our people to do their best work and take ownership of results.

Diversity, Equity, and Inclusion

Nedap relies on a diverse workforce to create the best solutions. When different perspectives and backgrounds come together, we challenge assumptions and uncover new possibilities for creating value. We firmly believe that a diverse workforce, supported by an inclusive and equitable work environment where people can express themselves authentically and ideas flow freely, leads to more relevant and impactful solutions for our customers. Our Diversity, Equity, and Inclusion (DEI) efforts are essential to sustaining the success of Nedap and improving the well-being and engagement of our people.

Our DEI focus areas are:

1. Inclusive leadership
   We foster a culture of openness and acceptance by promoting cross-cultural understanding, with leadership serving as role models. We promote diverse representation across our organization, and we strive to build a diverse leadership team. We provide tailored support to help women advance, especially into leadership roles, and align female representation in leadership with the overall workforce.

2. One global team
   We aim to foster collaborative and equitable partnerships across all business units and offices worldwide, embracing cultural differences to create an inclusive work environment. We expect our employees to embody our core values while acknowledging the cultural, societal, and geopolitical context of each region we operate in. Our commitment to equity extends to enhancing opportunities for women, remote workers, and neurodiverse colleagues while actively cultivating diverse local leadership teams.

3. Transparency
   We contribute to equitable opportunities by improving transparency and removing bias in internal hiring, promotion, and decision-making. We seek to promote effective communication through the standardized use of English when appropriate.

1.4 Sustainability

At Nedap, we make decisions with a long-term perspective. Our culture and purpose guide the actions we take today to shape our future: an organization where sustainability is business as usual, positive impact comes naturally from executing our strategy, and we take responsibility for our environmental footprint throughout the value chain.

This annual report provides insight into what sustainability means for Nedap, from our business model to specific measures related to environmental, social, and governance topics. Our policies, actions, and reporting are closely aligned with the material sustainability matters identified through our Double Materiality Assessment (DMA). We provide detailed information on the DMA and our performance per material topic in chapter 8 Sustainability statement.

The figure below shows the link between our focus areas and (material) sustainability matters.

Environment

Through our forward-looking solutions, we empower customers to adapt to a changing world. Our products are designed to grow with customer needs and enable more sustainable business models. We hold ourselves to the same high standard, integrating sustainability into our own operations with an ambitious goal of achieving net-zero greenhouse gas (GHG) emissions by 2030. Our sustainability strategy is therefore twofold: to support customers in becoming more sustainable while reducing the environmental footprint of our own products and operations. It is powered by our people, whose talent and diverse perspectives propel us forward.

Tomorrow in Motion

In 2025, we introduced our Nedap sustainability story: Tomorrow in Motion. This story articulates our view of sustainability as inherent to creating Technology for Life. It also articulates how, as part of our company culture and way of working, we support customers in becoming more sustainable. Tomorrow in Motion encompasses three principles: Technology for a changing world, Sustainable by default, and Sustainable operations.

Technology for a changing world

Our strategic focus is on delivering lasting value by developing Technology for a changing world. We combine our technological expertise and deep knowledge of our customers and markets to create highly relevant solutions. These solutions deliver value today and address future needs – from doing more with less to lowering GHG emissions and reducing waste.

Sustainable by default

We are committed to designing better products with the lowest possible environmental impact. This commitment is reflected in the principle of Sustainable by default. We look for improvements across every step of the product journey. We assess the impact of material choices, identify opportunities to reduce energy consumption, and prioritize responsible recycling and disposal at end of life. Our focus is on creating long-lasting, energy-efficient products that are easier to maintain, repair, and recycle. We also design solutions that grow with our clients through software-enabled expansions and upgrades, ensuring continued relevance over time.

Targets and ambition

• Reduce our scope 3 GHG emissions from purchased goods and services and the use of sold products by 51.6% per euro of added value by 2030 from a 2020 base year.

• Increase the circularity of our products through sustainable product design and collaboration across the value chain.

Sustainable operations

We are on our way to net-zero for our own operations: our scope 1 and 2 GHG emissions from the use of our offices and production facilities and other activities under our direct control. While our direct impact represents only a small share of our total GHG emissions, reducing it to a minimum is nonetheless a key priority. We achieve this by electrifying our operations, generating and procuring renewable energy, and improving the energy efficiency of our buildings.

Targets

• Reduce our absolute scope 1 and 2 GHG emissions by 95% by 2030 from a 2020 base year.

• • Phase out the use of natural gas in our operations by 2030.

  • Phase out fossil-fuel-powered company vehicles by 2030.

Stakeholders and materiality

In 2025, we revisited our double materiality assessment (DMA) using updated knowledge and insights and reassessed the existing topics through the established scoring methodology. The outcomes were validated and further refined based on the results of a customer and supplier survey. This reassessment confirmed that ESRS E5-2 Resource outflows is no longer considered a material sustainability matter. Please refer to the table in subsection 8.3.2 Material impacts, risks and opportunities of section 8.3 Material sustainability matters for the outcomes of this process.

We will regularly review and reassess our material sustainability matters. As part of this process, we will also reevaluate the stakeholder landscape, ensuring that we capture diverse perspectives and focus on the issues most relevant to Nedap and our long-term value creation ambitions. We will use various engagement methods, such as surveys, interviews, and focus groups, to maintain an ongoing dialogue with our stakeholders. In doing so, we aim to create a feedback loop that fosters transparency and open communication, helping us advance our sustainability impact.

1.5 Strategic ambition & financial goals

We aim for structural growth to secure a leading position in our markets and create long-term value. In this section, we lay out our objectives for the period 2025-2028 as announced at Nedap’s Capital Markets Day in 2024. One of the key principles of Step Up! is that we continuously and simultaneously work on strategy development and implementation. Our agility enables us to lead technical transformations and meet evolving market needs. At the same time, we have set a clear direction for our company and committed to ambitious targets for organic revenue growth, operating margin, and return on invested capital (ROIC). These targets are supported by our Create & Scale growth strategy. We report on our 2025 performance in section 2.2 Progress on our strategy.

During Nedap’s Capital Markets Day in 2024, we announced the following financial objectives for the period 2025-2028:

• Revenue growth
  Achieve high-single-digit, organic revenue growth.

• Operating margin
  Grow the operating margin, excluding one-off items, toward the mid-teens range.

• ROIC
  Attain a return on invested capital of at least 30%.

Financial position

We rely on our financial strength to make the investments in our workforce, innovation, and commercial capabilities needed to achieve market leadership and deliver long-term value for people, the environment, and our customers. We strive for our financial position to meet the following criteria:

• Solvency rate of at least 50% and a net debt-to-EBITDA ratio of no more than 1.5. Temporary deviation from this target is possible for strategic reasons.

• Profits are paid out to shareholders, after deduction of the amount needed for investments in profitable growth and the intended financial structure.

2.2 Progress on our strategy

The combination of our Step Up! strategy and Create & Scale growth strategy resulted in revenue growth and strengthened our position in the four key markets. Our Step Up! strategy consists of two core elements: focusing our efforts where we can create the most value and leveraging knowledge and expertise across Nedap. In 2025, we zeroed in on Digital Twin Technology and SaaS-based solutions, delivering recurring impact for our customers. We also strengthened our organizational capabilities to support collaboration. 

Our progress in 2025 included the establishment of the Nedap Leadership Team, as well as organization-wide initiatives on strategic topics. Key examples include talent development, technology and business model innovation, AI, and supply chain resilience.

This strategic alignment is essential as Nedap enters its next phase of growth. By creating a shared understanding of our priorities and impact, we are able to focus on the activities that create the most value. We are also more agile and better equipped to anticipate changing market dynamics, allowing us to move quickly to seize opportunities. These opportunities come from our enduring customer relationships and entrepreneurial culture, which bring new ideas for value creation and make it possible to pursue them.

Milestones

In 2025, we continued to meet milestones. Recurring revenue (revenue from software subscriptions (licenses) and services) continued to grow, reaching €111.5 million. Overall revenue grew by 11%. Growth in the key markets came in at 18%, with all four contributing to this development. Additionally, our operating margin improved by 180 basis points. Critically, we achieved this while keeping our investments in research and development at 20% of revenue. These investments support our ongoing efforts to build scalable solutions, with a well-balanced portfolio of Create, Scale, and Core.

In 2025, we:

• Grew our workforce by 33 FTE, reflecting investments in both our knowledge base and execution base.

• Expanded our client focus across our organization in line with our Create, Scale, Core model and emphasis on value delivery.

• Leveraged our Ons® Suite to facilitate the Dutch healthcare system's transition to network care, and continued developing our MediKIT solution for the general practitioner market.

• Expanded our customer base in Livestock, with an increase in the number of cows monitored on the Nedap Cow Monitoring Platform. 

• Entered into new partnerships with major retailers in Retail, supporting the growth of our RFID Digital Twin Technology for automation and traceability within the retail market.

• Grew our Security business and scaled our digital twin solution Pace for physical identity and access management.

Section 2.5 of this annual report includes additional information on developments in our markets.

Progress on financial targets

As part of the Step Up! process, the following financial targets were set:

1. Revenue that develops toward annual high-single-digit autonomous growth
   In 2025, revenue was up 11% compared to 2024. Growth in our key markets was 18%.

2. An operating margin, excluding one-off items, that rises toward mid-teens
   In 2025, the operating margin reached 11.3%, compared to 9.5% in 2024.

3. Return on invested capital (ROIC) that outgrows profitability
   ROIC grew to 37% in 2025 from 26% in 2024.

2.3 Progress on our people

We have continued to professionalize how we support, develop, and mobilize talent across our organization. This is guided by a Nedap-wide people strategy that prepares us for our next chapter of growth. In 2025, we focused on creating the conditions for people to excel, our leaders to advance our strategy, and our organization to grow more resilient.

Key figures

The Nedap organization grew to 1,077 people (1,032 FTEs) in 2025, an increase of 3.4%. At 8.6%, the average turnover rate in 2025 was lower than last year (10.8%) and well below the industry benchmark of 14%. Our engagement survey conducted in September 2025 had a 71% response rate (in January 2025: 79%) and revealed an overall engagement score of 8.0, +0.2 points higher than the technology industry average (in January 2025: 8.1, +0.3 points higher than the industry average). The employee Net Promoter Score (eNPS) was 47 (in January 2025: 46), which is considered a healthy score.

People strategy

Advancing talents and building capabilities

After launching the Nedap Learning Platform in 2024, we focused on expanding our portfolio of training content in 2025. The learning options roughly tripled in 2025, driving greater use of the platform. In January 2026, 42% of 433 Nedap employees who participated in our questionnaire reported spending at least 40 hours on their personal and professional development (in 2024: 42% of 547 respondents).

Our Nedap Academies, including Tech Academy and Leadership Academy, remained important to our strategy, with a stable curriculum of training programs to develop vital capabilities. These include expertise in core and emerging technologies with a focus on AI. Among the most in-demand Tech Academy programs in 2025 was Mastering Large Language Models.

The annual TechKnow event is an integral part of the Tech Academy. It is hosted for and by Nedap employees, with Nedap and external experts sharing their expertise through tech talks, workshops, and meetups. We hosted 245 employees at our TechKnow event in November 2025, with the theme “Unleash the future today.”

We established an AI Enablement Team in 2025 to drive AI adoption and optimize work processes using AI tools. By increasing our execution power, AI enables us to deliver more work faster. Developing an AI-ready workforce also creates opportunities for further enhancing our solutions.

Accelerating leadership and succession planning

Nedap is optimizing its leadership structure with a focus on strategy alignment, clear ownership and decision-making mandates, and diversity. In 2025, we introduced the Nedap Leadership Team (NLT) consisting of the Board of Directors, Managing Directors of each key market, and the General Counsel. The NLT strengthens accountability and speeds up decision-making.

We continued to build on our Nedap Leadership Framework. The framework sets out leadership profiles with clear roles, expectations, and behaviors, all based on extensive data and validated by our Leadership Circles. Our portfolio of leadership development programs, including our Leadership Academy, Leading Professionals program, and bespoke programs for our business units, supports leaders in developing essential leadership skills, including showing ownership, setting direction, and driving impact. By 2025, 85% of all leaders participated in at least one of our leadership development programs.

We continued to improve our approach to succession planning, assessing successors not just for business leadership and people and team leadership positions, but also expertise leadership roles. Succession planning secures continuity and contributes to our resilience.

Performance enablement

This year, we redesigned our performance enablement approach, providing leaders with tools and guidance to set direction and expectations while helping employees succeed and advance their careers with Nedap. In 2025, we launched a proof of concept with four pilot groups to test the design and model. The development and implementation of the Job Family Framework was a milestone in 2025. In collaboration with business unit leaders and team captains, we mapped positions to job families with clearly defined seniority levels, performance expectations, and development paths. These paths also provide insight into growth opportunities and lateral moves across the organization, supporting internal mobility. By doing so, we drive performance while giving our people greater visibility and control over their future at Nedap.

Diversity, Equity and Inclusion

At the end of 2025, the DEI team was made up of representatives from all markets and all major regions that Nedap is active in. These representatives are the eyes and ears of their teams, bringing ideas and concerns regarding DEI to the organization. They also work in subgroups on specific focus areas, actively keep their leadership informed about DEI, and help translate global policy into local initiatives.

We advanced our DEI objectives across all focus areas. As of 2025, gender balance is part of the focus area “inclusive leadership”.

1. Inclusive leadership
   In 2025, we focused on strengthening the representation of women in leadership roles, in line with Nedap’s ambitions and growing external expectations. Building on insights from the Women Leadership Initiatives survey, we began developing a pilot program to empower women at Nedap and support their advancement. The pilot, set to launch in 2026, focuses on equipping women with the tools to grow as authentic and effective leaders. At the same time, we are examining systemic barriers that have prevented progress in improving female representation in leadership. This allows us to identify the changes needed to move the needle and create a more inclusive leadership climate. Finally, the introduction of an inclusive leadership training program in 2025 equips leaders to foster an inclusive and equitable workplace.
   
   

2. One global team
   Our efforts in 2025 focused on fostering a sense of belonging for international colleagues and employees across various identity groups. We facilitated unconscious bias training and initiated research into interventions that help international colleagues, regardless of geography, feel more valued and aligned with Nedap’s strategic direction. In addition, we helped facilitate the establishment of employee resource groups: colleague-led communities built around shared identities and life experiences, with current groups focused on LGBTQ+ and neurodiversity. These groups strengthen belonging and create formal channels for employee input on Nedap policies and practices. By offering support, we actively encourage the formation of employee resource groups that represent the full spectrum of diversity within Nedap.
   
   

3. Transparency
   We are embedding DEI principles into Nedap’s hiring and promotion processes with a focus on transparency and equity. In 2025, we developed AI prompts for the generation of inclusive job descriptions. With these prompts, we support hiring managers in using inclusive language by default. Additionally, we launched new structural training programs to reduce bias in hiring and reviews.

In 2025, we also brought greater visibility to these DEI themes through a series of events. We celebrated International Women's Day, hosted a workshop on diversity in personality, and launched a Pride Awareness Campaign. These initiatives help foster important conversations across the organization.

Target

Achieve female representation in senior management by 2028 that aligns with the overall gender ratio of Nedap in 2023 (27%).

In 2025, women made up 6% of senior management, compared to 27% of the overall workforce. Our definition of senior management can be found in subsection 8.9.4 Senior management in section 8.9 Sustainability notes.

Based on developments in 2025, Nedap notes that achieving this target is under pressure. In particular, at the level just below senior management, the inflow and advancement of female leaders remain limited, and Nedap’s internal succession pipeline shows insufficient momentum. In addition, due to low natural turnover in leadership positions, changes occur gradually, meaning progress depends heavily on occasional vacancies and external hiring.

Nedap has also set a gender diversity target for the Board of Directors, aiming for at least one-third male and one-third female representation. For the NLT, Nedap aims for a female representation that aligns with Nedap’s overall gender ratio. For the Supervisory Board, we adhere to the statutory requirement of at least one-third male and one-third female representation. At the end of 2025, our Board of Directors consisted of one woman and two men, the NLT comprised two women and six men, while our Supervisory Board included three women and two men. 

Target percentages remain an important guide for Nedap, provided they are viewed in conjunction with the effectiveness of inflow and advancement mechanisms. In 2026, Nedap will therefore recalibrate its governance framework for diversity in leadership, distinguishing between the Board of Directors, the NLT, and senior management, with a stronger focus on concrete and predictive indicators for inflow and advancement.

2.4 Progress on our sustainable impact

We advanced our sustainability strategy in 2025 with a focus on reducing greenhouse gas (GHG) emissions from our own operations, reducing product GHG emissions in the production and use phases, and engaging with our customers and suppliers around their sustainability challenges. Our performance in 2025 shows we can make meaningful progress, even amid external challenges.

Our sustainability strategy has been successfully implemented and embedded across our organization. Our sustainability team continued to support the business units in executing their strategy with a focus on designing products for durability, energy efficiency, and circularity.

Additionally, we moved ahead in making our own operations more sustainable. The publication of our first sustainability statement, prepared in accordance with the requirements of the Corporate Sustainability Reporting Directive (CSRD), was a milestone for Nedap. Beyond compliance, this process equipped us to accelerate our sustainability efforts by establishing Nedap-wide and business unit strategies, implementing robust data-collection and analysis processes, and developing monitoring and reporting protocols. We have created a solid foundation for advancing our sustainability objectives, and we continue to standardize and automate our processes to improve our performance.

In this chapter, we present a high-level overview of our sustainable impact in 2025. For additional information, we refer to chapter 8 Sustainability statement.

Overview of our GHG emissions

To provide insight into our climate impact and progress over time, the figure below presents an overview of GHG emissions across scope 1, 2, and 3. It shows our GHG emissions trend and the effect of the measures we have taken, reflecting our strategic focus on reducing GHG emissions across our operations, products, and value chain.

Sustainable by default

Target

• Reduce our scope 3 GHG emissions from purchased goods and services and the use of sold products by 51.6% per euro of added value by 2030 from a 2020 base year.

We can achieve meaningful reductions in our scope 3 GHG emissions by lowering our product use GHG emissions and by designing products with lower GHG emissions in the production phase. Measures to achieve this include strategic, portfolio-level decisions such as prioritizing SaaS business models, as well as product-level improvements like integrating energy-saving features and selecting more energy-efficient components for products with relatively high GHG emissions compared with the added value they provide for our customers. In 2025, our business units continued to implement and refine these GHG emissions reduction measures, supported by insights from life cycle analyses (LCAs).

We measure our progress toward this target by tracking reductions in our scope 3 intensity-based GHG emissions. Our SBTi-validated target requires a 7% annual reduction from our 2020 baseline. In 2025, we achieved this goal. This was driven by an increase in our added value and a significant decrease in use phase GHG emissions (category 11), as high-emissions products made up a smaller share of sales.

Ambition

• Increase the circularity of our products through sustainable product design and collaboration across the value chain.

In the updated Double Materiality Assessment (DMA) in 2025, the subtopic resource outflows under ESRS E5 did not meet the materiality threshold. Business units tailor their approach to their markets, taking into account the nature of their products (including end-of-life considerations) and customer expectations. Current initiatives include conducting and learning from pilots with value chain partners, evaluating product recyclability in practice, and driving value chain transparency through product data. Details on our DMA update are provided in chapter 8 Sustainability statement.

Nedap has also implemented a company-wide packaging policy aimed at reducing packaging volumes and promoting the use of recyclable or reusable materials. In addition, the development of a GPT-based tool supports designers and engineers in making informed design choices during product development.

Nedap remains an active partner in the Circular Circuits research project, an initiative by TU Delft with funding from the Dutch Research Council ("Nederlandse Organisatie voor Wetenschappelijk Onderzoek"). Through this project, we have established valuable connections with companies and organizations across our value chain. In 2025, we began collaborating with a recycling company for the shredding of hardware products at the end of their life cycle. This is a learning partnership aimed at identifying the best methods to recover and repurpose materials used in our products, rather than disposing of them.

Customer initiatives

We work closely with our customers to identify opportunities for making our solutions better and more sustainable. In 2025, we conducted a customer and supplier survey on sustainability. Participants were asked to review our material sustainability matters and identify any gaps. We have used these insights to refine our DMA and sustainability strategy.

Additionally, we asked our customers and suppliers about the importance of sustainability to their organization, the topics that are most relevant to them, and opportunities for Nedap to contribute to their sustainability objectives. The importance of meeting certain standards or acquiring specific certifications was also addressed.

The survey showed that partners value sustainability and expect Nedap to support them by providing clear information and practical solutions. They want greater insight into product impact and supply chain transparency, support for reducing GHG emissions and improving energy use, and circular solutions such as take-back programs. Partners also value the use of more sustainable materials and closer collaboration across the value chain. Social topics are acknowledged as important but play a smaller role within partnerships. Overall, partners affirm our direction and encourage continued progress in terms of transparency, evidence, and collaboration. We will use these insights to better align our approach and solutions with customer expectations and needs.

Sustainable operations

Targets

• Reduce our absolute scope 1 and 2 GHG emissions by 95% by 2030 from a 2020 base year.

• • Phase out the use of natural gas in our operations by 2030.

  • Phase out fossil-fuel-powered company vehicles by 2030.

We are working toward net-zero GHG emissions in our own operations (scope 1 and 2) by 2030. We express GHG emissions in CO₂ equivalents (CO₂e). In 2025, we continued to implement our sustainability policy through improvements to our buildings, such as adding insulation and triple glazing. The further electrification of our buildings needed to phase out the use of natural gas was hampered by grid congestion. As such, we did not install additional solar panels, heat pumps, or charging points for electric vehicles (EVs) in 2025. We did, however, advance plans for the installation of battery storage systems. These systems store unused solar energy for use during peak demand periods, such as very cold or warm days requiring additional heating or cooling.

Our gas consumption remained at approximately the same level compared with 2024. Total gas consumption increased in the first half of 2025 due to low temperatures. Gas consumption for our production facilities was 50% lower than in 2024 as a result of sustainability improvements. This helped limit the impact of the cold spring. The figure below shows the downward trend of our gas consumption since 2020, with the exception of 2021 due to a cold spell. Despite the leveling off in 2025, our target remains achievable. Weather conditions, grid capacity, and the installation of battery storage may influence the timing of reaching our goals.

Our total scope 1 and 2 GHG emissions decreased compared with 2024. The 8% decrease in scope 1 GHG emissions resulted from the installation of heat pumps, as well as the implementation of our policy to only lease non-fossil-fuel-powered vehicles.

As of 2025, we lease almost exclusively EVs. This is consistent with our policy and ensures that we will have phased out fossil-fuel-powered company vehicles by 2030. By the end of 2025, 69% of our fleet was electric or hybrid (in 2024: 57%).

In 2025, we submitted our science-based targets to the Science Based Targets initiative (SBTi) for validation. In November 2025, we formally obtained SBTi validation.shannon.smit@nedap.com

Looking ahead

The validation of our GHG emissions targets by SBTi confirms that our climate transition plan is ambitious and realistic and meaningfully contributes to the Paris Agreement climate goals. Our commitment to our GHG emissions reduction goals means we will continue to act on all decarbonization levels at our disposal. Our strategic focus on Digital Twin Technology and SaaS models will drive the ongoing reduction of our scope 3 intensity-based GHG emissions. Achieving our scope 1 and 2 objectives rests on our ability to execute our planned measures. With grid congestion imposing constraints, we will continue to push forward on reducing our energy consumption and maximizing our usage of self-generated energy, enabling the further electrification of our operations.

The outcomes of the stakeholder survey will drive additional initiatives. Compliance is expected to play an important role in the coming years, both for Nedap and our customers and suppliers. Preparing our IT systems and data processes is essential to ensuring accurate reporting and compliance with evolving regulations and to obtaining essential certifications.

2.5 Key markets

Healthcare

In Healthcare, Nedap develops and markets SaaS solutions and care technology products that support healthcare institutions in the Netherlands in planning, registering, and administering care processes. With our solutions, we work toward a sustainable healthcare system.

Market developments

The Dutch healthcare system will undergo a major transition over the coming years. Growing demand for care, combined with fewer people to provide it, requires a shift toward an interconnected healthcare system and coordination and collaboration among professional and informal caregivers. This shift will be supported by interoperable and standardized technology.

While the shift to this new operating model for delivering and coordinating healthcare, known as network care, is still in its early stages, progress is accelerating. Network care depends on seamless information exchange among care providers, with general practitioners (GPs) playing a crucial role as gatekeepers and care coordinators.

There is also an urgent need for solutions that relieve pressure on healthcare professionals and make their work more meaningful. AI can support this by automating administrative tasks and optimizing workflows. The current regulatory landscape for integrating AI into healthcare solutions requires a careful approach.

Highlights

Nedap maintains a leading position in elderly care, disabled care, mental healthcare, and domestic help in the Netherlands. In 2025, we strengthened our market position in all sectors, with notable gains in the disabled care and mental healthcare sectors. We also entered the youth care sector. Given the significant overlap with disabled care and mental healthcare, the addition of youth care enables us to enhance service quality for existing customers. It also aligns with our strategic focus on network care.

Our Ons® Suite continues to be the leading contributor to revenue and performance. Among existing customers, we observed the expanded use of our Ons® Suite, both in the number of users and adoption of functionalities. Ons® Platform has contributed to this growth. Customers value the ability to seamlessly integrate vetted third-party software, preventing duplication of work and reducing operational complexity. Through Ons® Platform, Ons® Suite can be extended with a range of software applications, including AI-enabled services such as agentic voice communication and speech reporting. These secure services transform speech into accurate and high-quality reports, reducing the administrative burden for healthcare providers.

The scaling of MediKIT and Luna was also a factor in our revenue growth. The adoption of MediKIT by large GP organizations shows confidence in our solution and helps move the transition to network care forward. Luna, an electronic day calendar that helps people with cognitive disabilities manage activities of daily life, experienced rapid growth. Insurance coverage for Luna combined with our readiness to scale resulted in widespread adoption.

Organization

We continued to execute our strategic roadmap in 2025, with facilitating the transition to an integrated healthcare system as a central theme. The roadmap was developed with input from customers and sector organizations and provides visibility into our development priorities in the years ahead, supporting alignment across the healthcare ecosystem.

Outlook

We expect to continue our upward trajectory in 2026. Our strengthening market position brings both opportunity and responsibility. We will continue investing in the quality, stability, and scalability of our Ons® Suite, recognizing its role as critical infrastructure in the Dutch healthcare system. By prioritizing client-centric product enhancements, we aim to accelerate the adoption of MediKIT. At the business unit level, we will explore how we can better align our business model with the network care vision. The goal is to make our solutions accessible to a larger target group, so that we can drive meaningful change across the entire healthcare sector. Our revenue outlook is positive, and we have set ambitious growth objectives.

Network care remains a priority. As an active participant in the Nuts initiative, we will continue to expand secure data exchange across healthcare organizations. True to our purpose of Technology for Life, we will choose the best and most just way forward, going beyond developing reliable technology to create highly relevant and effective solutions. Part of our role is to advocate for innovation in healthcare, including through dialogue with policymakers at both European and national level to help shape the regulatory framework. The European Health Data Space (EHDS) is one development we are monitoring, as it may offer new opportunities for innovation in healthcare data management.

Livestock

In Livestock, Nedap develops technological solutions for the dairy farming industry worldwide. Alongside our network of global and local business partners, we serve dairy farmers with sensor-based cow monitoring and management solutions that improve life on the farm.

Market developments

Market conditions improved in 2025. Dairy farmers experienced higher milk prices and relatively lower costs, positively impacting investment appetite. This pattern was largely consistent across the world, with the exception of China. Economic challenges there continue despite initial signs of improvement. Tariffs and other changes in international trade dynamics had a limited impact on our performance.

With global milk demand expected to increase by 50% by 2050, the dairy industry needs to increase milk production while simultaneously navigating labor shortages, sustainability pressures, animal welfare, and compliance. This is prompting dairy farmers to rethink their operating model. We observe a move toward consolidation, resulting in larger dairy farms. The need to do more with less is driving the automation of repetitive tasks, and real-time data is becoming crucial to managing operations. As a result of these developments, the adoption of cow monitoring is accelerating, unlocking the potential of Digital Twin Technology to address dairy farmers’ biggest challenges.

Highlights

Revenue increased in 2025 driven by favorable market conditions, improved investment appetite, and a portfolio that meets the needs of dairy farmers globally. Overall revenue growth was outpaced by the growth in recurring revenue due to the adoption of as-a-service solutions such as SmartSight.

The expansion of our SmartTag range with SmartTag Ear has brought more farmers access to our proven technology, strengthening our market position. Our SmartSort sorting gate, which continued to gain traction in 2025, also increased SmartTag demand as the solutions work together to turn insight into action. Our boots on the ground approach with local teams supporting business partners and end-users contributed to customer satisfaction and success, an important factor in the adoption of our solutions.

The new and fully automated SmartTags production facility located at our Nedap Campus in the Netherlands is nearing completion. The facility will enable us to scale and speed up production as demand for our SmartTags grows.

We made significant investments in the Nedap Cow Monitoring Platform, establishing an integrated, modular platform that connects our sensors, insights, and automation tools to create unique solutions. Our platform focus in 2025 positions us to deliver greater value for business partners and dairy farmers while growing the value we capture per cow monitored on our platform.

The introduction of SmartSight marked an important milestone in 2025. SmartSight is an AI-driven innovation that uses computer vision to deliver actionable insights on cow health. The first application is Locomotion Monitoring and is used for early detection of lameness, which is one of the most costly and challenging issues in dairy farming. The launch in early October 2025 followed years of development and testing in close collaboration with dairy farmers. At the end of 2025, SmartSight was monitoring more than 50,000 dairy cows. The integration of SmartSight technology into our cow monitoring platform unlocks new valuable functionality for farmers, who have more tools and insights at their disposal to optimize the well-being and performance of each individual cow.

Organization

Our efforts to create a scalable organization with distinct teams and focus areas have proven effective. One focus is on helping customers maximize the value from the Nedap Cow Monitoring Platform with support from our local teams and partners. Another is on validating growth opportunities and developing minimum viable products. This approach ensures we optimize customer outcomes today while developing new solutions for future needs.

As a future-ready supply chain is essential to achieving our growth objectives, we advanced our supply chain initiative to maximize the availability and quality of our hardware products.

Outlook

We are well positioned to build upon our success, while recognizing that market conditions in 2026 are expected to become more challenging due to lower milk prices and geopolitical tensions. At the same time, labor shortages, regulatory pressure, sustainability expectations, and animal welfare standards continue to drive the need for greater efficiency, accelerating the adoption of cow monitoring and automation.

Our sales pipeline remains robust, and our focus remains on executing our platform strategy by combining sensors, software, and automation to reduce workload, improve efficiency, and enhance individual cow welfare. The distinctive value delivered through cow monitoring continues to drive adoption of SmartTag and our broader portfolio, while we expand Locomotion Monitoring and develop new SmartSight use cases.

Supported by an established global and local business partner network and teams close to the customer, we believe we are well positioned for the year ahead. While short-term market conditions may remain volatile, the long-term outlook remains positive.

Retail

In Retail, Nedap develops innovative inventory management solutions and serves retailers globally. Our Digital Twin Technology turns real-time data from across the retail chain into operational insights. With these insights, retailers drive sales, lower costs, and reduce losses, all while delivering seamless omnichannel retail experiences.

Market developments

The global retail market developed positively in 2025, marked by increasing investment appetite across all our regions. This was particularly evident in North America, with more retailers pursuing large-scale innovation projects.

Customer demand remains centered around inventory visibility, omnichannel retail, and the automation of core processes. Retailers are automating processes to adapt to a tight labor market and high employee turnover, and to maintain high-quality shopping experiences with leaner teams. Examples include the introduction of overhead readers to replace manual counts, as well as the adoption of self-checkout solutions.

Among fashion retailers, self-checkout solutions gained significant momentum in 2025. This service has become a customer expectation across many retail categories. At the same time, retailers benefit from improved operational efficiency and customer flows.

Highlights

Both overall and recurring revenue grew in 2025 compared with 2024. We closed new enterprise contracts with leading retailers, including Abercrombie & Fitch, Capri Group, Hema, and Aritzia, and we renewed contracts with Celio, lululemon, Mountain Warehouse, and Under Armour.

Our traditional RF systems remain a stable driver of our business. Targeted investments in our iSense operating system ensure that our RF solutions continue to meet the needs of our customers, with new software-based features that do not require additional investments in hardware. Meanwhile, the transition from RF to RFID is accelerating. Our iD Cloud platform addresses the growing demand for integrated inventory management solutions, with RFID as a foundational technology. In addition to iD Cloud Store, we see the steady, continued adoption of iD Cloud Supply Chain for item-level visibility across the supply chain.

We accelerated the development of our fixed RFID overhead solution for continuous, automated inventory tracking. This solution provides real-time insight into product availability and location, enabling retailers to proactively replenish their stock, improve in-store availability, and reduce excess inventory. The ability of the overhead solution to drive sales, lower costs, and improve the experience of customers and staff makes scaling this solution a strategic priority.

In response to customer feedback, we began providing early access to new software releases. By doing so, we support our enterprise customers in the seamless implementation of software updates, allowing sufficient time for testing and training.

Our point-of-sale and self-checkout RFID solutions, iD POS Pro and iD SCO Pro, went live in 2025. Five global retailers are participating in a large-scale proof of concept. One retailer launched self-checkout in several of its new flagship stores. Leveraging our deep understanding of customer needs and expertise in both RF and RFID technology, we developed a solution compatible with both technologies. Instead of migrating from RF to RFID all at once, our solution allows for a gradual transition by automatically deactivating RF-based tags at checkout. This significantly improves the business case for retailers. Following the successful proofs of concept, we are prepared to scale these solutions in the year ahead.

Organization

We increased our focus on customer engagement in 2025. With a dedicated North American team now in place alongside our European operations, we are able to support customers globally with the efficient deployment and adoption of our solutions. These teams work with our customers to optimize the performance of individual solutions, leverage our iD Cloud platform capabilities, and maximize their return on investment. At the same time, our new business teams remain essential to onboarding new clients onto the iD Cloud platform.

A recent deployment of our RFID-based EAS solution for a large supermarket chain in southern Europe led to the development of a new GHG emission compensation model for our solutions. The model covers GHG emissions from production to installation, as well as the equivalent of up to 10 years of energy consumption. We plan to develop this model into a customer offering. In addition to making our customers’ business models more sustainable, it also serves as an internal incentive to further optimize the energy efficiency of our solutions.

Outlook

We aim for double-digit growth in recurring revenue, driven mainly by our increasingly integrated portfolio of solutions. Our solutions work standalone or as part of an integrated inventory management platform that evolves with retailers’ needs. This allows us to add more value for retailers, as well as increase customer lifetime value. Targeted investments in our Sense solutions, the scaling of our RFID-based POS and autonomous overhead solutions, and the onboarding of customers onto iD Cloud are priorities for the year ahead. Together, our solutions create a digital twin of the physical retail environment: a single source of truth that helps retailers operate with clarity and confidence. This is a key market differentiator and a significant opportunity for growth. For 2026, we expect continued revenue growth.

Security

In Security, Nedap develops access management solutions used by leading organizations to secure people, buildings, and assets. Beyond protection, our solutions support digital transformation by turning access points into data sources, generating insights that inform better business decisions and enhance the user experience. Nedap maintains a leading market position in Europe and the Middle East.

Market developments

The security market remained stable in 2025, with large organizations continuing to rely on Nedap for their access management needs. At the same time, we are guiding customers through the transition from traditional on-premises systems to cloud-native platforms. For many customers, this shift represents more than a technology upgrade. They see the value of our systems to advance their digital transformation programs, where security delivers both protection and intelligence. Access points and interactions with security assets become data sources, and the integration of AI and analytics capabilities turns that data into insights to improve forecasting, planning, and other business processes.

Customers also view security systems in the context of the user experience, considering how employees, visitors, and other building users such as patients interact with their spaces. They look to our teams to create solutions combining hardware and software to both meet their security requirements and create a seamless experience for building users.

Highlights

Revenue increased in 2025 compared with 2024. Our on-premises access control system AEOS remains a stable driver of our business. The integration of the Nedap reader portfolio into the Security business unit has strengthened our commercial capabilities and provided new avenues for growth.

Recurring revenue as a share of total revenue continued to grow. With the scaling of cloud-based solutions including Access AtWork, Pace, and Mobile Access, we expect this trend to accelerate. Following the successful launch of Mobile Access in 2024, we initiated proofs of concept with several companies in 2025. These proofs of concept resulted in multiple long-term contracts, including a contract with ADNOC. Customers cite the frictionless experience that Mobile Access offers. The integration of Mobile Access with Google Wallet in 2025 has made our solution accessible to a larger customer base and accelerated adoption.

We continued to scale our physical identity and access management (PIAM) solution Pace. Our customers have been a valuable source of input. Their requirements, including the integration of credential and identity management into our PIAM platform, have informed our development efforts. The adoption of Pace in 2025 is evidence of the relevance of Digital Twin Technology for enterprise security management.

Within access control, AEOS maintained its position as critical security infrastructure. We remain focused on keeping the solution safe, secure, and reliable, ensuring long-term value for customers. At the same time, we supported customers in the transition to Access AtWork.

Organization

Customer centricity remains a hallmark of our business unit. As we diversify our business model from on-premises hardware to include SaaS, customers become a continuous source of insight, shaping how we deliver value. We are committed to maintaining a clear product and technology vision while remaining agile and responsive to customers’ evolving needs. The establishment of a SaaS commercial team in 2025 will support the alignment of product development with customer expectations moving forward.

Outlook

We are well positioned to seize emerging opportunities in the year ahead and expect continued revenue growth in 2026. Demand for our access control solutions remains robust, our Mobile Access pipeline is well-filled, and customer-centric enhancements to Pace are expected to accelerate adoption. Access AtWork will be expanded with features tailored to the mid-market companies and enterprises, expanding our reach. We are actively experimenting with the use of AI and data analytics to deliver both protection and intelligence through our access management solutions. As we continue to learn, test, and refine these capabilities, we are positioning Nedap not just as a security provider, but as a forward-thinking partner helping organizations optimize their operations and deliver seamless experiences.

2.6 Other solutions

UV

Nedap is a global leader in driver technology for UV lamps used in industrial curing and disinfection. UV system manufacturers use our technology to create energy-efficient and long-lasting UV treatment solutions. Within UV disinfection, these include systems for drinking and wastewater treatment, as well as ultrapure water systems for the microelectronics and semiconductor industries. The importance of UV disinfection in meeting increasingly strict water quality standards indicates the long-term value potential of our technology.

Nedap’s UV lamp driver technology is also used in industrial curing systems, which provide a safe and environmentally friendly alternative to chemical agents for the curing of substances such as ink, coatings, and resins.

In 2025, revenue decreased compared with 2024, when revenue was higher than expected. Based on current insights and ongoing customer engagement, we expect demand to increase again in 2026. The continued relevance of our UV driver technology in existing categories supports our confidence in further growth potential.

Other developments

We finalized the offboarding of Nedap Flux customers. Following the 2023 decision to scale down the solution, we assisted all customers in transitioning to other providers. The scaling down of the Pigs solution was nearing completion by the end of 2025.

2.7 Financial affairs

Key figures

• ¹ Defined as operating profit expressed as a percentage of revenue.
• ² ROIC represents operating profit divided by invested capital (fixed assets + net working capital).

Revenue

Revenue for 2025 amounted to €279.8 million, which was 11% ahead of 2024 (€251.6 million). Revenue in our key markets increased by 18%.

All key markets showed revenue growth. Healthcare saw continued high demand for its solutions. Livestock recovered well from slow market conditions in 2024. Retail scaled its RFID solutions, notably in Europe and the US. Security saw robust growth in demand for its access control solutions.

Recurring revenue rose by 11% to €111.5 million (in 2024: €100.2 million), comprising 40% of revenue (in 2024: 40% of revenue). This growth was supported by improved market conditions and a relevant offering in all key markets.

Added value was up from €179.9 million in 2024 (71% of revenue) to €204.7 million in 2025 (73% of revenue, an increase of 170 basis points). This was driven by higher revenue, reflecting our focus on value-adding solutions. Added value per FTE increased from €181 thousand per FTE in 2024 to €201 thousand per FTE in 2025. As we continue transitioning to SaaS business models, this metric may decline in the midterm, reflecting the longer value realization timeline inherent in the financial model.

Operating costs

Total operating costs grew by 11%, from €156.0 million in 2024 to €173.0 million in 2025.

This resulted largely from an increase in personnel costs from €114.8 million in 2024 to €127.9 million in 2025. In line with our long-term objectives, we invested in people to support our Create & Scale strategy in our key markets. The number of FTEs increased from 999 at the end of 2024 to 1,032 at the end of 2025. In addition, overall personnel costs per FTE have increased by around 9%. This stems from annual wage increases under collective agreements, as well as annual appraisals and role progression. Additionally, there was an increase in both employee settlements and profit sharing.

Other operating costs went up from €30.5 million in 2024 to €32.8 million in 2025, mainly as a result of decreased capitalization of development costs. Marketing and sales costs were broadly in line with 2024.

Foreign exchange differences amounted to a loss of €0.4 million in 2025, compared to a gain of €0.1 million in 2024.

Depreciation increased from €9.9 million in 2024 to €10.2 million in 2025. Amortization amounted to €1.6 million (in 2024: €0.6 million), driven primarily by the start of amortization on MediKIT. Additionally, we recognized an impairment of €0.6 million, up from 2024 (€0.3 million), due to the write-down of legacy technology used in internal administrative processes.

Investments in research and development totaled €55.8 million, representing 20% of revenue, whereby €1.5 million was capitalized (€50.2 million in 2024, i.e., 20% of revenue, with €3.4 million capitalized). We continue to invest in our capability in digital twin solutions.

Operating profit

Operating profit (EBIT) for 2025 came in at €31.7 million, compared to €23.9 million in 2024. The operating margin, i.e., the operating profit expressed as a percentage of revenue, amounted to 11.3% in 2025 (in 2024: 9.5%). This growth of 180 basis points reflects the increase in added value margin.

Financing costs

Net financing costs decreased to €0.6 million in 2025 (in 2024: €0.9 million) as a result of a flexible refinancing arrangement with a more optimized cost structure.

Taxation

Taxation over 2025 totaled €6.5 million (in 2024: €4.4 million). The effective tax rate increased to 21.0% (in 2024: 19.0%), mainly reflecting higher non-deductible expenses, lower deferred taxation, and a prior-year tax adjustment, partly offset by increased benefits from tax incentive schemes.

Profit for the financial year

Profit posted for the 2025 financial year came in at €24.6 million, compared to €18.5 million posted in 2024.

Earnings per share and dividend

Earnings per share increased from €2.82 in 2024 to €3.72 in 2025. The average number of outstanding shares in 2025 was 6,605,616 (in 2024: 6,581,074). This increase is the result of the delivery of shares held by the company itself to cover employee participation plans.

A dividend of €3.70 will be paid for 2025 (in 2024: €3.20).

Financial position

The balance sheet total decreased from €137.4 million as of 31 December 2024 to €136.4 million as of 31 December 2025.

Trade and other receivables increased in line with revenue, while days sales outstanding remained flat at 6.2 weeks compared to 2024.

Inventories continued to decrease, from €32.0 million in 2024 to €30.0 million in 2025, as actions initiated to reduce inventory in 2024 continued to show results in 2025.

Overall liabilities decreased from €53.7 million in 2024 to €46.9 million in 2025. The financing agreement with the bank for the standby roll-over loan, set to expire on 1 April 2026, was repaid in the financial year and a multi-purpose credit facility has been established. This was partly offset by an increase in trade and other payables (from €30.5 million in 2024 to €32.3 million in 2025) and an increase in our lease liability (from €1.7 million in 2024 to €4.4 million in 2025). This increase reflects the leasing of new premises in the US for a five-year term and the leasing of vehicles in the Netherlands as part of the electrification of our fleet.

The net debt position is now negative at -€3.4 million as of 31 December 2025, compared to €9.6 million as of 31 December 2024. Cash and cash equivalents decreased from €4.4 million as of 31 December 2024 to €3.4 million as of 31 December 2025, with repayment of the borrowings being largely compensated by the improved operational cash flow.

Net debt-to-EBITDA stood at -0.1 as of 31 December 2025 (0.3 as of 31 December 2024). Solvency stood at 66% as of 31 December 2025 (61% as of 31 December 2024).

There are no drawings on the credit facilities as of 31 December 2025 (€14 million as of 31 December 2024).

Cash flow

Net working capital as of 31 December 2025 amounted to €26.5 million, lower than in 2024 (€35.0 million). This was driven by reduced inventory levels and increases in employee-related payables, tax and lease liability. The increases in trade and other receivables and trade and other payables are roughly equivalent. Operating cash flow amounted to €44.5 million in 2025, against €28.9 million in 2024.

Return on invested capital

Return on invested capital (ROIC) increased to 37% in 2025 (in 2024: 26%), driven by higher operating profit and lower net working capital.

3.2 Risk management & internal controls

Risk management is an essential part of our business strategy. The primary objective is to identify and mitigate risks that have a potentially major impact on our ability to achieve our strategic and financial goals and, consequently, on the overall value of our business.

The Board of Directors has the overall responsibility for achieving our strategy and objectives and establishing adequate internal risk management and internal control systems. The implementation of our strategy, which is aimed at achieving market leadership in our key markets, is consistent with effective risk management, in which risks are identified in a timely manner and mitigating measures are taken where necessary.

We firmly believe that a sense of ownership leads to optimum risk management. Nedap’s culture balances personal responsibility and autonomy with risk awareness and provides a solid foundation for managing risks in both day-to-day operations and strategic decision-making. This culture is reinforced by our code of conduct. The Board of Directors, NLT, senior management, and the Supervisory Board all play an important role in safeguarding this culture and ensuring that long-term impacts are considered in decision-making. 

To support this approach, Nedap applies a three-lines model that fits the nature of the company and supports effective risk management across all risk categories.

• First line
  The first line consists of employees. They are responsible for identifying, managing, and escalating risks as part of their day-to-day activities. By identifying and addressing risks within their areas of responsibility, employees act as the first line of defense and contribute directly to maintaining an effective risk and control environment.

• Second line
  The second line consists of corporate expert functions and designated members of business unit leadership teams that provide guidance, support, and oversight to the first line. These functions include, among others, finance, IT, HR, legal, and compliance. Within the compliance domain, compliance theme owners and the compliance officer fulfill second-line roles by setting frameworks, monitoring developments, and supporting the organization in managing compliance risks.

• Third line
  The third line is formed by the internal auditor, who provides independent assurance on compliance and the design and effectiveness of Nedap’s risk management and internal control systems. The internal auditor reports findings to the Board of Directors and the Supervisory Board.

In our open, informal culture, finding the right balance between rules and entrepreneurship requires continuous dialogue, particularly in light of increasing regulatory pressure. While the primary responsibility for managing risks lies within the business units, the alignment of supporting processes and expertise within the corporate teams enables the business units to remain focused on their core activities. In this way, risk management is embedded throughout the organization and integrated into strategic planning and daily operations. 

Sustainability continues to play a prominent role in our value creation model, presenting both risks and opportunities for Nedap. The increasing importance of sustainability, combined with the evolving laws and regulations introduced in recent years, has driven us to embed sustainability into our strategic planning and risk management processes.

Risk appetite

Nedap strives to strike the right balance between acceptable entrepreneurial risk and sustainable long-term value creation while remaining in control. Our risk appetite ranges from medium to high in terms of strategic risks, like solution development and commercial initiatives, and operational risks. When it comes to compliance with legislation and regulations, our risk appetite is low, with respect for both the letter and the spirit of the law. The table below shows Nedap’s risk appetite by risk category:

Risk management and control systems

Nedap Risk Management Framework

Nedap has a solid system in place for responsible risk management. Our entrepreneurial culture leads to widespread interaction within and between teams, business units, and the Board of Directors, resulting in strong informal checks and balances. These are supplemented by formal procedures and controls where compulsory or deemed useful. These frameworks are based on the Nedap Risk Management Framework, which was adopted by the Board of Directors and the Supervisory Board. This framework identifies the connections between enterprise risk and the internal control system, contextualizing the Committee of Sponsoring Organizations (COSO) principles and linking them to business processes and procedures.

The Nedap Risk Management Framework is organized around our business processes. Risks that, due to their size, nature, and impact, could result in substantial losses, serious consequences for a business unit, or damage to the company as a whole, are reported to the Board of Directors. The Board of Directors then decides on follow-up actions in these situations.

As part of the strategic process, strategic risks and opportunities are included in the multi-year plan and discussed with the Board of Directors and the Supervisory Board. In addition, we organize annual risk sessions with business units and corporate teams to raise awareness, share knowledge, and identify Nedap-wide trends and developments to consider during the strategic process. Relevant risks for each business unit are identified and discussed. Specific sessions are held to raise awareness around fraud and integrity, including measures for detecting and preventing fraud. These risk sessions operate as an extra control mechanism, reinforcing the risk management principles of the business units and the Nedap Risk Management Framework. They also enable management to identify and share best practices within and across business units. We pay specific attention to identifying and prioritizing sustainability risks and opportunities in relation to the ESRS.

Risks that, due to their size, nature, and impact, could potentially have major consequences for Nedap, are included in the risk table at the end of this section. These risks have been classified into the following categories: strategic, operational, compliance, and reporting. The risk table includes a description of the associated impact and probability trend, as well as the key measures to mitigate the risk. Specific financial risks are addressed separately in the financial statements.

Strategic and financial management system

Nedap has an adequate and effective strategic and financial management system. Key components include the strategic calendar, which consists of the multi-year plan and the budget, and the financial reporting system, which tracks both the progress and actual outcomes of the company’s operating activities. The financial management system is designed to:

• Set and align the right priorities and targets at the board and business unit level.

• Test actual progress and performance against objectives.

• Enable management to retain control over responsibilities delegated to others.

• Manage cash and cash-equivalent flows within the organization.

• Identify and restrict risks.

• Detect and prevent fraud.

The Board of Directors and business unit leaders also hold consultations on significant market-related matters, major investments, the progress of research and development projects, and staff allocations that go beyond the budget. Their final decisions are made in the interest of Nedap as a whole.

The Group Controlling department in Groenlo plays a leading role in finance and risk management. The department’s role is to verify the data used in financial reporting and ensure the proper execution of administration and data processing tasks. It also ensures the correct, complete, and timely delivery of these reports, while overseeing other departments responsible for delivering data with a focus on detecting and preventing fraud. The Group Controlling department holds operational responsibility for financing, cash management, currency management, and taxes, and is responsible for risk management processes globally. Due to these responsibilities, the department is required to have regular and timely consultations with the Board of Directors and to work closely with employees in the Netherlands and abroad.

Operational risks

Operational risks are primarily managed within the business units as part of day-to-day operations. These risks relate, among other things, to people, processes, systems, supply chain activities, and the continuity and reliability of operations. Business units are responsible for identifying, assessing, and managing operational risks within the boundaries of Nedap’s risk appetite, supported by corporate expert functions and aligned processes. Where appropriate, operational risks that could have a significant impact on Nedap or require coordination across business units are discussed with the NLT.

Nedap Compliance Framework

The Nedap Compliance Framework describes the objectives, responsibilities, and scope of Nedap’s compliance management. The framework includes compliance-related communications, compliance monitoring and enforcement, and their integration within the organization. Subjects covered by the framework include supplier liability, information security, AI, privacy, insider trading, anti-bribery and corruption, competition, products and entities subject to sanctions under legislation and regulations, customs, HRM, health and safety, and product compliance, such as certifications.

Periodic meetings between the compliance theme owners and the compliance officer are held in the presence of the internal auditor to discuss relevant developments and progress. Significant or unusual compliance matters are escalated to the Board of Directors. Group privacy officers and group information security officers meet regularly to discuss developments, risks, and priorities within their respective domains.

The Board of Directors is responsible for the overall effectiveness of the Nedap Compliance Framework. The Audit & Risk Committee of the Supervisory Board oversees the functioning of the framework. The Supervisory Board is informed of material compliance matters.

The Nedap Compliance Framework is reviewed annually and updated as necessary.

Tax Control Framework

Nedap is exposed to tax risks that could potentially result in double taxation, penalties, and interest payments. These risks include, but are not limited to, transfer pricing risks on cross-border intercompany transactions and tax risks related to potential changes in tax laws that could result in higher tax expenses and payments.

Nedap’s tax policy corresponds with its global governance model. Our Dutch operations consist mainly of strategy design, product development, marketing, sales, supply chain management, legal affairs, compliance, and controlling. Activities at subsidiaries consist almost exclusively of local sales (support). A large part of the Group’s economic value is therefore generated in the Netherlands. Nedap neither engages in aggressive tax planning nor uses “tax havens” as defined by the Organization for Economic Cooperation and Development (OECD).

The Group Controlling department oversees and implements the global tax policy, formulates and implements the transfer pricing policy, and actively monitors compliance. Transactions between related entities are subject to the arm’s length principle and the relevant OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations. Through its transfer pricing policy, Nedap aims for all its companies to post profits that are in line with the scale and risks of the activities in their respective countries. Such profits are subject to all applicable local taxes. All Nedap subsidiaries issue periodic reports on their tax position, including taxes charged and paid. In line with the OECD guidelines, a new benchmark study is conducted at least every two years. Most of the countries where Nedap operates have endorsed the OECD guidelines. However, these are not binding, and local tax authorities still have to sign off on a company’s transfer pricing system. Although Nedap complies with the OECD guidelines, local tax authorities may withhold their approval. Nedap does not foresee significant financial, compliance, or reputation risks as a result.

Nedap has implemented a Tax Control Framework that is regularly monitored and updated. It documents and formalizes material tax risks, tax control, and the monitoring of taxes. Tax risks and mitigation strategies are discussed in regular meetings across the organization. The Tax Control Framework serves as the foundation for the horizontal supervision agreement with the Dutch tax authorities, which was reconfirmed in 2023 and will remain in effect through 2026.

Nedap has one ruling with Dutch tax authorities concerning an agreement to apply the Innovation Box tax regime. The current agreement remains in effect through 2026. When Nedap deems it helpful to gain prior certainty on the application of tax laws and regulations, the company tries to secure a ruling with the tax authorities.

A specific measure was taken to control tax risks and other risks. The directors under the articles of association of most subsidiaries are controllers who spend a considerable part of their time working with the Group Controlling department in Groenlo. They are responsible for local compliance, including tax legislation and regulations. The managers of our subsidiaries are evaluated based on the operating results of their respective business entities. Taxes are not a factor in such evaluations.

Assessment of effectiveness

The Board of Directors regularly assesses the design and operating effectiveness of Nedap’s risk management and internal control systems. This assessment is based on management information and reporting, discussions within the Board of Directors and the NLT, the outcomes of annual risk sessions, insights from the business and second line corporate expert functions, reports from the internal auditor and the external auditor, and discussions with the Audit and Risk Committee of the Supervisory Board. Where relevant, incidents, near misses, and developments in laws and regulations are taken into account.

Risk table

The following risk table provides a summary of the main risks identified, the associated impact and likelihood trend, the developments in 2025 that relate to these risks, and the main measures taken to mitigate them.

Other than what is stated in the Directors’ Report (the full annual report without chapter 5 Financial statements), there have, to the best of the Board of Directors’ knowledge, been no exceptional events that are exempt from being taken into consideration in the financial statements.

3.3 Corporate Governance

This chapter outlines Nedap’s corporate governance practices. It provides an overview of the composition and structure of our Board of Directors and Supervisory Board, detailing their roles and responsibilities, and specifying their relationship with the general meeting. Our governance framework is designed to support effective decision-making, accountability, and a sound and transparent system of checks and balances.

Board of Directors

Composition

The Board of Directors consists of three executive members: the CEO, the CCO, and the CFO.

Details of the members of the Board of Directors

Responsibilities

The Board of Directors is responsible for managing the company and safeguarding Nedap’s continuity. The Board of Directors sets the strategy for sustainable long-term value creation, taking into account an acceptable risk profile, the impact on people and the environment, and the interests of relevant stakeholders.

The Board of Directors is responsible for implementing this strategy and is accountable to shareholders and the Supervisory Board.

The Board of Directors is also responsible for compliance with applicable legislation and regulations and for establishing and maintaining adequate internal risk management and control systems. The Board of Directors renders account to the Supervisory Board on the effectiveness of the design and operation of these systems.

Certain decisions by the Board of Directors require the Supervisory Board’s approval. Article 18 of the articles of association specifies what decisions are subject to Supervisory Board approval.

Appointment

Members of the Board of Directors are appointed by the Supervisory Board. The Supervisory Board informs the general meeting of the proposed appointment. The Supervisory Board will not dismiss a director until after the general meeting has been heard about the intended dismissal.

Remuneration, employment, and management terms

Each individual director’s remuneration and employment terms are set by the Supervisory Board in accordance with the company’s remuneration policy adopted by the general meeting. The remuneration policy aims to attract and retain qualified, expert directors, while also supporting Nedap’s medium- and long-term interests. More information about the remuneration policy is available on our Corporate Governance webpage. For more details on the implementation of the remuneration policy in the 2025 financial year, please refer to section 4.2 of this report.

Nedap Leadership Team

The Nedap Leadership Team (NLT) functions as Nedap’s executive committee (ExCo). It was introduced on 4 March 2025 to support alignment and decision-making on Nedap-wide themes, which is essential to Nedap’s next phase of growth in its four key markets. The NLT consists of the Board of Directors, the Managing Directors of the key markets, and the General Counsel. It supports the Board of Directors in preparing strategic decisions and coordinating execution. The Board of Directors remains responsible for setting strategy and for strategic and material decision-making.

Supervisory Board

Composition

The Supervisory Board comprises five non-executive members. For more information about the members of the Supervisory Board and a skills matrix, we refer to section 4.1 Report of the Supervisory Board.

The Supervisory Board has established two committees, the Audit & Risk Committee and the Remuneration Committee, to support efficient and focused execution of tasks, decision-making, and meetings. For more information on these committees, we refer to section 4.1 Report of the Supervisory Board.

Responsibilities

The Supervisory Board reviews the governance of the Board of Directors and supervises general operations within Nedap N.V. and affiliated companies. The Supervisory Board also supports the Board of Directors in an advisory capacity. In fulfilling their duties, the members of the Supervisory Board are guided by the interests of Nedap N.V. and the affiliated companies. The Supervisory Board also oversees the effectiveness of internal risk management and control systems, and the integrity and quality of the financial and non-financial reporting. The profile for the size and composition of the Supervisory Board can be found on the company website. Membership of the Nedap Supervisory Board conforms to the profile described. All members are independent of the company and of each other and comply with the applicable limits on supervisory positions.

Appointment

Supervisory Board members are appointed by the general meeting following a proposal by the Supervisory Board, as specified in the articles of association, generally for a period of four years. This proposal is made on the basis of a profile drawn up by the Supervisory Board. The general meeting and the works council may recommend candidates. The works council has an enhanced right of recommendation for a third of the Supervisory Board membership, as laid down in Article 23.5 of the articles of association.

Remuneration

The remuneration of individual members of the Supervisory Board is determined by the general meeting in accordance with the Supervisory Board remuneration policy, as adopted by the general meeting.

General Meeting

The annual general meeting is held within six months of the end of the financial year. The agenda for the annual general meeting includes, among other items, the annual report, adoption of the financial statements, the remuneration report, dividend proposal, discharge of the members of the Board of Directors and the Supervisory Board, and proposed appointments. Key governance decisions that, by law and under the articles of association, must be submitted to the annual general meeting are also addressed, as are any other proposals submitted by the Supervisory Board or the Board of Directors. Shareholders representing at least 1% of the issued share capital may request in writing that items be placed on the agenda. Requests will be granted (i.e., the requested item will be put on the agenda) if the company has received the request no later than the 60th day before the day of the annual general meeting.

Extraordinary general meetings may be convened as often as deemed appropriate by a member of the Board of Directors or Supervisory Board, if required by law, or if one or multiple shareholders, who jointly represent at least 10% of the issued share capital, submit a timely request to this effect to the Board of Directors and the Supervisory Board. Their request must include a detailed breakdown of the items they want to address. The convocation procedure for an extraordinary general meeting is specified in Article 31 of the articles of association.

Convocation of a General Meeting

General meetings are convened either by the Supervisory Board or by the Board of Directors at least 42 days ahead of the meeting date. The convocation notice will be posted on the company’s website as per the procedure laid down in Article 46 of the articles of association.

Admission to General Meetings and meeting rights

Nedap has only issued registered shares. Holders of one or multiple registered shares are authorized to attend the general meetings and to speak and vote at the meetings, provided that their entitlement to attend and vote dates back to at least 28 days before the meeting date (the record date) and they have been registered in a register designated by the Board of Directors, regardless of who is entitled to the shares at the time of the general meeting.

Shareholders wishing to attend the annual or an extraordinary general meeting are required to notify Nedap of their intention before a date set by Nedap’s Board of Directors through their bank or broker where their shares are held in trust, and include proof of receipt, which serves as their entrance ticket to the meeting. This date cannot be set earlier than seven days ahead of the meeting date.

Voting rights

Every share comes with the entitlement to one vote, and there are no restrictions on voting rights.

Independent external auditor

The general meeting appoints the independent auditor following nomination by the Supervisory Board. The Supervisory Board oversees the performance of the external auditor and evaluates the performance annually.

Internal auditor

The Board of Directors both appoints and dismisses the internal auditor, after approval by the Supervisory Board. The performance of the internal auditor is evaluated by the Board of Directors on an annual basis, after consultation with the Supervisory Board. An independent third party will assess the performance of the internal auditor at least every five years.

Diversity, Equity, and Inclusion

Our policy is available on the website. Further information about DEI is also provided in section 1.3 Our people, in our stakeholder table in section 1.4 Sustainability, in the sections 2.3 Progress on our people, 2.4 Progress on our sustainable impact, 4.1 Report of the Supervisory Board, and in section 4.2 2025 Remuneration report (Sustainable organizational and revenue model). Additional information can be found in chapter 8 Sustainability statement, section 8.4 Sustainability governance, subsection 8.4.1, section 8.6 Own workforce, subsections 8.6.1, 8.6.2, 8.6.4, 8.6.5, and 8.6.8.

The Dutch Corporate Governance Code

The Supervisory Board and the Board of Directors are responsible for Nedap’s Corporate Governance and for compliance with the 2025 Dutch Corporate Governance Code (Code). Please refer to https://www.mccg.nl/english.

Deviations from the Dutch Corporate Governance Code

Principles and best practice provisions

Nedap largely endorses the Code’s basic and broadly supported principles. Nedap applies several of the Code’s provisions in a different way, for which we provide solid reasoning. In this report, we are accounting for our compliance with this Code, which is based on the principle of apply or explain.

3.2.3 Director severance pay

Regarding directors under the articles of association appointed before 1 January 2015, severance pay shall be determined partly by their length of service and partly in light of the permanent nature of their appointment. Directors under the articles of association appointed after 1 January 2015 are subject to the severance pay cap of one annual salary, which is the fixed component of their pay.

3.4.2 Director contract

The key elements of a director’s contract with the company are published in a list on the company’s website after the contract has been signed, and in all cases no later than the notice convening the general meeting, during which the appointment of the director will be proposed. For the provision of directors under the articles of association appointed after 1 January 2015, Nedap complies in the sense that members of the Board of Directors are appointed by the Supervisory Board after announcing the proposed decision to the general meeting.

4.1.3 Adding the dividend proposal to the agenda

Dividend payment is part of the company’s strategy and long-term policy. Dividend proposals will therefore not be addressed as an agenda item unless this payment is made partly or fully by drawing on the reserves. The dividend payment will, however, be explicitly included on the agenda as an item for discussion.

4.2.3 Meetings and presentations

Given the company’s scale and the limited international spread of Nedap’s shareholders, the availability of webcasting, smartphones, and other facilities for live viewing of meetings and presentations is restricted. Presentations are posted on the company’s website immediately prior to the meeting at which they are given, so that all shareholders can read them.

4.3 Casting votes

Shareholders can vote by proxy or directly by following voting instructions. Given the limited scale of the company and relatively limited spread of outstanding Nedap shares, facilities for communication between shareholders are not yet provided.

Stichting Preferente Aandelen Nedap

Based on best practice provision 4.2.6 of the Code, the Board of Directors must provide a summary of all protective measures that have been taken or could be taken to protect the company from a third party gaining control.

Since 1973, Nedap has been able to issue preference shares as a protective measure. This protection can be deployed if a third party intends to gain control of the company by acquiring a decisive interest or otherwise attempts to adversely affect Nedap, without consideration for its business interests and those of all stakeholders.

Stichting Preferente Aandelen Nedap (the Foundation) was founded for this purpose in 1983. It looks after the interests of Nedap N.V., its business, and all stakeholders, providing defense wherever possible against influences that could threaten continuity, independence, or identity, and conflict with its interests. Nedap has granted the Foundation the right to acquire preference shares through a call option, under which, on request, the Foundation can acquire preference shares up to a maximum equal to the number of ordinary outstanding shares, less one, at the time the option is exercised. The call option obliges Nedap to issue the number of preference shares requested by the Foundation whenever it makes that request. Consequently, no further decision by any corporate body of Nedap is required; the decision was made when the option was granted to the Foundation. If preference shares are issued, the Foundation must pay at least 25% of their nominal value in cash.

The board of the Foundation is made up of the following people:

• Mr. N. W. Hoek, chair

• Mr. A. C. Metzelaar

• Ms. A. P. M. van der Veer-Vergeer

• Mr. G. van de Weerdhof

The composition of the board is intended to ensure that the interests of all Nedap stakeholders are looked after in the decision-making process to the maximum degree. According to both the directors of this Foundation and those of Nedap, the Foundation is independent of Nedap, as specified in Article 5:71(1)(c) of the Dutch Financial Supervision Act (“Wet op het Financieel Toezicht”). Preference shares take precedence over ordinary shares when it comes to dividend payment or pay-out of capital paid up on shares, the latter occurring in the event of Nedap’s liquidation.

Other

Material transactions

To the best of Nedap’s knowledge, there are no:

• Material transactions between legal or natural persons who hold at least 10% of the shares in Nedap, as meant by provision 2.7.5 of the Code;

• Material transactions of the company with a related party that are outside the framework of normal operations or not in line with normal market conditions (Article 2:167 Dutch Civil Code); and

• Restrictive agreements with shareholders.

To the best of Nedap’s knowledge, its shareholders are not a party to an agreement that could lead to restrictions on trading in Nedap shares or on voting rights.

Change of control

The multi-purpose credit agreement that Nedap has entered into with its bank is also governed by general credit provisions under which the bank can demand early repayment of outstanding amounts if there is a significant change in control over Nedap’s activities. It is not unusual for other long-term alliances, in which Nedap is a party, to also include the possibility of terminating the agreement with immediate effect in the event of a change of control. A change of control, however, is not expected to have a significant impact on Nedap’s financial performance. Nedap has not entered into agreements with directors or other employees under which personal rights to compensation can be derived upon termination of their employment after the settlement of a takeover bid for Nedap shares.

Issue of shares in the company

As per the articles of association, the Board of Directors is only authorized to issue shares if the general meeting designates it as the body authorized to issue shares. The general meeting of 17 April 2025 designated the Board of Directors as the body authorized to issue ordinary shares in the capital of Nedap and to grant rights to subscribe to shares in Nedap’s capital. The Board of Directors’ authority to issue shares is limited to a maximum of 10% of the total issued share capital at the time of issue. This requested designation has been granted for a period of 18 months. A resolution by the general meeting to issue shares, to designate the Board of Directors as the body authorized to issue shares, or the withdrawal of a resolution to designate can only be passed on a proposal of the Board of Directors, with the prior approval of the Supervisory Board. A resolution to issue shares by the Board of Directors, provided that the Board of Directors has been designated as the body authorized to issue shares, is always subject to Supervisory Board approval in each specific case. Preferential rights can be limited or excluded by the body appointed to decide on share issues. The shareholders’ decision to adopt the proposal to designate the Board of Directors has been published on our website.

Share buybacks

Nedap may only acquire its own fully paid-up shares for no consideration. An acquisition, other than for no consideration, is only possible if:

1. Shareholders’ equity, less the purchase price, is not less than the paid-up and called-up part of the capital, plus the reserves that must be maintained by law and/or under the articles of association; and

2. The nominal amount of the company’s own shares is no more than 50% of the issued share capital; and

3. The general meeting has appropriately authorized the Board of Directors. This authorization is not required to acquire the company’s own shares or depository receipts in order to transfer them to employees under an applicable plan.

In accordance with Article 13 of the company’s articles of association and without prejudice to the provisions of Article 2:98 of the Dutch Civil Code, the annual general meeting of 17 April 2025 authorized the Board of Directors, with the approval of the Supervisory Board, to acquire ordinary shares up to a maximum of 10% of the total issued share capital of Nedap N.V. After such an acquisition, Nedap N.V. or one or several of its subsidiaries can never hold more than 10% of the total issued share capital of ordinary shares in Nedap N.V. for their own account. The ordinary shares can be acquired through purchase on the stock market or otherwise at a price that lies between the nominal value of the ordinary shares and 110% of the average closing price of the ordinary shares on the Euronext Amsterdam N.V. stock exchange over the five consecutive trading days prior to the day of purchase.

The requested authorization will be valid for a period of 18 months, starting from 17 April 2025. The decision by the annual general meeting has been published on our webpage.

Amendment of the articles of association

Nedap’s articles of association may be amended by a resolution of the general meeting after approval by the Board of Directors and Supervisory Board.

Consolidated non-financial statement

With the adoption of the European Sustainability Reporting Standards (ESRS), Nedap also ensures compliance with the reporting requirements related to sustainability information as described in the Non-Financial Reporting Directive (NFRD).

Corporate Governance statement

The Corporate Governance Statement specified in the Decree on the content of the Directors’ Report is part of this Directors’ Report. The required information can be found in this chapter, Governance & Risk. Additional information can be found in chapter 4 Report of the Supervisory Board. Regarding DEI, please refer to section 1.3 Our people, in our stakeholder table in section 1.4 Sustainability, in the sections 2.3 Progress on our people, 2.4 Progress on our sustainable impact, 4.1 Report of the Supervisory Board and in section 4.2 2025 Remuneration report (Sustainable organizational and revenue model). Additional information can be found in chapter 8 Sustainability statement, section 8.4 Sustainability governance, subsection 8.4.1, section 8.6 Own workforce, subsections 8.6.1, 8.6.2, 8.6.4, 8.6.5, and 8.6.8.

The Directors’ Report also includes information required under the Decree ratifying Article 10 of the Takeover Directive to the extent that it applies to Nedap N.V.

Directors’ statement

In line with best practice provision 1.4.3 of the Code, the Board of Directors states to the best of its knowledge that:

1. The Directors’ Report (the complete annual report without chapter 5 Financial statements) as included in this report offers an adequate level of insight into the shortcomings in the operation of Nedap’s internal risk management and control systems.

2. The aforementioned systems provide reasonable assurance that Nedap’s financial reporting is free from material misstatement.

3. The aforementioned systems provide limited assurance that Nedap’s sustainability statement is free from material misstatement.

4. The Board is not aware that the aforementioned systems would not provide sufficient comfort that material operational and compliance risks faced by Nedap are effectively managed in line with Nedap’s risk appetite, where ‘sufficient comfort’ is to be read as: comfort considering our risk appetite, the complexity of our enterprise, inherent limitations to these systems and other disclosures on these systems in our management report.

5. The report reflects the status of Nedap’s current operations and the fact that financial reporting has been prepared on a going concern basis.

6. The Directors’ Report contains material risks and uncertainties that are relevant in the formulation of expectations as to Nedap’s continuity.

Despite the internal risk management and control systems, material errors, fraud, and unlawful actions can still take place. The systems therefore do not provide absolute assurance that targets will be achieved. They have been developed to obtain sufficient assurance as to the effectiveness of controls implemented to mitigate the financial, compliance, and operational risks related to organizational objectives.

Additionally, the Board of Directors states, in compliance with Article 5:25(c) of the Dutch Financial Supervision Act and to the best of its knowledge, that:

1. The financial statements provide a faithful representation of the assets, liabilities, financial position, and profit/loss of the issuing entity and the companies included in the consolidation.

2. The Directors’ Report provides a faithful representation of the position of the company and consolidated businesses as of 31 December 2025 and of Nedap’s development and performance during the 2025 financial year and describes the significant risks the company is facing.

Groenlo, the Netherlands, 23 February 2026

Board of Directors  
Mr. R. M. Wegman, CEO
Mr. R. Schuurman, CCO
Ms. H. P. J. M. Jans, CFO

4.2 2025 Remuneration report

The Supervisory Board hereby presents the remuneration report for the members of the Board of Directors and the Supervisory Board for the 2025 financial year.

The remuneration report has been prepared in accordance with the provisions of Article 2:135(b) of the Dutch Civil Code and the Corporate Governance Code 2025. The remuneration report provides information about the remuneration policy pursued during the 2025 financial year to ensure transparency for all stakeholders. On 17 April 2025, the annual general meeting adopted the current remuneration policy for the Board of Directors.

The remuneration policy supports Nedap’s strategy and sustainable long-term value creation by aligning total remuneration with long-term performance, strategic priorities and shareholder interests through a balanced mix of fixed remuneration, short-term incentives and long-term incentives.

Implementation of the remuneration policy in 2025

Following adoption by the general meeting, the revised remuneration policies for both the Board of Directors and the Supervisory Board entered into force with effect from 1 January 2025. The policies were implemented as approved, without deviations.

The remuneration framework applied in 2025 reflects Nedap’s strategic objectives, governance principles and focus on sustainable long-term value creation. In applying the remuneration policies, the Supervisory Board took into account internal pay ratios, market developments, Nedap’s performance and broader societal considerations.

At the annual general meeting of 17 April 2025, the 2024 remuneration report was approved by a majority of the votes cast (99.99%). The Supervisory Board took note of the outcome of the advisory vote and the discussions held at the meeting. As no material objections or points of attention were raised, no amendments to the 2025 remuneration report were deemed necessary (other than those resulting from the implementation of the revised remuneration policies).

Remuneration summary

The table below provides a summary of the costs for the current members of the Board of Directors as recognized in the financial statements.

• ¹ Ms. H. P. J. M. Jans’s contract commenced on 1 July 2025, and Ms. D. van der Sluijs’s contract ended on 31 July 2025. The basic income of Ms. D. van der Sluijs includes a contractual severance payment of €350, relating to her departure following the annual general meeting in 2025 upon termination of her board position.

The table below provides a summary of the remuneration awarded to the members of the Board of Directors in the financial year.

• ¹ The basic salary does not include the employer’s social security contributions.
• ² ‘Depositary receipts’ means ‘certificates’.
• ³ This is the amount of the discount given on the purchase of depositary receipts in the financial year.
• ⁴ This is the value of the depositary receipts awarded.

Fixed annual income

The fixed annual income is in line with the current remuneration policy and is incremented at the same rate as the rate used for employees, as agreed in Nedap’s collective labor agreement.

Variable annual income

Variable remuneration for the Board of Directors in 2025 consisted of a Short-Term Incentive (STI) and a Long-Term Incentive (LTI), reflecting the revised remuneration structure.

Short-Term Incentive (STI)

The STI is designed to incentivize the achievement of Nedap’s annual strategic, operational and financial priorities. For 2025, the STI was composed of:

• 50% financial performance criteria; and

• 50% non-financial performance criteria. 

The financial and non-financial performance criteria were determined ex ante by the Supervisory Board and aligned with Nedap’s strategy and key priorities. The specific criteria applied for 2025 were disclosed prior to the start of the performance year.

The STI payout is determined using an additive model, based on the extent to which predefined threshold, target and maximum performance levels were achieved. Performance below threshold does not result in a payout.

After the end of the financial year, the Supervisory Board assessed the actual performance against the predetermined criteria and determined the STI outcome in accordance with the remuneration policy. In doing so, the Supervisory Board applied a reasonableness and fairness test and concluded that the resulting outcome appropriately reflected both performance achieved and the manner in which that performance was realized.

Financial performance criteria

The financial targets have been split up into three sub-targets. The table above shows each sub-target, along with the extent to which it was achieved in the 2025 financial year and how much of the variable remuneration it represents.

Based on the above table, the Board of Directors is awarded a financial targets-related variable component of their annual income that represents 27% of their fixed annual income.

Non-financial performance criteria

The non-financial component of the STI for 2025 was based on two criteria: (i) Strategic business transformation and (ii) Customer focus. Both criteria were weighted equally.

The Supervisory Board defined four performance levels for each criterion (below threshold, threshold, target and maximum), linked to predefined qualitative criteria and corresponding payout percentages of 0%, 50%, 100% and 150%, respectively. Between threshold, target and maximum, payout is determined on a linear basis.

Strategic business transformation

In 2025, Nedap implemented a structured company-wide approach, in line with its Create & Scale growth strategy, to strengthen the execution of strategic priorities. Strategic investment propositions were assessed against defined commercial, operational and development criteria, aimed at achieving sustainable performance within predefined timeframes. Accountability for execution and follow-up was explicitly assigned, and progress was monitored periodically using a limited set of indicators to support prioritization and capital allocation decisions.

The approach has been embedded within the Healthcare and Retail markets. In the Security and Livestock markets, initial execution cycles were completed in 2025.

The Supervisory Board notes an improvement in execution cadence and follow-up of strategic initiatives during 2025. In view of the predefined criteria for this target, including the degree of implementation, consistency of use across markets and teams, and observable impact on execution, the Supervisory Board determined that performance was between threshold and target level, close to target.

Based on this assessment, the Supervisory Board awarded 12% variable pay for this component.

Customer focus

In 2025, Nedap further developed its structured end-to-end customer process across sales, marketing, account management and customer excellence. For relevant SaaS teams, the BowTie methodology was implemented and embedded in commercial systems, contributing to greater consistency in pipeline management and improved insight into conversion data. For certain propositions, further integration remains in progress.

In assessing performance against the predefined criteria, including the level of roll-out, system integration and the use of conversion data for steering, the Supervisory Board concluded that performance was between threshold and target level, close to target. 

Based on this assessment, the Supervisory Board awarded 11% variable pay for this component.

Long-Term Incentive (LTI) plan

The Long-Term Incentive (LTI) plan for the Board of Directors is designed to promote sustainable long-term value creation and to align the interests of directors with those of shareholders. The LTI takes the form of a Performance Share Unit (PSU) plan, under which conditional performance shares are granted annually. The on-target value of the LTI award amounts to 50% of fixed annual income, with a maximum opportunity of 75%, depending on performance. Vesting is subject to the achievement of predefined performance criteria measured over a three-year performance period (2025–2027). These criteria comprise sales growth within key markets (40%), earnings per share growth (35%) and ESG objectives (25%), reflecting Nedap’s strategic, financial and sustainability priorities. For each criterion, vesting ranges from 0% below threshold to a maximum of 150% at outstanding performance. Shares that vest after the three-year performance period are subject to a subsequent two-year holding period, during which members of the Board of Directors are required to retain the shares, except for those sold to meet tax and social security obligations. This structure reinforces a long-term focus and supports sustained value creation for the company.

The number of conditionally granted performance shares under the LTI plan is determined by reference to the average Nedap share price over the five trading days immediately preceding the grant date. The fair value of the granted PSUs is determined at grant date in accordance with applicable accounting standards. In calculating the fair value, an adjustment is applied to reflect the absence of dividend entitlement during the vesting and holding periods. This adjustment is based on a discount equal to the average dividend yield of Nedap shares over the past five years.

Given the commercially sensitive nature of certain targets, detailed quantitative target ranges will be disclosed ex post, following completion of the performance period.

In 2025, no PSUs vested or were forfeited.

Share ownership and alignment with shareholders

In accordance with the remuneration policy, share ownership guidelines apply to the members of the Board of Directors with the objective of strengthening alignment with the long-term interests of shareholders.

Under these guidelines, the CEO is required to hold shares representing 150% of gross fixed annual income, while the other members of the Board of Directors are required to hold shares representing 100% of gross fixed annual income.

Share ownership is built up gradually, primarily through the vesting of performance shares awarded under the Long-Term Incentive (LTI) plan. Directors are permitted to sell shares at vesting to cover tax and social security obligations. Share positions accumulated under previous remuneration arrangements are taken into account when assessing compliance with the guidelines.

The Supervisory Board monitors compliance with the share ownership guidelines on an ongoing basis. As the LTI plan was introduced in 2025, the required shareholding levels have not yet been fully achieved by all members of the Board of Directors. No cases of non-compliance occurred in 2025.

Overview of share ownership

^* Ms. D. van der Sluijs’s shareholding position is not included, as she stepped down as a director under the articles of association. Mr. R. M. Wegman holds both shares and depositary receipts. Mr. R. Schuurman holds depositary receipts.

Directors’ pay mix

Board member remuneration scenarios (as % of basic salary)

_{If a director or Supervisory Board member was a member of the Board of Directors or Supervisory Board for only part of a year, their remuneration is presented on a pro rata basis for comparison purposes. The change in remuneration for the members of the Board of Directors and Supervisory Board is measured by dividing remuneration for the financial year by remuneration received in the previous financial year. If the date of appointment as director under the articles of association or Supervisory Board member is not 1 January, the change is recognized on a pro rata basis in the financial year following the year of joining.}

_{The change in the pay ratio is primarily driven by the variable nature of the CEO’s remuneration. A larger portion of the CEO’s compensation depends on performance-based components, which can fluctuate from year to year. In contrast, employee remuneration is more stable and follows a more gradual change path, resulting in a different overall development of remuneration levels and, consequently, the pay ratio. In compliance with the Corporate Governance Code disclosure requirements, provision 3.4.1(iv), the pay ratio for 2020 is 9.7.}

_{The 2025-2021 column shows the relative change as of 31 December 2025 compared to the beginning of 2021.}

_{The change in Nedap’s performance in any financial year is the change in the closing price of Nedap shares in the financial year, plus the dividend paid for the financial year, divided by the closing price of Nedap shares in the previous financial year.}

Use of reclaiming scheme

In accordance with the remuneration policy and Article 2:135(8) of the Dutch Civil Code, the Supervisory Board has the authority to reclaim variable remuneration awarded to members of the Board of Directors (claw back or hold back), where applicable. In 2025, no variable remuneration was reclaimed or adjusted, and the reclaiming scheme was not applied. 

Deviations from the remuneration policy

There were no deviations from the remuneration policy. 

Loans and guarantees

The company has not granted members of the Board of Directors any loans or guarantees.

Pay ratio

Nedap follows the recommendation of the Corporate Governance Monitoring Committee as reflected in the Dutch Corporate Governance Code 2025. In this context, the pay ratio is defined as the ratio between (i) the total annual remuneration of the CEO and (ii) the average annual remuneration of employees of the company and its group companies included in the consolidated financial statements, whereby:

The total annual CEO pay includes all pay components (fixed pay, variable pay in cash (bonus), share-based pay, social security contributions, pension, expense allowance, etc.), as recognized in the (consolidated) financial statements prepared based on IFRS accounting standards.

Employees’ average annual pay is calculated by dividing total wage and salary costs in the financial year (as recognized in the (consolidated) financial statements prepared based on IFRS accounting standards) by the average number of FTEs at the company during the financial year. The pay of insourced external workers is factored in on a pro rata basis, on the condition that they worked for the company for at least three months during the financial year. The value of the share-based part of the pay is calculated on the date that it is awarded, as per the applicable IFRS accounting standards requirements.

The pay ratio for 2025 is 8.9. In 2024, the pay ratio was 9.2.

Ex ante disclosure of STI and LTI performance criteria 2026

In line with the current remuneration policy, the Supervisory Board provides ex ante disclosure of the performance criteria that will apply to the variable remuneration of the Board of Directors for the 2026 financial year.

The performance criteria for both the Short-Term Incentive (STI) and the Long-Term Incentive (LTI) are aligned with Nedap’s strategy, long-term value creation objectives and sustainability ambitions. The Supervisory Board annually reviews and determines the applicable criteria, taking into account strategic priorities, internal and external developments and stakeholder interests.

Short-Term Incentive (STI) 2026

For 2026, the STI will continue to consist of a balanced set of financial and non-financial performance criteria, each representing 50% of the total STI opportunity.

The financial performance criteria for 2026 are based on three equally weighted criteria:

• Recurring revenue
  Reflects the stability and predictability of revenue streams from ongoing customer contracts and subscriptions.

• EBIT margin
  Measures operational profitability by evaluating earnings before interest and taxes as a percentage of revenue. It reflects Nedap’s ability to generate profit from its core operations.

• Working capital ratio
  Working capital is used as a key indicator due to its direct impact on operational efficiency and financial stability. Effective working capital management contributes to a healthy cash flow and enables Nedap to make investments that support sustainable growth. This approach aligns well with the current phase of the business model, where capital efficiency plays an important role.

The non-financial performance component for 2026 is based on two equally weighted criteria: 

• Customer process scalability and internationalization: Focused on the further development of a predictable, repeatable and internationally scalable customer process for XaaS propositions. This includes the clarification of roles and responsibilities, alignment across business units, and the structural embedding of processes and systems to support scalable growth.

• Joint technology foundation (Cloud, AI and Data): Focused on establishing a shared technology foundation to support cloud-based, data-driven and AI-enabled development across the organization.

Long-Term Incentive (LTI) 2026–2028

The LTI grant for 2026 will be based on performance over a three-year period (2026–2028) and will consist of conditional performance share units.

The LTI performance criteria will continue to reflect Nedap’s focus on sustainable long-term value creation and include:

• Sales growth (40%)
  The growth target is based on the average annual revenue growth within key markets over the 2026-2028 period.

• Earnings per Share (EPS) (35%)
  The objective is to achieve ambitious EPS growth in line with Nedap’s strategic and financial ambitions.

• ESG-related performance objectives (25%)
  Nedap aims for an annual intensity-based reduction in scope 3 GHG emissions per million euros of added value, in line with the Science Based Targets initiative (SBTi). This means that the 2028 target is set for a sustainable intensity-based reduction of GHG emissions per million euros of added value.

Supervisory Board member remuneration

On 17 April 2025, the annual general meeting adopted the current remuneration policy for the Supervisory Board. The policy reflects the increased responsibilities, time commitment and committee structure of the Supervisory Board.

Supervisory Board members receive fixed remuneration only, supplemented by committee fees where applicable. Remuneration is not linked to company performance and does not include variable or share-based components.

The amounts paid are in line with the remuneration policy for Supervisory Board members. The table below lists the remuneration that (former) Supervisory Board members received for the 2025 and 2024 financial years.

The company has not granted Supervisory Board members any loans or guarantees.