Highlight
Highlight Communications AG

ANNUAL REPORT
2025

in TCHF 2025 2024

KEY FIGURES

CONSOLIDATED BALANCE SHEET	Balance sheet total	491,169	624,640
	Film assets	229,537	223,905
	Cash and cash equivalents	21,793	16,773
	Financial liabilities	191,279	199,029
	Equity	-3,339	151,853
	Equity ratio	n/a	24.3%
CONSOLIDATED INCOME STATEMENT	Sales	412,135	404,081
	■ Film	310,419	251,398
	■ Sports and Event	101,716	152,683
	Profit from operations (EBIT)	-131,786	-6,357
	■ Film	5,281	9,540
	■ Sports and Event	-131,437	-10,573
	Net profit (Highlight shareholders)	-135,755	-27,683
	Earnings per share (CHF)	-2.39	-0.49
	Earnings per share (EUR)	-2.55	-0.49
CONSOLIDATED STATEMENT OF CASH FLOWS	Cash flow from operating activities	134,304	36,435
	Cash flow for investing activities	-122,901	-96,738
	thereof payments for film assets	-118,648	-89,257
	Cash flow for financing activities	-6,120	51,206
	thereof dividend payments	-534	-687
	Cash flow for the reporting period	5,283	-9,097
PERSONNEL	Average number of employees	1,383	1,337

This document is an unaudited English translation of the original German version. In the event of any discrepancies arising from the translation, the audited German version shall prevail and be binding.

HIGHLIGHT EVENTS OF THE YEAR 2025 04

FOREWORD BY THE CHAIRMAN 06

MEMBERS OF THE BOARD OF DIRECTORS 08

CORPORATE GOVERNANCE 09

REMUNERATION REPORT 17

REPORT OF THE STATUTORY AUDITOR 25

HIGHLIGHT STOCK 28

REPORT ON THE HIGHLIGHT GROUP'S SITUATION 34

Basic information on the Group 36
Economic report 40
Report on business performance and the situation in the segments:
FILM 42
SPORTS AND EVENT 48
Results of operations, net assets and financial situation of the Highlight Group 56
Personnel report 61
Report on risks and opportunities 61
Forecast 80

CONSOLIDATED FINANCIAL STATEMENTS 88

Consolidated balance sheet 90
Consolidated income statement 92
Consolidated statement of comprehensive income/loss 93
Consolidated statement of changes in equity 94
Consolidated statement of cash flows 96
Notes to the consolidated financial statements 98

REPORT OF THE STATUTORY AUDITOR 169

FINANCIAL STATEMENTS 175

Balance sheet 176
Income statement 178
Notes to the financial statements 179
Proposal for the appropriation of retained earnings and the legal reserves from capital contributions 183

REPORT OF THE STATUTORY AUDITOR 185

EVENTS 2026 back inside cover

Contents

FILM BREIS

EVENTS OF THE YEAR 2025

The Highlight Group

“Das Kanu des Manitu” is Germany’s most successful film of the year.
The “Kaulitz & Kaulitz” team celebrates winning a Blue Panther Award.
“September 5” wins the German Film Award in eight categories.
“Pumuckl und das grosse Missverständnis” delights young audiences.

A huge hit with critics: “September 5” has been nominated for nine categories at the German Film Awards, including “Best Feature Film,” “Best Director,” and “Best Screenplay.”

Events 2025

HIGHLIGHT EVENTS IN 2025

Q1

JANUARY

Congratulations:
"September 5" from screenwriter Moritz Binder and director Tim Fehlbaum is nominated for an Oscar. The thriller from producers Philipp Trauer and Thomas Wöbke is a Constantin co-production and in the running for the "Best Screenplay" award.

The Bavarian Film Awards are held on January 24. The Best Actress award goes to Jella Haase for her role in "Chantal im Märchenland". Christoph Maria Herbst is named Best Actor for his film roles, including in "Der Spitzname". The Constantin co-production "September 5" wins the award for Best Film.

FEBRUARY

There is a magical feeling in the air. "A Girl named Willow", directed by acclaimed children's and teen film director Mike Marzuk, premieres in Munich on February 23. The film is based on the series of children's books by SPIEGEL bestselling author Sabine Bohlmann.

MARCH

Pamela Anderson makes a triumphant comeback as a dancer in the film "The Last Showgirl". The production from director Gia Coppola is distributed by Constantin Film and released in German movie theaters on March 20. The film won the Special Jury Prize at the 2024 San Sebastián Film Festival.

MAY

The 75th German Film Awards are held in Berlin on May 9, 2025. "September 5" wins in eight categories, including Best Feature Film, Best Screenplay, and Best Director. The fantasy epic "Hagen" is also honored, winning in the Best Visual Effects category.

The 50th Eurovision Song Contest is held at St. Jakobshalle in Basel on May 13, 2025. The winner is JJ from Austria with the song "Wasted Love".

The Champions League final is played in Munich's Allianz Arena on May 31. Paris Saint-Germain beats Inter Milan 5:0, winning its first-ever Champions League title.

"Chantal im Märchenland" wins Jupiter Award

German Film Award in eight categories for "September 5"

Premiere: "A Girl named Willow"

Pamela Anderson in "The Last Showgirl"

German Film Award for Best Visual Effects goes to "Hagen"

UEFA Champions-League Finale: Paris Saint-Germain

Bavarian Film Award for Jella Haase, aka "Chantal"

Bavarian Film Award for Christoph Maria Herbst

Q2

APRIL

Another great success for the 2024 box office hit. April 10 in Hamburg: At the 47th Jupiter Awards ceremony, producer Lena Schömann accepts the Best German Film award for the Constantin production "Chantal im Märchenland".

MAY

The 50th Eurovision Song Contest is held at St. Jakobshalle in Basel on May 13, 2025. The winner is JJ from Austria with the song "Wasted Love".

The Champions League final is played in Munich's Allianz Arena on May 31. Paris Saint-Germain beats Inter Milan 5:0, winning its first-ever Champions League title.

JJ wins the 50th Eurovision Song Contest

JUNE

Spotlight on German film productions: Constantin Film and TikTok announce their partnership. Constantin Film is the first German production company to use the innovative "Spotlight" feature to market its latest theatrical releases.

In the 2025 funding allocation, the German Federal Film Board (FFA) honors the most successful producers and distributors of German films. Constantin Film is again recognized as an "FFA industry tiger" in production.

The minds behind the hit series "Dear Child" – Isabel Kleefeld, Tom Spiess, and Friederich Oetker – team up again to shoot the psychological thriller series "Die Falle" for Netflix. The production is based on the highly successful novel of the same name by Melanie Raabe.

The Annual General Meeting of Highlight Communications AG is held on June 25. The shareholders approve all motions put forward by the Board of Directors.

Events 2025

Q.3

JULY

At the 42nd Munich International Film Festival, Constantin Film teams up with Bvlgari to host a summer reception. Among other things, the event celebrates the world premiere of the Constantin production "Mädchen Mädchen". The remake of the racy cult comedy from 2001 hits theaters on July 3.

AUGUST

"Das Kanu des Manitu" is released into theaters on August 14: Michael Bully Herbig, Christian Tramitz, and Rick Kavanian earn standing ovations. They meet enthusiastic audiences on a tour of movie theaters in various cities. It's no wonder the film tops a million admissions in less than a week. The production goes on to become unbeatable as the most successful movie in Germany in 2025. By the end of the year, it has drawn an audience of more than five million to movie theaters across the country.

SEPTEMBER

"Doppelpass" celebrates its 30th birthday in a special anniversary episode on September 7. Numerous German football greats take the opportunity to offer their congratulations. "Doppelpass" aired for the first time on September 3, 1995.

Following the success of "Das perfekte Geheimnis" in 2019 comes the sequel "Der perfekte Urlaub". The film directed by Bora Dağtekin and featuring the popular cast from the first movie will be released in German theaters in 2026.

At the German Television Awards in Cologne on September 10, "Achtsam Morden" wins in the Best Comedy Series category. The second season of "Kaulitz & Kaulitz" produced by Constantin Entertainment also wins in the Best Entertainment Reality category.

"Mädchen Mädchen" premieres in Munich

Premiere with an all-star cast: "Das Kanu des Manitu"

Q.4

OCTOBER

The month kicks off with the premiere of "Momo" – Constantin Film brings the adaptation of Michael Ende's world-famous fantasy novel to the big screen on October 2.

On October 22, the team behind the second season of "Kaulitz & Kaulitz" win the Blue Panther award for the most popular reality series.

The drama "Regretting You" opens in German theaters on October 23. With warmth and humor, this moving film tells the story of main character Clara, played by Mckenna Grace.

Pumuckl returns on October 30. "Pumuckl und das grosse Missverständnis", the sequel to the 2024 hit, draws young audiences back to movie theaters.

NOVEMBER

Magdalena Prosteder strengthens the Constantin Film team: The experienced filmmaker joins Constantin Film as a producer from November 1, 2025.

The six-part series "Die Nibelungen – War of the Kingdoms", produced by Constantin Film, is released. Starting November 6, all episodes are available to stream exclusively on RTL+.

Michael Bully Herbig, lead actor and director of "Das Kanu des Manitu", receives the Bambi jury's Honorary Award on November 13. A special prize at the KURIER ROMY Gala 2025 in Kitzbühel follows on November 29.

A new take on the big screen: "Momo"

"The Physician 2" premieres in Cologne

German Television Award goes to the team behind "Kaulitz & Kaulitz"

"Pumuckl und das grosse Missverständnis"

Honorary Award from the Bambi jury for Michael Bully Herbig

Foreword by the Chairman

Dear shareholders and other interested parties,

In fiscal year 2025, the Highlight Group was able to consistently pursue its strategic direction in a challenging market environment while responding flexibly to ongoing market changes. The focus remained on operational discipline, selective investments, and further strengthening its competitive position.

The Highlight Group's consolidated revenue for 2025 amounted to 412.1 million CHF. The slight increase of 2.0% compared to the previous year is primarily attributable to other operating income. The Film segment generated significantly higher external sales than in the same period of the previous year, while external sales in the Sports and Events segment declined significantly. Due to one-time extraordinary items resulting from high depreciation and impairment charges, EBIT decreased to -132.3 million CHF. The share of results attributable to shareholders was lower than in the previous year and amounted to -136.2 million CHF; accordingly, earnings per share decreased to -2.39 CHF.

In the home entertainment segment, Constantin Film Distribution GmbH's market share remained stable compared to the previous year. This was due in particular to a well-balanced portfolio and a strong focus on German productions. The films with the highest viewing figures in 2025 were "Das Kanu des Manitu", "Der Spitzname", "Criminal Squad 2", "Manitou's Shoe", "Babygirl", "In the Lost Lands", and "Hagen".

In the Sports and Events segment, the TEAM Group focused on further innovation. The TEAM Group and UEFA have further expanded the use of Virtual Board Replacement (VBR), which enables the dynamic display of sponsor logos on perimeter boards. Another key focus for the TEAM Group in 2025 was supporting UEFA in concluding the first finals of the 2024/25 to 2026/27 commercial cycle.

With the 2026 World Darts Championship, SPORT1 once again achieved very strong programming results in early January. Throughout 2025, the network made targeted investments in new content formats and the further expansion of its offerings. Among other things, THE ICON LEAGUE was newly integrated into the lineup. Match days were primarily broadcast live online, with select matches also airing on free-to-air TV. At the same time, SPORT1 continued the strategic expansion of its new business and innovation activities and increasingly positioned itself as a partner for young companies with growth potential.

Highlight Event AG's activities once again focused on managing and implementing the sponsorship agreements with the Vienna Philharmonic Orchestra's main sponsors.

Now that the Eurovision Song Contest has been held in Basel in May 2025, attention is turning to the promotion of the 2026 contest. The event will take place in Vienna in May 2026.

As things stand at present, at least nine theatrical releases are planned for 2026. Highlights include the own productions “Der perfekte Urlaub” from director and screenwriter Bora Dağtekin – the sequel to 2019’s million-selling hit “Das perfekte Geheimnis” – and “Steckerlfischfiasko”, the tenth installment in the popular Eberhofer series. Further on the program is the film adaptation of the bestseller “Die Ältern”, directed by Sönke Wortmann, and “Das gewisse Etwas”, the German adaptation of the French megahit “A Little Something Extra”. Constantin Film is also bringing the international titles “Snake” and “Good Luck, Have Fun, Don’t Die” from director Gore Verbinski and the reboot of the “Resident Evil” series directed by Zach Cregger to the big screen in 2026.

In the first half of 2026, the TEAM Group will support UEFA in delivering a successful end to the league phase in the UEFA Champions League and UEFA Europa League. In parallel, the Business Development team will focus on the acquisition of new clients and the expansion of TEAM’s portfolio.

The fundamental focus in the 2026 fiscal year is on the consistent use, distribution, and capitalization of content in the areas of sports and entertainment. In addition to strengthening the SPORT1 portfolio by acquiring new rights and launching new formats, extending existing partnerships, and developing new content co-operations and business areas, the cross-platform evaluation and staging of established program pillars remain the focus.

In 2026, Highlight Event AG will continue to focus on fulfilling existing sponsorship agreements for the Eurovision Song Contest and the Vienna Philharmonic’s sponsorship events.

In closing, I would like to express my sincere and heartfelt thanks – also on behalf of my colleagues on the Board of Directors – to all employees of the Highlight Group. Your dedication, professional expertise, and daily commitment are essential to the continued success of our company. We would also like to extend our special thanks to everyone who placed their trust in us and supported the Highlight Group over the past year – especially our shareholders, our customers, and our business partners. This trust is both a responsibility and a source of motivation for us. We will continue to work diligently in the future to live up to this trust and to ensure the successful, continuous, and sustainable growth of the Highlight Group.

Yours,

Bernhard Burgener
Chairman and Delegate of the Board of Directors

Foreword

Members of the Board of Directors

Bernhard Burgener (born 1957) Chairman and Delegate of the Board of Directors

Businessman. Mr. Burgener has worked in the film business since 1982. His professional career began in 1983 with the founding of Rainbow Video AG (today: Rainbow Home Entertainment AG), Pratteln. Mr. Burgener was a shareholder of Highlight Communications AG from 1994 to 2016 and its Delegate of the Board of Directors until 1999. In May 1999, he took the company public and from 1999 to 2008, he was responsible for the activities of the Highlight Group as the Chairman of its Board of Directors.

Since 2008, Mr. Burgener has again been acting as Delegate of the Board. Since being elected as the new Chairman of the Board of Directors by the Annual General Meeting of Highlight Communications AG in 2011, he has been performing both functions simultaneously.

Peter von Büren (born 1955) Non-executive member of the Board of Directors

Businessman. Mr. von Büren exercised various management activities at Highlight Communications AG since 1994. In 1999, he became a member of the Highlight Group's management. He retired from the Group's Management Board as of June 30, 2024.

Edda Kraft (born 1957) Non-executive member of the Board of Directors

Media consultant. Edda Kraft began her career as an editor/local director for a German daily newspaper before switching to television. After editorial positions at RTL, Endemol and Sat.1, she became Managing Director of Saxonia Entertainment GmbH in Leipzig in 2012. From 2018 until 2023, she was Managing Director of rbb media GmbH in Berlin. She is a supervisory board member of Sport1 Medien AG.

Edda Kraft was elected as a non-executive member of the Board of Directors of Highlight Communications AG at the 2022 Annual General Meeting.

Stefan Wehrenberg (born 1965) Non-executive member of the Board of Directors

Attorney-at-law. Stefan Wehrenberg studied law in Zurich and, after working at the university and in administration, has been practising as an attorney in Zurich since 2000. His area of law includes mainly commercial criminal law, compliance and financial market law, commercial and contract law as well as administrative and public procedural law.

After many years of service with the military justice system, Stefan Wehrenberg has been a judge at the Military Court of Cassation since 2017 and its president since 2022.

Stefan Wehrenberg was elected as a non-executive member of the Board of Directors of Highlight Communications AG at the 2022 Annual General Meeting.

Corporate governance

INTRODUCTION

The Highlight Group welcomes the corporate governance rules as they heighten transparency for shareholders. As a Swiss company, Highlight Communications AG largely complies with the rules issued by Swiss stock exchange SIX. The organization of our management bodies complies with the leading “Codes of Best Practice”.

The articles of incorporation of Highlight Communications AG take into account the statutory requirements and duties of the Annual General Meeting in the areas of corporate governance and remuneration.

1. GROUP STRUCTURE

Highlight Communications AG is a holding company headquartered in Pratteln/BL.

1.1 Operative Group structure

Highlight Communications AG and its Group companies make up the Highlight Group, hereinafter referred to as the “Highlight Group”. The operative structure of the Highlight Group consists of the two segments “Film” and “Sports and Event”.

1.2 Listed companies

Highlight Communications AG

Highlight Communications AG has its registered offices in Pratteln/BL, Switzerland, and has been listed on the Frankfurt stock exchange since 1999. It is a member of the Prime Standard (ISIN: CH 000 653 9198, German WKN number: 920 299, ticker: HLG). As of December 31, 2025, the market capitalization of the company was around EUR 70.36 million, at a closing stock price for the year of EUR 1.24.

1.3 Non-listed companies

Further information on the key subsidiaries and the scope of consolidation of Highlight Communications AG can be found under note 3 in the notes to the consolidated financial statements.

1.4 Principal shareholders

As of December 31, 2025, Highlight Communications AG was aware of the following shareholders with a share of more than 5% of its subscribed capital:

Highlight Event and Entertainment AG	53.50%
Stella Finanz AG	11.11%

The rest is held by various institutional investors and funds as well as private investors.

Depending on market conditions, shares of up to a maximum amount of 10% of the company’s subscribed capital as stipulated by Swiss law may be bought back.

In the year under review no treasury shares were bought back. As of December 31, 2025, treasury stock comprised 6,254,518 shares, equivalent to 9.93% of the company’s subscribed capital.

1.5 Cross-holdings

As of December 31, 2025, Sport1 Medien GmbH holds 9.81% of the share capital of Highlight Communications AG.

Board of Directors/Corporate governance

2. CAPITAL STRUCTURE

2.1 Capital

Highlight Communications AG's subscribed capital amounts to CHF 63,000,000 and is divided into 63,000,000 bearer shares with a nominal value of CHF 1 each; all shares subscribed are paid up.

2.2 Capital band

The Board of Directors is authorised introduce a capital band with an upper limit of CHF 94,500,000 (in line with a 50% increase in the current subscribed capital) and a lower limit of CHF 50,400,000 until June 22, 2028.

2.3 Changes in capital – changes in nominal value

There were no changes in capital in the reporting period.

2.4 Shares, participating and profit-sharing rights

There are no preferential, participating or profit-sharing rights.

2.5 Restrictions on the transferability of shares and registration of nominees

There are no restrictions on the transferability of shares. The bylaws of Highlight Communications AG do not provide for any percentage clauses or conditions for shareholder registration; no nominees are registered.

3. BOARD OF DIRECTORS

The Board of Directors is the company's highest management body, responsible for the strategic orientation of the company and the monitoring of Group management. Each member of the Board of Directors is elected by the shareholders. The Board of Directors proposes the election of the Chairman and the members of the compensation committee for the Annual General Meeting. The Vice Chairman and the members of the audit committee are elected by the Board of Directors.

3.1 Members of the Board of Directors

The Board of Directors currently comprises four members. The list below provides an overview of the composition of the Board of Directors on December 31, 2025, the functions of the individual members within the Highlight Group, their nationality and their significant activities and interests outside the Highlight Group:

Bernhard Burgener

Chairman and Delegate of the Board of Directors, member of the Board of Directors since 1994

Swiss national, businessman, entrepreneur; responsible for the Highlight Group's strategy, executive member.

Other (corporate) activities and interests:

President and Delegate of the Board of Directors of Highlight Event and Entertainment AG, Pratteln, Switzerland
Chairman of the Supervisory Board of Constantin Film AG, Munich, Germany
President of the Board of Directors of Constantin Film und Entertainment AG, Zurich, Switzerland
President of the Board of Directors of Rainbow Home Entertainment AG, Pratteln, Switzerland
President of the Board of Directors of TEAM Holding AG, Lucerne, Switzerland
President of the Board of Directors of TEAM Football Marketing AG, Lucerne, Switzerland
President of the Board of Directors of TEAM Marketing AG, Lucerne, Switzerland

Chairman of the Board of Trustees of TEAM Pension fund, Lucerne, Switzerland
President of the Board of Directors of Highlight Event AG, Lucerne, Switzerland
President of the Board of Directors of World Boxing Super Series AG, Pratteln, Switzerland
President of the Board of Directors of Chameleo AG, Pratteln, Switzerland
President of the Board of Directors of Lechner Marmor AG, Laas, Italy
Member of the Board of Trustees of EurAsia Heart – A Swiss Medical Foundation, Zurich, Switzerland
Chairman of the Board of Directors of T Squared AG, Lucerne, Switzerland

Peter von Büren

Member of the Board of Directors since 2015

Swiss national, businessman, CFO (until June 30, 2024), non-executive member.

Other (corporate) activities and interests:

Member of the Board of Directors of Highlight Event and Entertainment AG, Pratteln, Switzerland
Member of the Supervisory Board of Constantin Film AG, Munich, Germany
Member of the Board of Directors of Constantin Film und Entertainment AG, Zurich, Switzerland
Vice President of the Board of Directors of Rainbow Home Entertainment AG, Pratteln, Switzerland
Member of the Board of Directors of TEAM Holding AG, Lucerne, Switzerland
Member of the Board of Directors of TEAM Football Marketing AG, Lucerne, Switzerland
Member of the Board of Directors of TEAM Marketing AG, Lucerne, Switzerland
Member of the Board of Trustees of TEAM Pension fund, Lucerne, Switzerland
Member of the Board of Directors of Highlight Event AG, Lucerne, Switzerland
Member of the Board of Directors of World Boxing Super Series AG, Pratteln, Switzerland
Member of the Board of Directors of Chameleo AG, Pratteln, Switzerland
President of the Board of Directors of CBE Marmor & Handels AG, Ibach, Switzerland
Member of the Board of Directors of T Squared AG, Lucerne, Switzerland

Edda Kraft

Member of the Board of Directors since 2022

German national, media consultant, non-executive member.

Other (corporate) activities and interests:

Member of the Board of Directors of Highlight Event and Entertainment AG, Pratteln, Switzerland

Stefan Wehrenberg

Member of the Board of Directors since 2022

Swiss national, attorney-at-law, non-executive member.

Other (corporate) activities and interests:

Member of the Board of Directors of Highlight Event and Entertainment AG, Pratteln, Switzerland
Member of the Board of Directors of Bristol Hotellerie AG, Speicher, Switzerland
Managing Director of Wehrenberg Rechtsanwälte GmbH, Zurich, Switzerland
Member of the Board of Directors, Scales Venture Holding AG, Arbon TG, Switzerland

3.2 Election and tenure

The Board of Directors comprises at least three members who are generally elected at the Annual General Meeting for the period of one year. Re-election is possible at all times.

Corporate governance

3.3 Internal organization

3.3.1 Constituent meeting and allocation of duties

The Board of Directors is responsible for supervising, monitoring and overseeing management activities. It is the company's highest body. Apart from the election of the Chairman of the Board of Directors and the compensation committee by the Annual General Meeting, the Board of Directors constitutes itself. It appoints the Vice Chairman and the Secretary.

3.3.2 Meetings of the Board of Directors

The Board of Directors generally meets at least once a quarter. Resolutions are passed with an absolute majority of the votes present. In the year under review, the Board of Directors convened 11 times for Board meetings and circular resolutions.

3.3.3 Committees

By way of resolution dated June 2, 2005, the Board of Directors established an audit committee, the current members of which are Bernhard Burgener (Chairman), Edda Kraft and Stefan Wehrenberg.

At the Annual General Meeting on June 25, 2025, the members of the Board of Directors Edda Kraft and Stefan Wehrenberg were re-elected to the compensation committee to decide on matters concerning compensation for the Board of Directors and Group management.

3.4 Allocation of duties

Management and representative authorization are based on the law, decisions of the Board of Directors and entries in the commercial register.

3.5 Internal management and supervision instruments

The Highlight Group's management information system is structured as follows: The financial statements (income statement, balance sheet and statement of cash flows) for the individual subsidiaries are prepared on a quarterly basis. These figures are consolidated and condensed per segment and for the Group. At the same time, the figures are compared with the previous year and the budget.

The Chief Financial Officer informs the Board of Directors regularly of the company's business performance and trends in the relevant business indicators. A Group-wide internal control system (ICS) was implemented and documented. The Internal Audit ensures the periodic evaluation and maintenance of the ICS in the main Group companies and tests its effectiveness. External controlling instruments are provided by the auditors.

Corporate governance

4. MANAGEMENT

The following disclosures reflect the status as of December 31, 2025.

4.1 Members of management

4.1.1 Group management

Bernhard Burgener, Chairman and Delegate of the Board of Directors
Swiss national, responsible for Group strategy, established Rainbow Home Entertainment AG (formerly Rainbow Video AG), Pratteln, in 1983. Shareholder from 1994 to 2016, Delegate of the Board of Directors until 2011, Chairman and Delegate of the Board of Directors since 2011.

Hasan Dilsiz, Chief Financial Officer and Head of Investor Relations
Swiss citizen, Chartered Expert in Financial Managerial Accounting, Controlling and Reporting, various management roles in the Highlight Group since 2015, member of Group management since July 1, 2024.

Management of the respective segments

4.1.2 TEAM (Sports and Event segment)

Simon Crouch, CEO
Dual Swiss-British national, chartered accountant, worked at Arthur Anderson Ltd. (now Deloitte) in London from 1996 until 2000; he was Senior Consultant at Spectrum Strategy Consultants in London from 2000 until 2008; since then, he has worked at TEAM initially as Director Strategy, then as Managing Director Marketing and as COO from 2012 until March 2022. Since April 2022, Simon is the CEO of TEAM Marketing AG.

Tom Houseman, General Counsel
British national, lawyer, worked at ISL Worldwide AG, Lucerne, from 1990 to 2001 and at FIFA, Zurich, as Head of Legal Affairs and a member of the Management Board of FIFA Marketing until 2007, then at Wharf House Pte Ltd, Singapore, as Managing Director and Board Member, then at UFA Sports Asia Pte Ltd, Singapore, and, since March 2013, as General Counsel at TEAM.

Iain Downie, Chief Operating Officer
British national, research executive before joining TEAM in 2011 as Research Manager. Senior Strategy and Research Manager from 2013 to 2015 and Head of Strategy and Research from 2015 to 2017. Left TEAM in 2017 to join FIFA as Director of Marketing Sales and Strategy. Returned to TEAM in 2019 as Director of Development and Marketing, then Managing Director of Development and Marketing, then Managing Director of Development, Marketing and Partner Operations and, since May 2025 as Chief Operating Officer.

Ian Warbrick, Chief Revenue Officer
British national, postgraduate diploma from Cambridge University, Strategy Consultant at Accenture from 2001 to 2003, Sponsorship Director at Ogilvy Action from 2004 to 2007, then Head of Sponsorship Sales, then Executive Director Sponsorship Sales at TEAM, then Managing Director of Marketing Sales and since May 2025, as Chief Revenue Officer.

4.1.3 Highlight Event AG (Sports and Event segment)

Ferdinand von Strantz, Chief Executive Officer (CEO), Lawyer/Dipl. Consultant St. Gallen Business School

German and Swiss national; Ferdinand von Strantz has been CEO of Highlight Event AG since 2012. Prior to this, he was a Member of the Executive Board at the group affiliate company TEAM Marketing AG, where he had worked in various areas since 1999. As managing director of Highlight Event AG he is responsible for both strategic development and worldwide marketing and sales activities under mandates for the European Television Union (Eurovision Song Contest) since 2003 and the Vienna Philharmonic Orchestra (including New Year's and Summer Night Concerts) since 2007.

4.1.4 Constantin Film (Film segment)

Oliver Berben, Chairman of the Management Board

German national, from 2017 Member of the Management Board, responsible for TV, Entertainment and Digital Media, from January 1, 2021 Deputy Chairman of the Management Board, since March 1, 2024 Chairman of the Management Board, responsible for corporate governance and strategy, film production, corporate communications and press.

Hanns Beese, Chief Financial Officer

German national, Chief Financial Officer since 2004, responsible for finance and accounting, legal affairs, human resources, risk management, information technology, administration and organization.

Martin Bachmann, Board Member for Marketing, Sales and Licence Trade

German national, since 2023 Board Member for Marketing, Sales and Licence Trade, responsible for home entertainment, distribution/sales in German-speaking territories, film purchasing, world sales, marketing and press.

4.1.5 Sport1 Medien GmbH (Sports and Event segment)

Tufan Özkul, Chief Executive Officer (CEO)

An Austrian citizen, Tufan Özkul was appointed Chief Executive Officer of Sport1 MEDIEN Group in 2025. In this role, he is responsible for the strategic development of Sport1 MEDIEN Group. His areas of responsibility include finance, marketing and communications, human resources, and sales.

4.2 Further corporate activities and interests

None.

Corporate governance

5. COMPENSATION, SHARES AND LOANS

Information on the compensation and shares of members of the Board of Directors and the management team as well as loans to these parties can be found in the "Remuneration report" section of this annual report.

6. SHAREHOLDERS' RIGHTS

6.1 Restrictions on voting rights, voting by proxy

6.1.1 All restrictions on voting rights

There are no restrictions on voting rights. At the Annual General Meeting, there is one vote per share held. All shareholders may vote by proxy at the Annual General Meeting.

6.1.2 Statutory rules on participation in the Annual General Meeting

The provisions of the Swiss law of obligations apply.

6.2 Statutory quorum

The statutory provisions apply.

6.3 Procedure for convening the Annual General Meeting

The provisions of the Swiss law of obligations apply.

6.4 Agenda

The provisions of the Swiss law of obligations apply.

6.5 Registration in the share book

The shares subscribed by Highlight Communications AG are bearer shares and are therefore not registered.

7. CHANGE OF CONTROL AND DEFENSE MEASURES

7.1 Duty to bid

A party acquiring shares in the company is not required to lodge a public bid pursuant to Sections 135 and 163 of the Swiss Financial Market Infrastructure Act.

8. AUDITORS

8.1 Duration of auditor mandate

The statutory auditor for Highlight Communications AG is elected for a period of one year subject to a resolution passed by the Annual General Meeting. Forvis Mazars AG in Zurich has audited the annual financial statements for the year ending December 31, 2025. Mr. Cyprian Bumann has been the auditor in charge for the audit mandate since fiscal year 2025.

8.2 Auditing fees

Auditing fees of TCHF 448 were paid to Forvis Mazars and TCHF 436 to third-party auditors for the audit of the 2025 financial year. Additional fees of TCHF 90 were invoiced by other auditing companies for other services.

9. INFORMATION POLICY

As a listed company and a member of the Prime Standard, the Highlight Group is subject to the strict stock market rules issued by Deutsche Börse AG. This includes compulsory quarterly reporting, the issue of an annual report as well as the publication of ad-hoc disclosures.

These documents are distributed via defined channels and issued on demand. In addition, the website at www.highlight-communications.ch is kept continuously updated and includes all key information about the company.

Publications are available from the IR department, which will also accept requests for inclusion in the distribution list. This is also possible via the company's website.

Remuneration report

This remuneration report for fiscal 2025 sets out the remuneration system and the remuneration paid to members of the Board of Directors and the management team of Highlight Communications AG. The remuneration report is based on the SIX Swiss Exchange's guidelines on corporate governance information and on Articles 734–734f of the Swiss Federal Act on the Amendment of the Swiss Civil Code (Code of Obligations).

The remuneration report of April 30, 2026 of Highlight Communications AG for the fiscal year ended December 31, 2025 has been audited by the statutory auditor. The audit was limited to the disclosures in accordance with Art. 734a–734f of the Code of Obligations.

As part of the implementation, the compensation committee devised proposals for the overall remuneration of the Board of Directors, the Chairman of the Board of Directors, the individual members of the Board of Directors, the overall remuneration of the management team as well as the individual members of the management team and the members of the committees. The corresponding proposals were submitted by the compensation committee to the full Board of Directors for a resolution. In accordance with the articles of incorporation, the Annual General Meeting separately approves the maximum total amounts of fixed remuneration for the members of the Board of Directors and of the management team for the fiscal year following the Annual General Meeting and the maximum total amounts of variable remuneration of the members of the Board of Directors and of the management team for the past fiscal year. This takes place once a year, usually at the ordinary Annual General Meeting. The company's articles of incorporation make a provision for members of the management team who are appointed after approval of the maximum total amount to be allowed to receive additional remuneration.

1. RESPONSIBILITIES AND AUTHORIZATIONS FOR REMUNERATION

The full Board of Directors is responsible for ensuring that the remuneration process is fair, transparent and monitored effectively. The chosen remuneration process is intended to provide adequate compensation for services rendered and a suitable incentive for the individual members of the Board of Directors and the management team, taking into account the longer-term interests of shareholders and the company's success.

The main tasks of the full Board of Directors are:

a. Determining the principles of the remuneration strategy
b. Determining the level and composition of overall remuneration for the Chairman of the Board of Directors
c. Determining the level and composition of individual overall remuneration for the Vice Chairman and the other members of the Board of Directors
d. Remuneration of committee members
e. Determining the level and composition of overall remuneration and individual remuneration for the Delegate and the individual members of the management team

As two of four members of the Board of Directors were also members of the compensation committee, they implicitly performed the tasks mentioned in points a–e in the meetings of the Board of Directors in the year under review.

Remuneration report

2. REMUNERATION TO MEMBERS OF THE BOARD OF DIRECTORS

2.1 Principles

The level of remuneration of the members of the Board of Directors is geared towards the role and degree of responsibility of the individual members.

Remuneration to the Board of Directors consists of the following elements:

Directors' fee (paid as cash remuneration)
Pension benefits

The remuneration structure ensures that the Board of Directors is focused on the long-term success of Highlight Communications AG and takes into account the workload and responsibility of the individual members of the Board of Directors.

With due consideration of the maximum amount approved by the Annual General Meeting, the full Board of Directors usually decides on the level of the Directors' and committee fees at its discretion once a year at the request of the compensation committee.

2.1.1 Directors' fee

The members of the Board of Directors of Highlight Communications AG receive fixed remuneration. The full Board of Directors determines the level of fixed remuneration at the request of the compensation committee. The level of remuneration is geared towards the role and degree of responsibility of the member of the Board of Directors. No attendance fees are paid to the members of the Board of Directors.

The Directors' fee also includes remuneration for work in the compensation committee, comprising the Directors Edda Kraft and Stefan Wehrenberg, and in the audit committee, comprising the Directors Bernhard Burgener (Chairman), Edda Kraft, and Stefan Wehrenberg.

2.1.2 Pension benefits

Pension benefits consist of all contributions by the employer to old-age and risk insurance as well as employer's contributions for social security, the unemployment insurance and family compensation fund (AHV, ALV, FAK) and the accident and health insurances (BU, NBU and KTG).

2.2 Remuneration to the individual members of the Board of Directors

Fiscal 2025

In 2025, the executive and non-executive members of the Board of Directors received overall remuneration of TCHF 248.0 (2024: TCHF 186.6). Compensation for the various activities at the subsidiaries is set out in section 3 "Remuneration to members of the management team".

Total remuneration for the members of the Board of Directors for their work on the Board of Directors increased compared to the previous year. The individual members of the Board of Directors received the following remuneration (in TCHF):

(TCHF) Name/role	Directors' fee, gross	Pension benefits	Total remuneration as a member of the Board of Directors
Bernhard Burgener, Chairman and Delegate, executive member	30.0	0.7	30.7
Peter von Büren*, non-executive member	70.0	2.8	72.8
Edda Kraft, non-executive member	70.0	0.0	70.0
Stefan Wehrenberg, non-executive member	70.0	4.5	74.5
Total	240.0	8.0	248.0

In addition to his board fees for his non-executive role within the Highlight Group, Mr. Peter von Büren received remuneration of TCHF 271.3, of which TCHF 225.2 was salary and TCHF 46.1 was pension benefits.

Fiscal 2024

(TCHF) Name/role	Directors' fee, gross	Pension benefits	Total remuneration as a member of the Board of Directors
Bernhard Burgener, Chairman and Delegate, executive member	20.0	0.2	20.2
Peter von Büren, executive member until June 30, 2024, and non-executive member from July 1, 2024	40.0	1.6	41.6
Edda Kraft, non-executive member	60.0	0.0	60.0
Stefan Wehrenberg, non-executive member	60.0	4.8	64.8
Total	180.0	6.6	186.6

No remuneration not in line with market conditions was granted to current or former members of the Board of Directors or related parties either in the year under review or in fiscal 2024, nor is any such remuneration outstanding.

Remuneration report

3. REMUNERATION TO MEMBERS OF THE MANAGEMENT TEAM

3.1 Principles

The level of remuneration of the members of the management team is geared towards the role and degree of responsibility of the individual member, and consists of the following elements:

Basic remuneration, including use of a company car for private and business purposes
Variable remuneration
Indirect remuneration for activities at subsidiaries
Pension benefits

At the request of the compensation committee, the full Board of Directors usually decides on the level of overall compensation at its discretion once a year, taking account of the maximum amount approved by the Annual General Meeting, and also decides on variable remuneration and the underlying company-specific targets once a year.

3.1.1 Basic remuneration

The members of the management team (including the executive members of the Board of Directors) receive fixed remuneration in cash, which has been contractually agreed in the employment contract with due consideration of the role and degree of responsibility.

As a benefit in kind, all members of the management team have the option of using a company car for private and business purposes.

3.1.2 Variable remuneration

The members of the management team (including the executive members of the Board of Directors) also receive variable remuneration. The members of the management team receive a fixed annual bonus. In addition, they receive a performance bonus based on performance criteria that are set by the Board of Directors each year. Variable remuneration is paid in cash with no resolution to the contrary by the Board of Directors. The remuneration is always paid in the fourth quarter of the reporting year.

At present, there are no stock, option or similar participation programs that give entitlement to (physical) subscription of shares in Highlight Communications AG.

3.1.3 Indirect remuneration for activities at subsidiaries

In addition to the fixed Directors' fee as described in section 2.1.1, various members of the Board of Directors and management team of Highlight Communications AG receive further remuneration for their activities on the Board of Directors or Supervisory Board and/or operating or advisory activities at (direct or indirect) subsidiaries of Highlight Communications AG. This essentially involves fixed basic remuneration, with the exception of remuneration for the Supervisory Board members of Constantin Film AG, where variable remuneration is possible.

3.1.4 Pension benefits

21
Remuneration report

3.2 Overall remuneration to members of the management team in the year under review

Fiscal year 2025

In 2025, the members of the management team (including executive members of the Board of Directors, BoD) received total remuneration of TCHF 2,312 (2024: TCHF 2,850). The total remuneration of the members of the management team thus increased compared to the previous year.

(TCHF) Name/role	Basic remuneration, gross¹	Variable remuneration, gross	Indirect remuneration for activities at subsidiaries	Pension benefits	Total remuneration as a member of the management team	Total remuneration as a member of the Board of Directors¹	Total remuneration
Bernhard Burgener, Chairman and Delegate of the BoD, executive member of the BoD (highest remuneration)	940	400	99	183	1,622	30	1,652
Hasan Dilsiz, executive member	325	250	0	85	660	0	660
Total	1,265	650	99	268	2,282	30	2,312

¹ Basic remuneration also includes flat-rate expenses.
² Details of remuneration as a member of the Board of Directors are set out in section 2.

Fiscal 2024

(TCHF) Name/role	Basic remuneration, gross¹	Variable remuneration, gross	Indirect remuneration for activities at subsidiaries	Pension benefits	Total remuneration as a member of the management team	Total remuneration as a member of the Board of Directors¹	Total remuneration
Bernhard Burgener, Chairman and Delegate of the BoD, executive member of the BoD (highest remuneration)	1,003	350	194	190	1,737	20	1,757
Hasan Dilsiz, executive member from July 1, 2024	275	200	0	68	543	0	543
Peter von Büren, executive member of the BoD until June 30, 2024	314	0	126	68	508	42	550
Total	1,592	550	320	326	2,788	62	2,850

¹ Basic remuneration also includes flat-rate expenses.
² Details of remuneration as a member of the Board of Directors are set out in section 2.

No remuneration not in line with market conditions was granted to current or former members of the management team or related parties either in the year under review or in fiscal 2024, nor was any such remuneration outstanding.

4. ADVISORY BOARD

Highlight Communications AG did not have an Advisory Board in the year under review or in the previous year.

5. BENEFITS AND CONTRACTUAL AGREEMENTS ON LEAVING HIGHLIGHT COMMUNICATIONS AG

No members of the Board of Directors or the management team have a contract with Highlight Communications AG that grants them severance pay on leaving Highlight Communications AG.

The employment contracts with members of the management team provide for notice periods of twelve months.

6. LOANS AND CREDITS TO EXECUTIVE BODIES

As of December 31, 2025 and December 31, 2024, there were no outstanding loans or credits granted by Highlight Communications AG to current or former members of the Board of Directors, the management team or related parties.

7. REMUNERATION OF RELATED PARTIES

7.1 Loans and credits to related parties not in line with market conditions

As of December 31, 2025 and December 31, 2024, there were no outstanding loans or credits granted by Highlight Communications AG to related parties.

7.2 Other remuneration to related parties not in line with market conditions

As of December 31, 2025 and December 31, 2024, the company had not paid any remuneration to related parties that was not in line with market conditions.

8. REMUNERATION TO FORMER MEMBERS OF EXECUTIVE BODIES

In the reporting year, no compensation was paid to former members of executive bodies, nor is any such compensation outstanding.

MANAGEMENT CONTRACTS

There are no management contracts with third parties.

SHAREHOLDINGS IN HIGHLIGHT COMMUNICATIONS AG

As of December 31, 2025, the members of the Board of Directors and the management team (including related parties) held a total of 0.00% of the outstanding bearer shares in Highlight Communications AG (previous year: 0.00%).

The individual members of the Board of Directors and the management team (including related parties) had the following shareholdings in Highlight Communications AG:

	2025			2024
	Number of shares	Share in capital	Number of shares	Share in capital
Bernhard Burgener	-	-	-	-
Peter von Büren	-	-	-	-
Edda Kraft	-	-	-	-
Stefan Wehrenberg	-	-	-	-
Hasan Dilsiz	500	0.00%	500	0,00%

Remuneration report

Report of the statutory auditor to the General Meeting of Highlight Communications AG, Pratteln

Report on the Audit of the Remuneration Report

Opinion

We have audited the remuneration report of Highlight Communications AG (the Company) for the year ended 31 December 2025. The audit was limited to the information pursuant to Art. 734a-734f of the Swiss Code of Obligations (CO) in the tables marked “audited” on pages 19 and 21 of the remuneration report.

In our opinion, the information pursuant to Art. 734a-734f CO in the remuneration report complies with Swiss law and the Company’s articles of incorporation.

Basis for Opinion

We conducted our audit in accordance with Swiss law and Swiss Standards on Auditing (SA-CH). Our responsibilities under those provisions and standards are further described in the “Auditor’s Responsibility for the Audit of the Remuneration Report” section of our report. We are independent of the Company in accordance with the provisions of Swiss law and the requirements of the Swiss audit profession, and we have fulfilled our other ethical responsibilities in accordance with these requirements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Other Information

The Board of Directors is responsible for the other information. The other information comprises the information included in the annual report, but does not include the tables marked “audited” in the remuneration report, the consolidated financial statements, the stand-alone financial statements and our auditor’s reports thereon.

Our opinion on the remuneration report does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the remuneration report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the audited financial information in the remuneration report or our knowledge obtained in the audit or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Board of Directors’ Responsibilities for the Remuneration Report

The Board of Directors is responsible for the preparation of a remuneration report in accordance with the provisions of Swiss law and the Company’s articles of incorporation, and for such internal control as the Board of Directors determines is necessary to enable the preparation of a remuneration report that is free from material misstatement, whether due to fraud or error. It is also responsible for designing the remuneration system and defining individual remuneration packages.

Remuneration report

Auditor's Responsibilities for the Audit of the Remuneration Report

Our objectives are to obtain reasonable assurance about whether the information pursuant to Art. 734a-734f CO is free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Swiss law and SA-CH will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this remuneration report.

As part of an audit in accordance with Swiss law and SA-CH, we exercise professional judgement and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement in the remuneration report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made.

We communicate with the Board of Directors or its relevant committee regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide the Board of Directors or its relevant committee with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied.

Zurich, 30 April 2026

Forvis Mazars AG

Cyprian Bumann
Licensed Audit Expert
(Auditor in Charge)

Fabio Cavalieri
Licensed Audit Expert

Other Matters – Use of the Audit Opinion

The renumeration report and the management report translated into English is provided for convenience purposes only. They are merely translated reproductions of the audited renumeration report and the management report included in the German annual report. Only the German version of the annual report has been audited. In the event of any inconsistencies, the audited German annual report shall prevail.

Remuneration report

HIGHLIGHT STOCK

Performance of Highlight Group stock in 2025

Year-end closing price: At EUR 1.24 above the level of the previous year (EUR 1.14).
Market capitalization: EUR 78.12 million, based on the number of shares outstanding.
Trading volume per trading day: Increase from around 6,300 to 11,000 shares.

At the 2025 Bambi Awards ceremony, Michael Bully Herbig is presented with the Bambi Jury’s Honorary Award. Over the past three decades, the actor, director, writer, and producer has made his mark on film and television history, touching the lives of generations of people.

Highlight stock

Xetra closing prices of Highlight stock*	Q1-2025	Q2-2025	Q3-2025	Q4-2025
■ Highlight Communications	1.80
■ SDAX	1.60
■ DAXsector Media	1.40
*Indices for comparison indexed at Highlight closing price as of December 30, 2024	1.20
	1.00
	0.80
	EUR

Upward trend on the stock markets continues in 2025

The previous 2024 stock market year was a good one overall, and this trend continued in 2025. Global stock markets continued to develop in a positive manner; the German benchmark index (DAX) reached record levels and rose above 24,000 points for the first time in May.

The US benchmark index, the Dow Jones Industrial 30, rose by 13.4% to 48,063 points in the reporting year. The index reached its highest level on December 24 at 48,731 points. The Japanese Nikkei 225 index performed even better, ending the year up 28.1% at 50,339 points.

This dynamic development also boosted the prices of many European shares. For instance, the EURO STOXX 50 ended the year at 5,791 points, which equates to an increase of 17.8%.

The Swiss benchmark index, the Swiss Market Index (SMI), also participated in the positive development in the reporting year after a weaker performance in 2024. The index closed at 13,267 points on the last trading day of 2025, up 14.14% on the previous year's closing price.

The DAX ended 2025 at 24,490 points, representing an increase of 22.3%. The small-cap index SDAX also kept up with the good performance and reached 17,174 points at the end of 2025 - an increase of 23.7%. German media stocks performed less well overall in 2025, despite a strong performance beyond the first half of the year: the DAXsector Media index exceeded 550 points several times up to August but was unable to maintain this momentum and showed a weaker performance from mid-August. The sector index fell by 3.2% between January and December 2025, ending the year at 431 points.

Highlight stock traded per month (units)	Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Dec.
	600,000
	500,000
	400,000
	300,000
	200,000
	100,000

Development of Highlight stock in 2025

Highlight stock performed positively overall in reporting year, despite a weaker performance in the middle of the year. The share started 2025 with a listing of EUR 1.15. In a strong start to the year, the share price rose by more than $23\%$ to EUR 1.42 on January 5 and reached its high for the year of EUR 1.55 on January 22 and 23 and on February 4. The share then lost considerable momentum and moved in a corridor between EUR 1.26 and EUR 1.02 until June. The share price fell below EUR 1.00 for the first time on June 11 and recorded its low for the year of EUR 0.90 on June 20 and August 11. From the end of August, the stock recovered and once again exceeded the EUR 1 mark. The positive trend consolidated in the following weeks, with the share price almost reaching its high for the year again at EUR 1.52 on December 8. The listing ended the year at EUR 1.24, up $7.8\%$ on the start of the year.

Trading volume up significantly

In the period from January to December 2025, around 2.8 million Highlight shares were traded on the Xetra trading system of Deutsche Börse AG (previous year: around 1.59 million). The average number of shares traded per day thus rose from around 6,300 to around 11,000.

No changes in shareholder structure

As of December 31, 2025, the issued capital of Highlight Communications AG remained unchanged at CHF 63.0 million. It is divided into 63.0 million bearer shares with a nominal value of CHF 1.00. The number of treasury shares was unchanged in the 2025 reporting year. They account for around $9.9\%$ of the issued capital. Not including these shares, there were 56.75 million shares outstanding as of December 31, 2025.

Our company's principle shareholders are still Highlight Event and Entertainment AG (53.50%) and Stella Finanz AG (11.11%). Further significant share packages are held by private investors. As of December 31, 2025, the free float amounted to $16.32\%$ as per Deutsche Börse AG's index weighting.

Highlight stock

229.1
300
250
200
150
100
50
	2020	2021	2022	2023	2024	2025

Investor relations activities focusing on direct communications

One of the priorities of our investor relations work is to provide investors, analysts and the financial press with information that is as detailed and comprehensive as possible. The basis for this is primarily our promptly published annual and interim reports, which give a detailed insight into the current performance of our company. In addition, we inform capital market players about all significant events within the Highlight Group in the form of press releases and ad hoc disclosures.

However, the core element of our investor relations work is and will remain personal communication through active and open dialog. In November 2025, we thus participated in the German Equity Forum in Frankfurt, Europe's leading investor fair for small and mid-sized stock corporations. Here we were able to speak to capital market participants in person, giving them detailed insights into the positioning of our business areas and the Highlight Group's strategic direction. Our stated aim is to use this type of PR work to achieve a fair valuation of Highlight's stock and to convince potential shareholders of the intrinsic value of an investment in our company.

In addition to direct communication, our website (www.highlight-communications.ch) is the main information tool for all interested parties. It offers all relevant facts on the history and the current development of the Highlight Group in a clearly laid-out format. To ensure equal treatment of all market participants, new documents and information are always published promptly on this medium. In addition to annual and interim reports, press releases and ad hoc disclosures, this primarily relates to transactions with treasury shares. The dates for the most important events and publications have been clearly compiled in our financial calendar.

Highlight stock

Information on Highlight stock as of December 31, 2025

Issued capital	CHF 63.0 million
Number of shares	63,000,000
Stock class	Ordinary bearer shares
Shares outstanding	56.75 million
Market capitalization
(based on shares outstanding)	EUR 70.36 million
Year-end price	EUR 1.24
52-week high
(January 22 and 23 and February 4)	EUR 1.55
52-week low (June 20, August 11)	EUR 0.90
Earnings per share	EUR 0.09

Key data for Highlight stock

WKN	920 299
ISIN	CH 000 653 9198
Ticker	HLG
Reuters code	HLGZ.DE
Index	DAXsector Media
Trading venues	Berlin, Düsseldorf, Frankfurt, Hamburg, Hanover, Munich, Stuttgart, Xetra

JUPITER

AARD

REPORT ON THE HIGHLIGHT GROUP'S SITUATION

Development of operations, net assets, and financial position in 2025

Group sales: Increased by 2.0% year-on-year to CHF 412.1 million.
Net profit for the period: Came to CHF -146.7 million.
Earnings per share: CHF -2.39 (previous year: CHF -0.49).

Jupiter Award for “Chantal im Märchenland”: Max von der Groeben, Lena Schömann, and Mido Kotaini are delighted to receive the award in the “Best National Feature Film” category.

Management report

36

"Das Kanu des Manitu" has thrilled over 5 million moviegoers

BASIC INFORMATION ON THE GROUP

GROUP STRUCTURE AND OPERATING ACTIVITIES

Highlight Communications AG, listed on the Frankfurt stock exchange since May 1999, is an internationally oriented strategic and financial holding company based in Pratteln near Basel. It operates through its subsidiaries in the Film segment and Sports and Event segment.

Film segment

In its Film segment, Highlight Communications AG wholly owns Constantin Film AG, Munich, which, together with its German and foreign subsidiaries, is Germany's leading producer and exploiter of productions in the entire fictional and non-fictional audiovisual sector. Its activities comprise the development, production and exploitation of the fictional and non-fictional audiovisual rights that it produces and acquires. Self-produced works are marketed both in Germany and worldwide, while third-party productions are essentially exploited in German-speaking countries. All stages of the exploitation chain – from the theatrical distribution of movies and home entertainment releases down to TV broadcasting on conventional TV stations and streaming services – are fully utilized in exploitation.

Highlight Communications AG operates its own distribution organizations to best exploit its home entertainment rights for in-house and licensed films. Rights are distributed in Switzerland by Rainbow Home Entertainment AG, which is wholly owned by the company. On the German market, digital distribution is handled by Constantin Film GmbH, while physical products are distributed in cooperation with Paramount Home Entertainment/Universal Home Entertainment.

The main sources of income in the Film segment result from the exploitation of the rights to the films it produces and acquires across all stages of the exploitation chain and from production orders for TV broadcasters and other exploiters in the audiovisual sector. Further income is generated from national and international film grants. The main expense items consist of acquisition and exploitation rights for screenplays and source material, production costs, as well as release and promotion expenses for the individual films (marketing and copies).

Sports and Event segment

In the Sports and Event segment, Highlight Communications AG wholly owns TEAM Holding AG (TEAM). Based in Lucerne, the TEAM Group specializes in global marketing of major international sports events. TEAM has been the marketing partner of the European Football Association, UEFA, for over 30 years. The current agency agreement with UEFA covers the UEFA Men's Club Competitions for the 2024/25 to 2026/27 seasons.

The mandate covers the UEFA Champions League, UEFA Super Cup, UEFA Europa League, UEFA Conference League, UEFA Youth League and UEFA Futsal Champions League.

The main source of income in the Sports and Event segment is the agency commission associated with the marketing of TV and sponsorship rights, while personnel expenses account for the largest share of expenses.

Highlight Event AG, a 100% subsidiary of Highlight Communications AG, is a Lucerne-based agency specializing in the marketing of international music, culture, and entertainment projects. Originating from the Music division of TEAM Marketing AG that was formed in 2003, the company was established in 2012.

Highlight Event is responsible for the global marketing of the Vienna Philharmonic Orchestra and – on behalf of the European Broadcasting Union (EBU) – the marketing of the Eurovision Song Contest. With regard to the Vienna Philharmonic Orchestra project, marketing activities focus on the orchestra's annual TV highlights: the New Year's Day Concert, the Summer Night Concert, and a special concert that is held in a different location each year.

Sport1 Medien GmbH, Ismaning, is wholly owned by Highlight Communications AG.

The main sources of income are advertising and sponsorship sales in the free TV and digital areas. In production, marketing, and consulting operations, this includes long-term production framework agreements and agreements with partners and customers in addition to corresponding distribution agreements in the new digital business areas. The main expense items consist of costs for license rights, production and distribution costs, staff costs, and costs of office space.

Management report

Over a million viewers watch "Pumuckl und das grosse Missverständnis"

CONTROL SYSTEM AND PERFORMANCE INDICATORS

Group management

Highlight Communications AG's Board of Directors is responsible for the strategic orientation and management of the Highlight Group. By contrast, responsibility for operating activities lies with the management body of the relevant subsidiary. At Constantin Film AG, this body is the Management Board, which consists of three members, at TEAM Holding AG it is the Board of Directors, which is made up of two people, and at Sport1 Medien GmbH it is one-member Management. Management of all activities within the Highlight Group is based on budget and medium-term planning and on regular reporting.

Financial performance indicators

The primary objective of the Highlight Group is to increase enterprise value on a sustainable basis. A value management system was developed and introduced to plan, manage and control business operations. The key financial parameters are EBIT and the EBIT margin calculated as the ratio of EBIT to sales. Another key parameter is earnings per share.

Non-financial performance indicators

The economic performance of the Group is also influenced by non-financial performance indicators, which result from the specific requirements of the respective business model in the individual segments:

Audience numbers: In theatrical distribution, the audience generated by a film is one of the key factors. Theatrical success usually also affects the subsequent stages of exploitation, particularly in the areas of home entertainment, TV and streaming.
Market share: In home entertainment business, the results generated from digital distribution and the sale of DVDs and Blu-rays is a performance indicator for the success of the Highlight Group.
Market share and ratings: In license trading/TV exploitation and service production for TV broadcasters and streaming providers, ratings, market share and viewing figures are key parameters for the success of a broadcast format with the public. These figures are often the basis for subsequent commissioning decisions by customers of the Constantin Film Group in the future. Another extremely important parameter is the completion rate, which essentially describes whether and to what extent programs are viewed in their entirety. In some cases, this parameter is more important than ratings.
Access to rights: The Constantin Film Group is exposed to strong competition with regard to the purchase of rights to literary works and screenplays, and for contracts with successful directors, actors and film studios. The Constantin Film Group therefore has decades of experience working closely with renowned and experienced screenwriters, directors and producers with extensive expertise in producing theatrical movies and TV formats at home and abroad.
Other major indicators for the success of the Group are a highly-developed network of contacts in addition to close, trusting relationships with business partners. Technical and content-related expertise are crucial factors, not only in view of the increasingly digital and convergent media use of cross-platform offerings. Accordingly, the recruitment, fostering and retention of well-trained, skilled, committed and creative employees are of great importance.

Management report

"22 Bahnen" - a gripping drama that really gets under your skin

In the Sports and Event segment, trusting business relationships with rights-holders as well as existing and potential sponsors are crucial to the marketing of international major sports events. The same applies if persistently high ratings are to be achieved by TV broadcasts.
Access to and the availability of attractive sports rights are extremely important to the various platforms of the Sports and Event segment. In free TV, these rights are essential to the ability to maintain and increase market share, as indicated by daily ratings.
Success in the online and mobile sector is measured mainly on the basis of visits, while the success of the video platform is measured by video views.

LEGAL INFLUENCING FACTORS

Highlight Communications AG must comply with a large number of stock market rules and statutory regulations. As a stock corporation under Swiss law, it follows the Codes of Best Practice of the SIX Swiss Exchange and the regulations of the Frankfurt stock exchange for the regulated market (Prime Standard). The operating activities of the Highlight subsidiaries and equity interests are carried out in accordance with a large number of media, data protection, copyright, and regulatory requirements.

Film segment

In the Film segment, the Highlight Group is also subject to statutory regulations with particular significance. These include the regulations of the Copyright Protection Act. Furthermore, it must comply with the German Youth Protection Act, which regulates the commitment to age classifications for movies and video films in association with the FSF - a German organization for the voluntary self-regulation of television.

Sports and Event segment

Defining legal influencing factors for the free TV broadcaster as well as the internet TV offer SPORT1 Livestream and the multi-sport streaming platform SPORT1 Extra, are the German Interstate Broadcasting Treaty and the state media laws, the framework of which is often set by European law and compliance with which is monitored by the respective media institutions of the German federal states. SPORT1, SPORT1 Livestream and SPORT1 Extra are under the responsibility of the Bavarian Regulatory Authority for New Media (BLM).

The German Interstate Broadcasting Treaty contains various regulatory requirements, including regarding the placement of advertising.

As a private broadcaster, the SPORT1 MEDIEN Group is also subject to the provisions of the German Interstate Treaty on the Protection of Children and Young People. This stipulates that care must be taken to ensure that children and young people are not exposed to content likely to impair their development as a responsible and socially competent person.

A magical cinematic experience with "A Girl named Willow"

MARKET RESEARCH AND DEVELOPMENT

Both nationally and internationally, the collection and analysis of market data in the areas of audience, user and customer research is important to the development and enhancement of the business areas in which the Group operates so that trends in the respective industry segments and changes in patterns of consumer behavior can be anticipated or responded to quickly. Furthermore, the data and findings obtained are used by the companies of the Highlight Group to provide customers, business partners and the advertising industry with authoritative and sound information for assessing their investment decisions.

In-house productions in the Film segment partially undergo an audience test in the form of screenings. Awareness figures are also collected for current theatrical releases, partly in order to assess the effect of marketing activities for the film in question and optimize these if necessary.

In addition to these purely quantitative performance measures, qualitative data – relating to research of advertising effectiveness, for example – is also an important basis for assessing, classifying and aligning the production, exploitation and marketing activities within the various segments. Wide-ranging studies and research work on the development of the media industry are also used here, as are surveys, screenings and audience tests relating to the Group's products. The level of market acceptance of elaborate source material is tested even prior to their respective production.

ECONOMIC REPORT

GENERAL ECONOMIC ENVIRONMENT

According to the calculations published by the International Monetary Fund (IMF) in January 2026, the global economy grew by 3.3% in 2025. Global economic output thus remained stable.

The global economy proved resilient overall, even if growth varied from region to region. Downward pressure from trade tensions was offset by strong investments in the technology sector – particularly in the field of artificial intelligence – as well as supportive financing conditions. Global inflation fell to 4.1% in 2025.

Emerging and developing countries recorded growth of 4.4% in 2025. India remained one of the fastest-growing major economies with an increase of 7.3% in 2025, compared with 6.5% in the previous year.

The industrialized nations achieved a growth rate of 1.7% in 2025, compared with 1.8% in 2024. The IMF calculated growth of 1.4% for the eurozone in 2025, compared with 0.9% in the previous year. The US economy recorded growth of 2.1% in 2025 (2024: 2.8%). This means that the US once again recorded higher growth than the eurozone.

"Regretting You" is a moving coming-of-age story

According to the forecasts published by the Swiss State Secretariat for Economic Affairs (SECO) in mid-December 2025, gross domestic product (GDP) increased by 1.4% in 2024. In the previous year, the figure was 1.2%. According to SECO, the year was characterized by uncertainty and strongly fluctuating developments, for example in exports to the US.

According to calculations by the German Federal Statistical Office (Destatis), German GDP was up 0.2% in 2025. After -0.9% in 2023 and -0.5% in 2024, this is the first positive development in three years. The growth was mainly due to increased consumer spending by private households and the state. On the other hand, the export industry was mainly burdened by customs duties.

According to provisional calculations released in December 2025, the Austrian Institute of Economic Research (WIFO) expects economic growth of 0.5% in 2025. Austria's GDP therefore lagged behind the EU average but recorded its first positive growth after two years of recession.

MEDIA AND ENTERTAINMENT MARKET ENVIRONMENT IN GERMANY

The development of the media and entertainment industry in Germany is closely linked to that of the economy as a whole. However, companies generally respond more quickly to economic changes in their advertising expenditure than consumers. According to estimates from November 2025, the audit company PricewaterhouseCoopers (PwC) expects sales throughout the media and entertainment industry in Germany to have increased more slowly by a total of 3.9% to around EUR 116.0 billion in 2025. Following growth of 4.0% in 2024, the sector is therefore developing stably. The strongest growth of 6.4% is expected in advertising revenues.

The digital segments in particular performed strongly. "Internet video" saw the strongest growth at 14.6%, followed by "online advertising" at 10.6% and "mixed reality" at 10.0%. Most segments developed positively. The only exceptions are "books, newspapers and magazines" and "television and TV advertising."

Global trade conflicts and geopolitical tensions also weighed down the entertainment and media industry in 2025. The trade conflict between China and the US in particular had an impact on the film industry. The mutual threat and introduction of tariffs is not only affecting Hollywood productions but also cooperation partners, for example from Germany. Uncertainty about future developments is making it difficult to plan and finance new projects. In addition, international live events are also being affected by political tensions. Another factor influencing the industry is artificial intelligence (AI). On the one hand, competition and cost pressure are increasing due to AI-generated content, while on the other, the use of AI offers numerous opportunities, especially for increasing efficiency. To seize these opportunities, businesses need to take a strategic approach and use AI in a targeted manner.

Management report

herb & fire

MANAGEMENT REPORT: FILM SEGMENT

Report on business performance and the situation

2025

The year's most successful film premieres in Munich:
"Das Kanu des Manitu" builds on the success of its predecessor and draws over 5 million viewers to 500 man theaters.

Management report

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The compelling story of "Momo"

INDUSTRY CONDITIONS

Preliminary remarks

The German film industry continues to operate in a challenging environment. The strained economic situation, which is reflected in particular in the rising cost of living, uncertainties regarding future economic development, and general economic restraint could lead to leisure budgets being reduced and consumers being more cautious. This could result in both fewer trips to the movies and a decline in spending on home entertainment.

As a result of the weak economy and a restrained TV advertising market, private broadcasters in particular remain under budget pressure.

The awarding of contracts in the streaming sector may also decline, as US and domestic services are facing an economic review of their business model.

Finally, the awarding of contracts by public broadcasters may also decline as a result of a (temporary) lack of or only minor increase in broadcasting fees or structural reforms.

Moreover, business is impacted by the strained economic conditions affecting production costs (cost increases, high financing costs).

Theatrical distribution

The number of moviegoers in the year 2025 was at 91.9 million, and was therefore slightly up year-on-year. At EUR 924.0 million, sales were also above the previous year's figure of EUR 868.4 million. The average ticket price is at a new high of EUR 10.05 (2024: EUR 9.64).

The most successful theatrical releases in 2025 (by audience figures in the period) were "Das Kanu des Manitu" with an audience of slightly over 5.0 million, "A Minecraft Movie" with just under 3.5 million tickets sold, and "Lilo & Stitch" with 3.3 million theater admissions.

Home entertainment

As in previous years, SVoD platforms, which have recently begun offering more affordable, ad-supported subscription models, continued the upward trend in the German home entertainment market as a whole. SVoD providers recorded sales of EUR 3.038 billion, an increase of 4% over the previous year (EUR 2.926 billion), accounting for 81% of the market. The overall market grew by 2% year-on-year to EUR 3.731 billion (2024: EUR 3.667 billion).

Sales in the area of digital transactional forms of exploitation (electronic-sell-through and transactional video-on-demand) remained constant at EUR 475 million compared to the previous year. While the EST sub-segment declined by 2% to EUR 283 million, the TVoD segment grew by 4% to EUR 192 million.

In contrast, the trend for physical media (DVD and Blu-ray) continues to decline. In 2025, sales fell by a further 19% to EUR 218 million (previous year: EUR 268 million). Including digital revenues, last year's sales of EUR 693 billion were 7% below the previous year's figure (2024: EUR 742 billion).

The sequel to the 2013 box office hit: "The Physician 2"

OPERATIONAL DEVELOPMENT

Theatrical production and distribution

Production has begun on a total of seven own and co-productions from January to December 2025. In 2025, filming began on the own production "Die Ältern", a theatrical comedy by successful director Sönke Wortmann based on the novel of the same name by bestselling author Jan Weiler; "Regretting You", an adaptation of the worldwide bestseller by star author Colleen Hoover; "Steckerlfischfiasko", the tenth film adaptation of the Eberhofer series to date; the comedy "Der perfekte Urlaub" directed by Bora Dågtekin, a sequel to the box office hit "Das perfekte Geheimnis"; and a new "Resident Evil" film directed by Zach Cregger.

Theatrical distribution

The Constantin Film Group released a total of seventeen films in German movie theaters in 2025, including "Das Kanu des Manitu", "Pumuckl und das grosse Missverständnis", and "22 Bahnen". With an audience of over 5 million and sales of EUR 50.9 million, "Das Kanu des Manitu" is top of the overall annual charts as the highest-grossing and most-watched film of 2025. All three titles mentioned above are in the German top ten for 2025, which also includes the productions "Regretting You" and "A Girl Named Willow" released in 2025.

Home entertainment market share stable

The market share of Constantin Film Distribution GmbH in the home entertainment segment could be maintained at 4% compared to the previous year thanks to a balanced portfolio and a strong focus on German productions.

The films with the highest viewing figures in 2025 were "Das Kanu des Manitu", "Der Spitzname", "Criminal Squad 2", "Manitou's Shoe", "Babygirl", "In the Lost Lands", and "Hagen". In the physical segment, the own production "Chantal and the Magic Kingdom" ("Chantal im Märchenland") and Bernd Eichinger's global hit "The Never Ending Story" also registered particularly high sales on DVD, Blu-ray, and 4K UHD.

Major license launches in TV exploitation/license trading

In the free-TV segment, the initial licenses for "Hagen", "Manta Manta – Zwoter Teil", and "Sonne und Beton" (all RTL) and for "Caveman" (ProSiebenSat.1) had a particularly significant impact on sales. In the pay-TV sector (PPC), there were also the initial sales of "200% Wolf", "Home Sweet Home", and "Giants of La Mancha" (all Sky), among others. Relevant sales from TV own and co-productions in the reporting year were generated in particular by "Stationär" (ARD) and the international distribution of the high-end series "Smilla's Sense of Snow".

Service productions (TV broadcasters and streaming providers)

In productions commissioned by TV broadcasters and streaming providers, filming began in 2025 on eleven productions from both the feature film and series sectors, including new episodes of the "Kroatien-Krimi" series (ARD), the twenty-first and twenty-second seasons of "Dahoam is Dahoam" (BR), the new Netflix miniseries "The Trap" based on the novel of the same name by Melanie Raabe, and a second season of the successful Netflix series "Achtsam Morden" with Tom Schilling.

Management report

A roller-coaster ride into adulthood with "Mädchen Mädchen"

In non-fiction, filming began on the third season of "Kaulitz & Kaulitz" (Netflix), the comedy format "LOL: Last One Laughing" (Prime Video) was expanded by a seventh season for the German market, including the spin-off "LOL Next", and another reality series was established with "Promihof" (RTLzwei). For the first time in several years, Constantin Entertainment also succeeded in providing its long-standing broadcast customers Sat.1, ProSieben, and ZDFneo with new ideas and programs. Constantin Entertainment also began the production of two microdrama pilots for an American-Asian app-based platform and produced a first creator event with "Berlin got Games" and a first full AI microdrama with "Aminho".

ANALYSIS OF NON-FINANCIAL PERFORMANCE INDICATORS

Focus on long-term cooperation

As in previous years, it is important to focus on long-term collaborations/contracts. With this focus, the Constantin Film Group employs numerous producers with creative decision-making authority, a large number of executive producers, and a multitude of filmmakers, writers, directors, and actors.

Audience figures in theatrical distribution

In the overall market of German films released in 2025, the Constantin Film Group took first place with "Das Kanu des Manitu" (about 5.0 million moviegoers), fifth place with "Pumuckl und das grosse Missverständnis" (about 1 million moviegoers), and seventh place with "22 Bahnen" (about 0.7 million moviegoers).

In 2025, the Constantin Film Group in Germany was able to secure fifth place in the ranking of all distributors in terms of sales and audiences (market share of 11.7% in audiences and 11.1% in sales) as well as first place among studio-independent distributors.

Among German productions, the Constantin Film Group secured first place among distributors with a market share of 40.5% in audiences and 41.6% in sales.

New releases achieve good sales figures in home entertainment

Among the new releases, the co-production "Das Kanu des Manitu" was particularly impressive. With an audience of 5 million, the highest-grossing and most-watched theatrical release of 2025 reached over 150,000 digital sales within a few days. In addition, the own production "Der Spitzname", which was released in April, contributed far above-average sales with over 300,000 digital transactions. Other new releases such as "Criminal Squad 2", "Babygirl", "In the Lost Lands", "Hagen", and "A Girl named Willow" were in line with sales expectations.

TV exploitation still at good level

The Sönke Wortmann comedy "Der Nachname" was the best title in ARD's summer movie program with 4.8 million viewers and a market share of 20.3%. On RTL, the Constantin Film own production "Manta Manta – Zwoter Teil" found its audience among 14–49-year-olds with a market share of 14.3% and a total of 1.6 million viewers aged three and over. The first broadcast of the movie "Sonne und Beton" reached 800,000 viewers on RTL. The social comedy "Contra" attracted a total of 1.1 million viewers on Sat.1 with a market share of 17.5% in the younger 14–29 target group. The "Suck Me Shakespear" series continues to be a ratings hit: the broadcast of the trilogy on ProSieben achieved a peak market share of over 20% among the young target audience.

Pamela Anderson shines as "The last Showgirl"

Strong ratings for TV service productions

Numerous first broadcasts of Constantin productions in 2025 secured strong market shares in the double-digit percentage range in the overall market. The leader with 7.1 million viewers and 25.6% market share was the Franconian crime drama "Ich sehe Dich" on ARD.

The Passau crime thrillers were also proven ratings drivers: the episode "Der Rote Wolf" on ARD, for example, reached 5.5 million viewers with a 25.7% market share. The first episodes of the new ARD crime series "Der Krimi aus Brandenburg" and "Blutspur Antwerpen" also impressed with well over 5 million viewers each and market shares of over 20%. The fifth season of "Die Heiland" (ARD) also delivered a perfect debut. The start of the season reached 4.26 million viewers with a 19.2% market share.

In the streaming segment, various productions from the Constantin Film Group once again performed convincingly. For example, the sixth season of the hit format "LOL: Last One Laughing", which launched on Prime Video in April 2025, attracted over 40 million views during the reporting period.

The action thriller "Exterritorial" also enjoyed very good viewing figures. It recorded 4.6 million views in Germany and is the fourth most-watched non-English-language film on Netflix worldwide with 91.7 million views.

In addition, the second season of the personality series "Kaulitz & Kaulitz" released on Netflix achieved an impressive 16 million views, while the much-discussed Netflix documentary "Babo - Die Haftbefehl-Story" achieved 2.5 million views. The historical series "Nibelungen: War of the Kingdoms" recorded around 700,000 views on RTL+ after just a few days, while the serial adaptation "Smilla's Sense of Snow" also achieved around 700,000 views on MagentaTV.

Management report

MANAGEMENT REPORT: SPORTS AND EVENT

Report on business performance and the situation

UEFA Champions League Final: Paris Saint-Germain faces Inter Milan in the final. The French side dominates the match and defeats their opponents 5:0.

Management report

The winners of the UEFA Champions League, UEFA Conference League and UEFA Europa League celebrate their success

INDUSTRY CONDITIONS

TEAM Group

In July 2025, the media planning and purchasing company Zenith estimated that global advertising expenditure had grown by 6.1%, to above USD 1 trillion, in 2025. In 2026, advertising growth is expected to continue, but to slow to 5.8%. Geopolitical uncertainty and potential tariffs are likely to weigh on growth, partly offset by support from major global events such as the Winter Olympics and the FIFA World Cup.

Sport1 Medien GmbH

The advertising and market research company Nielsen estimates gross advertising expenditure of companies in Germany in the amount of EUR 35.4 billion for the year 2025. This is a slight decline of -0.5% from 2024.

The most significant drop is in the TV category with a decline of -4.2% to EUR 16.6 billion. General interest magazines (-3.7%, EUR 2.3 billion) and movie theaters (-0.8%, EUR 112 million) are also down compared with 2024.

The above Nielsen figures are gross sales figures that do not provide information about actual net expenditure or revenues. However, they provide a reliable picture of advertising pressure and the development of individual categories and market segments.

A generally mixed second half of the year meant that market growth fell short of earlier expectations. As recently as this summer, the association "Die Mediaagenturen" had forecast growth of 4.9%. A more recent analysis based on updated market data, however, projects net advertising spending of EUR 30.5 billion in 2025. This would represent an increase of just 3.6%. The WPP Media agency group estimates growth in 2025 at 4.5%, with a market volume of EUR 34.7 billion – a higher figure due to a broader market definition. The British advertising research firm WARC, on the other hand, forecasts a 4.9% increase for Germany, with net advertising investments of just under EUR 30.5 billion. The differing growth rates result from varying survey methods and market definitions used by the respective sources.

There is cross-industry consensus that the majority of growth is attributable to global platforms such as Google, Meta, Amazon, and the like. For the other media types, this means significantly lower growth rates or, in some cases, declining advertising revenues.

Highlight Event AG

Even though political debates are becoming increasingly prevalent and sometimes challenging in the context of the Eurovision Song Contest, the overall music market remains stable.

In the field of classical music – especially with regard to the events of the Vienna Philharmonic – the outlook is nevertheless very positive. Despite further declines in government subsidies (for example, for the Summer Night Concert), which increase marketing pressure, demand remains stable and the overall outlook is promising.

OPERATIONAL DEVELOPMENT

TEAM Group

In 2025, the focus on technological innovation continued. With the start of the 2024/25 to 2026/27 commercial cycle, TEAM and UEFA further expanded the deployment of Virtual Board Replacement (VBR), enabling the dynamic display of sponsor branding on perimeter boards tailored to the viewer's geographic location. As a result, the number of matches delivered with VBR increased from 37 in the 2023/24 season to 147 in the 2024/25 season, representing an increase year-on-year.

Implementation of the new competition format and finals and league phase

The TEAM Group's other focus in 2025 was on supporting UEFA in concluding the first final of the 2024/25 to 2026/27 commercial cycle.

The UEFA Champions League Final between Paris Saint-Germain and Internazionale Milano was held on May 31, 2025, at Munich Football Arena in Munich, Germany. Paris Saint-Germain won the game 5:0 which meant the first title for the French side and the highest ever scoreline in a UEFA Champions League final.

In the final of the UEFA Europa League, Tottenham Hotspur took on English rivals Manchester United in the San Mamés Stadium in Bilbao, Spain, on May 21, 2025. Tottenham won the game 1:0, making it the first European title since 1984 for the club from London.

The UEFA Conference League was won by Chelsea 4:1 who took on Real Betis at the Stadion Miejski in Wroclaw, Poland.

The start of the 2024/25 to 2026/27 commercial cycle coincided with the implementation of new competition formats. At the beginning of 2025, the league phase concluded successfully, with the final matchday being received positively as, for the first time, 18 matches were played in parallel. The knockout phase was also restructured, introducing a new knock-out play-off round in the UEFA Champions League and increasing the total number of matches across the season by 69 to 207.

Conclusion of UEFA remit in 2027

At the start of 2025, TEAM has been informed that their bid in the tender process for the UEFA men's club competitions for the 2027/28 to 2032/33 seasons remained unconsidered. TEAM has been UEFA's marketing partner for more than 35 years. The current agency agreement with UEFA still covers the competitions for the seasons up to and including 2026/27.

Management report

WINNERS

Paris Saint-Germain wins UEFA Super Cup after UEFA Champions League victory

Sport1 Medien GmbH

Expansion of new business areas

After ACUNMEDYA came on board, the joint content expansion continued. The aim of the strategic partnership is to further develop SPORT1 as an innovative and relevant entertainment and sports broadcaster in German-speaking countries and to appeal to a broad family target group.

The shared vision is to position SPORT1 as a 24/7 entertainment channel with relevant sports and entertainment content for a broad audience aged 14 to 59.

At the beginning of January, SPORT1 once again celebrated outstanding programming success with the 2026 World Darts Championship. The tournament from December 11, 2025, to January 3, 2026, was the highest-reach World Darts Championship of all time. The average reach was 758,000 viewers aged three and over (Z3+) per session with market shares of 11.2% (men 14-59) and 14.2% (men 14-49). The final between world champion Luke Littler and Gian van Veen reached up to 3.05 million viewers (Z3+) at its peak and was thus only slightly below the previous year's figure (3.31 million viewers). The final achieved market shares of 9.1% among total viewers (Z3+) and 22.4% (men 14-59) and 27.2% (men 14-49) in the advertising-relevant target groups. In the World Cup period, SPORT1 was market leader five times over the whole day (men 14-49) and twelve times in prime time (8:00 p.m.-11:00 p.m.).

In 2025, SPORT1 made targeted investments in new content formats and the expansion of its offering. THE ICON LEAGUE was added to the program. All matchdays were largely broadcast live and digitally, with selected matchdays also broadcast on free-TV. The successful Fantalk format also made a special return to linear television. Selected UEFA Champions League matches are once again broadcast live from the 11 Freunde Bar in Essen.

SPORT1 also continued the strategic expansion of its new business and innovation activities and positioned itself specifically as a partner for young companies with growth potential.

The project related to Jackpot50 was discontinued during the 2025 reporting period.

After the balance sheet date, it was announced that the broadcasting rights to the PDC World Darts Championship will no longer be part of Sport1 GmbH's rights portfolio starting with the 2027/2028 rights cycle. The rights in effect until then, particularly for the 2026/2027 event, remain unchanged. In February 2026, SPORT1 announced that, as part of a new five-year contract with DAZN, extensive darts broadcasting rights remain secured starting with the 2027 rights cycle and beyond. The new contract guarantees year-round free-to-air TV coverage with a total of 69 broadcast days per year. However, the PDC World Darts Championship will no longer be part of this rights package starting with the 2027/2028 rights cycle.

The decline in revenue in the digital sector stands in contrast to the growing market and points to significant losses in market share.

"Der Doppelpass" remains a staple on SPORT1

Highlight Event AG

Despite the challenges posed by the Eurovision Song Contest the 2025 fiscal year ended very successfully. From sales and customer service to event implementation, all contractual obligations were met, for both the Eurovision Song Contest and the Vienna Philharmonic Orchestra. General consulting activities and support for media partnerships for the Vienna Philharmonic Orchestra only were also successfully implemented.

In addition to the two main events, the New Year's Concert and the Summer Night Concert, the following events were also successfully staged in the Vienna Philharmonic Orchestra project: Milan (Teatro alla Scala), Paris (Paris Opera), and Seoul (Arts Center).

ANALYSIS OF NON-FINANCIAL PERFORMANCE INDICATORS

TEAM Group

UEFA Champions League continues to lead the way on social media/Impressive viewer numbers for UEFA Men's Club Competitions

In 2025, the official social media accounts of the UEFA Champions League, UEFA Europa League and UEFA Conference League extended their leading position among sports rights holders.

The digital commercial programme delivered an increase of 81% in sponsorship media value year-on-year across all social media platforms.

This development was driven by the continued enhancement of digital assets and partner activations, which supported broader and more sustained coverage of the competitions whilst increasing the overall commercial impact of social media channels.

The 2025 final of the UEFA Champions League was broadcast in more than 200 countries and seen by 126 million live TV, streaming and out-of-home viewers.

The average live viewership was lower than the average recorded across the 2021-24 cycle, influenced by the one-sided nature of the match, with Paris Saint-Germain securing a decisive 5:0 victory.

Despite this, the final delivered France's highest UCL audience since 2020, reaching 12.5 million viewers.

The global live viewership for the UEFA Europa League final stood at 45.9 million live TV, streaming and out-of-home viewers.

In the UK, the all-English final between Manchester United and Tottenham Hotspur delivered the second most watched UEFA Europa League final of all time.

The final of the UEFA Conference League also attracted a large live viewership, with 32.2 million live TV, streaming and out-of-home viewers, which is directly in line with the 2024 final.

Management report

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The Darts World Championship is thrilling spectators again this year

Sport1 Medien GmbH

Free TV distribution still at high level

The free-TV channel SPORT1 was receivable in 31.2 million households in 2025 (2024: 31.01 million) and was therefore available in 80.8% of all accessible households in Germany (2024: 79.6%; reporting date: January 1, 2026).

With its free-TV offering, SPORT1 achieved market shares of 0.5% among viewers aged three and over in 2025 (2024: 0.6%), 0.9% among adults aged 14 to 49 (2024: 0.8%), and 1.0% in the core target group of men aged 14 to 59 (2024: 1.1%).

The ratings highlights on free-TV included, in particular, live broadcasts of the top match of the Bundesliga 2 on Saturday evenings (only in the first half of the year), "Doppelpass", darts tournaments shown throughout the year, and the World Darts Championship.

Digital performance: stable reach, strong growth in social media

SPORT1's digital channels maintained their strong position in the German sports media market in 2025. On a monthly average, there were 67.3 million visits (-16% compared with 2024) and 12.3 million video views on SPORT1's own platforms (-27% compared to 2024). As expected, both key figures were below the exceptionally high level of the previous year but continue to confirm the high relevance and reach of SPORT1 in the digital environment.

Despite these market developments, SPORT1 was able to significantly improve its performance in the social networks. In 2025, SPORT1 posts generated 80 million reactions, likes, and shares (2024: 74 million). Post impressions totaled 5,176,485,737, up +211% on the previous year's figure. In addition, 900 million video views were achieved on social media, which corresponds to an increase of 17.7%.

This development underlines the increasing importance of SPORT1 in the social networks as well as the high resonance and attractiveness of the content posted there. Revenue declined in previous years due to falling market share.

Audio and social media activities expanded further

SPORT1 has been active in the market with its own podcast family since September 2019. At the end of December 2025, the portfolio comprised around 10 podcasts that are available on all popular streaming platforms, including Spotify, Apple Podcasts, Google Podcasts, Amazon Music, Deezer, YouTube, and Podigee. The content also features on SPORT1.de and the SPORT1 apps.

SPORT1 also consolidated its leading position in the social media segment. At the end of December 2025, the channel had a total of 8.2 million fans and followers on the platforms Facebook, YouTube, TikTok, Instagram, X, WhatsApp, Threads, and Bluesky (December 2024: 7.54 million). The community saw particularly strong growth on TikTok, where SPORT1 currently has over 1.37 million followers.

The women in the first VBL are thrilling the spectators

Facebook remains the largest platform in terms of followers, with 3.8 million users on the various SPORT1 pages. The main channel on YouTube passed the 950,000 subscriber mark in November 2025. The SPORT1 WhatsApp channel recorded particularly strong growth around the World Darts Championship: in December 2025, the number of followers rose from 47,000 to 165,000.

In terms of content, the focus in 2025 was on further expanding video activities and increasing engagement. Coverage of the Bundesliga and Bundesliga 2, the Club World Cup, darts tournaments, the World Darts Championship, and the ICON LEAGUE were particularly relevant in content production. The #mittendrin approach has been consistently developed to tell sporting stories up close, authentically, and emotionally.

Highlight Event AG

Eurovision Song Contest (ESC) and the New Year's and Summer Night Concerts: very good viewing figures

Both projects achieved outstanding global TV viewing figures. In particular, the New Year's Concert (again with around 50 million viewers) and the Grand Final of the Eurovision Song Contest (likewise around 50 million, over 150 million in total) underlined their exceptional positions in the global music and entertainment market.

The streaming presence of the New Year's and Summer Night Concerts was also further expanded via the media libraries of the primarily public TV stations. Another especially notable innovation is the expansion of movie theater partnerships for the Vienna Philharmonic Orchestra in Asia, including China, Korea, Singapore, and Hong Kong.

Management report

| Revenue and earnings over time (in CHF million)
■ Profit from operations
■ Revenue | 28.6 | 508.2 | 14.6 | 523.8 | 6.9 | 421.3 | -6.4 | 404.1 | -131.8 | 412.1 |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | 60 | | | | | | | | | 600 |
| | 40 | | | | | | | | | 400 |
| | 20 | | | | | | | | | 200 |
| | 0 | | | | | | | | | 0 |
| | -20 | | | | | | | | | -200 |
| | 2021 | | 2022 | | 2023 | | 2024 | | 2025 | |

RESULTS OF OPERATIONS, NET ASSETS AND FINANCIAL SITUATION OF THE HIGHLIGHT GROUP

OVERALL ASSESSMENT OF THE REPORTING PERIOD

From the Group's perspective, business development in 2025 was generally satisfactory and was characterized by one-time special effects. At CHF 412.1 million, consolidated revenue was 2.0% higher than the previous year's figure of CHF 404.1 million due to production-related factors.

EBIT decreased to CHF -131.8 million from CHF -6.4 million in 2024.

At CHF -146.7 million, the Group's net loss for the period was also below the previous year (CHF -29.7 million).

With the share of results attributable to Highlight's shareholders at CHF -135.8 million, compared with CHF -27.7 million in the previous year, earnings per share decreased from CHF -0.49 in the previous year to CHF -2.39.

RESULTS OF GROUP OPERATIONS

Increase in consolidated revenue

The Highlight Group generated consolidated revenue of CHF 412.1 million in the past fiscal year, an increase of CHF 8.1 million as against the previous year (CHF 404.1 million). The Film segment generated higher external revenue than in the previous year due to production-related factors, while the Sports and Event segment recorded lower external revenue in the reporting period.

At CHF 112.1 million, capitalized film production costs and other own work capitalized were down by CHF 24.3 million from the 2024 comparative figure (CHF 136.4 million).

Other operating income increased by CHF 7.1 million to CHF 19.9 million (previous year: CHF 12.7 million).

EBIT down on previous year

Consolidated operating expenses, which totaled CHF 675.9 million, were CHF 116.3 million or 20.8% higher than in the 2024 fiscal year (CHF 559.6 million). The cost of materials and licenses decreased by CHF 27.2 million to CHF 234.9 million (previous year: CHF 262.1 million) due to production-related factors, while personnel expenses fell by CHF 7.8 million to CHF 146.5 million (previous year: CHF 154.3 million). Amortization, impairment and reversals of impairment amounting to CHF 227.6 million increased, among other things, due to amortization, impairment and reversals of impairment on film assets, which rose by CHF 47.3 million to CHF 109.8 million (previous year: CHF 62.6 million). There was also amortization and impairment of goodwill of CHF 90.9 million, compared with CHF 0 million in the previous year. This relates to non-recurring special effects in the Sports and Event segment.

Consolidated results

The financial result improved by a total of CHF 4.5 million to CHF -11.6 million (previous year: CHF -16.1 million). Financial income increased by CHF 4.1 million to CHF 9.8 million (previous year: CHF 5.7 million), while financial expenses fell slightly by CHF 0.3 million to CHF 21.4 million (previous year: CHF 21.7 million). Taking into account tax expenses (income taxes and deferred taxes) of CHF 3.2 million (previous year: CHF 8.0 million), the Highlight Group reported a consolidated net loss of CHF -146.7 million for the 2025 fiscal year (previous year: CHF -29.7 million). The share of profit attributable to Highlight shareholders decreased to CHF -135.8 million after CHF -27.7 million in the previous year. Based on an unchanged average number of shares outstanding of 56.7 million in the reporting year, this results in earnings per share of CHF -2.39 (previous year: CHF -0.49).

RESULTS OF SEGMENT OPERATIONS

Film: decline in earnings

In the period from January to December 2025, production began on a total of seven own and co-productions. Filming began on "Steckerlifischfiasko", the tenth film adaptation of the Eberhofer series to date; the comedy "Der perfekte Urlaub" directed by Bora Dağtekin, a sequel to the box office hit "Das perfekte Geheimnis"; and a new "Resident Evil" film directed by Zach Cregger.

The market share of Constantin Film Vertriebs GmbH in the home entertainment segment remained stable year on year at 4% thanks to a balanced portfolio and a strong focus on German productions. The films with the highest viewing figures in 2025 were "Das Kanu des Manitu", "Der Spitzname", "Criminal Squad 2", "Manitou's Shoe", "Babygirl", "In the Lost Lands", and "Hagen".

In the free-TV segment, the initial licenses for "Hagen", "Manta Manta - Zwoter Teil", and "Sonne und Beton" (all RTL) and for "Caveman" (ProSiebenSat.1) had a particularly significant impact on revenue.

Revenue in the Film segment rose by 23.5% to CHF 310.4 million in the reporting year (previous year: CHF 251.4 million). Other segment income, which is largely influenced by capitalized film productions, fell by 12.3% to CHF 126.8 million (previous year: CHF 144.6 million). At the same time, segment expenses increased by 11.8% overall to CHF 433.0 million (previous year: CHF 387.2 million). At CHF 5.3 million, segment earnings were 44.6% below the previous year's level (previous year: CHF 9.5 million).

Management report

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Sports and Event: segment revenue below previous year's level

In 2025, the TEAM Group focused on supporting UEFA in concluding the first final of the 2024/25 to 2026/27 commercial cycle.

At the beginning of 2025, the TEAM Group was informed that its bid had not been considered in the tender process for the UEFA men's club competitions for the 2027/28 to 2032/33 seasons.

Highlight Event AG concluded the 2025 fiscal year on a successful note. Sales, management and contract implementation activities in the sponsorship area (Eurovision Song Contest and Vienna Philharmonic Orchestra) as well as general consulting activities and media sales (Vienna Philharmonic Orchestra only) proceeded very positively.

After ACUNMEDYA came on board, the joint content expansion was continued. The aim of the strategic partnership is to further develop SPORT1 as an innovative and relevant entertainment and sports broadcaster in German-speaking countries and to appeal to a broad family target group.

External revenue in the Sports and Event segment amounted to CHF 101.7 million, down 33.4% on the previous year (CHF 152.7 million). Segment expenses rose by 42.0% from CHF 168.3 million to CHF 239.0 million due to non-recurring special effects, while other income increased slightly from CHF 4.8 million to CHF 5.6 million.

Consequently, the segment result of CHF -131.4 million was below the previous year's figure of CHF -10.6 million.

Holding costs

At CHF 5.6 million, the costs of holding activities remained at approximately the previous year's level (previous year: CHF 5.3 million).

NET ASSETS SITUATION

Balance sheet total down year on year

As at December 31, 2025, the Highlight Group's balance sheet total amounted to CHF 491.2 million - a decrease of CHF 133.5 million compared with the end of 2024 (CHF 624.6 million).

On the assets side of the balance sheet, the decrease is mainly due to goodwill, which declined by CHF 91.9 million to CHF 17.2 million (previous year: CHF 109.1 million), and other intangible assets, which decreased by CHF 15.2 million to CHF 30.6 million (previous year: CHF 45.8 million). Tangible assets decreased by CHF 9.7 million and other assets by CHF 9.3 million. Film assets, on the other hand, increased by CHF 5.6 million compared with the previous year.

Entertainment Highlights: The Eurovision Song Contest and the Vienna Philharmonic Summer Night Concert

While non-current assets fell sharply overall, current assets remained at approximately the previous year's level, with inventories, trade accounts receivable and other receivables decreasing; all other items increased. This development resulted in a slight increase in current assets of CHF 2.7 million to CHF 156.3 million (previous year: CHF 153.7 million). At 31.8%, the share of current assets in total assets was above the previous year's level (24.6%).

Film assets

At the end of the reporting year, the value of the film assets was CHF 229.5 million – an increase of CHF 5.6 million compared with the end of 2024 (CHF 223.9 million). Of this total, CHF 217.2 million (previous year: CHF 216.6 million) was attributable to in-house productions and CHF 12.3 million (previous year: CHF 7.3 million) to third-party productions.

Current liabilities up, non-current liabilities down

On the liabilities side of the balance sheet, current liabilities increased by a total of CHF 38.2 million to CHF 448.6 million (previous year: CHF 410.3 million), which is largely due to an increase in advance payments received, trade accounts payable and other liabilities.

Non-current liabilities decreased by CHF 16.5 million to CHF 45.9 million (previous year: CHF 62.4 million).

Decrease in consolidated equity due to one-time effects

Consolidated equity (including non-controlling interests) decreased by CHF 155.2 million to CHF -3.3 million compared with the end of the previous year (CHF 151.9 million). The main factor here was the consolidated net loss of CHF -146.7 million. The consolidated net loss was primarily due to the impairment of goodwill, which was a non-recurring effect in the reporting year.

Due to the negative equity, it is not possible to calculate the equity ratio for 2025 (previous year: 24.3%).

For detailed information on the development of consolidated equity, please see the consolidated financial statements (pages 94 and 95).

Management report

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FINANCIAL SITUATION

Current net debt at CHF 174.8 million

At CHF 21.8 million, cash and cash equivalents as at December 31, 2025, were CHF 5.0 million higher than at the end of 2024 (CHF 16.8 million). At the same time, current financial liabilities decreased by CHF 5.3 million to CHF 191.3 million (December 31, 2024: CHF 196.5 million), resulting in current net debt of CHF 174.8 million at the end of the reporting year, including current lease liabilities (December 31, 2024: CHF 186.4 million). Taking into account the non-current financial and lease liabilities, net debt amounted to CHF 196.4 million (previous year: CHF 218.0 million).

In the reporting year, cash flow from operating activities amounted to CHF 134.3 million – an increase of CHF 97.9 million compared with the 2024 fiscal year (CHF 36.4 million), which is partly due to changes in net working capital.

Cash flow used in investing activities increased by CHF 26.2 million to CHF 122.9 million compared with the previous year (CHF 96.7 million). This change is due to a production-related increase in payments for film assets of CHF 29.4 million to CHF 118.6 million (previous year: CHF 89.3 million).

The Highlight Group's financing activities resulted in a cash outflow of CHF 6.1 million in the 2025 fiscal year (previous year: cash inflow of CHF 51.2 million). Of this, CHF 38.3 million was received for current financial liabilities (previous year: CHF 51.1 million), while dividend payments of CHF 0.5 million were slightly below the previous year's level (CHF 0.7 million). There were cash outflows of CHF 41.9 million for repayments of current financial liabilities (previous year: CHF 10.0 million).

External and internal financing sources ensure liquidity

The Highlight Group has access to credit facilities, mostly with floating interest rates, as external sources of financing that have been partially utilized. These facilities are loans that usually have a remaining term of one month. The corresponding interest rates in the euro area were between 2.5% and 8% in the reporting year. For other foreign currencies, especially USD and CAD, interest rates were between 2.25% and 7.50%. In general, the only internal sources of financing are the returns on operating activities. Given the level of cash funds and credit facilities available, the Highlight Group was able to meet its payment obligations at all times in the reporting year.

The Board of Directors intends to continue actively assessing further options to secure the Group's financing. Nevertheless, material uncertainties exist that may cast significant doubt on the Group's ability to continue as a going concern. These uncertainties are related to the following prerequisites:

securing sufficient liquidity to cover ongoing business operations for a period of at least twelve months;
the refinancing of a financial liability owed to a banking syndicate amounting to CHF 74.5 million, which is contractually due for repayment on November 30, 2026; and
the extension or restructuring of liabilities from licence agreements amounting to EUR 57.5 million, which were due as of the reporting date.

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PERSONNEL REPORT

In the 2025 fiscal year, the Highlight Group employed an average of 1,383 people (previous year: 1,337), including freelance staff. Of these, 168 employees (previous year: 183) worked in Switzerland and 1,215 (previous year: 1,154) in Germany.

REPORT ON RISKS AND OPPORTUNITIES

Business activity and leveraging opportunities always entail risk. To protect the existence of the Highlight Group as a going concern, and to support the company in achieving its goals, an integrated, company-wide opportunity and risk management system (RMS) has been implemented.

RISK MANAGEMENT SYSTEM

The Risk Management System (RMS) is defined in a directive. Highlight Communications AG uses the definition from German Accounting Standard 20 "Group Management Report" issued by the Accounting Standards Committee of Germany (ASCG), which defines risks (opportunities) as "possible future developments or events that may lead to a negative (positive) deviation from forecasts/targets for the company". The RMS follows the general principles of the overall framework for "enterprise risk management", as developed by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The following objectives are pursued:

Creating freedom of action by means of early and systematic identification of opportunities and risks
Increasing reaction speed through transparency and timely communication of opportunities and risks
Supporting the company management in assessing the expected development of the Group with its main opportunities and risks
Reducing potential liability risks
Raising employees' awareness of risk-conscious and autonomous self-monitoring
Ensuring the company's continued existence as a going concern

The Highlight Group's risk management system comprises risks and opportunities in equal measure. In line with the decentralized Group structure, operational responsibility for dealing with risks lies with the respective risk officers. These are mainly the directors and committee members, or the management members and department managers of the individual subsidiaries.

Management report

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The factors underlying the risks and opportunities are identified and assessed on a quarterly basis and approved by the risk officers. At Group level, the reported factors are standardized and consolidated where appropriate. Potential risks to the company as a going concern are required to be reported immediately. Please also refer to the reports on risks and opportunities of Sport1 Medien GmbH and Constantin Film AG.

In the periodic report, the cause and effects of the factors are described, as well as possible early warning indicators and measures that are planned or have already been taken. If a loss or a measure can be quantified meaningfully, this value is determined and stated. If quantification is not reasonably possible, the possible loss is described verbally and classified in one of the categories "immaterial", "limited", "high" or "serious". The same applies to the probability of occurrence with the categories "low", "medium", "high" and "very high".

The product of the probability of occurrence and the level of loss results in the following risk levels:

Small risks
Small risks are immaterial to the company and no risk reduction measures must be agreed.
Medium risks
Medium risks exist in the case of a limited level of loss and a medium probability of occurrence. There is no need for immediate action. Efficient and effective measures are sufficient to reduce medium risks or to overcome them quickly if they occur.
Significant risks
In comparison to medium risks, significant risks have a higher level of loss or a higher probability of occurrence. They should be reduced by means of suitable controls or process optimization. If possible, suitable measures should be used to reduce the significant gross risk to the medium or small risk level.
Large risks
Large risks may in some circumstances threaten the existence of an organizational unit or of the entire Highlight Group as a going concern. Measures to reduce the gross risk are imperative and must be initiated immediately. The implementation of the measures is monitored by the management. Large risks must be reported to the management immediately, independently from the periodic reporting.

The net risk is derived from the potential gross loss, the probability of occurrence and the effect of the measures. To improve the structure, risks are divided into the categories of regulatory risks, business and market risks, operational risks, financial risks, legal risks and compliance risks.

In particular, risks beyond the control of the Group and risks arising from legal regulation often cannot be actively managed and avoided. Furthermore, risks with an extremely low or non-measurable probability of occurrence combined with a potentially major effect are not reliably determined. This includes unexpected and unavoidable events (force majeure).

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INFORMATION ON INDIVIDUAL RISKS

Individual risks, their risk factors and their effects are set out below. The risks are presented in groups in line with the RMS risk categories. The presentation in the risk report has a higher level of aggregation than in the RMS itself. Within each category, the risks whose impact on the net assets, financial position and results of operations is considered highest are listed first. Unless otherwise specified, the risks apply to all segments. If the classification of the risk does not make any reference to the measures taken, then this relates to classification as a gross risk.

If a risk factor may threaten the existence of a significant organizational unit as a going concern, this is referred to in the following. The same applies if a risk threatens the existence of the Group as a going concern.

Regulatory risks

The Highlight Group's business models are highly dependent on legislation, legal practice and regulatory intervention by public authorities

Regulatory interventions, changes in legislation, or legal proceedings may have a negative impact on the cost or revenue structure. For example, they could lead to restrictions for customers when purchasing licenses. A drastic change in licensing practice in the Film segment could have a negative impact on the business model. The following factors have a notable effect on this risk:

The current German Film Funding Act (Filmförderungsgesetz, FFG) expired at the end of 2024. With the entry into force of the amended Film Funding Act on January 1, 2025, the FFA film and distribution funding, which is financed by levies, will be awarded largely according to the reference principle: A film collects reference points according to certain criteria, the value of which is initially awarded as funding and can then be used. As an innovation of the FFG 2025, screenwriters and directors will also receive a share of the reference funds in the future. Unfortunately, the implementation of the other pillars, which was originally planned to take place at the same time, could not be launched on January 1, 2025. As further "pillars" for a reform of film funding, the federal government has planned a reform of the guidelines for jury-based cultural film funding by the federal government, the introduction of a tax incentive model for film and series productions, and an investment obligation for streamers and media library providers, in addition to the new FFG.
Furthermore, the incentives provided by the German Federal Film Fund and the German Motion Picture Fund continued to be available in 2025. On February 1, the funding rate was increased to a uniform 30% of German production costs. This is crucial to keep pace with international competition and thus maintain Germany's attractiveness as a film location.
The financial success of theatrical production and distribution is still largely dependent on the German film subsidy framework, hence there is a risk of such subsidies being reduced. The Constantin Film Group is constantly monitoring developments in the area of film subsidies in order to satisfy the relevant criteria for its productions and to participate in subsidies.

Management report

100

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In addition to the above proceedings, a number of other legislative proceedings are underway at national and EU level that could affect the Constantin Film Group, such as regulations to modify copyright contract law at national level of the amendment of the geo-blocking regulation at EU level.
In February 2026, the federal government and the coalition parties in the German Bundestag agreed on a statutory investment obligation for streaming services and television broadcasters.
The combination of voluntary investment commitments as part of individually negotiated industry agreements that include rights provisions on the one hand and a legally mandated baseline investment quota for streamers and broadcasters in Germany on the other provides the greatest possible economic flexibility and secures investments in Germany.
In addition, the federal government launched its "film booster", which will increase funding for commercial film promotion to EUR 250 million per year. This means almost twice as much funding will be available in the long term.
The sale of advertising time to providers of products such as sports betting, online casinos, lotteries or poker schools is heavily regulated. Regulatory measures such as concessions, prohibitions, or other restrictions could change the economic conditions for providers of these products, which could have an indirect effect on the planned sales.
In this context, possible administrative proceedings or antitrust proceedings against companies of the Group in terms of the advertising of these products could also have a direct negative effect on the recognition of sales and possibly lead to increased costs.
The draft e-Privacy Regulation, which is intended to regulate the use of cookies and similar technologies, the admissibility of creating user profiles (tracking, profiling, retargeting) or measures on the use of personal data, is still pending the EU legislative procedure.

As countermeasures, the Highlight Group keeps track of the relevant rulings and legislative proposals and attempts to form contacts with political decision-makers by means of lobbying and external studies.

In light of the possible effects, this risk continues to be classified as significant overall.

Management report

Business and market risks

The Highlight Group requires access to licenses and source material

The Highlight Group requires access to exploitation rights for its product portfolio. The following factors have a notable effect on this risk:

In the Film segment, access to and acquisition of rights to literary works, exploitation rights and screenplays, as well as the conclusion of contracts with successful directors, actors and licensors are important factors for the production of TV and theatrical movies. The Constantin Film Group therefore has decades of experience working closely with renowned and experienced screenwriters, directors and producers with extensive expertise in producing theatrical movies and TV formats at home and abroad. The willingness of streaming services to make new investments is also declining. Investment is increasingly focused on content that is already established. This is increasing competition and uncertainty in project financing.
In the Film segment, third-party productions are generally acquired on individual film markets. Various prices are paid here depending on the particular project and the specific market. Usually, the film has not yet been made at this point, but the rights are sold in advance for financing. Nonetheless, films bought at a high price can adversely affect the Group's net assets, financial position and results of operations if they are a complete failure.
In a multi-year cooperation, national and international own and co-productions from the Constantin Film Group are first offered on SVoD to Netflix subscribers just ten to twelve months after their theatrical release. In return, the streaming platform makes a relevant contribution to the financing of the productions. This contract will be replaced by the output deal with HBO Max from January 1, 2026. Under this collaboration, German and international theatrical productions will be available to HBO subscribers on SVoD just ten months after their theatrical release in the years to come.
In order to operate its platforms, the SPORT1 MEDIEN Group is dependent on attractive broadcast rights to sports events and programming formats. The relicensing of exploitation rights for sports events or programming formats can entail an increase in the planned license costs. The unavailability of broadcast rights to sports events, including on account of greater competition such as OTT platforms, or an increase in license costs in the future could lead to the SPORT1 MEDIEN Group lacking attractive content for its TV stations or other platforms. This would mean lower market share, lower advertising or sponsorship revenue and lower pay TV revenue.

These risks are monitored by experienced employees responsible for purchasing rights and licenses at the relevant subsidiaries. Firstly, source material, films and rights are acquired on a long-term basis where possible in order to build up an inventory of material that reduces uncertainty in the planning period. Secondly, the development of alternative formats and in-house productions is being continuously expanded so as to create a certain degree of independence from third-party rights. In the Film segment, the "Constantin Film" brand plays an important role as the leading independent German film producer and distributor.

Overall, this risk continues to be classified as significant.

The Highlight Group is in intense competition regarding sales of its products

The Group's sales planning assumes certain market shares, audience figures and proceeds from the different stages of exploitation. If these assumptions are not matched, the planned sales may not be achieved. There is also a risk that it may not be possible to adapt the cost structure in a timely manner. The following factors are notable in this context:

Market changes in the movie-theater or the home entertainment sector, such as falling audience and sales figures or growing competition, could be linked with a drop in prices for productions and licensed products. The expiry of framework agreements or a deterioration in the economic situation of licensees can lead to falling sale prices for licenses and thus threaten the intrinsic value of the film assets.
Increasing production and distribution activities by relevant/competing independents and majors and by distributors on the German-language market could lead to falling margins in theatrical distribution. The effects of the coronavirus pandemic will influence the movie theater market for a long time. The regulatory closures and restrictions imposed in the past have a negative impact on theatrical distribution. The market will take a long time to recover. It can also be assumed that consumers' patterns of use have changed. Only when the markets have been working over a certain period again will a more detailed analysis be possible. Due to the pandemic-related restrictions, some movie theater operators have encountered financial difficulties. There is a risk that in some individual cases businesses may no longer be solvent after the subsidies cease to apply. It is difficult to assess what effects will arise from the tense economic situation, including in relation to the Middle-East conflict, the rise in energy and food prices, the cost of living, the shortage of skilled workers, etc. Persistently high inflation could lead consumers to reduce their entertainment budgets, which in turn is likely to result in fewer trips to the movies. Movie theaters are now facing the challenge of reaching the level they were at before the coronavirus pandemic.
New streaming providers could increase the fight for end customers and the pressure on television stations. Reach and revenue power could fall for private stations in particular, leading to a decline in market share. Moreover, a potential economic slump could result in declining advertising revenue and accompanying budget reductions for the private free TV stations. There is a risk that both public broadcasters due to stagnating broadcasting fees and private broadcasters due to shrinking advertising revenue could have considerably decreasing budgets for the acquisition and licensing of transmission rights. This could result in a decline in commissions.
A strong competitive environment could result in decreasing margins in theatrical distribution business.
There is not inconsiderable competition for advertisers' limited budgets, coupled with a rising number of TV broadcasters and other potential advertising platforms. Declining advertising investment and falling prices in the marketing of airtime and ad space could have a material impact on the Group's sales and earnings performance.

General economic fluctuations have a direct impact on the advertising market. This could lead to decreasing advertising budgets and spending by advertisers and thus lower sales at Sport1 GmbH.
The changes or adjustments to AGF Videoforschung GmbH's television panel weighting model can lead to an unplanned loss of market share for the free TV broadcaster SPORT1, and as a consequence of this possibly to declining prices in the marketing of airtime and ad space.
Because reach, market shares and subscriber numbers in particular are key factors for the amount of advertising revenue and sales that can be generated, the SPORT1 MEDIEN Group endeavors to expand its market shares via targeted, sought-after program content for its TV stations and other platforms in order to increase its competitiveness and to raise the profile and enhance the image of products through expenses for marketing them.

The Group's diversification in unrelated products and markets reduces the risk of competition in an individual area/segment. Because market shares and audience figures in particular are key factors for the amount of revenue that can be generated, the Highlight Group endeavors to gain possession of attractive program content for TV stations and other platforms and for its theatrical movies and TV productions in order to increase its competitiveness and to raise the profile and enhance the appeal of products through higher expenses for marketing them.

Accordingly, this risk continues to be classified as significant.

The Highlight Group is dependent on customers and business partners

Like any other enterprise, the Highlight Group is dependent on customers, suppliers and other business partners. The media and entertainment industry involves specific requirements. If contracts with key customers or business partners expire, are not extended or are terminated during their term, this could have a significant negative impact on sales and earnings in subsequent periods. The following factors are significant in this context:

In the Sports and Event segment, the TEAM Group is dependent on the major client UEFA.
With regard to the exploitation of theatrical productions, the Group is dependent on Sky Deutschland Fernsehen GmbH & Co. KG at the pay TV exploitation stage, as a considerable portion of its pay TV license sales is generated with this partner. If framework agreements are not extended, or are extended only at considerably worse terms, this could result in declining sales for the Highlight Group.
There is a dependence on the major German free TV and pay TV stations, as a considerable part of production costs is covered by sublicensing TV transmission rights to theatrical movies. If contracts with key customers or business partners expire, are not extended or are terminated during their term, this could have a significant negative impact on sales and earnings in subsequent periods.

Management report

In the case of TV service productions, the Constantin Film Group relies on continuous commissions. At some subsidiaries, there remains a dependence on a few major projects with a correspondingly high sales share. In the German TV station market, there is a small number of customers for a large number of producers. The individual TV stations therefore have a strong market position that can have an adverse effect on the margins that the Constantin Film Group can achieve.
The market for TV ad time is defined by concentrated structures on both the supply and the demand sides. On the demand side, there are essentially seven large associations of media agencies that, in turn, typically consist of a number of smaller agencies. Their counterparts on the supply side are mainly the two private broadcast groups RTL and ProSiebenSat.1 and the public broadcasters, along with independent marketing companies, which include Sport1 Media GmbH and Magic Sports Media GmbH, which market SPORT1's platforms and content. If advertising budgets diminish, the price level for airspace marketing falls or customers cease to operate, this could have significant consequences for the company's sales and earnings performance. A further increase in competitive intensity on the German advertising market can currently be observed.

There are long-term relationships with technical service providers, which are necessary for uninterrupted broadcasting. Early termination or non-renewal of certain supplier agreements could result in higher costs due to the search for new partners and the establishment of new structures.

Overall, this risk continues to be classified as a significant risk.

The business models are dependent on catering to customers' tastes and the way in which content is consumed and reacting quickly to changes

The changes in patterns of use and the technical possibilities for handling media may have the effect that consumers use Highlight Group's product portfolio less than planned, causing it to lose appeal, range or relevance and meaning that the planned sales consequently are not achieved. The following factors are particularly relevant:

Due to technical possibilities for producing illegal copies of movies, the difficulties involved in taking down pages on relevant streaming/movie portals to prevent copyright violations, and insufficient legal protection of lawful copyright exploitation, there is a risk of lost sales.
In the already changing market environment for in-home viewing, both the provider structure and in particular consumer behavior have changed further as a result of the coronavirus pandemic. The constantly growing digital market, and particularly SVoD exploitation, are continuing to develop positively. The decline in sales of physical audiovisual storage media is continuing. Analyzing the opportunities and risks for content producers as a result of this development, which is driven chiefly by IP-based offers such as SVoD, is a central topic of Constantin Film's strategic discussions.

There are contracts in place with the key cable network, satellite and platform operators in Germany to secure the digital distribution of the channels operated by Sport1 GmbH in the medium term. However, contractual termination rights or changing legal requirements and competitor conduct on other channels could have a negative impact on the cable distribution of SPORT1 and the distribution of pay TV programming in general.
The SPORT1 MEDIEN Group's strategy is to maintain or extend the maximum possible reach via long-term contracts with the cable network, satellite and platform operators based in the broadcasting area. In addition, the actively pursued media policy ensures access and findability for stations such as SPORT1 free of discrimination and above all with the same opportunities as other providers, especially the large broadcasting groups. The Group also attaches great importance to auspicious channel planning, which is an important decision-making criterion when it comes to assigning cable channels and especially findability in the digital environment.
Analog cable distribution is gradually being discontinued in Germany. Since the middle of 2019, the relevant cable network operators will halt analog TV broadcasts, relying instead on digital channels. Media institutions do not currently assign capacity on digital cable for private broadcasters.
As only digital broadcasts will be available in the future, the free TV channel SPORT1 will no longer be just one of 30 analog programs, but rather one of several hundred digital programs. The ability to find channels will therefore be essential to them.

By means of targeted market research and analyses of use, the Highlight Group is attempting to anticipate future trends in terms of both content and technological developments, as is also reflected in the Film segment's digitalization strategy. The appeal of the products is enhanced by developing consumer-friendly programming and source material. The effects of piracy are reduced by means of lobbying, awareness campaigns and systematic prosecution of violations.

Overall, this risk continues to be classified as a significant risk.

Management report

Legal risks

The Highlight Group is subject to risks from legal disputes

As an international enterprise, the Highlight Group is exposed to a number of legal risks. These particularly include risks relating to copyright law, company law and securities trading law. The outcomes of currently pending and future legal proceedings often cannot be reliably predicted, meaning that, among others, court rulings or decisions by public authorities may result in expenses that are not covered, or not fully covered, by insurance policy benefits and could have a negative impact.

As part of the legal support for operating activities, legal risks are identified and assessed qualitatively and quantitatively in terms of their probability of occurrence and potential impact.

Based on the assessments made and the measures taken, this risk is still classified as small.

Operational risks

In the Film segment, the production of a theatrical or TV movie is a cost-intensive and long-term project

Production costs for a German theatrical movie with an average budget are between EUR 3 million and EUR 7 million, while major international productions can be many times this amount. The period from the initial idea to the final marketing stage may last several years. The following factors have a notable effect on this risk:

In TV service productions, the cost risk can be high due to development costs. In the event of non-commissioning, these costs are often only partially borne by the respective broadcaster. Even in the case of an order, there is no requirement for these costs to be added as initial costs to the budget of the respective TV provider.
For TV broadcasters, in terms of tying up big-spending advertising partners, successful coverage and market share performance are important when buying and producing program content. This is why program providers are increasingly reserving the option to back out of a format commissioned in their contracts with producers if it fails to meet ratings expectations. Therefore, producers increasingly face the risk of having productions canceled at short notice.
In the unlikely event of a delay or cancellation of a theatrical or TV service production due to unforeseeable market or project developments, it is possible that already delivered or commissioned services may no longer be usable and additional costs may arise from renewed commissioning of the services.
The lack of budget discipline in terms of release expenses can cause an overspend on film-related marketing costs and reduce a film's contribution margin.
Unlike theatrical movies, international TV series cannot be financed largely by way of advance sales based on the script. Sales cannot generally be made until at least one completed pilot episode has been presented. As a result, production costs have already reached an advanced stage by the time any sales take place.

In addition, advance sales of in-house productions on national and international film markets are declining. At the same time, structures in traditional global distribution have changed, so established distribution channels and revenue models no longer function as well as they used to. This results in a risk that important financing may only be obtained later or not at all. In addition, there is growing uncertainty regarding exploitation opportunities on the international market, which can lead to delays, budget adjustments and a general increase in economic risk for the Constantin Film Group.
The increasing use of artificial intelligence (AI) in film production is reducing production costs across the industry. While the resulting efficiency gains can have a positive effect on in-house productions for the Constantin Film Group, it is increasing the price pressure on service productions. Clients expect producers to use AI-assisted processes and factor the resulting cost benefits into their budget and procurement policies. This could lead to a sustained reduction in margins and increased competitive pressure.

If budget overruns occur in the course of a production, this can then negatively affect a movie's planned gross and therefore its earnings. In addition to the regular monitoring of production costs, movie insurance and completion bonds in particular are agreed to help ensure the completion of a movie.

Constantin Film AG is applying for formats at various broadcasters and program providers/distribution platforms in Germany and abroad and has entered into development contracts for series and non-series formats. Thanks to its long-term experience in producing movies, Constantin Film AG has usually managed to fully cover production costs with the exploitation sales in the past. Furthermore, Constantin Film AG kept film productions on schedule and on budget and largely avoided unplanned costs or insured against them.

Overall, this risk continues to be classified as a medium risk.

The Highlight Group is dependent on a secure and well-functioning IT infrastructure

The Highlight Group depends on smooth functioning of its IT systems in order to ensure smooth operations. Despite security measures such as access control systems, contingency plans and an uninterruptible power supply for critical systems, back-up systems and regular data mirroring, it cannot be ruled out that the protection against damage from a failure of its IT systems may prove insufficient.

In the event of a failure of the IT systems, theft of company data or manipulation of the company's IT, there could be negative effects on operations and thus on earnings.

The risks with regard to unauthorized access to company data are largely eliminated by using virus scanners and firewall systems. In addition, the Group has taken measures to keep the existing IT service landscape in line with the current technological standard and to counteract the obsolescence process in device and program technology, which was also examined as part of a cyber risk assessment. Training courses are also provided to raise awareness of security among the employees.

An outflow of company data to external AI cannot be ruled out either.

Taking into account the effects of the countermeasures, this risk continues to be classified in the medium risk level.

Management report

The Highlight Group is dependent on the creativity, commitment and expertise of its employees

The future success of the Highlight Group depends to a significant extent on the performance of its managers and employees. There is intense and increasing competition for staff with the relevant qualifications and knowledge of the industry.

The Highlight Group therefore cannot guarantee that it will be able to retain its highly qualified and committed staff and gain new employees with the relevant qualifications in future.

If qualified staff or key personnel leave the Group, this could lead to a loss of expertise and give rise to unplanned costs for the recruitment and orientation of new staff, which would have negative effects on earnings.

To minimize this risk, target agreement and feedback discussions are held on a regular basis. In addition, the Highlight Group offers an attractive work environment, appropriate compensation and opportunities for development. To increase the Group's appeal as an employer on the recruitment market, increased investments have been made in social networks and job portals.

Overall, this risk continues to be classified in the small risk level.

The Highlight Group could have insufficient insurance against damages and claims

The Highlight Group decides on the type and scope of insurance cover on the basis of a business analysis of the costs and benefits in order to cover the risks it considers significant. However, the Highlight Group cannot guarantee that it will not suffer losses or that no claims will be raised that go beyond the scope of the existing insurance cover.

If the Highlight Group suffers material damages for which there is no insurance cover, or only insufficient insurance cover, this could have negative effects on earnings. In the event of damages, third-party claims or replacement investments would have to be financed from own resources.

Overall, this risk continues to be classified in the small risk level.

Compliance risks

Despite the existing control and monitoring systems in the Highlight Group, these may prove insufficient to prevent violations of the law by employees, representatives, external service providers or partners, and to detect violations of the law that have already taken place

It is not possible for the Highlight Group to comprehensively monitor the activities of employees, representatives and partners in paving the way for business with customers. If it transpires that persons whose actions are attributable to the Highlight Group accept or grant unfair advantages in connection with paving the way for business or use other corrupt business practices, this could lead to legal sanctions under Swiss and German law and under the law of other countries in which the Highlight Group operates. Possible sanctions could include substantial fines or a loss of orders.

This could have a negative impact on earnings and cause damage to the Highlight Group's reputation.

Overall, this risk continues to be classified in the small risk level.

Financial risks

The risks associated with financing are described in detail in note 8, disclosures on financial risk management, of the notes to the consolidated financial statements. The Group uses corresponding hedges for currency and interest rate risks where appropriate.

The Highlight Group is subject to the credit risk

A credit risk exists if a debtor cannot pay a receivable or cannot pay it on time. Credit risks include direct counterparty risk and the risk of deterioration in credit quality.

Potential risks of default on customer receivables are assessed regularly and allowances for bad debts are recognized if necessary. Furthermore, the Group also hedges the risk of default due to insolvency of a debtor by obtaining credit rating information. Therefore, the Group rates its credit quality for receivables that are neither overdue nor impaired as predominantly good.

Default on receivables from customers could have a negative impact on earnings.

Taking into account the measures implemented, this risk continues to be classified as a small risk.

The Highlight Group is subject to liquidity risks

Liquidity risks arise when the Group's payment obligations cannot be covered by its available liquidity or by corresponding credit facilities. As of the end of the reporting period, the Highlight Group had liquidity reserves taking into account the available short-term credit facilities. Nonetheless, it cannot be ruled out that the guarantee or master credit agreements in place will be canceled or not renewed by individual banks or investors, with the result that the Highlight Group, even taking into account the free working capital facilities, is forced to borrow further debt capital on the capital market or from banks, at short notice or in the medium term, to finance new projects or to refinance existing financial liabilities.

Therefore, there is the risk that, in the event of a deterioration of the Group's economic situation, further funding may not be available or not be available to a sufficient extent, or could only be available at more disadvantageous terms. If the Highlight Group does not service the respective loans when due or does not repay them following termination or at the end of their term, there is a risk that the respective lender may liquidate the assets pledged as security by the Highlight Group. In the event of such liquidation, there is a risk that assets might have to be sold below their actual value, which would have a significant negative impact on earnings.

Parts of the credit facilities in Constantin Film's license trading and the revolving credit facility for production have to be renegotiated on a regular basis. All other credit facilities are renewed annually. The persistently strained overall economic situation is leading to more restrictive lending practices on the part of banks and other financing institutions.

Overall, this risk is classified as a significant risk.

Management report

The Highlight Group is exposed to currency risks

These currency risks mainly relate to the euro, the US dollar and the Canadian dollar.

In significant transactions, the Group attempts to reduce currency risks by using suitable derivative financial instruments. However, it cannot be ensured that the currency hedging measures taken by the Group are sufficient, and that fluctuations in exchange rates will not have a negative impact on earnings.

In view of the fact that the EUR/CHF exchange rate recovered in the past reporting period compared to the previous years, this risk is currently still assessed as a medium risk.

The Highlight Group is subject to the risk of changes in interest rates

Interest rate risks primarily relate to current and non-current financial liabilities. There is also an interest rate risk resulting from the mismatching of maturities.

At the current time, the Highlight Group has fixed-rate and floating-rate current financial liabilities and fixed-rate non-current financial liabilities.

Risks from changes in the interest rates for financial liabilities may have a negative impact on earnings.

The Constantin Film Group interest rate risks primarily relate to financial liabilities. On July 24, 2025, the European Central Bank (ECB) left the key interest rate at 2.0% after seven consecutive cuts. At the end of 2025, the key interest rate remains unchanged at 2.0%. There is also an interest rate risk resulting from the mismatching of maturities. As a countermeasure, the yield curve is analyzed in order to arrange maturity-matched financing for non-current receivables using interest rate swaps.

Overall, this risk continues to be classified in the small risk level.

The Highlight Group is subject to risks in the measurement of financial and non-financial assets

As of the end of the reporting period, the Highlight Group held material financial and non-financial assets such as film assets, other intangible assets, goodwill as well as other non-current financial assets.

The Highlight Group's goodwill and film assets are tested for impairment at least once a year or more frequently if there are indications of impairment.

If there is no market value available, the evaluation approach includes management estimates and assumptions on the basis of premises that reflect the most recent information available. Actual developments, which are often beyond the company's control, may overtake the assumptions made and require the carrying amounts to be adjusted. This can have a negative impact on earnings.

Overall, this risk continues to be classified in the medium risk level.

Despite proper processes and careful checks, the Highlight Group cannot rule out risks in connection with future tax or social security audits

Highlight Communications AG believes that the tax returns and details for the social security agencies prepared within the Group were submitted completely and correctly. Nonetheless, there is a risk that additional tax claims could be made, particularly in light of the complex regulations on sales tax and withholding tax in the media industry. In the event of a social security audit within the Highlight Group, it also cannot be ruled out that the social security agency may arrive at a different perception of the social security contributions, resulting in additional claims against the Highlight Group.

If differing tax assessments or additional social security claims arise, this could have a negative impact on earnings.

Overall, this risk continues to be classified in the small risk level.

OPPORTUNITY MANAGEMENT SYSTEM

Similarly to risk management, the Highlight Group's opportunity management has the objective of implementing the strategic and operational goals rapidly and efficiently by means of specific activities. Opportunities may arise in any area. Identifying opportunities and taking advantage of them in a target-oriented way is a management task that is involved in day-to-day decision-making.

To improve the structuring and communication of the opportunity portfolio, the existing risk management system (RMS) was supplemented by the identification and assessment of opportunities. The corresponding guidelines and procedures also apply.

In line with the definition of the term "risk", the Highlight Group defines an opportunity as a possible future development or event that may lead to a positive deviation from forecasts/targets for the company. This means that events that are already included in the budget planning or the medium-term planning do not represent opportunities according to this definition and are not reported below. As with risks, opportunities are classified in four categories: "minor", "medium", "significant" and "high".

Management report

INFORMATION ON INDIVIDUAL OPPORTUNITIES

Individual opportunities, their factors and their effects are set out below. The opportunities are presented in groups in line with the RMS opportunity categories. The presentation in the opportunity report has a higher level of aggregation than in the RMS itself.

Business and market opportunities

The Highlight Group sees opportunities in implementing the digital transformation strategy

Advancing digitization is changing the individual patterns of media use. For some time, the Highlight Group has been vigorously developing its business models, thus actively promoting digital transformation within the Group, for example by way of licensing agreements with digital distribution providers, new forms of digital marketing or productions for international and national providers such as Netflix. The broad operational positioning that covers the categories of Sports- and Event-Marketing and Film and Entertainment, the excellent and in several cases leading market positions of the Group's business, and its strong, well-known brands represent clear advantages in a media world that is undergoing massive upheaval. The shift towards digital evaluation channels, which was already apparent in the market before the coronavirus pandemic, could accelerate further as a result. In times of crisis, streaming in particular could benefit greatly from people's growing need for variety and entertainment, and from increased leisure time - with the result of stronger than anticipated content demand among streaming providers. In addition to this "added effect", the exclusively digital exploitation by streaming services of movies originally intended to be released in theaters first could enable a kind of "substitute business". The company is therefore increasingly monitoring the advantages and disadvantages of the possible forms of exploitation, and has suitable structures to respond relatively flexibly to the lessons learned.

The planning of the sales that can be generated using these business models is based on cautious assumptions. There is the chance that actual development will be far better than the assumptions made and that digital transformation results in increased sales more quickly than anticipated.

This opportunity continues to be classified as medium.

Operational opportunities

The Highlight Group sees opportunities in the exploitation and development of licenses, formats and source material that have already been secured, as well as in the connection to a distinctive network

The Highlight Group already has a range of exploitation or marketing rights for sports and entertainment events that are important for its operating activities in the different segments, as well as film rights and source material. This establishes the basis for generating sales beyond the planning period as well. The Group's image and the maintenance and updating of a distinctive network will continue to facilitate access to these rights in the future.

Attractive film rights and source material for films that have already been secured could lead to higher sales than planned along the entire exploitation chain if they suit customers' tastes better than expected. In particular, there is the option of international relaunches of existing established intellectual property/brands belonging to the Constantin Film Group.

Advancing digitalization is changing the individual patterns of media use. Therefore, the SPORT1 MEDIEN Group's strategy includes identifying relevant trends and deriving promising business models from them. The following factors are decisive for the management:

The expansion and establishment of existing and new mobile offerings in the sports and entertainment sector with the aim of benefiting as much as possible from the increasing use of mobile devices. In light of the potential reach on all mobile devices, this creates an opportunity for increasing revenue through new responsive marketing products and cooperations with new platforms and partner networks.

Another clear trend in consumers' media use is the sharp rise in the use of video content on all digital platforms. In order to benefit from this development, the Group continues to enhance its digital video infrastructure on the basis of data in order to increase the amount of content available, reduce editorial processing times and enable individual user recommendations for further video content. In order to maintain the relevant quantity and quality of content, SPORT1 has acquired the clip rights for the Bundesliga and Bundesliga 2 and can editorially expand the content portfolio in line with the trend. There is an opportunity to generate additional, unplanned sales through the exclusive marketing of these digital rights.

This opportunity continues to be classified as medium.

SUMMARY OF THE OPPORTUNITY AND RISK SITUATION

In line with the RMS directive, the risks and opportunities reported by the individual risk officers are combined, aggregated and assessed at the level of the Group as a whole. The decentralized Group structure is taken into account here. The officers at the company concerned are responsible for full and accurate identification, assessment and communication of opportunities and risks.

Based on the available information and estimates, particularly for probabilities of occurrence, maximum losses and the effect of the countermeasures taken, the Board of Directors of Highlight Communications AG has come to the conclusion that these risks cast significant doubt on the Group's ability to continue as a going concern. The consolidated financial statements do not include any adjustments that would result if the Group were unable to continue as a going concern. This applies to the risks both on an individual basis and also in combination, provided the effect of the combined risks can be meaningfully simulated or estimated in another way.

In summary, three risk clusters can be identified: The first category comprises risks originating externally, which arise in particular from regulatory interventions and legal requirements and are difficult to influence. These topics are monitored closely in order to identify unfavorable developments at an early stage. In general, the effect of these topics is inherently not short-term, meaning that it is possible to respond to them with adjustments in the planning process. The second category covers topics that the Group management knowingly accepts for reasons relating to the implementation of the business strategy. These include in particular risks arising from film and TV production and access to license rights and source material and risks relating to sales, taste and consumers. The Group management believes that the effects of these risks are manageable in relation to the income opportunities arising from the business areas concerned. By monitoring key indicators, it is possible to identify whether this relationship between risk and opportunity is worsening on a long-term basis in individual areas. If so, this can be addressed by adapting the strategy. The last group comprises operational risks and particularly includes business risks, safety and security plans, contractual/financial obligations, safeguarding liquidity, and legal risks. These are controlled by the Group management by way of guidelines and process checks and by consulting external advisors, thereby ensuring that the residual risk remains at an economically acceptable level.

Management report

The Group management continues to see the biggest opportunities in the rigorous expansion of the digital strategy and the potential afforded by a transformation of the media world. There are further opportunities arising from the continuous maintenance of existing business relationships, the establishment of new partnerships and the diversification of business activities in the two established segments.

All the Group companies are established in their respective sectors, can access a broad network of technical and creative energy, and respond quickly to changes. Accordingly, the Group management believes that the measures taken keep the risk to an economically acceptable level and considers the Group's risk-bearing capacity to be sufficient. At the same time, it is rigorously pursuing the existing opportunities.

INTERNAL CONTROL SYSTEM (ICS) AND RISK MANAGEMENT SYSTEM IN RELATION TO THE GROUP ACCOUNTING PROCESS

The Highlight Group's accounting-related Internal Control System (ICS) comprises the measures to ensure complete, correct and timely transfer of relevant information required for the preparation of the annual financial statements, the consolidated financial statements and the Group management report. This is intended to minimize risks of misstatements in the accounting and external reporting.

Like the risk management system, the ICS also follows the general principles of the overall framework for "enterprise risk management", as developed by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

Accounting within the Highlight Group is organized on a decentralized basis. While separate departments exist at the levels of the subgroups, Highlight Communications AG supports its direct subsidiaries with specific accounting-related issues. The separate financial statements of Highlight Communications AG and its subsidiaries are prepared in accordance with the legal regulations of the individual countries. To fulfill the requirements to prepare consolidated financial statements in accordance with the provisions of IFRS, reconciliations are prepared for all companies included in the Group and are reported to Group Accounting. The accounting provisions in the Highlight Group regulate uniform accounting policies and define a uniform chart of accounts throughout the Group in accordance with the applicable IFRS provisions. Laws, accounting standards and other pronouncements are analyzed on an ongoing basis with regard to whether and to what extent they are relevant and how they affect the accounting. Relevant requirements are, for example, set out in the Group accounting directive and communicated. Together with the financial reporting calendar that applies throughout the Group, they represent the basis for the process of preparing the financial statements. In addition, supplementary procedural instructions, standardized report forms, IT systems and IT-based reporting and consolidation processes support the process of uniform and correct Group accounting. Where necessary, we also use external service providers, for instance to measure pension liabilities. The qualifications of the employees involved in the accounting process are ensured by means of suitable selection processes and regular training.

The specific control activities performed at Group level to ensure proper and reliable Group accounting comprise the analysis and, where necessary, the correction of the separate financial statements presented by the Group companies. Clear delimitations of responsibilities and process-integrated controls such as the use of the dual control principle constitute additional control measures. The correctness and effectiveness of the internal control system is ensured on an annual basis by process-independent auditing activities by the Internal Audit department and is regularly reported to the Group management and the Board of Directors.

RISKS AND OPPORTUNITIES OF HIGHLIGHT COMMUNICATIONS AG

The financial statements of Highlight Communications AG are largely impacted by the risks and opportunities of the subsidiaries, as it is directly involved as a financial holding company and parent company. Accordingly, the above-mentioned opportunities and risks also apply to Highlight Communications AG.

The risks and opportunities may impact Highlight Communications AG at a different time from when they impact the operating subsidiaries.

Based on financial forecasts approved by the Board of Directors and the currently available liquid funds, management believes that the Group will have sufficient financial resources to continue its business operations for a period of at least twelve months as of the date of the approval of the consolidated financial statements. This assessment is based in particular on the expectation that existing financing arrangements can be extended or that alternative sources of financing can be obtained.

securing sufficient liquidity to cover ongoing business operations for a period of at least twelve months;
the refinancing of a financial liability owed to a banking syndicate amounting to CHF 74.5 million, which is contractually due for repayment on November 30, 2026; and
the extension or restructuring of liabilities from licence agreements amounting to EUR 57.5 million, which were due as of the reporting date.

The credit facility of Highlight Communications AG amounting to CHF 74.5 million is secured by shares in Constantin Film AG and TEAM Holding AG as well as by equity interests in Sport1 Medien GmbH (formerly Sport1 Medien AG). A single maturity date of November 30, 2026 has been agreed for the entire credit facility. The facility includes strict financial covenants, in particular the requirement to achieve a minimum consolidated EBITDA as well as defined milestones for the disposal of specific assets of the Group. In the event that these covenants are not met, the liability may become immediately repayable.

The liabilities arising from licence agreements in the amount of EUR 57.5 million are secured by shares in Sport1 Digital GmbH.

Management report

FORECAST

GENERAL ECONOMIC ENVIRONMENT

In its current “World Economic Outlook” dated January 2026, the International Monetary Fund (IMF) surprisingly forecasts a stable economic situation in 2026. According to the IMF, this stability is the result of a balance of opposing forces. Trade policy is slowing growth on the one hand, while tech investments are driving growth on the other. The global reduction in inflation will continue in 2026. In the United States, however, inflation is approaching the target value more slowly than in other major economies. Overall, global financial conditions will continue to support growth in 2026, driven primarily by favorable monetary policy, strong asset prices, and broad access to capital markets. At the same time, there are risks that could lead to a greater shortage of financing in the event of shocks, particularly if risks in the tech sector or rising debt materialize. According to the experts, the growth rate for global economic output in 2026 is 3.3%. This is attributed to rising investments, particularly in the technology and AI sector, which are supporting the growth momentum. According to the IMF, global inflation is likely to continue to fall from an estimated 4.1% in 2025 to 3.8% in 2026 and further to 3.4% in 2027. The report cites a continued decline in demand and falling energy prices as the main reasons, with energy prices expected to decrease by around 7% overall in 2026.

For the United States, the report also forecasts robust growth above the global average, driven by continued strong consumer spending and dynamic investments in new technologies that support both productivity and demand.

In Europe, especially in the euro area, growth is expected to be moderate at around 1.3% in 2026, which is mainly due to ongoing structural challenges in industry and the after-effects of high energy prices, which are slowing the pace of recovery.

According to its December 2025 forecasts for 2026, the State Secretariat for Economic Affairs (SECO) expects the Swiss economy to grow by 1.1%, following 1.4% in 2025. For 2027, SECO expects an economic recovery in Switzerland with growth of 1.7%.

MEDIA AND ENTERTAINMENT MARKET ENVIRONMENT IN GERMANY

Developments in the field of artificial intelligence are having a major impact on the industry. AI-generated content is putting the industry under heavy pressure, especially as budgets are stagnating at the same time. On the other hand, the use of artificial intelligence also offers major opportunities in all areas of the entertainment and media industry. There is a particular focus on applications that can increase the efficiency of various processes.

The audit company PricewaterhouseCoopers (PwC) expects the German entertainment and media industry to grow by an average of 2.5% annually until 2029, with total sales rising to EUR 126.1 billion by 2029. The industry is growing despite structural changes and changes in consumer behavior. The strongest growth is expected in advertising revenues, among other areas, with average growth of 4.6% per year. Digital sales will also predominate in the advertising segment, while non-digital sales will continue to dominate revenues from distribution. Streaming also remains one of the most important growth factors, with annual growth of 7.9% expected in the “Internet video” segment in particular until 2029.

FOCUS IN FISCAL YEAR 2026

Film segment

Industry conditions

The PwC German Entertainment and Media Outlook 2025 to 2029 forecasts continuous growth in the movie theater market in the coming years. Sales are expected to increase to EUR 1.2 billion in the forecast period up to 2029, which equates to a compound annual growth rate of 4.7%.

The PwC German Entertainment and Media Outlook 2025 to 2029 estimates positive growth rates in the digital home entertainment sector for the following years. Subscription-Video-on-Demand (SVoD) sales are expected to grow at a compound annual growth rate of 5.7% until 2029 and continue to account for around two-thirds of the overall market. Growth is likely to come from the number of subscriptions, which are expected to grow at a stable annual average rate of 6.2%, while average sales per subscription are likely to fall by 0.5% annually. The Transaction-based Video-on-Demand (TVoD) segment is also expected to continue growing until 2029, albeit at an annual average of 1.9%, significantly less than the Advertising-based Video-on-Demand (AVoD) segment, for which compound annual growth of 18.5% is forecast.

By contrast, the German television market will continue to decline slightly until 2029, according to the forecast. An average annual decline of 0.2% is expected. Revenues from consumer subscriptions in pay-TV are expected to undergo an average annual decline of 0.1%. Sales from agency fees and TV advertising revenues are also expected to fall by an annual rate of 1.0% and 1.2%, respectively.

The order situation for service productions has declined overall as a result of the consolidation of the streaming market and savings at public broadcasters. There could be further consolidation in the streaming sector at international and national level in the future. On the other hand, the legal establishment of an investment obligation for TV broadcasters and streaming services is likely to have positive effects. At the same time, national broadcasters are increasing their orders again as the advertising market continues to recover.

Key areas

In theatrical production/acquisition of rights, the Constantin Film Group focuses on continuously optimizing the consistently high quality of its national and international in-house productions. The goal is to produce titles that are heavily geared towards the audience's emotional needs and that are ideally based on well-known brands or are of an event nature. However, productions with smaller budgets and therefore more manageable box office risk are also of interest if they have a convincing concept. Each production is centered around an analysis of the audience segment to be addressed and the commercial quality of the production.

In the area of theatrical distribution, the Constantin Film Group is implementing its proven strategy of combining national and international own and co-productions with high-quality third-party productions and releasing these titles in theaters with a suitable press and marketing strategy at a strategically favorable time. This year, too, estimating the potential success of movies with theatrical exploitation is of crucial importance to the Constantin Film Group.

Management report

Because theatrical exploitation and the associated brand launch continue to provide the foundations for the subsequent stages of exploitation, the Constantin Film Group intends to adopt a product-focused strategy. This means the quantity structures will depend on the extent to which promising titles can be produced or acquired.

As things stand at present, at least nine theatrical releases are planned for 2026. Highlights include the own productions "Der perfekte Urlaub" from director and screenwriter Bora Dağtekin – the sequel to 2019's million-selling hit "Das perfekte Geheimnis" – and "Steckerlfischfiasko", the tenth installment in the popular Eberhofer series. Also on the program is the film adaptation of the bestseller "Die Ältern", directed by Sönke Wortmann, and "Das gewisse Etwas", the German adaptation of the French megahit "A Little Something Extra". Constantin Film is also bringing the international titles "Snake" and "Good Luck, Have Fun, Don't Die" from director Gore Verbinski and the reboot of the "Resident Evil" series directed by Zach Cregger to the big screen in 2026. The productions "Solo Mio" with Kevin James and "The Wizard of the Kremlin" will also be shown in German theaters as licensed titles.

With "Das Kanu des Manitu", "Steckerlfischfiasko", "Regretting You", and "22 Bahnen", to name just a few productions, Constantin Film is once again well positioned in the transactional home entertainment sector for 2026. In SVoD initial exploitation, the theatrical projects "Das Kanu des Manitu", "Regretting You", and "22 Bahnen", among others, will have an impact on sales in 2026. Not least, the digital distribution operated by the Constantin Film Group itself and the continued good sales figures for catalog products are also contributing to the positive outlook for 2026.

In free-TV exploitation, the theatrical projects "Chantal and the Magic Kingdom" ("Chantal im Märchenland"), "Wow! Nachricht aus dem All", and "Das Beste kommt noch!", among others, will have an impact on sales in 2026. In pay-TV, notable revenues will be generated by "In The Lost Lands" and "Bad Genius".

The subsidiaries of Constantin Film AG are constantly working to develop innovative TV formats in the service production business area. In addition to traditional service productions for German TV channels, the Constantin Film Group also realizes productions on behalf of digital platforms such as Netflix or Amazon.

For the coming year, Constantin Film expects demand for content in the area of service and licensed productions for TV channels and streaming services to remain largely stable. The Constantin Film subsidiaries are therefore preparing numerous projects, including further seasons of the dailies "Dahoam is Dahoam" (BR), "Shopping Queen" (VOX), "Die Heiland" (ARD), new episodes of the TV series "Kroatien-Krimi" (ARD) and "Passau-Krimi" (ARD) as well as streaming productions such as a third season of "Achtsam Morden" (Netflix).

With its TV service productions and the TV exploitation of its theatrical productions, the Constantin Film Group is also assuming ratings above the respective network's average for the current year.

Sports and Event segment

Industry conditions

Market outlook and structural trends in the advertising market

The OWM trend barometer shows that only a few companies consider the marketing and media system in Germany to be sufficiently equipped for the coming years. The respondents cite the increasing use of AI and automation as the most important drivers up to 2030, followed by the further fragmentation of the media landscape and the growing need for cross-media measurability. At the same time, online video, connected TV, influencer marketing, social media, and retail media will continue to grow in 2026, according to the trend barometer. Podcasts are also gaining in importance, while search is viewed more cautiously. Traditional channels such as print and linear TV, meanwhile, remain under heavy pressure.

Given the continued economic uncertainty, experts of the JOM Group expect another year of stagnation in 2026. A trend reversal is not foreseeable in the short term; in the best-case scenario, JOM expects slight growth of around 0.5%, provided the economy recovers as expected. Irrespective of this, the shift in advertising budgets towards digital is continuing: platforms such as YouTube, Amazon, and Netflix are winning, while linear TV remains under pressure. JOM sees positive development in out-of-home advertising and retail media. In addition, Google, Amazon, and Meta already account for over 50% of advertising spend in Germany, supplemented by other platforms such as TikTok. JOM sees reliable proof of effectiveness as a key lever for winning back budgets for traditional media.

The advertising holding company Dentsu forecasts an increase in advertising spend of 2.7% in 2026, with further growth in the following years. The trend towards the digitalization of advertising budgets is also continuing here. Digital advertising is expected to grow by 6.7% in 2026; its share of global advertising expenditure is set to rise to 68.7% and to continue to increase until 2028. Online video and social media are the main growth drivers, while retail media is the strongest winner. In TV, Dentsu expects declines in linear television but growth in connected TV and advertising-financed streaming services.

The "Global Ad Trends" report by the British advertising researcher WARC confirms this development. Net growth rates of +5.2% (2026) and +4.6% (2027) are expected for Germany. The majority of investments are flowing into digital channels, particularly social media, while traditional media types continue to lose advertising revenues.

Following a decline in video advertising revenues in 2025, WPP Media expects moderate growth of 1% again from 2026. TV is therefore relatively stable compared with other traditional media but continues to lose market share to dynamically growing digital channels such as search and social media. In contrast, the association of media agencies expects linear TV advertising to decline significantly by 6% in 2026, while video will grow overall, driven almost exclusively by digital formats. TV thus remains relevant in the video category, but the linear model continues to lose economic significance.

Management report

PricewaterhouseCoopers expects a compound annual growth rate of 2.5% for the German entertainment and media industry between 2024 and 2029. Total sales are expected to reach EUR 126.1 billion in 2029. PwC assumes compound annual growth of 4.6% in advertising revenues to EUR 41.7 billion in 2029. At the same time, advertising revenues are increasingly dominated by the digital segments (2024: 59.8% digital vs. 40.2% non-digital).

Development of selected segments:

Books, newspapers, and magazines: average of -2.6% p.a. (books: -1.0% to EUR 7.7 billion; newspapers: -4.5% to EUR 5.0 billion; magazines: -3.4% to EUR 2.0 billion)
Television/TV advertising: average of -0.6% p.a. to EUR 10.2 billion; biggest losses in free-to-air TV
Internet video/OTT: average of +7.9% p.a.; broadcaster VoD advertising to EUR 688.2 million by 2029
Online advertising: average of +7.5% p.a. to EUR 27.8 billion
Out-of-home advertising: average of +4.0% p.a. to EUR 1.8 billion; digital OOH growing by an average of +10.0% p.a., share in 2029: 45.4%
Movie theaters: average of +4.7% p.a. to EUR 1.2 billion
Music, radio, and podcasts: average of +2.3% p.a. to EUR 6.7 billion
Video games and e-sports: average of +3.9% p.a. to EUR 9.9 billion; video games as main driver
Mixed reality: average of +8.7% p.a. to EUR 1.3 billion

Key areas

TEAM Group

In the first half of 2026, the TEAM Group will support UEFA in delivering a successful end to the league phase in the UEFA Champions League and UEFA Europa League. Starting in February, the knock-out stage takes place, concluding with the UEFA Champions League final, which will be played in Budapest (Hungary) at the Puskás Aréna for the first time ever. The finals of the UEFA Europa League and UEFA Conference League will be played in Istanbul (Turkey) and Leipzig (Germany) respectively.

In parallel, the Business Development team will focus on the acquisition of new clients and the expansion of TEAM's portfolio. In addition, TEAM will start the execution of the mandate for the Mexican Football Federation, following TEAM's successful appointment to market the global media rights of the Mexican national teams.

Sport1 Medien GmbH

Highlight Event AG

In 2026, Highlight Event AG will continue to focus primarily on fulfilling all contractual obligations as well as event implementation and consulting.

In addition to the main events – the New Year’s Concert, the Summer Night Concert, and the Eurovision Song Contest – Highlight Event AG will also implement events for the Vienna Philharmonic Orchestra in Boston (March), Hamburg (September), and Tokyo (October). Further activities will focus on selling media rights for the Vienna Philharmonic Orchestra for the coming years.

Another key focus is the sale of European Song Contest sponsorship rights. The Eurovision Song Contest 2026 will take place in Vienna. The partners include Moroccanoil (presenting sponsor), easyJet, and Idealista.

Financial targets of the Highlight Group

It should be noted that the actual results may differ significantly from the expectations for future developments if the underlying assumptions for the forward-looking statements prove to be incorrect.

The Constantin Film Group plans to return to theaters with successful films in the 2026 fiscal year. Overall, the Board of Directors therefore expects revenues from cinema exploitation to remain largely unchanged. Among the candidates with particular commercial potential at the box office is Bora Dağtekin’s new film “Der perfekte Urlaub”, the sequel to the million-dollar hit “Das perfekte Geheimnis” from 2019. “Steckerlfischfiasko,” now the tenth installment in the popular Eberhofer series, as well as the (international) major productions “Resident Evil 8” and “Good Luck, Have Fun, Don’t Die” are further important and promising anchors in a diverse and broad-based cinema lineup with at least nine titles expected.

In home entertainment, sales are expected to be moderately below the previous year’s level. The top titles in the 2026 exploitation lineup in the transactional segment are expected to be “Das Kanu des Manitu” and “Regretting You.” In the SVoD first exploitation, the successful cinema projects “Das Kanu des Manitu,” “Regretting You,” and “22 Bahnen” will have an impact in 2026. Last but not least, high (proportionate) revenues are expected from the international exploitation of productions such as “Resident Evil 8” and “Good Luck, Have Fun, Don’t Die.”

In license trading/TV exploitation (pay TV and free TV), sales from fiction productions are expected to be moderately above the previous year’s level. The successful cinema project “Chantal and the Magic Kingdom” (“Chantal im Märchenland”) will deliver particularly high revenues in 2026. In addition, significant revenues are expected in this category from in-house and co-productions such as “Der Ursprung der Liebe” and from the international exploitation of productions such as “Resident Evil 8” and “In the Lost Lands.”

In the area of commissioned productions for TV stations and streaming services, the Board of Directors expects a slightly lower level of sales in 2026 compared to the previous year. Major projects that will generate significant sales revenues in 2026 include “Dahoam is Dahoam”, Season 24 and “Achtsam Morden”, Season 3. Any initial positive effects in 2026 resulting from the upcoming legal anchoring of the investment obligation for TV stations and streaming services have not yet been taken into account.

Management report

A currently unquantifiable positive potential may arise from license evaluations, especially in the international sector, if additional profit shares can be collected.

The TEAM Group will focus on assisting UEFA in staging the second half of the season. Across the UEFA Champions League, UEFA Europa League, UEFA Conference League and UEFA Super Cup, there will be 550 matches to deliver. In parallel, the Business Development team will resume its focus on acquiring new clients and expanding TEAM's portfolio.

SPORT1 will again focus on the use, distribution and capitalization of content in 2026. In addition to the exploitation of key sports, it is still working intensively on expanding its cross-platform media content to push the diversification of the SPORT1 brand.

Highlight Event AG focuses on fulfilling and securing existing sponsorship agreements for the Eurovision Song Contest.

On the part of the Vienna Philharmonic, the focus is particularly on contract negotiations with media partners for the coming years and the successful staging of events.

Pratteln, April 2026

The Board of Directors

Notes and forward-looking statements

This document contains forward-looking statements that are based on estimates and expectations of the Group management. Words such as "anticipate", "intend", "expect", "can/could", "plan", "intended", "further improvement", "target is", and similar expressions are intended to identify forward-looking statements.

Forward-looking statements are not historical facts. These are subject to risks, uncertainty, and factors that are mostly difficult to assess and, in general, beyond the control of the Group management. If one or more of these risks or uncertainties materializes, or if underlying expectations do not occur or assumptions prove to be incorrect, the actual results, performance, or achievements of the Highlight Group may differ significantly from those described explicitly or implicitly in the forward-looking statements. Highlight Communications AG does not intend to update the forward-looking statements contained in this document on an ongoing basis.

Although every effort has been made to ensure that the information and facts provided are correct, and that the opinions and expectations are reasonable, no liability or warranty as to the completeness, correctness, adequacy, or accuracy of any forward-looking statements in this document is assumed.

The information within our annual report is originally published in German. Discrepancies or differences created in the translation are not binding and have no legal effect for compliance or enforcement purposes.

If any questions arise related to the accuracy of the information contained in the translation, please refer to the German version of our annual report, which is the official and only binding version.

Management report

DER DEUTSCHE FERNSEHPREIS

"Kaulitz & Kaulitz" wins the German Television Award in the "Best Entertainment Reality" category for the second season of their Netflix series. The series follows the two brothers as they go about their lives in Los Angeles.

DER DEUTSCHE FERNSEHPREIS
DER DEUTSCHE FERNSEHPREIS

CONSOLIDATED FINANCIAL STATEMENTS

as of December 31, 2025 of Highlight Communications AG, Pratteln

Consolidated balance sheet 90
Consolidated income statement 92
Consolidated statement of comprehensive income/loss 93
Consolidated statement of changes in equity 94
Consolidated statement of cash flows 96
Notes to the consolidated financial statements 98
Report of the statutory auditor 169

Consolidated financial statements

CONSOLIDATED BALANCE SHEET AS OF DECEMBER 31, 2025

Highlight Communications AG, Pratteln

ASSETS (TCHF)	Note	Dec. 31, 2025	Dec. 31, 2024
Non-current assets
In-house productions		217,220	216,580
Third-party productions		12,317	7,325
Film assets	6.1	229,537	223,905
Other intangible assets	6.2	30,632	45,822
Goodwill	6.2	17,216	109,069
Property, plant and equipment	6.3	5,790	15,502
Right-of-use assets	6.4	23,018	32,425
Investments in associates and joint ventures	6.6	551	700
Non-current receivables	6.7	14,850	15,620
Other assets	6.9	12,055	21,316
Deferred tax assets	6.8	1,197	6,622
		334,846	470,981
Current assets
Inventories	6.10	6,069	7,905
Trade receivables and other receivables	6.11	111,343	117,906
Contract assets	6.12	14,584	10,091
Receivables from associates and joint ventures	12	319	148
Income tax receivables	6.13	2,215	836
Cash and cash equivalents	6.14	21,793	16,773
		156,323	153,659
Assets	491,169	624,640
---	---	---

This consolidated balance sheet is to be read in conjunction with the following notes.

87
Consolidated financial statements

EQUITY AND LIABILITIES (TCHF)	Note	Dec. 31, 2025	Dec. 31, 2024
Equity	6.15
Issued capital		63,000	63,000
Treasury shares		-6,255	-6,255
Capital reserves		-79,723	-79,523
Other reserves		-77,708	-75,371
Profit carryforward		106,971	243,030
Equity attributable to shareholders		6,285	144,881
Non-controlling interests		-9,624	6,972
		-3,339	151,853
Non-current liabilities
Financial liabilities	6.18	-	2,483
Lease liabilities	6.4	21,617	29,152
Trade payables and other liabilities		259	-
Pension obligations	6.16	2,457	4,753
Deferred tax liabilities	6.17	21,595	26,061
		45,928	62,449
Current liabilities
Financial liabilities	6.18	191,279	196,546
Lease liabilities	6.4	5,315	6,610
Advance payments received	6.19	69,508	42,771
Trade payables and other liabilities	6.20	165,105	148,110
Contract liabilities	6.21	14,324	11,466
Provisions	6.22	27	2,292
Income tax liabilities	6.23	3,022	2,543
		448,580	410,338
Equity and liabilities		491,169	624,640

This consolidated balance sheet is to be read in conjunction with the following notes.

CONSOLIDATED INCOME STATEMENT 2025

Highlight Communications AG, Pratteln

(TCHF)	Note	Jan. 01 to Dec. 31, 2025	Jan. 01 to Dec. 31, 2024
Sales		412,135	404,081
Capitalized film production costs and other own work capitalized	7.2	112,139	136,419
Other operating income	7.3	19,861	12,722
Costs for licenses, commissions and materials		-38,573	-48,679
Cost of purchased services		-196,308	-213,388
Cost of materials and licenses	7.4	-234,881	-262,067
Salaries		-124,863	-134,681
Social security, pension costs		-21,671	-19,631
Staff costs		-146,534	-154,312
Amortization, impairment and reversals of impairment of film assets	6.1	-109,821	-62,566
Amortization, depreciation and impairment of intangible assets and property, plant and equipment	6.2/6.3	-21,169	-14,398
Amortization, depreciation and impairment of right-of-use assets	6.4	-5,716	-6,873
Goodwill impairment	6.2	-90,884	-
Amortization, impairment and reversals of impairment		-227,590	-83,837
Other operating expenses	7.5	-64,322	-58,945
Impairment/reversals of impairment of financial assets	7.6	-2,096	-410
Gains/losses from the derecognition of financial assets at amortized cost		-498	-8
Profit from operations		-131,786	-6,357
Net income from equity investments in associates and joint ventures	6.6	-107	665
Financial income	7.7	9,821	5,671
Financial expenses	7.8	-21,419	-21,727
Financial result		-11,598	-16,056
Profit before taxes		-143,491	-21,748
Income taxes		-3,655	-2,509
Deferred taxes		437	-5,470
Taxes	7.9	-3,218	-7,979
Net profit for the period		-146,709	-29,727
thereof shareholders' interests		-135,755	-27,683
thereof non-controlling interests		-10,954	-2,044
Earnings per share (CHF)
Earnings per share attributable to shareholders (basic)		-2.39	-0.49
Earnings per share attributable to shareholders (diluted)		-2.39	-0.49
Average number of shares outstanding (basic)		56,745,482	56,745,482
Average number of shares outstanding (diluted)		56,745,482	56,745,482

This consolidated income statement is to be read in conjunction with the following notes.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME/LOSS 2025

Highlight Communications AG, Pratteln

(TCHF)	Note	Jan. 01 to Dec. 31, 2025	Jan. 01 to Dec. 31, 2024
Net profit for the period		-146,709	-29,727
Unrealized gains/losses from currency translation		-2,182	2,339
Reclassification of realized gains/losses through profit or loss		-	-
Currency translation differences	6.15	-2,182	2,339
Gains/losses from cash flow hedges	6.15	-145	-506
Items that can be reclassified to profit or loss		-2,327	1,833
Actuarial gains/losses of defined benefit pension plans	6.15	5,041	-766
Gains/losses from financial assets at fair value through other comprehensive income	6.15	-10,690	-11,595
Items that cannot be reclassified to profit or loss		-5,649	-12,361
Total other comprehensive income/loss, net of tax		-7,976	-10,528
Total comprehensive income/loss		-154,685	-40,255
thereof shareholders’ interests		-138,396	-38,071
thereof non-controlling interests		-16,289	-2,184

This consolidated statement of comprehensive income/loss is to be read in conjunction with the following notes.

Consolidated financial statements

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 2025

Highlight Communications AG, Pratteln

(TCHF)	Note	Issued capital	Treasury shares
Balance as of January 1, 2025		63,000	-6,255
Currency translation differences		-	-
Gains/losses from cash flow hedges		-	-
Items that can be reclassified to profit or loss		-	-
Actuarial gains/losses of defined benefit pension plans		-	-
Gains/losses from financial assets at fair value through other comprehensive income		-	-
Items that cannot be reclassified to profit or loss		-	-
Total other comprehensive income/loss, net of tax		-	-
Net profit for the period		-	-
Total comprehensive income/loss		-	-
Dividend payments		-	-
Change in scope of consolidation		-	-
Change in non-controlling interests		-	-
Balance as of December 31, 2025	6.15	63,000	-6,255
Balance as of January 1, 2024		63,000	-6,255
Currency translation differences		-	-
Gains/losses from cash flow hedges		-	-
Items that can be reclassified to profit or loss		-	-
Actuarial gains/losses of defined benefit pension plans		-	-
Gains/losses from financial assets at fair value through other comprehensive income		-	-
Items that cannot be reclassified to profit or loss		-	-
Total other comprehensive income/loss, net of tax		-	-
Net profit for the period		-	-
Total comprehensive income/loss		-	-
Dividend payments		-	-
Personnel expenses from share-based payment		-	-
Change in non-controlling interests		-	-
Balance as of December 31, 2024	6.15	63,000	-6,255

This consolidated statement of changes in equity is to be read in conjunction with the following notes.

attributable to shareholders

Capital reserves	Other reserves	Profit carryforward	Total	Non-controlling interests	Total equity
-79,523	-75,371	243,030	144,881	6,972	151,853
-	-2,192	-	-2,192	10	-2,182
-	-145	-	-145	-	-145
-	-2,337	-	-2,337	10	-2,327
-	-	5,041	5,041	-	5,041
-	-	-5,345	-5,345	-5,345	-10,690
-	-	-304	-304	-5,345	-5,649
-	-2,337	-304	-2,641	-5,335	-7,976
-	-	-135,755	-135,755	-10,954	-146,709
-	-2,337	-136,059	-138,396	-16,289	-154,685
-	-	-	-	-534	-534
-	-	-	-	27	27
-200	-	-	-200	200	-
-79,723	-77,708	106,971	6,285	-9,624	-3,339
-104,136	-77,264	282,994	158,339	2,052	160,391
-	2,399	-	2,399	-60	2,339
-	-506	-	-506	-	-506
-	1,893	-	1,893	-60	1,833
-	-	-766	-766	-	-766
-	-	-11,515	-11,515	-80	-11,595
-	-	-12,281	-12,281	-80	-12,361
-	1,893	-12,281	-10,388	-140	-10,528
-	-	-27,683	-27,683	-2,044	-29,727
-	1,893	-39,964	-38,071	-2,184	-40,255
-	-	-	-	-687	-687
123	-	-	123	-	123
24,490	-	-	24,490	7,791	32,281
-79,523	-75,371	243,030	144,881	6,972	151,853

Consolidated financial statements

CONSOLIDATED STATEMENT OF CASH FLOWS 2025

Highlight Communications AG, Pratteln

(TCHF)	Note	Jan. 01 to Dec. 31, 2025	Jan. 01 to Dec. 31, 2024
Net profit for the period		-146,709	-29,727
Deferred taxes		-437	5,470
Income taxes		3,655	2,509
Financial result (without currency result)		18,908	13,763
Net income from equity investments in associates and joint ventures	6.6	107	-665
Amortization, impairment and reversals of impairment of non-current assets	6.1/6.2/6.3/6.4	227,590	83,837
Gain (-)/loss (+) from disposal of non-current assets	7.3/7.5	-76	-43
Other non-cash items		7,596	-183
Increase (-)/decrease (+) in inventories, trade receivables and other assets not classified as investing or financing activities		-5,694	-14,924
Decrease (-)/increase (+) in trade payables and other liabilities not classified as investing or financing activities		44,738	-12,487
Dividends received from associated companies and joint ventures		6	5
Interest paid		-12,474	-13,388
Interest received		68	228
Income taxes paid		-2,974	-1,336
Income taxes received		-	3,376
Cash flow from operating activities		134,304	36,435

This consolidated statement of cash flows is to be read in conjunction with the following notes.

(TCHF)	Note	Jan. 01 to Dec. 31, 2025	Jan. 01 to Dec. 31, 2024
Change in cash and cash equivalents resulting from the acquisition/disposal of businesses/interests in businesses (net)		-448	-
Payments for intangible assets	6.2	-2,297	-3,988
Payments for film assets		-118,648	-89,257
Payments for property, plant and equipment	6.3	-1,705	-3,322
Payments for financial assets	6.9	-17	-296
Proceeds from disposals of property, plant and equipment		186	125
Proceeds from disposal of financial assets		28	-
Cash flow for investing activities		-122,901	-96,738
Proceeds from sale of non-controlling interests		2,216	16,551
Repayment of current financial liabilities	6.18	-41,925	-9,967
Repayment of lease liabilities	6.4	-4,437	-5,962
Proceeds from receipt of non-current financial liabilities	6.18	275	144
Proceeds from receipt of current financial liabilities	6.18	38,285	51,127
Dividend payments	6.15	-534	-687
Cash flow for/from financing activities		-6,120	51,206
Cash flow from/for the reporting period		5,283	-9,097
Cash and cash equivalents at the beginning of the reporting period	6.14	16,773	25,498
Effects of currency differences		-263	372
Cash and cash equivalents at the end of the reporting period	6.14	21,793	16,773
Change in cash and cash equivalents		5,283	-9,097

This consolidated statement of cash flows is to be read in conjunction with the following notes.

Consolidated financial statements

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 2025

Highlight Communications AG, Pratteln

1. GENERAL INFORMATION

The consolidated financial statements of the Highlight Group were adopted by the Board of Directors of Highlight Communications AG on April 30, 2026, and require the approval of the Annual General Meeting to be held in June 2026.

1.1 General information on the Group

The parent company Highlight Communications AG is based at Netzibodenstrasse 23b, Pratteln, Switzerland. Highlight Communications AG is included in the consolidated financial statements of Highlight Event and Entertainment AG, Pratteln, Switzerland.

The company is listed on the regulated market (Prime Standard) of the Frankfurt stock exchange.

The operating activities of Highlight Communications AG comprise the Film and Sports and Event segments. Please see note 10 for further information on segment reporting.

1.2 Basis of presentation

The consolidated financial statements of Highlight Communications AG were prepared in accordance with the IFRS Accounting Standards and the additional provisions of Swiss commercial law. All IFRSs/IASs and SICs/IFRICs applicable as of December 31, 2025, were complied with.

A list of the subsidiaries, associated companies and joint ventures included in the consolidated financial statements can be found in these notes. The effects of the first-time consolidation and deconsolidation of subsidiaries, joint ventures and associated companies are shown in the section "Scope of consolidation" (see note 3).

The consolidated income statement was prepared in line with the nature of expense method. The annual financial statements of the companies included in the consolidated financial statements are based on uniform accounting policies in line with their respective business activities. The consolidated financial statements are prepared based on historical cost; exceptions to this are described in the accounting policies (see note 4).

In preparing the consolidated financial statements in accordance with IFRS, the management is required to make estimates and assumptions influencing the income, expenses, assets, liabilities as well as contingent liabilities and assets reported as of the end of the reporting period. These estimates and assumptions are based on the management's best possible assessment based on past experience and other factors including estimates of future events. Estimates and judgments are reviewed on an ongoing basis. Changes to estimates are required if the circumstances on which they are based have changed or new or additional information has become available. Such changes are recognized in the reporting period in which the estimate is modified. Further information on estimates can be found separately under the respective balance sheet item (see note 5).

The financial statements have been prepared in Swiss francs, which is the functional and reporting currency of the Group's parent company. Amounts are reported in thousands of Swiss francs (TCHF) unless stated otherwise. For calculation-related reasons, rounding differences of +/- one unit (TCHF) may arise and the percentages shown may not precisely reflect the absolute figures to which they relate.

The consolidated annual financial statements have been prepared on a going concern basis. This basis of preparation assumes that the Group will continue in business in the foreseeable future and will be able to realise its assets and discharge its liabilities in the normal course of business.

The Board of Directors and management intend to continue actively assessing further options to secure the Group's financing. Nevertheless, material uncertainties exist that may cast significant doubt on the Group's ability to continue as a going concern. These uncertainties are related to the following prerequisites:

securing sufficient liquidity to cover ongoing business operations for a period of at least twelve months;
the refinancing of a financial liability owed to a banking syndicate amounting to CHF 74.5 million, which is contractually due for repayment on November 30, 2026; and
the extension or restructuring of liabilities from licence agreements amounting to EUR 57.5 million, which were due as of the reporting date.

The liabilities arising from licence agreements in the amount of EUR 57.5 million are secured by shares in Sport1 Digital GmbH.

At the time of preparing the consolidated financial statements, the Board of Directors is in discussions with the banking syndicate as well as with relevant contractual partners and suppliers regarding the extension or restructuring of the existing liabilities. Furthermore, the Group announced by way of an ad hoc disclosure on February 2, 2026 that the capital increase at the level of the parent company, Highlight Event and Entertainment AG, which had been announced on August 24, 2025, has not yet been implemented within the originally envisaged timeframe; the further timing remains open. Against this background, the Group is evaluating alternative financing options and has mandated an investment bank for this purpose.

These conditions represent a material uncertainty related to events or conditions that may cast significant doubt on the Group's ability to continue as a going concern. The consolidated financial statements do not include any adjustments that would result if the Group were unable to continue as a going concern.

Consolidated financial statements

2. ACCOUNTING

2.1 Relevant standards and interpretations applied for the first time

In the current fiscal year, the Group has applied the following standard amendment for the first time:

Amendment to IAS 21 – Lack of Exchangeability

The application of the standard amendment has not had any significant impact on the Group’s accounting policies or the need for retrospective adjustments.

2.2 Relevant standards, revised standards and interpretations published but not yet adopted

The Highlight Group waived early adoption of the new and revised standards and interpretations whose adoption is not yet required for Highlight Communications AG. The Group considers the impact of these new standards and interpretations on current or future reporting periods and foreseeable future transactions to be immaterial, with the exception of changes in presentation and disclosure (IFRS 18).

3. SCOPE OF CONSOLIDATION

3.1 Acquisitions and sales

Acquisitions

On January 1, 2025, Constantin Television GmbH, Munich, acquired the remaining 49% of shares in the already fully consolidated Constantin TV Productions GmbH, Munich, and increased its shareholding to 100%. This is a transaction between equity providers. As a result of the transaction, the capital reserve decreased by TCHF 200 compared to December 31, 2024, and the non-controlling interests increased by TCHF 200.

Sales

In April 2025, the fully consolidated 50.1% subsidiary Match IQ GmbH (Sports and Event segment), including its wholly owned subsidiary Event IQ GmbH, was sold for TCHF 95. The cash inflow of TCHF 95 is offset by a cash outflow of TCHF 188 from the sale of cash and cash equivalents. The sale resulted in a deconsolidation gain of TCHF 122, which is reported under other operating income (Sports and Event segment). Net assets at the time of the sale amounted to TCHF -27 (of which TCHF -54 were attributable to shareholders) and consisted primarily of receivables (TCHF 125), cash and cash equivalents (TCHF 188), and liabilities (TCHF 390).

On July 7, 2025, the fully consolidated wholly owned subsidiary PLAZAMEDIA GmbH (Sports and Event segment) was sold for EUR 1. The sale resulted in a deconsolidation expense of TCHF 7,251, which is reported under other operating expenses (Sports and Event segment). Net assets at the time of the sale amounted to TCHF 7,251 and consisted primarily of right-of-use assets (TCHF 2,547), property, plant, and equipment (TCHF 7,285), receivables (TCHF 5,439), cash and cash equivalents (TCHF 355), financial liabilities (TCHF 3,470), lease liabilities (TCHF 2,727), and other liabilities (TCHF 2,980).

3.2 Other changes

In January 2025, Sport1 Medien AG was converted into a GmbH and has since been operating under the name Sport1 Medien GmbH.

Effective retroactively from January 1, 2025, Constantin Film Verleih GmbH, Munich, was merged into its fellow subsidiary Constantin Film Vertriebs GmbH, Munich. Constantin Film Vertriebs GmbH, Munich, was subsequently renamed Constantin Film Distribution GmbH, Munich.

Similarly, effective retroactively from January 1, 2025, Constantin Television GmbH, Munich, was merged into its fellow subsidiary Constantin Film Produktion GmbH, Munich.

During the reporting period, Sport1 Digital GmbH, based in Ismaning, was established as a wholly owned subsidiary of Sport1 GmbH. In addition, S1.Technology sp. z o.o., based in Warsaw, was established as a wholly owned subsidiary of Sport1 Holding GmbH. Both companies are currently in the start-up phase.

The fully consolidated company Constantin Entertainment CZ s.r.o., Prague, was liquidated on August 4, 2025. In addition, Constantin Entertainment SRB d.o.o., Belgrade, which was also a fully consolidated company, was liquidated on December 25, 2025.

The effects of these transactions on these consolidated financial statements are immaterial.

3.3 Overview of consolidated companies

Fully consolidated companies as of December 31, 2025

	Activity	Country	Currency	Subscribed capital	Share in capital*	Voting rights of the respective parent company
TEAM Holding AG	Holding company	CH	CHF	250,000	100%	100%
TEAM Football Marketing AG	Exploitation of sports rights	CH	CHF	6,340,000	95,27%	100%
TEAM Marketing AG	Marketing of sports events	CH	CHF	200,000	100%	100%
TEAM Marketing UK Ltd.	Marketing of sports events	GB	GBP	1	100%	100%
TEAM Marketing Asia Limited	Marketing of sports events	SG	SGD	100	100%	100%
TEAM Marketing USA LLC	Marketing	US	USD	-	100%	100%
T Squared AG	Marketing	CH	CHF	100,000	100%	100%
Highlight Event AG	Event Marketing	CH	CHF	500,000	100%	100%
Rainbow Home Entertainment AG	Distribution	CH	CHF	200,000	100%	100%
Constantin Film und Entertainment AG	Acquisition and development of content	CH	CHF	500,000	100%	100%
Constantin Film AG	Film production and distribution	DE	EUR	12,742,600	100%	100%
Constantin Media GmbH
audiovisuelle Produktionen	Acquisition and development of content	DE	EUR	26,000	100%	100%
Constantin Film Produktion GmbH	Film and TV production	DE	EUR	105,100	100%	100%
Constantin Film Services GmbH	Service provider	DE	EUR	25,000	100%	100%
Constantin Film Development Inc.	Acquisition and development of content	US	USD	530,000	100%	100%
Dahoam Television GmbH	TV entertainment production	DE	EUR	25,000	100%	100%
Hager Moss Film GmbH	TV entertainment production	DE	EUR	102,300	100%	100%
Constantin TV Productions GmbH	Film and TV production	DE	EUR	25,000	100%	100%
Constantin Holding Inc.	Holding company	US	USD	10	100%	100%
Constantin Film International GmbH	International film production	DE	EUR	105,000	100%	100%
Constantin Pictures GmbH	International film and TV production	DE	EUR	25,000	100%	100%
Constantin Entertainment GmbH	TV entertainment production	DE	EUR	200,000	100%	100%
Constantin Entertainment Polska Sp z.o.o.	TV entertainment production	PL	PLN	54,000	100%	100%
Moovie GmbH	Film and TV production	DE	EUR	104,000	100%	100%
Westside Filmproduktion GmbH	Film and TV production	DE	EUR	104,000	51%	51%
Rat Pack Filmproduktion GmbH	Film and TV production	DE	EUR	103,000	100%	100%
Olga Film GmbH	Film and TV production	DE	EUR	603,000	100%	100%
Constantin Film Distribution GmbH
(formerly: Constantin Film Vertriebs GmbH)	License trading and theatrical distribution	DE	EUR	250,000	100%	100%
VERA contracts GmbH	Development and sale of contract production and contract application software and database	DE	EUR	25,000	100%	100%
Constantin Music Verlags GmbH	Exploitation of music rights	DE	EUR	70,000	100%	100%
Constantin Music GmbH	Exploitation of music rights	DE	EUR	25,000	90%	90%
Constantin Film Production Services GmbH	Film and TV production	DE	EUR	100,000	100%	100%
Königskinder Music GmbH	Record label and music consulting	DE	EUR	50,000	100%	100%

Consolidated financial statements

Voting rights of the respective parent company

	Activity	Country	Currency	Subscribed capital	Share in capital*	Voting rights of the respective parent company
Sport1 Medien GmbH
(formerly Sport1 Medien AG)	Holding company	DE	EUR	93,600,000	100%	100%
Sport1 Holding GmbH	Holding company	DE	EUR	55,000	100%	100%
Sport1 GmbH	Platform operator	DE	EUR	500,000	50%	50%
Sport1 Digital GmbH	Development, operation, and marketing of digital media services	DE	EUR	25,000	100%	100%
S1.Technology sp. z o.o.	Software development	PL	PLN	5,000	100%	100%
Magic Sports Media GmbH	Marketing	DE	EUR	25,000	100%	100%
Jackpot50 GmbH	Business and services relating to virtual online games	DE	EUR	33,333	75%	75%

Direct/indirect share held by the Group

3.4 Overview of companies not included in consolidation

Owing to a lack of business activities, Impact Pictures LLC, Delaware, is insignificant in providing a true and fair view of the Group's net assets, financial position and results of operations. This company is therefore not included in Highlight Communications AG's scope of consolidation.

The non-consolidated equity interest was reported at a carrying amount of TCHF 0 in the previous year and was liquidated as of October 30, 2025.

3.5 Overview of associated companies

The following associated companies are included in the consolidated financial statements using the equity method:

	Share of capital	Period recognized in the consolidated financial statements	Currency	Subscribed capital
BECO Musikverlag GmbH	50%	Jan. 01 to Dec. 31, 2025	EUR	25,565
Upgrade Productions LLC	25%	Jan. 01 to Dec. 31, 2025	USD	40,000

The annual financial statements of BECO Musikverlag GmbH and of Upgrade Productions LLC as of December 31, 2024, were used for reporting as the 2025 annual financial statements are not yet available.

Detailed financial information on the associated companies can be found in note 6.6.

3.6 Overview of joint ventures

The following joint ventures are included in the consolidated financial statements using the equity method:

	Share of capital	Period recognized in the consolidated financial statements	Currency	Subscribed capital
High-end Productions GmbH	50%	Jan. 01 to Dec. 31, 2025	EUR	35,000
High-end Productions Germany GmbH	100%	Jan. 01 to Dec. 31, 2025	EUR	25,000

Detailed financial information on the joint venture can be found in note 6.6. High-end Productions Germany GmbH, Munich, is included as a wholly owned subsidiary of High-end productions GmbH on a pro rata basis through the at-equity valuation of High-end Productions GmbH, Vienna.

High-end productions GmbH, Vienna, has been in liquidation since December 2025. The plan is to include High-end Productions Germany GmbH, Munich, in the consolidated financial statements using the equity method in the coming year as well. Once the liquidation is complete, the plan is for the shares in High-end Productions Germany GmbH to be held directly by the Group. High-end Productions Germany GmbH is therefore still included in the consolidated financial statements using the equity method. The change in the ownership structure does not have any material impact on the Group's net assets, financial position or results of operations.

4. SUMMARY OF KEY ACCOUNTING POLICIES

The balance sheet is structured by maturity. Assets and liabilities are reported as current if they are due within one year or one business cycle or they are primarily held for trading. Conversely, assets and liabilities are classified as non-current if they are held by the Group for more than one year or one business cycle. Trade accounts receivable, trade accounts payable, contract assets, contract liabilities and inventories are reported as current items. Loans are classified as current liabilities unless the Group has the right to defer settlement of the liability for at least twelve months after the reporting period. Deferred tax assets and liabilities are reported as non-current items.

4.1 Consolidation methods

All significant subsidiaries are included in the consolidated financial statements. Subsidiaries are companies that Highlight Communications AG controls directly or indirectly.

Highlight Communications AG monitors on an ongoing basis whether it controls an investee when facts or circumstances indicate that one or more of the three control criteria have changed.

If Highlight Communications AG holds less than a majority of the voting or similar rights in the investee, Highlight Communications AG takes into account all relevant facts and circumstances in assessing whether it controls an investee.

First-time capital consolidation is implemented by offsetting the cost (consideration rendered) of the equity interest against the remeasured pro rata share of equity in the subsidiary as of the date of acquisition. For this purpose, assets and liabilities (including contingent liabilities) are stated at their fair values regardless of the amount of any non-controlling interests in equity. Incidental costs of acquisition are recognized as an expense. If an acquisition is gradual, shares held before control is obtained are remeasured at fair value as of the time of acquisition and added to the consideration rendered. Gains or losses resulting from remeasurement are recognized in profit or loss. The remaining positive difference is recognized as goodwill, which is tested for impairment annually or when there are indications of impairment. Any impairment loss resulting from this is recognized in profit or loss. Any negative difference arising from capital consolidation is reported in full as income in the year incurred after reassessment. For each acquisition, the acquirer can elect to measure non-controlling interests either at fair value (full goodwill method) or at the pro rata identifiable net assets (partial goodwill method).

An associated company is a company in which Highlight Communications AG has significant influence. Significant influence is the ability to participate in the financial and business policy decisions of the investee, but not control or joint control of these decisions.

A joint venture is a joint arrangement in which parties exercise joint control of the arrangement and have rights to the net assets of the arrangement. Joint control is the contractually agreed common control of an arrangement. It exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control.

Associated companies and joint ventures are measured using the equity method. Equity interests are recognized at cost at the time of acquisition. Any goodwill identified is included in the carrying amount of the equity interest and is not recognized as separate goodwill.

The results of associated companies and joint ventures are absorbed into the Group pro rata and allocated to the carrying amount of the equity interest. Profit distributions by these companies reduce their carrying amount. If there are objective indications of impairment, impairment losses are recognized in profit or loss. Changes recognized in the equity of associated companies and joint ventures are recognized by the Group in the amount of its interest and shown in the statement of changes in consolidated equity. Items recognized in other comprehensive income (OCI) in the financial statements of associated companies and joint ventures (e.g. currency translation differences) are shown in the consolidated financial statements as a separate item in other comprehensive income (OCI).

Consolidated financial statements

Companies are deconsolidated when they are no longer controlled. Deconsolidation is shown as the disposal of all assets attributable to the subsidiary including goodwill, liabilities and the differences from currency translation. Expenses and income incurred prior to this date are still included in the consolidated financial statements.

The effects of intragroup transactions are eliminated. Receivables and liabilities between consolidated companies are netted off and intragroup profits are eliminated. Intragroup income is offset against the corresponding expenses. Non-controlling interests represent the share of earnings and net assets not attributable to the shareholders of the parent company. Non-controlling interests are reported separately in the consolidated income statement, the consolidated statement of comprehensive income/loss and the consolidated balance sheet. They are reported in the consolidated balance sheet under equity but separately from the equity attributable to the shareholders of the parent company.

The effects of transactions with non-controlling interests that do not result in a loss of control are recognized in equity as transactions with equity providers. If transactions lead to a loss of control, the resulting profit or loss is recognized in profit or loss. The profit or loss also includes effects from the remeasurement of the retained shares at fair value.

4.2 Currency translation

4.2.1 Functional currency

The functional currency of Highlight Communications AG and the reporting currency of the Group is Swiss francs. The functional currency is the local currency for a majority of the Group companies.

4.2.2 Measurement of balances and transactions in foreign currency

Transactions in currencies that are not the functional currency of the Group company in question are recognized by the companies using the exchange rate in effect on the transaction date. Monetary assets and liabilities are translated at the closing rate as of the end of the reporting period.

Gains or losses from the settlement of these transactions and gains or losses from the translation of monetary assets and liabilities are recognized in profit or loss. Gains or losses from qualified cash flow hedges and monetary items classified as the Group's net investments in a foreign operation constitute an exception to this. These gains or losses are shown in other comprehensive income (OCI). Translation differences on non-monetary equity instruments measured at fair value through other comprehensive income (OCI) are also recognized in other comprehensive income (OCI).

4.2.3 Currency translation in the Group

The balance sheet items of foreign subsidiaries with a functional currency other than Swiss francs are translated in accordance with the functional currency concept at the middle rate at the end of the reporting period while income statement items are translated at annual average exchange rates. Goodwill and fair value adjustments from purchase price allocation are also translated at the exchange rate at the end of the reporting period. Any translation differences or differences from currency translation in amounts carried forward from previous years resulting from this are recognized in other comprehensive income (OCI).

When a foreign Group company is sold and deconsolidated, the cumulative translation differences from the translation of the assets and liabilities of that company which were recognized in other comprehensive income (OCI) are recognized as part of the gain or loss on its sale and deconsolidation.

4.2.4 Exchange rates

		Closing rate		Annual average rate
		Dec. 31,2025	Dec. 31,2024	Jan. 01 to Dec. 31,2025	Jan. 01 to Dec. 31,2024
Euro	(EUR)	0.93076	0.94015	0.93687	0.95254
US dollar	(USD)	0.79278	0.90499	0.83105	0.88060
British pound	(GBP)	1.06675	1.13446	1.09400	1.12508
Canadian dollar	(CAD)	0.57832	0.62968	0.59431	0.64286

Consolidated financial statements

4.3 Fair value measurement

The Group measures its financial instruments, including derivatives, and non-financial assets and liabilities measured at fair value at the end of each reporting period. Fair value is the price that independent market participants would receive or pay under normal market conditions as of the measurement date when selling an asset or transferring a liability (exit price).

In measuring this, it is assumed that the sale/transfer takes place on the priority market (market with the largest volume) for this asset/liability. If a priority market is not available, the most advantageous market must be used to measure fair value. The fair value of an asset or liability is measured assuming that market participants act in their economic best interest when pricing the asset or liability.

Counterparty non-performance risk is measured using the Standard & Poor's model (AAA - CCC). The risk of default is calculated using a percentage for each rating category. An entity's own rating is determined using a peer group model approach. Third-party credit risk is taken into account when measuring the fair value of financial assets and derivative financial instruments where material.

A fair value measurement of a non-financial asset takes into account a market participant's ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

When measuring non-financial liabilities and an entity's own equity instruments, a transfer to another market participant is assumed. An exit scenario is assumed here. When a quoted price for the transfer of an identical or a similar liability or entity's own equity instrument is not available, an entity shall measure the instruments from the perspective of a market participant that holds the identical item as an asset.

The Group applies measurement methods that are appropriate in the circumstances and for which there are sufficient data to measure fair value. In doing so, the use of relevant, observable input factors is maximized and that of non-observable input factors is minimized.

All financial assets and liabilities that are measured at fair value or for which the fair value is disclosed in the notes are assigned to the following levels of the fair value hierarchy based on the lowest input significant overall for measurement:

Level 1: (non-adjusted) prices quoted on active markets accessible to the Group on the measurement date for identical assets or liabilities
Level 2: other input factors than the quoted prices listed in level 1 that can be observed either directly or indirectly for the asset or liability
Level 3: input factors that are not observable for the asset or liability

The fair value of non-current financial instruments measured at amortized cost is calculated for the disclosures in the notes by discounting the forecast future cash flows using the interest rates currently applicable for financial instruments with similar conditions and remaining terms if a level 1 measurement is not possible. Matched term interest rates are calculated annually as of the end of each reporting period.

For assets and liabilities that are measured at fair value on a recurring basis, the Group determines as of the end of the reporting period whether there were transfers between the levels of the fair value hierarchy based on the lowest input factor significant overall to measurement. Information on the measurement methods used and the input factors for determining the fair value of assets and liabilities can be found in notes 6, 7 and 8.

4.4 Film assets

Film assets include purchased rights to third-party productions (i. e. films produced outside the Group) and the costs of films produced within the Group (in-house and co-productions) plus the cost of developing new projects. The acquisition of rights to third-party productions usually includes movie theater, home entertainment and TV rights.

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The costs for third-party productions include minimum guarantees. The individual payments of the minimum guarantee are recognized as advances and capitalized as film assets on delivery and acceptance of the material.

In-house productions are carried at cost. This cost also includes the financing costs that can be allocated to the production in question. Costs for releasing the film, such as press and marketing costs, are also incurred but not capitalized and instead are recognized immediately in other operating expenses.

A performance-based amortization method is applied to film rights (both third-party and in-house productions) that represents the loss in value of film assets based on the recoverable revenue. Under the individual film forecast method, the amortization for a film in a period is calculated by the formula "sales generated by the film in the period divided by the film's estimated total remaining sales and multiplied by the residual carrying amount of the film". The revenue used as a basis for calculating amortization includes all income generated by the film. This income is adjusted for home entertainment costs when calculating amortization in connection with home entertainment revenue. The maximum period for estimating sales is ten years for films as recognized in the film assets of the Highlight Group.

The estimate of the total sales is reviewed at the end of each quarter and adjusted if necessary. The quotient for the amortization for the period is calculated on the basis of any (adjusted) total sales. Each film is also tested for impairment at the end of each reporting period and if there are indications of impairment. If the cost or the carrying amount of the film is not covered by its estimated total sales less release costs yet to be incurred, the film is written down to its value in use. Estimated cash flows are discounted with an individual interest rate that takes into account the terms of the different periods of exploitation. Estimated cash flows can vary significantly as a result of a number of factors such as market acceptance. The Group examines and revises the cash flow forecasts and amortization expenses as soon as any changes arise in previous forecasts. Impairment losses on film assets are reversed if there are indications that the reasons for the original write-down have ceased to apply, resulting in a higher recoverable amount. They must not exceed the amortized cost. Reversals of impairment are offset against losses in value in the fiscal year.

Capitalized costs for the development of new projects (particularly script rights) are regularly reviewed to determine whether they can still be used as a basis for film productions. If, eight years after first-time capitalization of costs for projects classified as film assets, or five years for projects classified as inventories, the start of filming or the sale of the rights cannot be specifically determined or are no longer considered likely, the costs are written off in full. Any indications of early impairment are recognized accordingly.

4.5 Other intangible assets

This category essentially includes purchased software and licenses, internally generated intangible assets, and intangible assets identified in purchase price allocation. They are measured at cost less straight-line amortization and impairment. Please also see the comments in the section "Impairment of non-financial assets" (see note 4.9). Amortization on computer programs is calculated on the basis of the term or the standard useful life of three to six years. Internally developed intangible assets are measured at cost. Capitalized costs are amortized over their useful life once the development phase is complete and utilization is possible. The amortization period is determined according to the economic life and is between two and six years.

Customer relationships identified in purchase price allocations are reported under other intangible assets. Their carrying amount is their fair value as of the time of acquisition less necessary depreciation and amortization.

As a result of initial consolidation of Sport1 Medien GmbH in 2018, purchase price allocation identified customer relationships, the brand name for SPORT1 and licenses that are reported under other intangible assets. The amortization period is between six and 20 years. Their carrying amount is their fair value as of the time of acquisition less necessary depreciation and amortization.

The exclusive rights for the marketing of the Eurovision Song Contest and the Vienna Philharmonic Orchestra identified in the first-time consolidation of Highlight Event AG in 2020 and the corresponding purchase price allocation are reported under other intangible assets and amortized over a useful life of 40 years. Their carrying amount is their fair value as of the time of acquisition less necessary depreciation and amortization.

Consolidated financial statements

4.6 Goodwill

Goodwill is carried at cost less any cumulative impairment losses. The cost of goodwill is the total of

(i) the fair value of the consideration transferred as of the acquisition date,
(ii) the amount of any non-controlling interests and
(iii) the fair value of shares of the acquired company previously held by the acquirer in a step acquisition less the fair value of the identifiable assets, liabilities and contingent liabilities acquired.

Non-controlling interests can be measured on a transaction basis either at fair value (full goodwill method) or at the proportional share of the net assets of the company acquired (partial goodwill method). In the latter case, the goodwill is recognized only at the percentage share of the acquirer in the goodwill.

Goodwill is allocated to cash-generating units expected to benefit from the combination on recognition. The cash-generating units to which goodwill is allocated are the organizational units in the segments.

4.7 Property, plant and equipment

Property, plant and equipment comprises leasehold improvements, technical equipment and machinery, other equipment, operating and office equipment, advance payments and assets under construction.

Leasehold improvements are measured at cost less depreciation and impairment. Scheduled depreciation is usually carried out over the term of the respective rental agreement lease (from three to up to 27.5 years). Technical equipment and other equipment, operating and office equipment are measured at cost less depreciation and impairment. Scheduled depreciation is calculated on a straight-line basis over the normal useful life of three to eleven years for technical equipment and three to 25 years for operating and office equipment. Repairs and maintenance expenses are expensed as and when incurred. More extensive renovation work or improvements are capitalized. Renovation work is also depreciated over the above-mentioned expected useful life. Costs and the associated cumulative depreciation are derecognized on disposal. Any resulting gains or losses are recognized in profit or loss in the fiscal year. If the cost of specific components of an item of property, plant and equipment is material, these components are recognized and depreciated individually.

4.8 Leases

A lease is a contract under which the lessor grants the lessee the right to use an asset for a period of time in exchange for a payment or a series of payments.

4.8.1 Lease liabilities

At the inception of the lease, the Group recognizes lease liabilities measured at the present value of the lease payments to be made over the term of the lease. The lease payments include fixed payments less any lease incentives receivable, variable lease payments that depend on an index or a rate and amounts expected to be payable under residual value guarantees. Lease payments also include the exercise price of a purchase option if it is reasonably certain to be exercised and the payments of penalties for terminating the lease early if the Group exercises the option. Variable lease payments that do not depend on an index or a rate are recognized as an expense in the period in which the event or condition that triggers the payment occurs.

If it is not possible to determine the interest rate implicit in the lease, the Group uses the incremental borrowing rate at the inception of the lease to calculate the present value of the lease payments. The incremental borrowing rate is the rate of interest that the Group would have to pay to borrow the funds necessary to obtain an asset of a similar value and similar conditions to the right-of-use asset in a similar economic environment.

After the inception of the lease, the amount of the lease liability is increased by the interest accreted and reduced by the lease payments made. Furthermore, the carrying amount of the lease liabilities is remeasured if there is a change in the term of the lease, a change in the significant fixed lease payments or a change in the acquisition-date value of the lease asset.

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4.8.2 Short-term leases and leases for low-value assets

The Group exercises the option of not recognizing short-term leases (i.e. leases with a term of twelve months or less from the inception date and without a purchase option).

The Group also refrains from recognizing leases for low-value assets (typically less than TCHF 5 per asset). Low-value assets include office machines.

Lease payments for short-term leases and leases for low-value assets are recognized in other operating expenses on a straight-line basis over the lease term.

4.8.3 Leases for intangible assets

The Group does not exercise the option concerning right-of-use assets for intangible assets, and accounts for intangible assets in accordance with the principles of IAS 38. In the case of IT leases where hardware and software cannot be separated, the leased asset including the software is recognized in accordance with IFRS 16 "Leases".

4.8.4 Additional lease components

Contracts containing both lease components and non-lease components are not separated. Each lease component is recognized as a lease together with the other service components. The incidental costs when renting premises are not considered a lease component.

4.8.5 Right-of-use assets

The Group recognizes right-of-use assets at the inception of the lease, i.e. when the underlying asset is available for use. Right-of-use assets are measured at cost less cumulative depreciation and impairment and adjusted for the remeasurement of lease liabilities.

The cost of a right-of-use asset comprises the amount of the lease liabilities recognized, the initially incurred direct costs and the lease payments made at or before the inception of the lease, less any lease incentives received. If the Group is not reasonably certain that it will acquire ownership of the lease asset at the end of the lease term, the capitalized right-of-use assets are depreciated on a straight-line basis over the shorter of the estimated useful life and the lease term.

4.8.6 Sale and leaseback

In the context of sale and leaseback transactions, the criteria set out in IFRS 15 must first be used to determine whether the transfer of an asset should be accounted for as a sale. If the transfer of an asset does not meet the requirements set out in IFRS 15 for recognition as a sale, the asset continues to be recognized and the proceeds received are recognized as a financial liability in accordance with IFRS 9.

If the transfer of the asset constitutes a sale, the leased-back assets are reflected in the consolidated financial statements in accordance with the lessee accounting principles outlined above. Accordingly, any gains or losses are recognized only to the extent that they relate to the rights transferred to the buyer or lessor.

Consolidated financial statements

4.9 Impairment of non-financial assets

Goodwill is tested for impairment at the level of cash-generating units, intangible assets with an indefinite useful life and internally generated assets not yet in use at least once per year, or more frequently if there are indications of impairment. Highlight Communications AG carries out annual impairment testing as of December 31 of each fiscal year. Impairment testing is carried out for other intangible assets, property, plant and equipment, and right-of-use assets if there are indications of any impairment. Indications of impairment include, for example, a marked drop in the fair value of an asset, significant changes in the business environment, substantial evidence of obsolescence or a change in expected income. The basis for the impairment test is the calculation of the recoverable amount, which is the higher of fair value less costs to sell or the value in use of an asset. If the recoverable amount is determined on the basis of value in use, this will be based on the forecast future cash flows. Impairment is recognized if the recoverable amount is less than the carrying amount.

If the amount of impairment exceeds the goodwill assigned to the cash-generating unit, the unit's other assets must be written down proportionately in line with their carrying amounts. This is not the case if the carrying amount in question would be less than the higher of the fair value less costs to sell or the value in use.

Impairment recognized in prior periods on intangible assets, not including goodwill, property, plant and equipment, and right-of-use assets is reversed if the reasons for impairment no longer apply. Reversals of write-downs are recognized in profit or loss and cannot exceed the theoretical amortized cost.

4.10 Inventories

Inventories, consisting of DVDs and Blu-rays in particular, are recognized at the lower of cost or net realizable value (sales-oriented, loss-free measurement). The net realizable value is the estimated sale price in normal business less costs to sell. The cost is determined using the first-in, first-out (FIFO) method.

Impairment on merchandise is recognized on the basis of coverage analyses. This means that the management analyzes whether merchandise is impaired per product on the basis of past movements and the products in stock. If this analysis shows that certain products have become impaired, this is recognized accordingly. Further impairment losses are recognized for damaged or defective merchandise.

Inventories also include service productions where revenue is recognized at a point in time and that cannot be recognized as contract assets or liabilities, as well as service productions in development that have not yet been ordered by the broadcaster (see note 4.16). In addition, inventories include trade accounts receivable not yet invoiced.

4.11 Financial instruments

The management classifies financial assets as of the time of acquisition and checks whether the criteria for classification are complied with at regular intervals. Their cost includes transaction costs. Transaction costs for financial assets measured at fair value through profit or loss are recognized in profit or loss immediately.

Regular way purchases and sales of financial assets are accounted for at the settlement date.

Financial assets and financial liabilities are usually not offset. They are netted only if there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis.

Derivative financial instruments and separable embedded derivatives are measured at fair value as of the trading date on first-time recognition and subsequently if they are not part of a designated hedge. Gains/losses from fluctuations in value are recognized immediately in profit or loss.

Write-downs on receivables are generally recognized in separate allowance accounts. They are derecognized at the same time as the corresponding impaired receivable. Amounts in the allowance account are derecognized against the carrying amount of impaired financial assets only if the issue in question is past the statute of limitations.

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4.11.1 Financial assets at amortized cost

The Group recognizes financial assets at amortized cost if the business model allows for the financial asset to be held and the terms of the instrument result only in cash flows that represent interest payments and principal repayments (cash flow condition). Financial instruments that do not meet these criteria are recognized at fair value.

The financial instruments assigned to this category are recognized at amortized cost using the effective interest method.

Current trade accounts receivable and other current receivables are carried at amortized cost. Interest-free monetary receivables with a maturity of more than one year are discounted with a matching interest rate.

The reported carrying amounts of the current receivables are the approximate fair values.

Cash and cash equivalents comprise cash in hand as well as bank balances and call and demand deposits at banks and other financial institutions. These are only reported as cash and cash equivalents if they can be converted into amounts of cash determined in advance at any time, are subject to only minor fluctuations in value and have a remaining maturity of three months or less from the date of acquisition. Cash and cash equivalents are measured at amortized cost.

4.11.2 Financial assets at fair value

Financial assets that cannot be recognized at amortized cost are recognized at fair value.

Financial instruments recognized at amortized cost can be measured at fair value using the fair value option if this prevents or significantly reduces accounting mismatches.

Equity instruments are always measured at fair value. On first-time recognition there is the irrevocable option to show realized and unrealized changes in value in other comprehensive income (OCI) rather than in the income statement, provided that the equity instrument is not held for trading. Amounts recognized in other comprehensive income (OCI) cannot be reclassified to profit or loss in the future.

The fair value is the market price as of the end of the reporting period. If no market price is available, the fair value is determined on the basis of similar market transactions or using recognized measurement methods. If the fair value of an active financial instrument cannot be reliably determined, the cost may be the best estimate.

The effects of the currency translation of monetary items are recognized in the income statement, while the currency translation effects of non-monetary items are recognized in other comprehensive income (OCI) with the change in fair value.

4.11.3 Financial liabilities

Financial liabilities held for trading (e. g. non-hedge derivative financial instruments) are measured at fair value through profit or loss (FVTPL).

All other financial liabilities are measured at amortized cost – unless Highlight Communications AG voluntarily designates them at fair value through profit or loss on initial recognition (fair value option). Low-interest and interest-free non-current liabilities are recognized at present value on acquisition and discounted on an accrual basis until maturity. Liabilities from outstanding invoices are reported under trade accounts payable and other liabilities. Non-current liabilities are measured using the effective interest method.

4.11.4 Impairment of financial assets (debt instruments at amortized cost)

The impairment model is based on expected credit losses and is applicable to financial debt instruments that are measured either at amortized cost or at fair value through other comprehensive income. In addition, the impairment provisions of IFRS 9 also apply to contract assets, lease receivables, irrevocable loan commitments and financial guarantees. Loss allowances are recognized in profit or loss in separate allowance accounts, thereby reducing the carrying amount of the financial assets accordingly.

The general impairment model uses a three-stage procedure to determine loss allowances in the amount of the expected credit losses.

Stage 1: All instruments are initially assigned to stage 1. The present value of expected credit losses from possible defaults in the twelve months after the end of the reporting period is expensed for such instruments. Interest is recognized on the basis of the gross carrying amount, i. e. the effective interest method is applied based on the carrying amount before loss allowances.

Stage 2: This contains all instruments with significant increases in credit risk at the end of the reporting period compared to the initial amount. Loss allowances are recognized at the present value of all expected losses over the remaining term of the instrument. Interest is recognized on the basis of the gross carrying amount, i. e. the effective interest method is applied based on the carrying amount before loss allowances. Evidence of significant increases in credit risk includes:

Significant deterioration in the expected performance and behavior of the debtor
Significant deterioration in the credit quality of other instruments of the same debtor
Actual or expected deterioration in the economic, financial, regulatory, or technological circumstances relevant to the debtor's credit rating

The application of an assumed number of days past due of 30 is not appropriate.

Stage 3: If there is objective evidence of impairment in addition to a significant increase in credit risk at the end of the reporting period, the loss allowance is also measured on the basis of the present value of the expected losses over the remaining term. However, the recognition of interest in subsequent periods must be adjusted so that future interest income is calculated on the basis of the net carrying amount, i. e. the carrying amount after deducting loss allowances. Objective evidence of impairment includes:

Significant financial difficulty of the issuer or obligor
A breach of contract, such as a default or delinquency in interest or principal payments
It becoming probable that the borrower will enter bankruptcy or other financial reorganization

The simplified approach in accordance with IFRS 9 is always applied to trade accounts receivable or contract assets that do not contain a significant financing component. Changes in credit risk do not have to be tracked. Instead, a loss allowance is initially and subsequently recognized for the lifetime expected credit losses.

The Highlight Group recognizes specific loss allowances on trade accounts receivable and contract assets where there is clear objective evidence such as default or an increased probability of bankruptcy. For assets that are not credit-impaired, impairment is calculated using a provision matrix that determines the expected losses over the remaining term as percentages on the basis of the number of days past due and external ratings available for the borrower. These percentages are based on historical loss rates, which are adjusted for forward-looking estimates.

Besides additions to impairment losses, the item "Impairment and reversals of impairment on financial assets" also includes net income from the reversal of impairment losses.

Financial assets covered by the scope of the impairment provisions under IFRS 9 are derecognized when there is no reasonable expectation of recovery. These are reported at amortized cost under "Gains and losses on the derecognition of financial assets". Amounts previously written off received subsequently are recognized in the same item.

Cash and cash equivalents are also subject to the impairment provisions of IFRS 9. As long as the counterparties - banks and financial institutions - have a good rating and there are no doubts regarding the ability to continue as a going concern, no impairment losses are recognized on account of immateriality.

For long-term financial debt instruments, expected losses are discounted to the reporting date using the effective interest rate of the instrument determined at initial recognition to reflect the time value of money. The remaining term is the maximum term of the contract taking possible extension options into account.

Consolidated financial statements

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4.11.5 Hedging instruments

Currency

As an international enterprise, the Group is exposed to currency fluctuations. Both derivative and primary financial instruments are used to hedge foreign currency fluctuations. Hedge accounting means hedging against changes in the fair value of assets, liabilities or unrecognized firm commitments under contracts for sale or purchase (fair value hedges) or as cash flow hedges to hedge against the risk of fluctuating cash flows. Currency forwards, currency swaps and non-derivative financial liabilities are designated as hedging instruments, either in full or in part. The currency component of non-derivative financial liabilities is designated to hedge sales contracts in foreign currencies that are currently still off-balance sheet.

If all relevant criteria are met, hedge accounting is used to eliminate the accounting mismatch between the hedging instrument and the hedged item. This results in the reporting of the following items in the income statement and in other comprehensive income (OCI):

For forward contracts used to hedge expected transactions, the Group designates the change in the fair value of the forward contract as a hedge, regardless of whether it is a fair value hedge or cash flow hedge. Any material ineffectiveness arising from the cross-currency basis spread (CCBS) is recognized directly in profit or loss. In a fair value hedge, any change in the credit quality of the other party impacts the fair value of the hedging instrument and thus the result of the measurement of effectiveness.

In case of a fair value hedge, the changes in the fair value of the hedged item attributable to the hedged risk and the change in the fair value of the hedging derivate are reported net in the income statement. When hedging unrecognized firm commitments under contracts for sale or purchase (hedged item), the cumulative change in the fair value of the hedged item is recognized as a separate asset or liability. In addition, a corresponding profit or loss is reported so that this is offset against the change in the fair value of the hedging instrument.

When presenting a hedge as a cash flow hedge, the effective portion of the change in the fair value of the derivative is recognized in other comprehensive income (OCI) and in equity under other reserves. Possible ineffectiveness is immediately recognized in profit or loss. When hedging foreign currency transactions, ineffectiveness may arise when the timing of the planned transaction differs from the original estimate, there is CCBS ineffectiveness or when changes occur in the probability of default of the Group or the derivative's counterparty.

Cumulative amounts recognized in other comprehensive income (OCI) as part of a cash flow hedge or assets or liabilities recognized as part of a fair value hedge are reclassified as follows in the periods in which the hedged item is recognized in profit or loss:

If the hedged item results in the recognition of a non-financial asset (e. g. film assets), the deferred hedging gains and losses are included in the original cost of the asset. The deferred amounts are ultimately recognized in the income statement when the hedged item is recognized in profit or loss.
If the hedging instrument expires or is sold or terminated, or when the hedge no longer meets the criteria for hedge accounting, any cumulative deferred hedging gains and losses previously recognized in other comprehensive income (OCI) remains in equity, or in the recognized asset or liability, until the forecast transaction occurs and results in the recognition of a non-financial asset, such as film assets. If the transaction is no longer expected to occur, the cumulative deferred hedging gains and losses will be reclassified to profit or loss.

The hedges are considered highly effective in terms of compensating for the risks of changes in the fair value of the hedged item and the hedging instrument. The effectiveness of the hedge is reviewed on the basis of prospective effectiveness tests to ensure that there is an economic relationship between the hedged item and the hedging instrument. The prospective effectiveness test uses the critical terms match method. The hedged item and the hedging instrument are therefore subject to the same risk and the resulting changes in value largely offset each other. At the inception of the hedge, both the hedge and the risk management goals and strategies of the Group for hedging are formally stipulated and documented.

Derivatives are solely used for hedging purposes and not as speculative investments. However, if derivatives do not meet the criteria for hedge accounting, they are recognized at fair value through profit or loss for accounting purposes. They therefore constitute current assets or liabilities expected to be settled within twelve months of the end of the reporting period.

Interest

Interest rate swaps as hedging instruments can be reported either as hedging against changes in fair value (fair value hedges) or as cash flow hedges to protect against the risk of fluctuating cash flows. Interest rate swaps are either fully or partially designated as hedging instruments.

If all relevant criteria under IFRS 9 are met, hedge accounting is used to reduce the accounting mismatch between the hedging instrument and the hedged item. This results in specific disclosures in profit or loss and other comprehensive income (OCI):

For expected hedges of transactions with interest rate swaps, the Group designates the change in fair value of the interest rate swap as a hedge, regardless of the type of hedge (fair value or cash flow). Ineffective portions are, where material, recognized directly in profit or loss.

In a fair value hedge, the fair value changes of both the hedged item and the interest rate swap are recognized in profit or loss and offset against each other.

For cash flow hedges, the effective portion of changes in the fair value of the interest rate swap is recognized in other comprehensive income (OCI) and reported in equity. Possible ineffectiveness is immediately recognized in profit or loss. Ineffectiveness can occur if the timing of the planned transaction changes or if there are changes in the credit rating of the Group or the counterparty.

Cumulative amounts from cash flow hedges that have been recognized in equity or assets/liabilities from fair value hedges are reclassified to the periods in which the hedged item affects the profit or loss:

If interest rate swap hedges lead to the recognition of a non-financial asset, the deferred hedging gains and losses are included in the cost of this asset and ultimately recognized in profit or loss when the item is recognized.
If an interest rate swap ends or is removed from the hedge and the criteria for hedge accounting no longer apply, accumulated gains or losses remain in equity until the expected transaction occurs. If the transaction is no longer expected to occur, it is immediately reclassified to profit or loss.

The effectiveness of the hedge with interest rate swaps is regularly reviewed to ensure a high degree of risk compensation between the hedged item and the hedging instrument. The effectiveness is confirmed by prospective tests, such as the critical terms match method, which ensures that the underlying transaction and the interest rate swap are exposed to the same risk.

Derivatives, including interest rate swaps, are used exclusively for hedging purposes. If hedge accounting is not used, they are recognized at fair value in profit or loss.

4.12 Pension obligations

Post-employment benefits comprise employee pension benefits. These are divided into defined benefit and defined contribution plans.

A defined contribution plan is a plan in which contributions are paid to a government or private pension scheme on the basis of statutory or private terms and the company has no further benefit obligations on payment of these contributions. The contributions are recognized in profit or loss on maturity.

For defined benefit plans, the present value of defined benefit obligations is calculated each year by an independent actuary using the projected unit credit method. The actuarial assumptions on which the calculations are based are determined by market expectations, at the end of the reporting period, for the period over which the obligations are to be settled. The pension plans are funded. The plan assets are recognized at fair value.

Consolidated financial statements

Actuarial gains and losses arise from changes in the assumptions made, deviations between the actual and forecast return on plan assets and differences between benefits acquired and those calculated using actuarial assumptions. These are recognized in other comprehensive income (OCI) under “Items that cannot be reclassified to profit or loss”. The current service cost and net interest are recognized in profit or loss under personnel expenses. Special events such as plan amendments that change employee claims, curtailments and settlements are recognized in profit or loss.

In addition, the TEAM Group maintains a provident fund for its management staff. This fund manages another savings facility in addition to the pension plan required by law. The fund participates in the capital TEAM Football Marketing AG. The dividend income of TEAM Football Marketing AG is added to the additional savings deposits of the members of management. This provident fund of the management staff is not relevant under IAS 19 as it is a voluntary provident fund.

4.13 Provisions, contingent liabilities and contingent assets

Provisions are recognized for present legal or constructive obligations to third parties arising from past events for which an outflow of cash or other resources is likely in order to settle the obligation. Another requirement for recognition is that the amount of the obligation can be reliably estimated.

Provisions are measured in the amount of the most likely expenditure. Non-current provisions with a material interest effect are carried at the present value of the expected outflow calculated using current interest rates.

Provisions for onerous contracts (pending losses) are recognized when the unavoidable costs of meeting the obligations of a contract exceed the economic benefits expected to be received under it. Impairment on assets relating to this contract is recognized before the provision is recognized.

Possible obligations whose existence (occurrence/non-occurrence) must be confirmed by future events, or obligations whose extent cannot be reliably determined are disclosed as contingent liabilities. Contingent assets are not capitalized, but disclosed as for contingent liabilities if economic benefits are likely for the Group.

4.14 Income taxes

Current taxes are calculated on the basis of the results for the fiscal year and in accordance with the national tax laws of the respective tax jurisdiction. Forecast and actual additional tax payments or refunds for previous years are also taken into account.

Deferred tax assets and liabilities are recognized in line with the liability method. Deferred taxes are recognized in the consolidated financial statements for temporary differences between the carrying amounts and the tax carrying amounts of assets and liabilities and for tax loss carryforwards. Deferred tax assets on deductible temporary differences and tax loss carryforwards are reported only to the extent that it can be assumed with sufficient probability that the respective company will have sufficient taxable income against which temporary differences and unutilized loss carryforwards can be used.

Deferred taxes for temporary differences in the separate financial statements are calculated on the basis of the tax rates that apply in the individual countries as of the realization date or that will apply in future.

Deferred tax assets and deferred tax liabilities have been netted where they relate to the same tax debtor/creditor and the same type of tax and offset each other in the same fiscal year. Deferred tax assets and liabilities arising in the individual consolidated companies are netted depending on their maturities.

Deferred taxes on items recognized directly in other comprehensive income (OCI) are also recognized in other comprehensive income (OCI) and not in the income statement.

No deferred tax liabilities were recognized on temporary differences in connection with shares in subsidiaries provided that it is likely that these temporary differences will not reverse in the foreseeable future and Highlight Communications AG is not able to determine the time at which these temporary differences will reverse.

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Consolidated financial statements

4.15 Equity

Bearer shares outstanding are classified as equity. If the Group acquires treasury shares, the amount paid for the shares including the attributable transaction costs is deducted from equity. The consideration received when treasury shares are sold or issued is added to equity.

4.16 Revenue from contracts with customers

Revenue for goods and services is recognized when a performance obligation is satisfied by the transfer of a promised good or service. Appropriate refund liabilities are recognized under trade accounts payable for additional expenses in connection with goods and services, including expenses for returned products.

Revenue from the exchange of services is recognized in profit or loss only when services of different types and values have been exchanged and the amount of the revenue can be reliably determined.

Revenue is recognized net of invoiced value added tax and trade discounts.

Dividend income is recognized in the fiscal year in which the right to receive payment arises. Interest income is recognized pro rata temporis using the effective interest method.

In the Film segment, revenue from theatrical films is recognized at a point in time from the time of their release. The revenue amount is directly dependent on the number of people who go to see the film. In line with standard practice in the industry, the film rental reported by the movie theater operators to the distributor is recognized as the distribution component of the total movie theater proceeds. Film rentals are calculated on the basis of a percentage of the box office takings.

Revenue from licenses for TV (pay/free) rights is recognized at a point in time on which the license takes effect, generally twelve to 26 months after the commencement of movie exploitation. With these forms of exploitation of film rights, revenue is realized on expiry of the contractual holdback period. They are therefore realized as of the date on which the respective license becomes available.

In global distribution, the Group usually receives minimum guarantees for the exploitation rights sold (movie theater, home entertainment, TV rights). These are allocated to the various revenue types. They are allocated on the basis of past experience in line with corporate planning at the following general rates: 25% for movie theater rights, 15% for home entertainment rights and 60% for TV rights. The corresponding revenue is recognized at a point in time as follows: movie revenue on theatrical release, home entertainment revenue six months after theatrical release, TV revenue 24 months after theatrical release. Revenue from global distribution without any minimum guarantee is recognized on the royalty settlements being received from the licensees.

For home entertainment exploitation, revenue from DVDs and Blu-rays sold is recognized at a point in time as of release, taking into account the expected returns of merchandise. For digital purchase and rental transactions, revenue is also recognized at a point in time from release, based on the number of digital transactions. Revenue from licenses for home entertainment rights is recognized as of the date on which the license takes effect.

Revenue from service productions is generally recognized over time in the amount of the share of total revenue for the reporting period. Total contract sales and costs relating to this are recognized in profit or loss according to the performance progress, provided the earnings from a service production can be determined reliably.

In the case of productions with a comparatively high number of episodes (e.g. dailies, weeklies), an output-based method is generally used to determine the progress of performance. The decisive criterion here is the number of episodes that the client has accepted. For productions with a comparatively small number of episodes (e.g. one-part films, mini-series), the stage of completion is determined using the cost-to-cost method (input-based method). In this case, the stage of completion is based on the costs incurred in relation to the planned total costs. Sufficient certainty with regard to earnings from a service production when determining the stage of completion with the cost-to-cost method is usually achieved at the time the rough cut version is accepted by the client.

If the earnings from a service production cannot be reliably determined, sales are only recognized in the amount of the costs already incurred (zero profit method). If the uncertainties no longer apply at a later date and the earnings from a service production can be estimated reliably, pro rata profits are realized in line with the percentage of completion. If it is likely that the total cost of the production will exceed its total proceeds the expected loss is expensed immediately.

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Current service productions are recognized as contract assets or contract liabilities in the amount of the difference between the revenue realized and invoiced. Service productions where revenue is recognized at a point in time and that cannot be recognized as contract assets or liabilities, as well as service productions in development that have not yet been ordered by the broadcaster, are included in inventories.

In addition to the activities of the TEAM Group and Highlight Event AG, the Sports and Event segment includes the operating business of the Group company Sport1 Medien GmbH and its subsidiaries (see also note 10).

Revenue recognition is based on the contractual terms of the respective project. The Group has an interest in the earnings from the respective project. This comprises fixed remuneration and a variable component based on the revenue generated by the project. The project earnings are calculated using project accounting. The annual project accounting period does not have to be the same as the fiscal year. If it becomes clear that the latest expectations differ from the expectations previously applied, the variable revenue from the respective project is adjusted over the remaining project term in line with the latest expectations. Revenue received for services performed over a defined period and invoiced on a periodic basis is recognized over the period in which the services are performed.

In the free-TV and online video business, revenue is generated in the form of advertising revenue (sale of advertising time). This takes the form of traditional advertisements as well as program sponsorship. Advertising revenue comprises net revenue after discounts, rebates, agency commission and value-added tax. TV advertising revenue is recognized at a point in time when the respective advertisements are broadcast on the SPORT1 channel. Online advertising revenue includes revenue from the marketing of digital services. As online advertising space is sold to an external agency on an annual basis, this revenue is recognized over time.

Production revenue is generally recognized over time (output-oriented method), as the programs produced are created over an extended period, the contractual provisions mean there is no alternative use for their content, and there is a legal right to payment for production services already rendered. The degree of progress is determined by reference to the number of programs produced or the broadcast duration. The normal payment period is generally 30 days. As a matter of principle, there is no right of return for live productions.

4.17 Government grants

4.17.1 Project promotion

Project promotion as a contingently repayable loan

Project film promotions are provided in the form of a contingently repayable interest-free loan in accordance with the requirements of the Film Promotion Act and/or the relevant regional promotions (rules of the Bavarian Film Promotion Fund ("FFF Bayern") for example). These are repayable as soon as or if the producer's income from a film exceeds a certain amount. These are government grants for assets. In the balance sheet, they are deducted from the carrying amount of the film assets in the amount which is sufficiently certain not to have to be repaid.

The grants are recognized in profit or loss using a reduced amortization amount of capitalized cost over the exploitation cycle of a film.

The amount which is sufficiently certain not to have to be repaid can usually be determined at the time of release. If it is determined at a later date that a further part of the loan is repayable, the carrying amount of the film asset is raised by this amount and a liability is recognized at the same time for the corresponding obligation.

Project subsidies

Project subsidies are non-repayable subsidies that a producer is entitled to depending on the number of people who go to see the (subsidized) film in theatrical exploitation for financing the project costs of a subsequent film. These are government grants for assets. The subsidies granted are deducted from the carrying amount of the subsidized film in the balance sheet when filming on the subsequent film commences. If there is no longer a residual carrying amount at the time of requesting the subsidies for the subsidized film, income from the project subsidies remains in the income statement.

The grants are recognized in profit or loss using a reduced amortization amount of capitalized cost over the exploitation cycle of a film.

Consolidated financial statements

Project film funding in accordance with BKM (DFFF) and Creative Europe MEDIA regulations

Project film funding in accordance with BKM (DFFF) regulations – such as the MFG Line Producer grant, the German Motion Picture Fund (GMPF) – or the regulations of Creative Europe MEDIA are grants that do not have to be repaid and serve to refund the production costs of theatrical movies or TV movies/series after clearly defined requirements are fulfilled.

These are government grants for assets. Project film promotions granted are deducted from the carrying amount of the film in the balance sheet according to the stage of completion when the decision is received in accordance with the matching principle. Prior to theatrical release these are capitalized as other receivables. At the same time, deferred income is reported under other liabilities.

The grants are recognized in profit or loss using a reduced amortization amount of capitalized cost over the exploitation cycle of a film.

4.17.2 Distribution loans

Distribution loan as a contingently repayable loan

Distribution loans are provided in the form of a contingently repayable interest-free loan in accordance with the requirements of the Film Promotion Act and/or the relevant regional promotions (rules of the Bavarian Film Promotion Fund ("FFF Bayern") for example). These are repayable as soon as or if the distributor's income from a film exceeds a certain amount.

These are government grants for expenses already incurred. These are recognized as a reduction of release costs by the amount which is sufficiently certain not to have to be repaid. These grants are recognized in the periods in which the corresponding release costs are incurred.

The amount which is sufficiently certain not to have to be repaid can usually be determined at the time of release. If it is determined at a later date that a further part of the loan is repayable, this is posted as an expense and the corresponding amount recognized as a liability.

Sales subsidies

Sales subsidies are non-repayable subsidies that a distributor is entitled to depending on the number of people who go to see the (subsidized) film in the theatrical exploitation for financing the release costs for a subsequent film. Distribution funding under Creative Europe MEDIA regulations also qualifies as a sales subsidy. These are government grants for expenses already incurred. The sales subsidies granted are recognized in profit or loss as a reduction of release costs at the time of the subsequent film's release.

The extent of Swiss film grants is of immaterial significance. The accounting policies described above apply analogously to Swiss film grants.

4.18 Share-based remuneration

Share-based remuneration transactions that are offset by equity instruments are measured at fair value at the time they are granted. The fair value of the liability is recognized over the vesting period as personnel expenses and offset against the capital reserve. In the case of share-based remuneration transactions that are offset by equity instruments, the fair value is determined using a measurement method (Black-Scholes model). The assumptions for estimating the fair value of share-based remuneration transactions are set out in note 9. No share-based remuneration transactions were issued that stipulate settlement in cash.

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5. JUDGMENT/ESTIMATION UNCERTAINTY

In preparing the consolidated financial statements in accordance with IFRS, the management is required to make estimates and assumptions influencing the income, expenses, assets, liabilities as well as contingent liabilities and assets reported as of the end of the reporting period. These estimates and assumptions are based on the management's best possible assessment based on past experience and other factors including estimates of future events. These developments are dynamic and so deviations from the estimates and assumptions made in these consolidated financial statements cannot be ruled out. Estimates and judgments are reviewed on an ongoing basis. Changes to estimates are required if the circumstances on which they are based have changed or new or additional information has become available. Such changes are recognized in the reporting period in which the estimate is modified.

The key assumptions concerning the future and other key sources of estimation uncertainty that have a significant risk of causing a material adjustment to the reported income, expenses and contingent liabilities within the next twelve months are discussed below.

5.1 Significant risks

5.1.1 Impairment of non-financial assets

To assess whether assets have become impaired, the expected future cash flows from the use and possible disposal of such assets are estimated per cash-generating unit. The estimates and assumptions are based on premises that reflect the most recent information available. The actual cash flows may differ significantly from the discounted future cash flows based on these estimates. Changes in revenue and cash flow forecasts could lead to impairment.

5.2 Other risks

5.2.1 Estimates used to determine the transaction price for revenue from contracts with customers

Certain contracts with customers at the Highlight Group have transaction-based consideration. Typically, however, the effective transaction prices are known when the financial statements are prepared and no estimates are required. Nonetheless, it may occur that transaction-based consideration has to be estimated; this is done using the probability-weighted expected value or the most likely amount – depending on which of the two values is closest to the consideration owed to the Highlight Group. Future revenue from licenses based on future transactions (user-based royalties) are recognized at the later of license utilization or fulfillment of the performance obligation.

5.2.2 Financial assets

The fair value of financial assets which are traded on organized markets is determined on the basis of the quoted market price at the end of the reporting period. The fair value of financial assets for which there is no active market is determined by using measurement methods. Measurement methods include using the most recent transactions between knowledgeable, willing parties in an arm's length transaction, comparing the fair values of other, mostly identical financial instruments, analyzing discounted cash flows and using other measurement models based on management assumptions.

5.2.3 Impairment of financial assets (debt instruments)

The requirements for the recognition of impairment on financial assets, which is based on the expected loss model, include substantial judgments regarding the extent to which expected credit losses can be influenced by changes in economic factors. Financial assets must be divided into different risk classes/ratings in accordance with historical and expected probabilities of default (for example, due to the general economic situation and related forecasts). Loss allowances must be recognized before loss events occur.

At the Highlight Group, expected losses are defined as the weighted average of credit losses or using available external ratings, which are weighted by the respective probabilities of default. The estimates always account for the possibility of default and the possibility of non-default, even if the most probable scenario is non-default.

Please see note 4.11.4 for further disclosures.

Consolidated financial statements

5.2.4 Service productions

The percentage of completion of customer-specific service productions for which revenue is recognized over time is determined using the cost-to-cost method (recognition in the amount of costs incurred as of the end of the reporting period in proportion to the expected total costs) or the physical completion method. The expected production cost and the stage of completion are calculated on the basis of estimates. Changes in estimates have a direct effect on earnings generated.

5.2.5 Refund liabilities for expected returns of merchandise

The Group's refund liabilities for expected returns of merchandise are based on an analysis of contractual or legal obligations, historical trends and the Group's experience. On the basis of information currently available, management considers the refund liabilities recognized for expected returns of merchandise to be adequate. As they are based on management estimates, they may have to be revised upon better information becoming available. Such adjustments could affect the refund liabilities recognized for expected returns of merchandise and the sales in future periods.

5.2.6 Provisions for litigation

The Group companies are involved in various legal disputes. On the basis of current knowledge, the Group assumes that its provisions recognized are adequate. However, further litigation could arise resulting in costs not covered by the existing provisions. Moreover, it cannot be ruled out that the extent, duration and the costs of legal disputes could increase. Such changes may affect the provisions recognized for litigation in future reporting periods.

5.2.7 Pension obligations

Pension liabilities and the associated net pension costs for each period are calculated by way of actuarial measurement. Such measurement is based on key premises, including discounting factors, salary trends and pension trends. The discounting factors used are determined on the basis of the returns at the end of the reporting period on high quality corporate or government bonds of a consistent currency and term. The premises used can differ from actual development owing to fluctuations in the market and economic situation. This can have a material impact on pension obligations. Differences resulting from this are recognized in other comprehensive income (OCI) in the period in which they arise.

5.2.8 Income taxes

Extensive estimates are required to determine deferred tax assets and liabilities. Some of these estimates are based on an interpretation of existing tax laws and regulations. Management is of the opinion that the estimates are appropriate and take sufficient account of any uncertainty in the tax assets and liabilities recognized. In particular, the deferred tax assets arising from loss carryforwards that can be offset are dependent on future profits being generated. Deferred tax claims arising from remeasurement are also dependent on future profits. Moreover, tax loss carryforwards expire after a certain number of years in some countries. Actual profits may differ from estimates. Such changes may affect the deferred tax assets and liabilities recognized in future reporting periods.

5.2.9 Leases

The Group determines the lease term as the non-cancellable lease term and all periods covered by an option to extend the lease if the Group is reasonably certain to exercise that option and all periods covered by an option to terminate the lease if the Group is reasonably certain not to exercise that option. The Group assesses whether it is reasonably certain to exercise the extension option at its own discretion. This means that management takes into account all relevant factors that create an economic incentive to extend the lease. After the inception of the lease, the Group reassesses the term of the lease when a material event or change in circumstances (such as a change in business strategy) occurs within the Group's control and affects its ability to exercise (or not exercise) the option.

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6. NOTES TO INDIVIDUAL ITEMS OF THE BALANCE SHEET

6.1 Film assets

(TCHF)	Third-party productions	In-house productions	Total film assets
Acquisition and production costs 2025
January 1, 2025	340,847	1,572,109	1,912,956
Currency translation differences	-2,895	-16,365	-19,260
Additions	10,888	106,851	117,739
Disposals	5,420	1,017	6,437
Balance on December 31, 2025	343,420	1,661,578	2,004,998
Accumulated amortization, impairment and reversals of impairment 2025
January 1, 2025	333,522	1,355,529	1,689,051
Currency translation differences	-2,789	-14,185	-16,974
Depreciation for the year	7,225	94,849	102,074
Impairment	155	14,484	14,639
Reversals of impairment losses	1,590	5,302	6,892
Disposals	5,420	1,017	6,437
Balance on December 31, 2025	331,103	1,444,358	1,775,461
Acquisition and production costs 2024
January 1, 2024	352,495	1,470,943	1,823,438
Currency translation differences	3,406	16,796	20,202
Additions	4,046	84,370	88,416
Disposals	19,100	-	19,100
Balance on December 31, 2024	340,847	1,572,109	1,912,956
Accumulated amortization, impairment and reversals of impairment 2024
January 1, 2024	345,685	1,281,750	1,627,435
Currency translation differences	3,329	14,821	18,150
Depreciation for the year	4,204	46,192	50,396
Impairment	56	13,481	13,537
Reversals of impairment losses	652	715	1,367
Disposals	19,100	-	19,100
Balance on December 31, 2024	333,522	1,355,529	1,689,051
Net carrying amounts on December 31, 2025	12,317	217,220	229,537
Net carrying amounts on December 31, 2024	7,325	216,580	223,905

Impairment losses of TCHF 14,639 (previous year's period: TCHF 13,537) were recognized in the year under review as the value in use no longer covers the acquisition costs or the carrying amount of certain films due to a lack of market acceptance. The pre-tax discount rates used for determination of impairment are between 5.97% and 6.80% (previous year: between 6.61% and 6.90%). The disposals relate to co-productions and third-party productions to which the distribution rights expired in the year under review. Reversals of impairment losses are recognized for projects for which a write-down has been recognized in the past and whose forecast revenues for the remaining exploitation period are considerably higher than the previous year's estimates.

In the year under review, the Highlight Group received project subsidies and project promotion loans of TCHF 31,128 (previous year's period: TCHF 43,349), which were deducted from the capitalized production costs.

Deferred project promotion loans amounted to TCHF 6,872 as of December 31, 2025 (previous year: TCHF 5,389). Project promotions of TCHF 1,060 were repaid in the year under review (previous year's period: TCHF 1,453).

In addition, sales subsidies and distribution loans of TCHF 2,739 (previous year's period: TCHF 3,095) were recognized in the consolidated income statement in the year under review as a reduction of release costs. These grants are recognized in the periods in which the corresponding release costs are incurred.

There were deferred distribution loans of TCHF 22 as of December 31, 2025 (previous year: TCHF 0). Distribution loans of TCHF 1,161 (previous year's period: TCHF 1,905) were repaid over the year under review. As of December 31, 2025, there were receivables for subsidies and grants of TCHF 23,794 (previous year: TCHF 19,946).

Directly attributable financing costs of TCHF 5,288 (previous year's period: TCHF 5,294) were capitalized in the year under review. The costs to be capitalized were calculated using the interest rates from the funds borrowed specifically for the financing. The financing interest rate varied from 4% to 10.29% (previous year: 4.0% to 11.48%).

6.2 Other intangible assets and goodwill

(TCHF)	Patents and licenses	Purchased software	Internally developed intangible assets	Advance payments	Total intangible assets	Goodwill
Acquisition and production costs 2025
January 1, 2025	71,051	14,537	16,369	1,712	103,669	115,195
Change in scope of consolidation	-1,393	-294	-	-	-1,687	-
Currency translation differences	-16	-48	-140	-18	-222	-1,007
Additions	127	435	-	1,735	2,297	-
Disposals	270	976	260	-	1,506	-
Transfers	-	72	1,613	-1,613	72	-
Balance on December 31, 2025	69,499	13,726	17,582	1,816	102,623	114,188
Accumulated amortization/impairments 2025
January 1, 2025	33,709	11,721	12,417	-	57,847	6,126
Change in scope of consolidation	-1,393	-197	-	-	-1,590	-
Currency translation differences	-11	-45	-104	-	-160	-38
Depreciation for the year	3,224	1,692	2,207	-	7,123	-
Impairment	10,277	-	-	-	10,277	90,884
Disposals	270	976	260	-	1,506	-
Balance on December 31, 2025	45,536	12,195	14,260	-	71,991	96,972
Acquisition and production costs 2024
January 1, 2024	71,141	13,056	13,859	2,352	100,408	113,983
Currency translation differences	31	60	99	37	227	1,212
Additions	515	1,739	-	1,734	3,988	-
Disposals	636	318	-	-	954	-
Transfers	-	-	2,411	-2,411	-	-
Balance on December 31, 2024	71,051	14,537	16,369	1,712	103,669	115,195
Accumulated amortization/impairments 2024
January 1, 2024	30,352	9,855	10,224	-	50,431	6,082
Currency translation differences	21	50	58	-	129	44
Depreciation for the year	3,972	2,136	2,135	-	8,243	-
Disposals	636	320	-	-	956	-
Balance on December 31, 2024	33,709	11,721	12,417	-	57,847	6,126
Net carrying amounts on December 31, 2025	23,963	1,531	3,322	1,816	30,632	17,216
Net carrying amounts on December 31, 2024	37,342	2,816	3,952	1,712	45,822	109,069

Consolidated financial statements

118

Goodwill

The table below shows the allocation of goodwill:

(TCHF)	Dec. 31, 2025	Dec. 31, 2024
Sport1 Medien GmbH (Sports and Event segment)	-	84,537
Jackpot50 GmbH (Sports and Event segment)	-	7,264
Constantin Film Distribution GmbH (Film segment)	12,025	12,025
Constantin Entertainment GmbH (Film segment)	3,236	3,268
Constantin Film Produktion GmbH (Film segment)	1,478	1,493
Hager Moss Film GmbH (Film segment)	438	442
Other (Film segment)	39	40
Total	17,216	109,069

Goodwill was tested for impairment at the level of the cash-generating units in the respective segment. The recoverable amounts in impairment testing for goodwill are equal to the value in use. The basis of the discounted cash flow method in the Highlight Group is future cash flows derived from three- or five-year earnings planning. The growth rate beyond the detailed planning period was set at 1% for the impairment test of Constantin Film Distribution GmbH (previous year: 1%), 1.5% for Sport1 Medien GmbH (previous year: 2%) and between 0% and 0.5% for other items (previous year: 0% to 0.5%). The capital asset pricing model (CAPM) as well as specific risk premiums were used to calculate the costs of capital and a peer group was referred to. As of December 31, 2025, the CAPM-based discount factor before taxes was set at 10.03% for the impairment test of Constantin Film Distribution GmbH (previous year: 10.26%), 13.83% for Sport1 Medien GmbH (previous year: 9.94%) and between 10.28% and 10.49% for other items (previous year: 10.77% to 11.35%).

As of December 31, 2025, goodwill was tested for impairment as part of the annual impairment test. This resulted in impairment losses of TCHF 90,884 in the financial year, as the goodwill of Sport1 Medien GmbH and Jackpot50 GmbH is no longer supported by estimated future cash flows. In the prior year, there was no need to recognize impairment losses on goodwill.

The impairment is recognized in the income statement under "Goodwill impairment".

Corporate planning was also supplemented by further alternative scenarios for the possible development of the Highlight Group and these were also used for the purposes of impairment testing. Even using more conservative scenarios, no goodwill impairment was required regarding the remaining goodwill items.

6.3 Property, plant and equipment

(TCHF)	Leasehold improvements	Technical equipment and machinery	Other equipment, operating and office equipment	Advance payments and assets under construction	Total property, plant and equipment
Acquisition and production costs 2025
January 1, 2025	4,600	30,714	21,331	42	56,687
Change in scope of consolidation	-976	-26,643	-58	-	-27,677
Currency translation differences	-14	-115	-263	-	-392
Additions	12	957	736	-	1,705
Disposals	12	208	1,601	-	1,821
Reclassifications	42	-	-72	-42	-72
Balance on December 31, 2025	3,652	4,705	20,073	-	28,430
Accumulated depreciation 2025
January 1, 2025	4,310	21,463	15,412	-	41,185
Change in scope of consolidation	-892	-19,490	-	-	-20,382
Currency translation differences	-11	-75	-135	-	-221
Depreciation for the year	64	2,333	1,372	-	3,769
Disposals	12	208	1,491	-	1,711
Balance on December 31, 2025	3,459	4,023	15,158	-	22,640
Acquisition and production costs 2024
January 1, 2024	4,517	29,332	19,922	77	53,848
Currency translation differences	19	363	209	1	592
Additions	64	940	2,275	43	3,322
Disposals	-	-	1,075	-	1,075
Reclassifications	-	79	-	-79	-
Balance on December 31, 2024	4,600	30,714	21,331	42	56,687
Accumulated depreciation 2024
January 1, 2024	3,953	17,039	14,727	-	35,719
Currency translation differences	14	161	127	-	302
Depreciation for the year	343	4,263	1,549	-	6,155
Disposals	-	-	991	-	991
Balance on December 31, 2024	4,310	21,463	15,412	-	41,185
Net carrying amounts on December 31, 2025	193	682	4,915	-	5,790
Net carrying amounts on December 31, 2024	290	9,251	5,919	42	15,502

Consolidated financial statements

120

6.4 Leases

Right-of-use assets

(TCHF)	Real estate	Vehicles	Technical equipment	Operating and office equipment	Total right-of-use assets
Acquisition and production costs 2025
January 1, 2025	55,204	1,992	3,351	487	61,034
Change in scope of consolidation	-6,824	-100	-3,334	-	-10,258
Currency translation differences	-557	-17	-17	-4	-595
Additions	1,950	138	-	-	2,088
Disposals	6,922	220	-	-	7,142
Balance on December 31, 2025	42,851	1,793	-	483	45,127
Accumulated depreciation 2025
January 1, 2025	24,525	1,269	2,563	252	28,609
Change in scope of consolidation	-4,919	-40	-2,745	-	-7,704
Currency translation differences	-187	-12	-14	-2	-215
Depreciation for the year	5,116	335	196	69	5,716
Disposals	4,080	217	-	-	4,297
Balance on December 31, 2025	20,455	1,335	-	319	22,109
Acquisition and production costs 2024
January 1, 2024	47,427	1,593	3,311	415	52,746
Currency translation differences	435	13	40	3	491
Additions	9,824	665	-	69	10,558
Disposals	2,482	279	-	-	2,761
Balance on December 31, 2024	55,204	1,992	3,351	487	61,034
Accumulated depreciation 2024
January 1, 2024	20,450	1,125	2,120	175	23,870
Currency translation differences	151	12	20	1	184
Depreciation for the year	5,963	411	423	76	6,873
Disposals	2,039	279	-	-	2,318
Balance on December 31, 2024	24,525	1,269	2,563	252	28,609
Net carrying amounts on December 31, 2025	22,396	458	-	164	23,018
Net carrying amounts on December 31, 2024	30,679	723	788	235	32,425

Reconciliation of liabilities arising from financial liabilities

( TCHF )

Balance on December 31, 2023	31,429
Additions (net)	10,100
Interest cost	819
Payments	-6,781
Cash change from repayment	-5,962
Cash change from interest	-819
Currency translation	333
Other	-138
Balance on December 31, 2024	35,762
Change in scope of consolidation	-2,734
Additions/disposals (net)	-1,226
Interest cost	771
Payments	-5,208
Cash change from repayment	-4,437
Cash change from interest	-771
Currency translation	-433
Balance on December 31, 2025	26,932
thereof non-current lease liabilities	21,617
thereof current lease liabilities	5,315

The amounts in the consolidated income statement attributable to leases are shown in the following table:

Lease payments in the consolidated income statement

(TCHF)	Jan. 01 to Dec. 31, 2025	Jan. 01 to Dec. 31, 2024
Income from the disposal of right-of-use assets	470	15
Expenses from short-term leases	1,256	1,609
Expenses from leases of low-value assets (if not already short-term)	41	31
Expenses from variable lease payments (not included in lease liabilities)	944	1,205
Amortization on right-of-use assets from leases	5,716	6,873
Interest expenses from lease liabilities	771	819
Total	8,258	10,522

The ancillary costs from renting buildings are recognized as variable lease expenses.

The cash outflows in the consolidated cash flow statement attributable to leases are shown in the following table:

Lease payments in the consolidated cash flow statement

(TCHF)	Jan. 01 to Dec. 31, 2025	Jan. 01 to Dec. 31, 2024
Short-term leases	1,256	1,609
Leases for low-value assets	41	31
Variable lease payments	944	1,205
Repayment and interest on lease liabilities	5,208	6,781
Total	7,449	9,626

Consolidated financial statements

Under IFRS 16, the following lease-related future payments are not included in the measurement of lease liabilities:

Future unrecognized lease payments

(TCHF)	Future payments from short-term leases	Future payments from leases for low-value assets	Future variable lease payments	Future payments from non-guaranteed renewal options	Total
As of December 31, 2025
Due within one year	353	29	490	–	872
Due between one year and five years	–	55	1,665	497	2,217
Due after five years	–	–	1,226	776	2,002
Total	353	84	3,381	1,273	5,091
As of December 31, 2024
Due within one year	414	36	494	–	944
Due between one year and five years	–	86	1,730	3,163	4,979
Due after five years	–	–	1,650	784	2,434
Total	414	122	3,874	3,947	8,357

6.5 Financial information of subsidiaries with material non-controlling interests

Material non-controlling interests

	Dec. 31, 2025	Dec. 31, 2024
Sport1 GmbH	50.00%	50.00%
Disclosures on financial information (after elimination of internal relations)
(TCHF)	Dec. 31, 2025	Dec. 31, 2024
Share in equity of non-controlling interests	-10,057	4,634
(TCHF)	Jan. 01 to Dec. 31, 2025	Jan. 01 to Dec. 31, 2024
Share of earnings of non-controlling interests	-9,358	-3,135
Other share of earnings of non-controlling interests	-5,381	-80
Paid dividends to non-controlling interests	–	–
Disclosures on financial information (before elimination of internal relations)
(TCHF)	Dec. 31, 2025	Dec. 31, 2024
Current assets	23,396	21,586
Non-current assets	31,227	41,660
Total assets	54,623	63,246
Current liabilities	67,372	44,787
Non-current liabilities	7,364	9,191
Total liabilities	74,736	53,978
Net assets	-20,113	9,268

(TCHF)	Jan. 01 to Dec. 31, 2025	Jan. 01 to Dec. 31, 2024
Sales	49,338	36,881
Earnings from continuing operations after taxes	-18,719	-6,271
Other earnings after taxes	-10,762	-160
Total earnings for the year	-29,481	-6,431
Cash flow for/from operating activities	-7,147	2,731
Cash flow for investing activities	-5,301	-923
Cash flow from/for financing activities	12,475	-1,794
Cash flow from the reporting period	27	14

As in the previous year, all other non-controlling interests are immaterial.

6.6 Investments in associates and joint ventures

Associated companies

As in the previous year, the Group holds interests in two associated companies that are included in the consolidated financial statements using the equity method as of December 31, 2025.

Carrying amounts

(TCHF)
Balance on December 31, 2023	47
Dividends/repayments of capital	-5
Share of earnings	4
Currency translation	1
Balance on December 31, 2024	47
Dividends/repayments of capital	-6
Share of earnings	4
Balance on December 31, 2025	45

Financial information

(TCHF)	Jan. 01 to Dec. 31, 2025	Jan. 01 to Dec. 31, 2024
Earnings after taxes	8	7
Profit from discontinued operations after taxes	-	-
Other comprehensive income/loss (OCI)	-	-
Total earnings	8	7
	Dec. 31, 2025	Dec. 31, 2024
Contingent liabilities (proportional)	-	-

For updating reasons, the annual financial statements of BECO Musikverlag GmbH as of December 31, 2024, were used for reporting on associated companies as the annual financial statements as of December 31, 2025, have not yet been prepared. No circumstances arose in the current fiscal year that would have necessitated an adjustment to the annual financial statements used as a basis.

The financial statements for Upgrade Productions LLC have also not yet been prepared as of December 31, 2025. In the previous year, an operating loss of TCHF 124 was not included in the consolidated financial statements and was carried forward off the balance sheet. No circumstances arose in the current fiscal year that would have necessitated an adjustment to the annual financial statements used as a basis.

Consolidated financial statements

124

Joint ventures

As of December 31, 2025 – as in the previous year – the Group has investments in one joint venture that is included in the consolidated financial statements using the equity method.

Carrying amounts

(TCHF)

Balance on December 31, 2023	-
Share of earnings	661
Currency translation	-8
Balance on December 31, 2024	653
Additions	354
Dividends/repayments of capital	-382
Share of earnings	-111
Currency translation	-8
Balance on December 31, 2025	506

Financial information

(TCHF)	Jan. 01 to Dec. 31, 2025	Jan. 01 to Dec. 31, 2024
Earnings after taxes	-222	1,323
Profit from discontinued operations after taxes	-	-
Other comprehensive income/loss (OCI)	-	-
Total earnings	-222	1,323
	Dec. 31, 2025	Dec. 31, 2024
Contingent liabilities (proportional)	-	-

In the reporting period, there were no unrecognized pro rata losses of companies valued at equity (previous year: TCHF 0).

6.7 Non-current receivables

(TCHF) Dec. 31, 2025 Dec. 31, 2024

Non-current trade accounts receivable (financial assets)
Non-current trade accounts receivable	14,147	15,307
Credit losses expected over the entire term (level 2)	-	-
Individual value adjustments (level 3)	-	-
Total	14,147	15,307
Non-current other receivables (financial assets)
Non-current other receivables	-	313
Total	-	313
Non-current other receivables (non-financial assets)
Non-current other receivables	703	-
Total	703	-
Total non-current receivables	14,850	15,620

Non-current financial receivables primarily relate to the transfer of rights. They also relate to the VAT portion for revenue not yet recognized in accordance with IFRS. They are discounted in line with their maturity and measured in accordance with the impairment provisions general impairment approach.

6.8

Deferred tax assets

Breakdown of deferred tax assets

(TCHF)	Dec. 31, 2025	Dec. 31, 2024
Tax loss carryforwards	3,183	3,803
Intangible assets/film assets	18,266	21,596
Property, plant and equipment	-	473
Trade receivables and other receivables	1,321	6,094
Contract assets	3	1
Other financial assets	337	215
Inventories	21,940	19,242
Lease liabilities	7,401	9,401
Trade payables and other liabilities	962	1,542
Contract liabilities	1,164	2,333
Advance payments received	8,734	9,076
Provisions	236	247
Pension obligations	246	475
Total	63,793	74,498
Netting with deferred tax liabilities	-62,596	-67,876
Deferred tax assets (net)	1,197	6,622

Maturities

(TCHF)	Dec. 31, 2025	Dec. 31, 2024
Current deferred tax assets	300	936
Non-current deferred tax assets	897	5,686

For the year under review, deferred tax assets were recognized on tax loss carryforwards to the extent that the Group expects the respective companies to generate future taxable profits. In addition, deferred tax assets were recognized for temporary differences. After offsetting against deferred tax liabilities, deferred tax assets totaling TCHF 1,197 (previous year: TCHF 6,622) result as of December 31, 2025.

The Group has total loss carryforwards of TCHF 131,751 (previous year: TCHF 97,459) for which no deferred tax assets were recognized. These are scheduled to expire as follows:

2025 (TCHF)	Expiry date
	< 1 year	1 - 5 years	> 5 years	thereof without expiry
	-	18,365	113,386	86,539
2024 (TCHF)	Expiry date
	< 1 year	1 - 5 years	> 5 years	thereof without expiry
	-	18,365	79,094	55,287

Deferred tax assets are measured at the tax rates applicable in the individual countries at the realization date or in future.

(TCHF)	Jan. 01 to Dec. 31, 2025	Jan. 01 to Dec. 31, 2024
Changes in deferred taxes (assets and liabilities)	-959	-5,107
thereof:
Change in income statement	437	-5,470
Change in other comprehensive income/loss	-477	482
Change in scope of consolidation	-519	-
Change in currency translation	-400	-119

Consolidated financial statements

126

6.9 Other assets

Other financial assets

Other non-current financial assets

(TCHF)	Dec. 31, 2025	Dec. 31, 2024
Equity instruments at fair value through other comprehensive income (FVTOCI)
Investment in Deutsche Streaming Allianz GmbH	-	1,151
Investment in Starzz LLC	-	165
Investment in Tigerspin GmbH	4,373	4,068
Investment in Footbao.world AG	2,968	2,998
Investment in Car4Sports GmbH	-	4,339
Investment in Racemates GmbH	1,866	2,356
Investment in Clanq AG	2,644	5,739
Investment in Venturetech	16	-
Other investments	14	14
Total	11,881	20,830

In the previous years, 17.5% of Car4Sports GmbH, 25% of Deutsche Streaming Allianz GmbH, 19.5% of Tigerspin GmbH, 12.51% of Starzz LLC (Kingstown/Saint Vincent and the Grenadines), 10% of Footbao.world AG, Zug, 10% of Clanq AG and 16% of Racemates GmbH were acquired through media-for-equity deals. During the reporting year, an additional 10% stake in Tigerspin GmbH was acquired through a media-for-equity deal. In addition, the investment agreement with Starzz LLC was terminated during the reporting year, and the carrying amount of the investment was fully written down. Due to the provisions in the shareholders' agreement, there is no significant influence in relation to the interest in Deutsche Streaming Allianz GmbH. The equity interests are held as strategic investments and are not intended for short-term trading purposes; they are therefore measured at fair value through other comprehensive income (FVTOCI) and allocated to level 3 of the fair value hierarchy (see note 8.4). Due to the business performance being below expectations and the failure to meet the planned figures, impairments on the investments amounting to a total of TCHF 10,816 (previous year: TCHF 10,111) were recognized in other comprehensive income in the reporting period.

Profit participation rights were acquired in return for advertising services in the previous year. Through this profit participation right, Sport1 GmbH is entitled to 19.99% of the EBIT of a third-party company's profit center. As the profit participation rights contain a combined call/put option in a company yet to be founded, this is treated as an equity instrument, recognized at fair value through other comprehensive income (FVTOCI) and assigned to level 3 of the fair value hierarchy (see note 8.4). Due to business performance falling short of expectations, a fair value adjustment of TCHF 1,656 was recognized in other comprehensive income in the previous year as a result of which the profit participation right is completely impaired.

As in the previous year, there are no other current financial assets as of the end of the reporting period.

Other non-financial assets

Other non-current non-financial assets contain pension assets in connection with defined benefit pension plans of TCHF 174 (previous year: TCHF 486).

6.10 Inventories

(TCHF)	Dec. 31, 2025	Dec. 31, 2024
Net balance
Unfinished goods and services	6,001	7,408
Blu-rays/DVDs	68	398
Constants	-	99
Total	6,069	7,905

Unfinished goods and services essentially relate to service productions in development that have not yet been ordered by the broadcaster, as well as service productions where revenue is recognized at a point in time and that cannot be recognized as contract assets or liabilities.

In the year under review, impairment losses were recognized in the amount of TCHF 1,337 (previous year's period: TCHF 599) and impairment losses of TCHF 82 were reversed (previous year's period: TCHF 0).

Consolidated financial statements

6.11 Trade accounts receivable and other receivables

(TCHF)	Dec. 31, 2025	Dec. 31, 2024
Trade accounts receivable	42,966	45,449
Other receivables	68,377	72,457
Total	111,343	117,906

6.11.1 Trade accounts receivable

(TCHF)	Dec. 31, 2025	Dec. 31, 2024
Trade accounts receivable (financial assets)
Current receivables	43,676	44,499
Receivables due from related parties	517	265
Credit losses expected over the entire term (level 2)	-208	-88
Individual value adjustments (level 3)	-2,416	-2,777
Total	41,569	41,899
Trade accounts receivable (non-financial assets)
Receivables from countertrades	1,397	3,550
Total	1,397	3,550
Total trade accounts receivable	42,966	45,449

Receivables from countertrades arise when the Group receives a service or goods in an exchange transaction but the agreed consideration has not yet been paid in full. This is a trade account receivable without a direct cash payment.

The carrying amount of receivables not yet due and receivables that are overdue by up to 90 days is approximately their fair value.

Impairment losses

(TCHF)	Credit losses expected over the entire term (level 2)	Individual value adjustments (level 3)
Balance on December 31, 2023	119	2,471
Currency translation differences	-	26
Addition due to an increase in the volume of receivables	17	-
Reduction due to a decrease in the volume of receivables	-48	-
Additions	-	391
Utilization	-	-111
Balance on December 31, 2024	88	2,777
Change in scope of consolidation	-7	-122
Currency translation differences	-1	-22
Addition due to an increase in the volume of receivables	124	-
Change in risk parameters	4	-
Additions	-	306
Utilization	-	-523
Balance on December 31, 2025	208	2,416

Trade accounts receivable are measured using the simplified approach. Stage 3 impairment is recognized following an individual assessment. There is no relevant collateral or other credit enhancements.

The stage 3 impairment losses relate to various individual matters that were not yet completed and therefore were not derecognized.

Currency profile

(TCHF)	Dec. 31, 2025	Dec. 31, 2024
CHF	665	955
EUR	31,525	31,767
USD	10,684	12,477
Other	92	250
Total	42,966	45,449

6.11.2 Other receivables

Other receivables (financial assets)

(TCHF)
Dec. 31, 2025	Gross	Level 1	Level 2	Level 3	Net
Suppliers with debit balances	1,143	-2	-	-	1,141
Receivables from loans	570	-1	-	-233	336
Subsidies receivables	23,796	-2	-	-	23,794
Positive fair value of derivative financial instruments without hedging relationships	462	-	-	-	462
Receivables due from personnel (financial)	44	-	-	-	44
Other assets (financial)	9,675	-7	-	-5	9,663
Other receivables due from related parties	22,250	-	-	-1,512	20,738
Total	57,940	-12	-	-1,750	56,178
(TCHF)
---	---	---	---	---	---
Dec. 31, 2024	Gross	Level 1	Level 2	Level 3	Net
Suppliers with debit balances	756	-1	-	-	755
Receivables from loans	643	-1	-	-235	407
Subsidies receivables	19,947	-1	-	-	19,946
Positive fair value of derivative financial instruments without hedging relationships	1,340	-	-	-	1,340
Receivables due from personnel (financial)	774	-	-	-	774
Other assets (financial)	3,978	-3	-	-	3,975
Other receivables due from related parties	28,869	-	-	-	28,869
Total	56,307	-6	-	-235	56,066

Receivables from loans essentially include loans to co-producers and service producers of ongoing productions.

In connection with a media-for-equity fund, embedded derivatives and options of TCHF 410 (previous year: TCHF 415) were recognized under other financial assets. In the previous year, these items were measured at TCHF 360 in financial income through profit or loss and TCHF 143 in financial expenses through profit or loss.

Other financial assets in the reporting year and the previous year essentially include options for script rights and deposits paid.

The carrying amount for all current financial assets is approximately their fair value. They are measured using the general approach.

Impairment losses

(TCHF)	Credit losses expected over 12 months (level 1)	Credit losses expected over the entire term (level 2)	Individual value adjustments (level 3)
Balance on December 31, 2023	8	–	517
Currency translation differences	–	–	10
Reduction due to a decrease in the volume of receivables	–2	–	–
Additions	–	–	71
Utilization	–	–	–363
Balance on December 31, 2024	6	–	235
Currency translation differences	–1	–	–12
Addition due to an increase in the volume of receivables	7	–	–
Additions	–	–	1,547
Utilization	–	–	–20
Balance on December 31, 2025	12	–	1,750

No material impairment was taken on receivables from the public sector.

Other receivables (non-financial assets)

(TCHF)	Dec. 31, 2025	Dec. 31, 2024
Prepaid expenses	6,269	6,054
Input tax	2,836	831
Other taxes	2	3,270
Advance payments	25	247
Other assets (non-financial)	3,067	5,989
Total	12,199	16,391

Advance payments include advance payments for various future projects in the Film segment.

Currency profile

(TCHF)	Dec. 31, 2025	Dec. 31, 2024
CHF	12,544	15,836
EUR	44,740	51,533
USD	9,083	3,761
CAD	34	903
PLN	446	262
Other	1,530	162
Total	68,377	72,457

6.12 Contract assets

(TCHF)	Dec. 31, 2025	Dec. 31, 2024
Contract assets	14,755	10,094
Credit losses expected over the entire term (level 2)	–9	–3
Individual value adjustments (level 3)	–162	–
Total	14,584	10,091

The contract assets are mainly services rendered that have not yet been invoiced or that it has not yet been possible to invoice. They are measured using the simplified approach in accordance with IFRS 9.

The contract assets include TCHF 4,814 (previous year: TCHF 1,410) from a media-for-equity deals concluded in the fiscal year 2024 and 2025. As the corresponding shareholding had not yet been transferred as of the reporting date, no investment could yet be recognized.

Consolidated financial statements

130

Development of contract assets
(TCHF)

Balance on December 31, 2023		26,175
	Currency translation differences	213
	Additions	29,264
	Impairment	-3
	Reclassification to trade accounts receivable	-45,558
Balance on December 31, 2024		10,091
	Change in scope of consolidation	-147
	Currency translation differences	-126
	Additions	13,212
	Impairment	-171
	Reclassification to trade accounts receivable	-8,275
Balance on December 31, 2025		14,584
Impairment losses
(TCHF)	Credit losses expected over the entire term (level 2)	Individual value adjustments (level 3)
Balance on December 31, 2023	7	-
Currency translation differences	-1	-
Reduction due to a decrease in the volume of receivables	-3	-
Balance on December 31, 2024	3	-
Currency translation differences	-	-1
Addition due to an increase in the volume of receivable	6	-
Additions	-	163
Balance on December 31, 2025	9	162

6.13 Income tax receivables

(TCHF)	Dec. 31, 2025	Dec. 31, 2024
Income taxes Switzerland	912	305
Income taxes Germany	669	252
Income taxes rest of the world	634	279
Total	2,215	836

6.14 Cash and cash equivalents

Interest is paid on call money and short-term sight deposits. The interest rate varies between 0% and 2.1% (previous year: 0% to 2.85%).

Consolidated financial statements

6.15 Equity

Changes in equity are shown in the consolidated statement of changes in equity.

Subscribed capital

As of December 31, 2025, the fully paid-up share capital of the parent company, Highlight Communications AG, totaled CHF 63,000,000 (previous year: CHF 63,000,000), divided into 63,000,000 bearer shares with a par value of CHF 1.00 per share (previous year: 63,000,000 bearer shares of CHF 1.00 per share).

Treasury shares

As of December 31, 2025, the separately reported item “Treasury shares” amounted to TCHF -6,255 (previous year: TCHF -6,255). The amount reflects the nominal capital of treasury shares. The number of directly and indirectly held non-voting treasury shares in Highlight Communications AG was 6,254,518 as of December 31, 2025 (previous year: 6,254,518). No treasury shares were purchased or sold in the year under review.

Capital reserves

As of December 31, 2025, the Group’s capital reserve amounted to a total of TCHF -79,723 (previous year: TCHF -79,523).

Based on a loan agreement, it is not permitted to distribute dividends, implement nominal value reductions or carry out share buybacks at the level of Highlight Communications AG.

In the previous year, the capital reserve increased by TCHF 123 as a result of share-based remuneration (see note 9). In the previous year, the sale of 50% of the shares in Sport1 GmbH led to an increase in the capital reserve of TCHF 24,346. In this context, directly attributable legal and consulting fees of TCHF 1,030 were recorded without affecting profit or loss in the previous year.

The increase in the stake in Königskinder Music GmbH led to an increase in the capital reserve of a further TCHF 144 in the previous year.

Non-controlling interests

Non-controlling interests in consolidated subsidiaries amounted to TCHF -9,624 as of December 31, 2025 (previous year: TCHF 6,972).

Dividend payments in the reporting year amounted to TCHF 534 (previous year’s period: TCHF 687) and the net profit for the period attributable to non-controlling interests was TCHF -10,954 (previous year’s period: TCHF -2,044). Differences from currency translation amounted to TCHF 10 (previous year: TCHF -60).

In the previous year, the sale of 50% of the shares in Sport1 GmbH and the increase in the stake in Königskinder Music GmbH led to a change in the non-controlling interests of TCHF 7,979 and TCHF -188, respectively.

Other reserves

Other reserves totaled TCHF -77,708 as of the end of the reporting period (previous year: TCHF -75,371).

As of December 31, 2025, these relate to the translation of equity of companies that do not use Swiss francs as their functional currency (December 31, 2025: TCHF -77,634; previous year: TCHF -75,442) and to other cash flow hedge reserves of TCHF -74 (previous year: TCHF 71).

The cash flow hedge reserve before taxes developed as follows as of December 31, 2025:

Reconciliation of the market valuation of financial instruments

(TCHF)

Balance as of December 31, 2023	835
Gains or losses from effective hedging relationships	-732
Balance as of December 31, 2024	103
Gains or losses from effective hedging relationships	55
Reclassification due to the settlement of the underlying transaction	-263
Balance as of December 31, 2025	-105

131

The changes in other components of equity in fiscal years 2025 and 2024 were as follows:

Other comprehensive income/loss (OCI)

2025 (TCHF)	Before taxes	Tax effect	After taxes
Unrealized gains/losses from currency translation	-2,182	-	-2,182
Reclassification of realized gains/losses through profit or loss	-	-	-
Currency translation differences	-2,182	-	-2,182
Gains/losses from cash flow hedges	-208	63	-145
Items that can be reclassified to profit or loss	-2,390	63	-2,327
Actuarial gains/losses of defined benefit pension plans	5,707	-666	5,041
Gains/losses from financial assets at fair value through other comprehensive income	-10,816	126	-10,690
Items that cannot be reclassified to profit or loss	-5,109	-540	-5,649
Other comprehensive income/loss	-7,499	-477	-7,976
2024 (TCHF)	Before taxes	Tax effect	After taxes
Unrealized gains/losses from currency translation	2,339	-	2,339
Reclassification of realized gains/losses through profit or loss	-	-	-
Currency translation differences	2,339	-	2,339
Gains/losses from cash flow hedges	-732	226	-506
Items that can be reclassified to profit or loss	1,607	226	1,833
Actuarial gains/losses of defined benefit pension plans	-850	84	-766
Gains/losses from financial assets at fair value through other comprehensive income	-11,767	172	-11,595
Items that cannot be reclassified to profit or loss	-12,617	256	-12,361
Other comprehensive income/loss	-11,010	482	-10,528

Information on capital management

In managing capital, the Highlight Group pays particular attention to ensuring that the continuation of the Group's operating activities is guaranteed. Consolidated equity is the most important control parameter in this respect.

Highlight Communications AG aims to increase the capital provided to the company by the capital market and to generate an appropriate return for shareholders. The parent company uses its equity for this purpose by acquiring equity interests and co-financing their and its own operating activities. The Highlight Group can also distribute a dividend, pay back capital to the shareholders or issue new shares. The aim of management in this is to use equity and borrowed capital efficiently in order to ensure financial flexibility on the basis of a solid capital structure and thereby guarantee sufficient liquidity resources.

Liquidity consists of the inflows from operating activities, cash on hand and the borrowings available. The liquidity of the Highlight Group is managed centrally for all segments by Highlight Communications AG. This does not include Constantin Film AG and Sport1 Medien GmbH, which manage their own liquidity independently of Highlight Communications AG. In addition to a liquidity report and liquidity planning to assess its liquidity status, Highlight Communications AG essentially uses its gearing and net debt ratios, defined as current and non-current financial liabilities less cash and cash equivalents, to monitor its liquidity resources.

The equity management of Highlight Communications AG comprises all items of equity reported in the balance sheet.

Highlight Communications AG also monitors the borrowed capital in the context of Group management. Debt capital is monitored non-centrally by Highlight Communications AG, Sport1 Medien GmbH and Constantin Film AG. Financial ratios and other conditions must be complied with for borrowed funds, and information must be provided.

The credit agreements of Highlight Communications AG and Constantin Film AG include compliance with certain financial covenants. The financial covenants of Highlight Communications AG relate to minimum EBIT, gearing and reported equity including non-controlling interests, while the financial covenants of Constantin Film AG relate to the economic equity ratio, the level of economic equity, the interest coverage ratio (EBITDA) and minimum liquidity. Highlight Communications AG applied for a waiver for the financial covenants of minimum EBIT, gearing ratio and economic equity ratio as of September 30, 2025, and December 31, 2025, which was approved on December 23, 2025. If the conditions on borrowed funds are violated, the interest rate could increase and the existing termination option could be invoked. In fiscal 2025, no financial covenants were violated within the Group, or there was a corresponding waiver or waiver declaration from the lending banks. In fiscal year 2026, the financial covenants in Highlight Communications AG's loan agreement were amended. Starting in the first quarter of 2026, the company agreed to maintain a minimum EBITDA and meet defined milestones for the sale of specific Group assets.

6.16 Pension obligations

6.16.1 Defined benefit pension plans

The defined benefit pension plans in place relate to the Swiss companies of the Highlight Group. Practically all employees and pensioners of these companies are insured in various pension plans. These pension plans have ties to various collective facilities. These are independent legal entities in the form of foundations for the purpose of retirement and invalidity pensions for employees and their surviving dependents after their death.

The pension plans grant more than the individual benefits demanded by law in the event of invalidity, death, old age and resignation. The risk benefits are defined on the basis of the insured salary. The retirement pension is calculated on the basis of the projected interest-bearing savings and a conversion rate.

Through these defined benefit pension plans, the Group is exposed to actuarial risks such as longevity, interest rate risk as well as market and investment risk.

Companies abroad have defined contribution plans only.

Funding agreements for future contributions

The Swiss occupational pension scheme (BVG - Swiss Federal Law on Occupational Retirement, Surviving Dependents' and Disability Pension and related ordinances) stipulates the minimum pension benefits. Legislation prescribes minimum annual amounts for employers. However, an employer can also pay higher contributions than those prescribed by law. These contributions are set out in the pension plan/regulations. In addition, an employer can also pay non-recurring contributions or advances to the scheme. However, these contributions cannot be paid back to the employer. However, they are available to the employer in order to settle future employer contributions (employer contribution reserve).

Even if the pension plan has a statutory excess, the law still demands annual minimum contributions. For active insured parties, both the employer and the employee must pay contributions. The employer contribution must at least equal the employee contributions. The minimum annual contributions are dependent on the age and insured salary of the insured party. They are set out in the pension plan/regulations.

In the event that an insured party changes employer before reaching pension age, termination benefits (accrued savings) are payable. These are transferred by the pension scheme to the pension plan of the new employer.

As described above, the pension plans/regulations prescribe minimum requirements for contributions. The pension plans/regulations do not stipulate additional funding requirements provided that the pension plan has a statutory excess. If, however, funding is insufficient, additional contributions ("restructuring contributions") are required from the insured party and the employer until pension obligations are covered again.

The forecast employer contributions for fiscal year 2026 amount to TCHF 1,385.

Maturity profile of defined benefit obligation

(TCHF)	2025	2024
Less than 1 year	1,741	5,438
Weighted average maturity of defined benefit obligation (in years)	14.4	13.7

Consolidated financial statements

134

Change in defined benefit liabilities

The defined benefit liabilities recognized in the consolidated balance sheet are calculated as follows:

Pension liabilities

(TCHF)	Dec. 31, 2025	Dec. 31, 2024
Present value of defined benefit obligation	34,144	46,787
Fair value of plan assets	34,658	46,364
Asset ceiling	2,797	3,844
Carrying amount	2,283	4,267

The pension liabilities totaling TCHF 2,283 (previous year: TCHF 4,267) consist of pension assets of TCHF 174 (previous year: TCHF 486, see note 6.9) and pension liabilities of TCHF 2,457 (previous year: TCHF 4,753).

The figure to be included as assets is limited to the amount of the employer contribution reserve, resulting in an asset ceiling of TCHF 2,797 as of December 31, 2025 (previous year: TCHF 3,844).

Development of defined benefit obligation

(TCHF)	2025	2024
Present value of defined benefit obligation as of January 1	46,787	41,672
Current service cost (without employee contributions and administrative expenses)	2,186	2,016
Employee contributions	967	1,038
Past service cost	2,723	-
Interest cost	432	617
Benefits paid	-15,970	-2,267
Actuarial losses/(gains) from experience adjustments	-1,446	444
Actuarial losses/(gains) from changes in financial assumptions	-1,535	3,267
Present value of defined benefit obligation as of December 31	34,144	46,787
thereof actively insured persons	28,695	40,850
thereof pensioners	5,449	5,937

Development of plan assets

(TCHF)	2025	2024
Fair value of assets as of January 1	46,364	43,403
Interest income	392	575
Employee contributions	967	1,038
Employer contributions	1,310	1,477
Administrative expenses of the foundation	-84	-86
Benefits paid	-15,970	-2,267
Income from plan assets (excluding amounts contained in net interest cost)	37	58
Actuarial (losses)/gains from experience adjustments	1,642	2,166
Fair value of assets as of December 31	34,658	46,364

Retirement benefit expenses broke down as follows:

(TCHF)	Jan. 01 to Dec. 31, 2025	Jan. 01 to Dec. 31, 2024
Current service cost (without employee contributions and administrative expenses)	2,186	2,016
Administrative expenses of the foundation	84	86
Past service cost	2,723	-
Net interest cost (income)	40	42
Total income statement	5,033	2,144

Plan assets

The plan assets are divided among the individual investment categories as follows:

(TCHF)	2025	2024
Cash and cash equivalents	427	335
Bonds with quoted market prices on active markets	6,304	8,581
Shares with quoted market prices on active markets	11,849	15,105
Real estate	10,444	16,256
Insurance surrender value	3,063	3,992
Other	2,571	2,095
Total	34,658	46,364

The actual return on plan assets in the year under review amounted to TCHF 2,071 (previous year's period: TCHF 2,799).

Actuarial assumptions

The calculation of the pension provision was based on the following assumptions (in%):

	2025	2024
Discount rate	1.25	0.95
Pension trend	0.10	0.10
Salary trend	1.25	1.25
Average life expectancy after pension men (in years)	23.19	23.07
Average life expectancy after pension women (in years)	24.91	24.81

As in the previous year, the BVG 2020 generation table was used for the actuarial assumptions for mortality, disability and employee turnover.

Sensitivity analysis

Changes in one of the key actuarial assumptions that would reasonably be expected to be possible as of the end of the reporting period would affect the pension obligation as follows:

2025 (TCHF)	Discount rate (incl. change in interest rate applied)		Pension trend		Salary trend		Average life expectancy
	+25 BP	-25 BP	+25 BP	-25 BP	+25 BP	-25 BP	+1 year
Effect on defined benefit obligation	-1,189	1,266	549	-222	219	-188	846
2024 (TCHF)	Discount rate (incl. change in interest rate applied)		Pension trend		Salary trend		Average life expectancy
	+25 BP	-25 BP	+25 BP	-25 BP	+25 BP	-25 BP	+1 year
Effect on defined benefit obligation	-1,558	1,659	826	-319	242	-234	1,264

Although the analysis does not fully reflect the forecast cash outflow from the pension plans, it shows an approximation of the sensitivity of assumptions. The same method (present value of defined benefit pension obligations calculated with the projected unit credit method as of the end of the reporting period) was used as for the calculation of the pension liabilities recognized in the consolidated balance sheet.

6.16.2 Defined contribution pension plans

The expenses recognized in profit or loss for defined contribution plans (including state plans) amounted to TCHF 6,236 in the year under review (previous year's period: TCHF 6,162).

Consolidated financial statements

136

6.17 Deferred tax liabilities

Breakdown of deferred tax liabilities

(TCHF)	Dec. 31, 2025	Dec. 31, 2024
Film assets	43,855	46,664
Intangible assets	6,624	9,766
Right-of-use assets	6,300	8,520
Inventories	2	2
Trade receivables and other receivables	4,485	5,410
Contract assets	2,130	1,412
Other financial assets	113	114
Pension assets	23	65
Provisions	-	37
Trade payables and other liabilities	4,339	4,421
Contract liabilities	170	137
Advance payments received	16,150	17,389
Total	84,191	93,937
Netting with deferred tax assets	-62,596	-67,876
Deferred tax liabilities (net)	21,595	26,061

Maturities

(TCHF)	Dec. 31, 2025	Dec. 31, 2024
Current deferred tax liabilities	-	-
Non-current deferred tax liabilities	21,595	26,061

6.18 Financial liabilities

Reconciliation of liabilities arising from financial liabilities

(TCHF)	Jan. 01, 2025	Changes affecting cash flow	Non-cash changes				Dec. 31, 2025
			Accrual of interest	Change in scope of consolidation	Currency translation	Reclassi- fication
Non-current financial liabilities	2,483	275	-	-2,020	-13	-725	-
Current financial liabilities	196,546	-3,640	327	-1,450	-1,229	725	191,279
Total financial liabilities	199,029	-3,365	327	-3,470	-1,242	-	191,279
(TCHF)	Jan. 01, 2024	Changes affecting cash flow	Non-cash changes				Dec. 31, 2024
---	---	---	---	---	---	---	---
			Accrual of interest	Change in scope of consolidation	Currency translation	Reclassi- fication
Non-current financial liabilities	3,470	144	-	-	56	-1,187	2,483
Current financial liabilities	153,715	41,160	81	-	403	1,187	196,546
Total financial liabilities	157,185	41,304	81	-	459	-	199,029

Please see note 6.4 for the reconciliation with lease liabilities.

Consolidated financial statements

6.18.1 Current financial liabilities

As of the end of the reporting period, there were current liabilities to banks of TCHF 177,127 (previous year: TCHF 195,295), TCHF 98,767 (previous year: TCHF 109,408) of which relates to the financing of film projects. Liabilities to related parties amounted to TCHF 14,152 (previous year: TCHF 0; see also Chapter 12). Furthermore, current financial liabilities in the previous year included liabilities from sale and leaseback agreements with buy-back options amounting to TCHF 1,251, which are reported as a financing transaction.

The Highlight Group had free short-term credit facilities totaling around TCHF 89,565 (previous year: TCHF 97,251) as of the end of the reporting period. Of this, the Constantin Film Group's credit facilities (production financing and license trading facilities) are secured by the film rights reported as film assets (and the resulting exploitation revenues) in the amount of TCHF 229,537 (previous year: TCHF 223,905) as well as receivables and contract assets of TCHF 42,874 (previous year: TCHF 39,196). The security interests of the banks serve as collateral for all current and future receivables of the banks from Constantin Film AG. The banks are entitled to liquidate this collateral if necessary. They will be transferred back to Constantin Film AG by the banks after all secured claims have been satisfied (also see note 6.15).

In the 2025 reporting period, Highlight Communications AG had a loan from the bank syndicate for TCHF 70,333 and TEUR 12,174. In the reporting period, repayments of TCHF 2,000 and TEUR 5,574 were made for the current loan. Highlight Communications AG's credit facility of TCHF 68,333 and TEUR 6,600 (previous year: TCHF 70,333 and TEUR 12,174) is secured by the shares in TEAM Holding AG and Constantin Film AG as well as by equity interests in Sport1 Medien GmbH, and the maturity date for the entire credit facility was agreed to be November 30, 2026.

As of the reporting date, the SPORT1 MEDIEN Group had a variable-rate working capital credit line of TCHF 4,654 (previous year: TCHF 8,461) and guarantee lines of TCHF 4,945 (previous year: TCHF 5,423). As of December 31, 2025, a total of 6,182,518 Highlight Communications AG shares with a carrying amount of TCHF 7,135 (previous year: 6,182,518 Highlight Communications AG shares with a carrying amount of TCHF 6,626) were pledged for these credit lines as well as a blanket assignment of receivables from Sport1 GmbH of TCHF 7,790 (previous year: TCHF 8,471 TCHF). In the previous year, there was also a blanket assignment of receivables from the delivery of goods and services against third-party debtors of PLAZAMEDIA GmbH in the amount of TCHF 1,240. No financial covenants are required for these borrowings.

Currency profile

(TCHF)	Dec. 31, 2025	Dec. 31, 2024
CHF	68,182	70,001
EUR	95,281	79,049
USD	27,807	46,677
CAD	-	819
Other	9	-
Total	191,279	196,546

6.18.2 Non-current financial liabilities

The non-current financial liabilities relate to the non-current portion of sale and leaseback agreements with buyback options, which were reported as financing transactions.

6.19 Advance payments received

Advance payments received of TCHF 69,508 in total (previous year: TCHF 42,771) essentially include amounts received from productions for which revenue has not yet been recognized.

6.20 Trade payables and other liabilities

(TCHF)	Dec. 31, 2025	Dec. 31, 2024
Trade accounts payable	83,245	68,352
Other liabilities	81,860	79,758
Total	165,105	148,110

138

6.20.1 Trade accounts payable

(TCHF)	Dec. 31, 2025	Dec. 31, 2024
Trade accounts payable (financial)
Current liabilities	61,822	48,284
Liabilities to related parties	4,030	146
Outstanding invoices	16,190	17,117
Total	82,042	65,547
Trade accounts payable (non-financial)
Liabilities from countertrades	1,203	2,805
Total	1,203	2,805
Total trade accounts payable	83,245	68,352

Apart from the customary retentions of title, the reported trade accounts payable are not secured in any other way. They essentially relate to licensing and services.

Overall, the trade accounts payable are mostly non-interest-bearing and short-term, which means that the carrying amount of the financial trade accounts payable is approximately their fair value.

Currency profile

(TCHF)	Dec. 31, 2025	Dec. 31, 2024
CHF	1,820	1,338
EUR	76,220	63,771
USD	1,448	1,387
Other	3,757	1,856
Total	83,245	68,352

6.20.2 Other current liabilities

(TCHF)	Dec. 31, 2025	Dec. 31, 2024
Other liabilities (financial)
Liabilities from conditional loan repayment (subsidies)	8,284	11,020
Short-term interest liabilities	9,199	5,115
Customers with credit balances	1,031	563
Commissions, licenses and royalty payments	23,267	27,580
Negative fair value of derivative financial instruments within hedging relationships	105	160
Negative fair value of derivative financial instruments without hedging relationships	645	13
Personnel-related liabilities (financial)	8,911	12,770
Other current liabilities (financial)	11,610	8,135
Other liabilities to related parties	425	454
Total	63,477	65,810
Other liabilities (non-financial)
Value-added tax liabilities	3,119	2,323
Other taxes	5,464	3,599
Social security	307	748
Deferred income	8,886	6,494
Personnel-related liabilities (non-financial)	607	784
Total	18,383	13,948

Personnel-related liabilities primarily relate to obligations arising from bonuses, overtime worked, and unused vacation days.

Deferred income essentially includes subsidies that have already been received for which the conditions for recognition in profit or loss have not yet been met.

Currency profile

(TCHF)	Dec. 31, 2025	Dec. 31, 2024
CHF	14,325	12,223
EUR	51,408	46,777
USD	15,395	20,400
Other	732	358
Total	81,860	79,758

6.21 Contract liabilities

Development of contract liabilities

(TCHF)
Balance on December 31, 2023	28,482
Currency translation differences	260
Additions	9,673
Amounts utilized due to performance	-26,949
Balance on December 31, 2024	11,466
Change in scope of consolidation	-59
Currency translation differences	-88
Additions	14,430
Amounts utilized due to performance	-11,425
Balance on December 31, 2025	14,324

Contract liabilities generally relate to consideration already received from customers for which the Highlight Group has not yet fulfilled its performance obligations.

The line "Amounts utilized due to performance" relates to revenue recognized in the reporting period that was contained in net contract liabilities at the beginning of the period.

6.22 Provision

(TCHF)	Jan. 01, 2025	Change in scope of consolidation	Currency translation differences	Utilization	Reversal	Addition	Dec. 31, 2025
Provisions for litigation risks	76	-2	-	47	-	-	27
Staff provisions	2,216	-	-8	2,208	-	-	-
Total	2,292	-2	-8	2,255	-	-	27
thereof current provisions	2,292	-2	-8	2,255	-	-	27
(TCHF)	Jan. 01, 2024	Change in scope of consolidation	Currency translation differences	Utilization	Reversal	Addition	Dec. 31, 2024
Provisions for litigation risks	124	-	2	38	12	-	76
Staff provisions	554	-	-15	568	-	2,245	2,216
Other provisions	12	-	1	13	-	-	-
Total	690	-	-12	619	12	2,245	2,292
thereof current provisions	690	-	-12	619	12	2,245	2,292

The provisions for litigation risks were recognized to provide for various pending and possible legal proceedings. The provision is expected to be utilized in fiscal 2026. The provisions for personnel of TCHF 2,216 recognized in the previous year in connection with the SPORT1 MEDIEN Group's restructuring program were fully utilized during the reporting year. As in the previous year, there were no non-current provisions as of the end of the reporting period.

6.23 Income tax liabilities

(TCHF)	Dec. 31, 2025	Dec. 31, 2024
Income taxes Switzerland	221	222
Income taxes Germany	2,302	1,951
Income taxes rest of the world	499	370
Total	3,022	2,543

Consolidated financial statements

140

7. NOTES TO INDIVIDUAL ITEMS OF THE INCOME STATEMENT

7.1 Revenue from contracts with customers

Please see the segment reporting under note 10 for a breakdown of revenue.

Revenue from contracts with customers from prior periods recognized in the current period amounted to TCHF 335 (previous year's period: TCHF 74).

Future revenue from contracts with customers

Revenue expected to be recognized (TCHF)	Dec. 31, 2025	Dec. 31, 2024
within one year	226,892	236,300
between one and five years	108,242	183,130
after five years	1,575	2,124
Total	336,709	421,554

7.2 Capitalized film production costs and other own work capitalized

Capitalized film production costs and the change in inventories of TV service productions amount to TCHF 110,404 (previous year: TCHF 134,686) and have decreased compared with the previous year. Other own work capitalized of TCHF 1,735 (previous year's period: TCHF 1,733) mainly relates to digital internally generated intangible assets.

7.3 Other operating income

(TCHF)	Jan. 01 to Dec. 31, 2025	Jan. 01 to Dec. 31, 2024
Income from the reversal of provisions and deferred liabilities	6,899	2,203
Prior-period income	897	333
Recharges	241	488
Price gains	3,865	2,802
Income from rents and leases	111	108
Write-off of liabilities	20	80
Income from the disposal of non-current assets	106	61
Income from deconsolidation	122	-
Income from settlements of claims for damages and settlement agreements	4,329	3,197
Income from the disposal of right-of-use assets from leasing	470	15
Miscellaneous operating income	2,801	3,435
Total	19,861	12,722

Income from the reversal of provisions and deferred liabilities is primarily due to the discontinuation of obligations from the exploitation of licenses. No material provisions for potential litigation were reversed in the reporting year. Income from settlements of claims for damages and settlement agreements essentially includes income from compensation for copyright violations.

In addition to a number of items that cannot be assigned to any of the items mentioned separately, other operating income mainly includes sales proceeds from productions (such as costume sales) and income from benefits in kind (previous year: sales proceeds from productions (such as costume sales) and reimbursements from the default fund).

7.4 Cost of materials and licenses

(TCHF)	Jan. 01 to Dec. 31, 2025	Jan. 01 to Dec. 31, 2024
Licenses and commission	30,307	38,058
Other costs of material	8,266	10,621
Total licenses, commissions and material	38,573	48,679
Production costs	182,480	205,920
Purchased services	341	501
Royalty payments in the Film segment	13,487	6,967
Total purchased services	196,308	213,388

7.5 Other operating expenses

(TCHF)	Jan. 01 to Dec. 31, 2025	Jan. 01 to Dec. 31, 2024
Rental costs	1,785	2,751
Repair and maintenance costs	760	966
Advertising and traveling expenses	4,985	7,255
Legal, consulting and auditing costs	9,954	11,121
IT costs	6,500	7,418
Administrative costs	1,562	1,813
Other personnel-related expenses	1,357	2,102
Insurance, dues and fees	1,923	2,004
Expenses relating to other periods	57	691
Price losses	4,350	2,234
Vehicle costs	532	721
Bank fees	239	267
Losses from the disposal of non-current assets	30	18
Expenses from deconsolidation	7,251	-
Other taxes	272	427
Release and promotion expenses	16,740	12,166
Expenses from short-term leases	1,256	1,609
Expenses from leases of low-value assets (if not already short-term)	41	31
Expenses from variable lease payments (not included in lease liabilities)	944	1,205
Miscellaneous operating expenses	3,784	4,146
Total	64,322	58,945

Consolidated financial statements

Legal, consulting and auditing costs include the costs of auditing the consolidated and separate financial statements, tax consulting fees and the costs of legal advice including for ongoing legal proceedings and copyright violations.

Release and promotion expenses include the costs of promoting and distributing theatrical movies and of releasing home entertainment titles.

Miscellaneous operating expenses include a number of items that cannot be allocated to separate items. These mainly relate to purchased services.

7.6 Impairment/reversals of impairment on financial assets

This item includes impairment losses on financial assets of TCHF 2,155 (previous year's period: TCHF 473) and reversals of impairment losses on financial assets totaling TCHF 59 (previous year's period: TCHF 63).

7.7 Financial income

(TCHF)	Jan. 01 to Dec. 31, 2025	Jan. 01 to Dec. 31, 2024
Interest and similar income	1,150	1,259
Gains from changes in the fair value of financial instruments	77	2,917
Currency exchange gains	8,594	1,495
Total	9,821	5,671

The interest and similar income item contains essentially income from accrued interest on non-current receivables with a financing component.

In the previous year, gains from changes in the fair value of financial instruments included those on the embedded derivatives and options in connection with advertising services with a media-for-equity fund.

As in the previous year, several derivative financial instruments were not in a formal hedge in accordance with IFRS 9 in the year under review. However, there were still economic hedges. The measurement of derivative financial instruments without a hedge resulted in lower income in the reporting year than in the previous year.

7.8 Financial expenses

(TCHF)	Jan. 01 to Dec. 31, 2025	Jan. 01 to Dec. 31, 2024
Interest and similar expenses	17,431	16,661
Losses from changes in the fair value of financial instruments	1,933	459
Currency exchange losses	1,284	3,788
Interest expenses from lease liabilities	771	819
Total	21,419	21,727

The developments in exchange rates resulted in lower expenses from the remeasurement of bank balances and financial liabilities in the reporting period. The measurement of derivative financial instruments without a hedge resulted in higher expenses in the reporting year than in the previous year.

In the previous year, losses from changes in the fair value of financial instruments included those on the embedded derivatives and options in connection with advertising services with a media-for-equity fund.

7.9 Taxes

Income taxes paid or owed in the individual countries and deferred taxes are recognized as taxes. The expected tax rate of 17.93% (previous year: 17.93%) relates to the tax rate applicable at the domicile of Highlight Communications AG.

Effective tax rate reconciliation

(TCHF)	Jan. 01 to Dec. 31, 2025	Jan. 01 to Dec. 31, 2024
Profit before taxes	-143,491	-21,748
Expected taxes based on a tax rate of 17.93% (previous year: 17.93%)	25,728	3,899
Differing tax rates	4,893	-800
Reversal of deferred tax assets	112	105
Write-down on deferred tax assets	-	-3,095
Tax-free income	2	-
Permanent differences	-189	239
Changes to tax rates	673	-
Non-deductible expenses	-4,465	-5,901
Non-deductible value adjustments of shares	8	-13
Aperiodic income taxes	524	-352
Other effects	2,953	824
Unrecognized deferred taxes	-8,578	-2,885
Goodwill impairment	-24,879	-
Actual tax expense	-3,218	-7,979
Effective tax rate in %	n/a	n/a

Consolidated financial statements

144

8. DISCLOSURES ON FINANCIAL RISK MANAGEMENT

8.1 Financial instruments by class

The table below shows the carrying amounts and fair values of financial instruments by class and a breakdown into the various categories of financial instruments in accordance with IFRS 9:

Disclosures IFRS 7: Classes as of December 31, 2025

ASSETS (TCHF)
Cash and cash equivalents
Trade accounts receivable
Contract assets
Receivables from associates and joint ventures (current and non-current)
Other receivables (current)
Financial assets at fair value
Other receivables
Non-current receivables
Financial assets at fair value
Other receivables
Other financial assets (non-current)
Financial assets at fair value
EQUITY AND LIABILITIES (TCHF)
Financial liabilities (current and non-current)
Lease liabilities (current and non-current) **
Trade accounts payable (current and non-current)
Contract liabilities
Other liabilities (current and non-current)
Financial liabilities at amortized cost
Financial liabilities at fair value
Derivative financial instruments with a hedge
AGGREGATED BY CATEGORY
Assets (TCHF)
Financial assets at amortized cost
Financial assets at fair value through profit or loss
Financial assets at fair value through OCI
Equity and liabilities (TCHF)
Financial liabilities at amortized cost
Financial liabilities at fair value

Valuation in the balance sheet under IFRS 9

Note	Classification category IFRS 9	Carrying amount as on Dec. 31, 2025	thereof not relevant under IFRS 7*	Amortized cost	Fair value through other comprehensive income	Fair value through profit or loss	Fair value on Dec. 31, 2025
	AC	21,793	-	21,793	-	-	21,793
6.11.1	AC	42,966	-1,397	41,569	-	-	41,569
6.12	without category	14,584	-14,584	-	-	-	-
12	AC	319	-	319	-	-	319
6.11.2
	FVTPL	462	-	-	-	462	462
	AC	67,915	-12,199	55,716	-	-	55,716
6.7
	FVTPL	14,055	-	-	-	14,055	14,055
	AC	795	-703	92	-	-	92
6.9
	FVTOCI	11,881	-	-	11,881	-	11,881

6.18	AC	191,279	-	191,279	-	-	191,453
6.4	without category	26,932	-	-	-	-	-
6.20.1	AC	83,245	-1,203	82,042	-	-	82,042
6.21	without category	14,324	-14,324	-	-	-	-
6.20.2
	AC	81,110	-18,383	62,727	-	-	62,727
	FLTPL	904	-	-	-	904	904
	without category	105	-	-	105	-	105

	AC	133,788	-14,299	119,489	-	-	119,489
	FVTPL	14,517	-	-	-	14,517	14,517
	FVTOCI	11,881	-	-	11,881	-	11,881

	AC	355,634	-19,586	336,048	-	-	336,222
	FLTPL	904	-	-	-	904	904

Not relevant under IFRS 7: It does not concern financial instruments.
*In accordance with IFRS 7.29(d), no fair value disclosures are required for lease liabilities.

AC: Financial assets at amortized cost

FVTOCI: Financial assets at fair value through OCI

FVTPL: Financial assets at fair value through profit or loss

FLTPL: Financial liabilities at fair value through profit or loss

Consolidated financial statements

Disclosures IFRS 7: Classes as of December 31, 2024

ASSETS (TCHF)
Cash and cash equivalents
Trade accounts receivable
Contract assets
Receivables from associates and joint ventures (current and non-current)
Other receivables (current)
Financial assets at fair value
Other receivables
Non-current receivables
Financial assets at fair value
Other receivables
Other financial assets (non-current)
Financial assets at fair value

EQUITY AND LIABILITIES (TCHF)
Financial liabilities (current and non-current)
Financial liabilities with hedging relationships (current and non-current)
Lease liabilities (current and non-current) **
Trade accounts payable (current and non-current)
Contract liabilities
Other liabilities (current and non-current)
Financial liabilities at amortized cost
Financial liabilities at fair value
Derivative financial instruments with a hedge

AGGREGATED BY CATEGORY
Assets (TCHF)
Financial assets at amortized cost
Financial assets at fair value through profit or loss
Financial assets at fair value through OCI
Equity and liabilities (TCHF)
Financial liabilities at amortized cost
Financial liabilities at fair value

The category of financial assets measured at fair value through profit or loss includes derivative financial instruments as well as a non-current receivable. The category of financial liabilities measured at fair value through profit or loss includes derivative financial instruments. Of the receivables (current and non-current) totaling TCHF 111,894 (previous year: TCHF 113,585), an amount of 72.6% (previous year: 63.6%) is attributable to the film industry.

Valuation in the balance sheet under IFRS 9

Note	Classification category IFRS 9	Carrying amount as on Dec. 31, 2024	thereof not relevant under IFRS 7*	Amortized cost	Fair value through other comprehensive income	Fair value through profit or loss	Fair value on Dec. 31, 2024
	AC	16,773	-	16,773	-	-	16,773
6.11.1	AC	45,449	-3,550	41,899	-	-	41,899
6.12	without category	10,091	-10,091	-	-	-	-
12	AC	148	-	148	-	-	148
6.11.2
	FVTPL	1,340	-	-	-	1,340	1,340
	AC	71,117	-16,391	54,726	-	-	54,726
6.7
	FVTPL	15,190	-	-	-	15,190	15,190
	AC	430	-	430	-	-	430
6.9
	FVTOCI	20,830	-	-	20,830	-	20,830

6.18	AC	198,766	-	198,766	-	-	199,138
	AC	263	-	263	-	-	263
6.4	without category	35,762	-	-	-	-	-
6.20.1	AC	68,352	-2,805	65,547	-	-	65,547
6.21	without category	11,466	-11,466	-	-	-	-
6.20.2
	AC	79,585	-13,948	65,637	-	-	65,637
	FLTPL	13	-	-	-	13	13
	without category	160	-	-	160	-	160

	AC	133,917	-19,941	113,976	-	-	113,976
	FVTPL	16,530	-	-	-	16,530	16,530
	FVTOCI	20,830	-	-	20,830	-	20,830

	AC	346,966	-16,753	330,213	-	-	330,585
	FLTPL	13	-	-	-	13	13

Not relevant under IFRS 7: It does not concern financial instruments.
*In accordance with IFRS 7.29(d), no fair value disclosures are required for lease liabilities.

AC: Financial assets at amortized cost

FVTOCI: Financial assets at fair value through OCI

FVTPL: Financial assets at fair value through profit or loss

FLTPL: Financial liabilities at fair value through profit or loss

Consolidated financial statements

148

8.2 Offsetting

For derivative financial instruments, according to the contractual agreements in the event of insolvency, all asset and liability derivatives with the counterparty in question are offset and only the net amount of the receivable or liability remains. As offsetting is only legally enforceable in the event of insolvency and the Group neither has a legal right to offset amounts at the current time nor does it intend to settle on a net basis, the derivative financial instruments are reported in the consolidated balance sheet on a gross basis.

The following tables provide an overview of the offsetting that has been carried out or is contractually agreed:

Offsetting as of December 31, 2025

Offsetting of financial assets

(TCHF)	Gross amounts of recognized financial assets	Gross amounts of recognized financial liabilities offset in the balance sheet	Net amounts of financial assets shown in the balance sheet	Related amounts not offset in the balance sheet	Net amount
Financial assets at fair value through profit or loss	462	-	462	-56	406

Offsetting of financial liability

(TCHF)	Gross amounts of recognized financial liabilities	Gross amounts of recognized financial assets offset in the balance sheet	Net amounts of financial liabilities shown in the balance sheet	Related amounts not offset in the balance sheet	Net amount
Financial assets at fair value through profit or loss	904	-	904	-56	848
Derivative financial instruments with a hedge	105	-	105	-	105

Offsetting as of December 31, 2024

Offsetting of financial assets

(TCHF)	Gross amounts of recognized financial assets	Gross amounts of recognized financial liabilities offset in the balance sheet	Net amounts of financial assets shown in the balance sheet	Related amounts not offset in the balance sheet	Net amount
Financial assets at fair value through profit or loss	1,340	-	1,340	-13	1,327

Offsetting of financial liability

(TCHF)	Gross amounts of recognized financial liabilities	Gross amounts of recognized financial assets offset in the balance sheet	Net amounts of financial liabilities shown in the balance sheet	Related amounts not offset in the balance sheet	Net amount
Financial assets at fair value through profit or loss	13	-	13	-13	-
Derivative financial instruments with a hedge	160	-	160	-	160

8.3 Management of financial risks

The Group is exposed to various financial risks resulting from its operating and financing activities. Financial risks can be broken down into the categories liquidity risks, credit risks and market risks (including currency risks, interest rate risks and price risks). These risks are monitored centrally within the Highlight Group. The risk situation is tracked by the risk manager on the basis of a risk management directive that applies to the whole Group using standardized risk reports and reported to the Board of Directors of Highlight Communications AG. Financial risks are identified, assessed and hedged in close cooperation with the Group's operating companies.

8.3.1 Liquidity risks

A liquidity risk arises if future payment obligations of the Group cannot be covered by available liquidity or corresponding credit facilities. In order to limit this risk, processes are in place within the Highlight Group, with which cash inflows or outflows and maturities are monitored and controlled on an ongoing basis. For further details on the credit lines, please refer to note 6.18.

The liquidity risk tables show the maturity structure of the primary financial liabilities and an analysis of the cash outflows from derivative financial liabilities and assets. These are undiscounted cash flows.

Liquidity risk

2025 (TCHF)	Carrying amount Dec. 31, 2025	Due within one year			Due within one year and five years			Due after five years
		Fixed interest	Variable interest	Repayment	Fixed interest	Variable interest	Repayment	Fixed interest	Variable interest	Repayment
Non-derivative financial liabilities
Liabilities due to banks and similar liabilities	191,279	116	2,952	189,190	-	-	-	-	-	-
Lease liabilities	26,932	-	-	5,537	-	-	14,908	-	-	7,075
Other interest-bearing and non-interest-bearing financial liabilities	144,769	-	9,199	135,570	-	-	-	-	-	-
Derivative financial liabilities
Derivatives without hedging relationships	904	-	-	51,383	-	-	21,000	-	-	-
Other Derivatives	105	-	-	-	-	-	-	-	-	-
Derivative financial assets
Derivatives without hedging relationships	462	-	-	12,148	-	-	-	-	-	-
2024 (TCHF)	Carrying amount Dec. 31, 2024	Due within one year			Due within one year and five years			Due after five years
		Fixed interest	Variable interest	Repayment	Fixed interest	Variable interest	Repayment	Fixed interest	Variable interest	Repayment
Non-derivative financial liabilities
Liabilities due to banks and similar liabilities*	199,029	58	7,711	191,338	-	-	2,604	-	-	-
Lease liabilities	35,762	-	-	7,395	-	-	21,844	-	-	11,250
Other interest-bearing and non-interest-bearing financial liabilities	131,184	213	4,622	126,349	-	-	-	-	-	-
Derivative financial liabilities
Derivatives without hedging relationships	13	-	-	1,498	-	-	-	-	-	-
Other Derivatives	160	-	-	-	-	-	-	-	-	-
Derivative financial assets
Derivatives without hedging relationships	1,340	-	-	35,359	-	-	-	-	-	-

Financial liabilities include sale and leaseback transactions. For this reason, only monthly payments are shown in the repayment column in the liquidity risk table.

Consolidated financial statements

In general, the Group companies are responsible for the management of cash and cash equivalents on their own, including current deposits of excess liquidity and the procurement of loans to bridge liquidity bottlenecks. Highlight Communications AG partly supports its subsidiaries in credit financing and at times acts as a coordinator with banks and capital markets. This also includes the ability to issue equity and debt instruments on the capital market. It should be noted that various projects, especially in the film business, and other financing activities such as the purchase of non-controlling interests and the acquisition of treasury shares, can influence liquidity differently over time.

Despite unused working capital facilities, it may be necessary to borrow further debt capital on the capital market or from banks both in order to refinance existing liabilities and to finance new projects. There is a risk or significant uncertainty, that financing may not be available, or may be available only to an insufficient extent, or only on unfavorable terms, due to a deterioration in the economic situation.

8.3.2 Credit risks

The default risk arises from cash and cash equivalents, contractual cash flows from debt instruments carried at amortized cost, from derivative financial instruments that are assets, balances with banks and financial institutions and lending to customers including outstanding receivables.

A credit risk exists if a debtor cannot pay a receivable or cannot pay it on time or assets pledged as collateral lose value and therefore cause financial losses. Credit risks include the direct counterparty risk and the risk of deterioration in credit quality.

Banks and financial institutions with which the Highlight Group performs transactions must have a good credit quality and a good rating. In addition, any risks to cash and cash equivalents are minimized by allocating cash deposits among several banks.

The default risks of the Highlight Group's key customers are monitored and assessed on an ongoing basis. Furthermore, in significant cases, the company also hedges the risk of default by a creditor by obtaining credit rating information.

Risks from the international distribution of film licenses are minimized by concluding business only with companies of reliable credit quality, by transferring rights to the contractual partner only after payment, and/or entering into transactions in exchange for corresponding collateral (e.g. letters of credit).

The maximum credit risk of the Highlight Group is equal to the carrying amount of its financial assets.

Please see note 4.9 for further information on impairment of non-financial assets.

8.3.3 Market risks

Currency risk

The Highlight Group is exposed to currency risks in its ordinary business activities. This primarily relates to the euro, the US dollar and the Canadian dollar. Exchange rate movements can lead to undesirable and unforeseen earnings and cash flow volatilities.

Each subsidiary is subject to risks associated with exchange rate fluctuations when it performs transactions with international contractual partners and incurs future cash flows in a currency other than its functional currency. The Highlight Group does not enter into any operating activities in currencies that are otherwise considered to be especially prone to risk.

Currency translation differences in net operating income and net finance costs of TCHF 6,825 (previous year's period: TCHF -1,725) were recognized in profit or loss in the year under review. In addition, currency differences from the translation of foreign subsidiaries of TCHF -2,182 (previous year's period: TCHF 2,339) and from cash flow hedges of TCHF 0 (previous year's period: TCHF -506) were recognized in other comprehensive income (OCI).

Hedge accounting is used where permissible; otherwise, the earnings effects of economic hedges largely offset each other as a result of natural hedging.

150

Consolidated financial statements

Interest risk

An interest risk arises when market interest rates fluctuate, which could improve or worsen the proceeds from deposits or payments for money borrowed. In addition, due to the mismatching of maturities, there is a risk of changes in interest rates which is actively controlled in the Group, in particular by monitoring changes in the yield curve.

The risk of change in interest rates to which the Group is exposed primarily relates to financial liabilities. The Group currently utilizes financial instruments to hedge the risk of changes in interest rates.

Fixed interest agreements provide protection against additional expenses in phases of rising interest rates. They have the disadvantage that the company does not profit from corresponding developments in times of falling interest rates. Fixed interest agreements provide sufficient planning security for financial liabilities without flexible regulations on utilization and repayment. By contrast, for credit agreements with high flexibility, variable interest agreements take into account future fluctuations in credit utilization. For further information on financial liabilities please see note 6.18.

The Group hedges a portion of the interest rate risks arising from variable interest-bearing financial liabilities and future financing measures with interest rate swaps.

In the case of interest rate swaps, variable interest payments are exchanged for fixed interest payments, or a compensation payment equal to the difference between the two payments is made or received. This transforms the future variable and therefore uncertain interest payments from the secured loans into fixed interest payments. The market values of interest rate swaps are determined by discounting the forecast future cash flows. The interest rate swaps are recognized as stand-alone hedge accounting transactions at fair value.

In the reporting year, interest effects from cash flow hedges amounting to TCHF 55 (previous year: TCHF -160) were recognized in equity.

Other price risks

Other price risks are defined as the risk that the fair value or future cash flows of a financial instrument could fluctuate as a result of changes in market prices not already arising from interest or currency risks. Other price risks apply to financial assets measured at fair value. These financial assets are not hedged.

Sensitivities

The sensitivity analysis shows the effects of possible changes in market interest rates on earnings before taxes or equity. Changes in market interest rates affect interest income and expenses on floating-rate financial instruments. The interest rate sensitivity analysis was prepared assuming a change in the market interest rate of 100 basis points upwards and downwards.

The Group's currency sensitivities were calculated for the main currency pairings of EUR/CHF, EUR/USD and EUR/CAD (each expressed in Swiss francs) assuming that the underlying exchange rate of the pairing fluctuates by 10% in either direction with all other currency parameters remaining the same. The sensitivity analysis does not include translation risks. The following table shows the effects of a change in the exchange rate of 10%. The closing rate was used for the sensitivity analysis.

151

152

Sensitivity analysis

Dec. 31, 2025 (TCHF)	Interest rate risk
	-1%	+1%
Financial assets
Cash and cash equivalents	-218	218
Trade accounts receivable (current and non-current)	-	-
Other receivables (current and non-current)	-	-
Derivative financial instruments	-	-
Other financial assets (current and non-current)	-	-
Financial liabilities
Financial liabilities (current and non-current)	1,913	-1,913
Lease liabilities (current and non-current)	-	-
Trade accounts payable (current and non-current)	443	-443
Other liabilities (current and non-current)	-	-
Derivative financial instruments	-	-
Total increase/decrease	2,138	-2,138
thereof through OCI	-	-
thereof through profit or loss	2,138	-2,138
Dec. 31, 2024 (TCHF)	Interest rate risk
---	---	---
	-1%	+1%
Financial assets
Cash and cash equivalents	-168	168
Trade accounts receivable (current and non-current)	-	-
Other receivables (current and non-current)	-	-
Derivative financial instruments	-	-
Other financial assets (current and non-current)	-	-
Financial liabilities
Financial liabilities (current and non-current)	1,956	-1,956
Lease liabilities (current and non-current)	-	-
Trade accounts payable (current and non-current)	386	-386
Other liabilities (current and non-current)	-	-
Derivative financial instruments	-	-
Total increase/decrease	2,174	-2,174
thereof through OCI	-	-
thereof through profit or loss	2,174	-2,174

Exchange rate risk

EUR/CHF		EUR/USD		EUR/CAD		Total		Other price risks
-10%	+10%	-10%	+10%	-10%	+10%	-10%	+10%	-10%	+10%
-1,130	1,130	-85	100	-2	3	-1,217	1,233	-	-
-6	6	-2,254	2,754	-6	7	-2,266	2,767	-	-
-	-	-824	1,007	-3	4	-827	1,011	-	-
-	-	-2	3	-	-	-2	3	-	-
-	-	-	-	-	-	-	-	-1,229	1,229
612	-612	2,528	-3,090	-	-	3,140	-3,702	-	-
-	-	101	-124	-	-	101	-124	-	-
42	-42	131	-160	-	-	173	-202	-	-
1	-1	1,400	-1,711	-	-	1,401	-1,712	-	-
59	-59	-302	370	-	-	-243	311	-	-
-422	422	693	-851	-11	14	260	-415	-1,229	1,229
-	-	-	-	-	-	-	-	-1,188	1,188
-422	422	693	-851	-11	14	260	-415	-41	41

Exchange rate risk

EUR/CHF		EUR/USD		EUR/CAD		Total		Other price risks
-10%	+10%	-10%	+10%	-10%	+10%	-10%	+10%	-10%	+10%
-142	142	-48	58	-1	1	-191	201	-	-
-88	104	-2,516	3,075	-	-	-2,604	3,179	-	-
-6	6	-374	457	-	-	-380	463	-	-
-	-	-1,547	1,891	-	-	-1,547	1,891	-	-
-	-	-	-	-	-	-	-	-2,125	2,125
1,141	-1,141	4,245	-5,188	74	-91	5,460	-6,420	-	-
-	-	125	-152	-	-	125	-152	-	-
190	-200	127	-154	-	-	317	-354	-	-
1	-1	1,854	-2,267	-	-	1,855	-2,268	-	-
-	-	-1,547	1,892	-	-	-1,547	1,892	-	-
1,096	-1,090	319	-388	73	-90	1,488	-1,568	-2,125	2,125
-	-	-1,100	900	-	-	-1,100	900	-2,084	2,084
1,096	-1,090	1,419	-1,288	73	-90	2,588	-2,468	-41	41

Consolidated financial statements

154

8.4 Fair value of financial and non-financial assets and liabilities

8.4.1 Fair value of financial assets and liabilities

The following table shows the allocation to the three levels of the fair value hierarchy of financial assets and liabilities measured at fair value/the fair values to be disclosed in the notes:

Fair value hierarchy

2025 (TCHF)		Level 1	Level 2	Level 3	Total
Financial assets at fair value
Derivative financial instruments	FVTPL/without category	-	52	410	462
Financial assets at fair value through profit or loss	FVTPL	-	14,055	-	14,055
Financial assets at fair value through OCI	FVTOCI	-	-	11,881	11,881
Financial liabilities at fair value
Derivative financial instruments	FLTPL/without category	-	1,009	-	1,009
2024 (TCHF)		Level 1	Level 2	Level 3	Total
Financial assets at fair value
Derivative financial instruments	FVTPL/without category	-	925	415	1,340
Financial assets at fair value through profit or loss	FVTPL	-	15,190	-	15,190
Financial assets at fair value through OCI	FVTOCI	-	-	20,830	20,830
Financial liabilities at fair value
Derivative financial instruments	FLTPL/without category	-	173	-	173

Disclosures on level 3 financial instruments

	Equity investments	Profit participation rights	Embedded derivatives
Fair value on December 31, 2023	18,167	1,636	237
Transfer to level 3	4,253	-	-
Gains/(losses) through profit or loss	-	-	50
Gains/(losses) through equity	-9,900	-1,636	1
Purchase	8,310	-	127
Fair value on December 31, 2024	20,830	-	415
Gains/(losses) through equity	-11,028	-	-5
Purchase	2,079	-	-
Fair value on December 31, 2025	11,881	-	410

The financial assets measured at fair value through profit or loss and included in level 1 are measured using stock market prices.

The derivative financial instruments in level 2 are measured at current market rates. A discounted cash flow method was used to determine the fair value of level 2 derivative financial instruments.

Level 3 equity instruments are measured at fair value through other comprehensive income (see also note 6.9). This involves using present value methods with discount rates in the double-digit percentage range, based on the five-year plans of the respective companies. The estimated fair value of all level 3 financial instruments would decrease by 1,447 TCHF if the discount rate were increased by 300 basis points, or increase by 1,990 TCHF if the discount rate were reduced by 300 basis points. A discounted cash flow method was used to determine the fair value of level 3 derivative financial instruments.

During the reporting period, there were no reclassifications between the individual levels of the fair value hierarchy. They are reclassified quarterly in each reporting period if circumstances requiring a different classification arise.

8.4.2 Financial assets and liabilities at amortized cost

Given the short remaining term, the carrying amounts of current financial receivables and liabilities as of the end of the reporting period are approximately the fair value. Non-current receivables are discounted according to their remaining term. Their carrying amounts are therefore also approximately their fair value. Please see note 8.1 for the fair value disclosures on non-current receivables.

8.4.3 Fair value of non-financial assets and liabilities

As of December 31, 2025, and December 31, 2024, there were no non-financial assets or liabilities measured at fair value.

8.5 Use of hedging instruments

Currency

In significant transactions, particularly in US dollars and euro, the Group attempts to minimize currency risks by using suitable derivative and non-derivative financial instruments. The derivative financial instruments are concluded with credit institutions. The financial instruments predominantly relate to future cash flows in foreign currencies from film projects and loans. The Group ensures that the amount of the hedge does not exceed the value of the hedged item.

The Group entered into currency forwards and currency swaps for hedging purposes in the current fiscal year. To the extent possible, these are accounted for as fair value hedges or cash flow hedges in accordance with IFRS 9.

The hedged items essentially relate to pending sales in US dollars. Furthermore, currency forwards were bought as a hedge for recognized foreign currency receivables and liabilities.

Interest

The Group uses interest rate swaps to reduce interest risks arising from liabilities with variable interest rates. These derivative instruments are concluded with renowned credit institutions. The interest rate swaps are directly related to future interest payments resulting from these financial liabilities.

In the current fiscal year, the Group entered into interest rate swaps for hedging purposes. These hedges are recognized as cash flow hedges under IFRS 9 whenever possible. The hedged transactions primarily involve future interest payments from loans. The objective of these hedges is to stabilize the predictable cash flows and the financial risks associated with changes in interest rates.

Consolidated financial statements

156

8.5.1 Fair values of hedging instruments in hedges

Cash flow hedges

As of December 31, 2025, the currency risk component of non-derivative financial liabilities with a nominal amount of TCHF 0 (previous year: TCHF 10,279) and interest rate risk components with a nominal value of TCHF 23,269 (previous year: TCHF 23,504) were designated as a hedging instrument in cash flow hedges. The hedged items are forecast transactions that are highly likely to occur.

The unrealized profit before tax from the remeasurement of hedging instruments recognized in other comprehensive income (OCI) amounts to TCHF 55 (previous year: TCHF -732).

Derivatives and non-derivative financial liabilities included in hedge accounting are used only to hedge currency risks and interest risks.

The following table shows the conditions of the non-derivative financial instruments designated in existing hedges as of the end of the reporting period:

Primary financial instruments in hedges

(TCHF)	< 1 year	1 - 5 years	> 5 years	Dec. 31, 2025
				Nominal volume	Annual average rate
Primary financial instrument (financial liability)
Loan	-	23,269	-	23,269	-
Forward exchange transaction/purchase of interest rate swap
Interest rate swap	-	23,269	-	23,269	-
				Dec. 31, 2024
(TCHF)	< 1 year	1 - 5 years	> 5 years	Nominal volume	Annual average rate
Primary financial instrument (financial liability)
USD	10,279	-	-	10,279	0.98829
Loan	-	23,504	-	23,504	-
Forward exchange transaction/purchase of interest rate swap
FX Swap	10,279	-	-	10,279	-
Interest rate swap	-	23,504	-	23,504	-

The carrying amounts and nominal amounts of hedging instruments in existing cash flow hedges are shown in the following table. Only the designated foreign currency component of the financial liability is recognized as carrying amount:

Information on hedging instruments

	Currency risk		Interest risk
(TCHF)	2025	2024	2025	2024
Cumulative fair value changes to determine ineffectiveness	-	-572	55	-160
Carrying amount of financial liabilities	-	263	-105	-160
Nominal value	-	10,279	23,269	23,504

The designated hedged items are as follows:

Information on underlying transactions

Currency risk/interest risk

(TCHF)	2025	2024
Cumulative fair value changes to determine ineffectiveness	-55	732
Nominal value	105	-103

Only the change in the carrying amount of the designated currency and interest rate risk component is shown in the table:

Hedging instruments in hedge accounting

Currency risk/interest risk

(TCHF)	Jan. 01 to Dec. 31, 2025	Jan. 01 to Dec. 31, 2024
Unrealized gains and losses from hedging instruments	55	-732
Reclassification of realized gains and losses to profit or loss due to the settlement of the underlying transaction	-263	-

Please see note 6.15 for the reconciliation of the reserve for the fair value remeasurement of financial instruments in other comprehensive income (OCI).

As in the previous year, the ineffectiveness from CCBS and credit risks was immaterial in fiscal 2025 and therefore not recognized in profit or loss.

Fair Value Hedges

There were no fair value hedges in the year under review or the previous year.

8.5.2 Derivative financial instruments without a hedge

Derivatives that are not or no longer included in a hedge are still used to hedge a financial risk from operating activities. The hedging instruments are closed out if the operating hedged item no longer exists or is no longer expected. The nominal amounts and fair values of derivatives not designated in hedge accounting as of December 31, 2025 and 2024, are as follows:

Derivative financial instruments without a hedge

(TCHF)	Dec. 31, 2025		Dec. 31, 2024
	Nominal value	Fair value	Nominal value	Fair value
Foreign currency forwards (sale)
EUR	62,000	-593	-	-
USD/CZK	8,893	-69	-	-
thereof credit balance	-	-	-	-
thereof debit balance	70,893	-662	-	-
Foreign currency forwards (acquisition)
PLN	1,489	-36	1,498	-13
USD	3,937	-206	35,359	925
USD/CZK-Swap	8,211	52	-	-
thereof credit balance	8,211	52	35,359	925
thereof debit balance	5,426	-242	1,498	-13

Consolidated financial statements

158

9. SHARE-BASED PAYMENT

As part of a stock option program, the ultimate parent company, Highlight Event and Entertainment AG, issued stock options to eligible employees and selected quasi-employees without employee status at Constantin Film AG. The stock options entitle participants to shares in Highlight Event and Entertainment AG at the end of the three-year vesting period. The date of issue for all stock options was July 23, 2021. The program expired in the previous year.

10. SEGMENT REPORTING

Segments and segment reporting are defined on the basis of internal reporting (Management Approach) to the chief operating decision maker with regard to the allocation of resources and the assessment of earnings power. The management of the company as the chief operating decision maker makes decisions on the allocation of resources to the segments and assesses their success on the basis of key indicators for revenue and segment earnings. The Group's management does not rate the segments on the basis of their assets and liabilities, which is why the corresponding values are not calculated and reported.

The Group consists of the Film segment and the Sports and Event segment. Group functions of Highlight Communications AG are shown under "Other" and therefore do not represent an operating segment. These include actual Group Management, Corporate Finance, Investor Relations, Controlling, Legal, Group Accounts, Corporate Communications, Internal Audit and Human Resources. Segment earnings are defined as EBIT as this figure is used internally for performance measurement.

The activities of Constantin Film AG and its subsidiaries plus the Highlight Communications equity interest in Rainbow Home Entertainment AG and its subsidiary are combined in the Film segment as have a similar operational activity. Its activities comprise the production of films, the exploitation of the rights to the films it produces and acquires and the distribution of theatrical, DVD/Blu-ray and TV movies.

The Sports and Event segment comprises the activities of TEAM Holding AG, Highlight Event AG and Sport1 Medien GmbH. The main activities of this segment include as main projects:

The marketing of the UEFA Champions League, the UEFA Europa League, the UEFA Europa Conference League and the UEFA Super Cup
The marketing of the Eurovision Song Contest and the Vienna Philharmonic Orchestra
TV and digital activities with the SPORT1 brand, as well as production, content solutions services and content marketing with PLAZAMEDIA
Marketing offers and comprehensive competencies in the areas of betting, poker and casino games, as well as an event agency specializing in sports preparation for professional teams and top athletes, as well as the implementation of sports events and brand activation measures

Sales and service transactions between the segments are performed as arm's length transactions.

Segment information 2025

(TCHF)	Film	Sports and Event	Other	Reconciliation	Group
External sales	310,419	101,716	-	-	412,135
Intragroup sales	1,081	308	-	-1,389	-
Total sales	311,500	102,024	-	-1,389	412,135
Other segment income	126,825	5,579	-	-404	132,000
Segment expenses	-433,044	-239,040	-5,630	1,793	-675,921
thereof amortization and depreciation	-106,562	-12,120	-	-	-118,682
thereof impairment and reversals of impairment	-7,747	-101,161	-	-	-108,908
Segment earnings	5,281	-131,437	-5,630	-	-131,786
Timing of revenue recognition
Over time	138,397	30,449	-	-	168,846
Point in time	172,022	71,267	-	-	243,289
	310,419	101,716	-	-	412,135
Sales by product type
Film	171,366	-	-	-	171,366
Production services	139,053	-	-	-	139,053
Sports and Event	-	45,462	-	-	45,462
Platform	-	47,557	-	-	47,557
Services	-	8,697	-	-	8,697
	310,419	101,716	-	-	412,135

Segment information 2024

(TCHF)	Film	Sports and Event	Other	Reconciliation	Group
External sales	251,398	152,683	-	-	404,081
Intragroup sales	813	313	-	-1,126	-
Total sales	252,211	152,996	-	-1,126	404,081
Other segment income	144,574	4,755	-	-188	149,141
Segment expenses	-387,245	-168,324	-5,324	1,314	-559,579
thereof amortization and depreciation	-55,195	-16,472	-	-	-71,667
thereof impairment and reversals of impairment	-12,170	-	-	-	-12,170
Segment earnings	9,540	-10,573	-5,324	-	-6,357
Timing of revenue recognition
Over time	132,287	58,488	-	-	190,775
Point in time	119,111	94,195	-	-	213,306
	251,398	152,683	-	-	404,081
Sales by product type
Film	118,368	-	-	-	118,368
Production services	133,030	-	-	-	133,030
Sports and Event	-	54,651	-	-	54,651
Platform	-	80,220	-	-	80,220
Services	-	17,812	-	-	17,812
	251,398	152,683	-	-	404,081

The elimination of inter-segment transactions is reported in the reconciliation column.

Consolidated financial statements

Segment information by region

| Jan. 01 to Dec. 31, 2025
(TCHF) | Switzerland | Germany | Rest of Europe | Rest of world * | Total |
| --- | --- | --- | --- | --- | --- |
| External sales | 52,071 | 199,062 | 63,242 | 97,760 | 412,135 |
| Non-current assets | 23,037 | 283,707 | - | - | 306,744 |

TCHF 88,273 of which attributable to US

| Jan. 01 to Dec. 31, 2024
(TCHF) | Switzerland | Germany | Rest of Europe | Rest of world * | Total |
| --- | --- | --- | --- | --- | --- |
| External sales | 65,395 | 192,317 | 64,693 | 81,676 | 404,081 |
| Non-current assets | 120,124 | 307,299 | - | - | 427,423 |

TCHF 80,574 of which attributable to US

External sales by customers

(TCHF)	2025		2024
	nominal	in %	nominal	in %
Customer A (Film segment, previous year: Sports and Event segment)	45,618	11	51,197	13
Customer B (Film segment)	45,091	11	34,520	9
Customer C (Sports and Event segment, previous year: Film segment)	41,133	10	31,345	8
Sales with other customers	280,293	68	287,019	70
Total external sales	412,135	100	404,081	100

In total, the Highlight Group generated more than 10% of total revenue with two customers (previous year: one customer).

11. FINANCIAL COMMITMENTS, CONTINGENT LIABILITIES AND OTHER UNRECOGNIZED FINANCIAL OBLIGATIONS

11.1 Overview

Financial commitments, contingent liabilities and other unrecognized financial obligations

(TCHF)	Financial commitments	Contingent liabilities	Purchase commitments for licenses	Other unrecognized financial obligations	Lease liabilities	Total
As of December 31, 2025
Due within one year	22,836	–	21,411	22,720	872	67,839
Due between one year and five years	–	–	10,975	28,673	2,217	41,865
Due after five years	25	–	–	108	2,002	2,135
Total	22,861	–	32,386	51,501	5,091	111,839
(TCHF)	Financial commitments	Contingent liabilities	Purchase commitments for licenses	Other unrecognized financial obligations	Lease liabilities	Total
As of December 31, 2024
Due within one year	36,424	–	37,039	22,473	944	96,880
Due between one year and five years	4,137	–	22,694	19,758	4,979	51,568
Due after five years	25	–	–	109	2,434	2,568
Total	40,586	–	59,733	42,340	8,357	151,016

11.2 Financial commitments

As of December 31, 2025, there were guarantees to various TV stations for the completion of service productions totaling TCHF 22,861 (previous year: TCHF 40,586). As there are no indications that the collateralized service productions will not be completed as contractually agreed, it is not expected that material actual liabilities will result from the contingent liabilities.

11.3 Contingent liabilities

There were no contingent liabilities as at the balance sheet date.

11.4 Purchase commitments for licenses

The Group secures its access to future film rights by concluding license agreements. Film purchasing and production preparations result in future financial obligations of TCHF 10,164 (previous year: TCHF 20,432).

Furthermore, the purchase commitments for licenses include TCHF 22,222 (previous year: TCHF 39,301) for broadcasting and transmission rights of Sport1 GmbH – chiefly for the Bundesliga rights purchased in 2024.

11.5 Other financial obligations not recognized in the balance sheet

Other financial obligations not recognized in the balance sheet include TCHF 21,016 (previous year: TCHF 19,388) for obligations under option, work and film contracts for the development of in-house productions in addition to obligations for distribution costs and other services of TCHF 30,485 (previous year: TCHF 22,952).

11.6 Rental and lease obligations

The Highlight Group rents numerous offices, warehouses, vehicles and facilities.

The Group has recognized right-of-use assets for these leases with the exception of short-term leases and leases for low-value assets (for more information see notes 4.8 and 6.4).

Consolidated financial statements

162

12. RELATED PARTY DISCLOSURES

As part of its normal business activities, the company maintains relations with associated companies, joint ventures, the main shareholder and its subsidiaries as well as with companies controlled by members of the Board of Directors.

Related party disclosures

(TCHF)	Dec. 31, 2025	Dec. 31, 2024
Receivables	12,292	15,983
Liabilities	3,515	213
Other current financial liabilities	14,152	-
	Jan. 01 to Dec. 31, 2025	Jan. 01 to Dec. 31, 2024
Sales and other income	171	-
Cost of materials and licenses and other expenses	4,499	65

Parent company and its direct subsidiaries

(TCHF)	Dec. 31, 2025	Dec. 31, 2024
Receivables	8,963	13,151
Liabilities	940	387
	Jan. 01 to Dec. 31, 2025	Jan. 01 to Dec. 31, 2024
Sales and other income	241	360
Cost of materials and licenses and other expenses	678	691

Associates and joint ventures

(TCHF)	Dec. 31, 2025	Dec. 31, 2024
Receivables	319	148
Liabilities	-	-
	Jan. 01 to Dec. 31, 2025	Jan. 01 to Dec. 31, 2024
Sales and other income	-	-
Cost of materials and licenses and other expenses	-	-

Other expenses of the direct parent company Highlight Event and Entertainment AG were incurred in the amount of TCHF 99 in the reporting year (previous year: TCHF 152).

As of December 31, 2025, there were further liabilities to various members of the Board of Directors and managing directors of TCHF 135 (previous year: TCHF 213).

Related parties include the members of the Board of Directors, the members of Group management and their relatives. Highlight Communications AG did not perform significant services for companies controlled by related parties in the reporting period or in the same period of the previous year.

Total remuneration for the members of the Executive Board

(TCHF)	2025
	Remuneration	Expenses for pension benefits	Remuneration as a member of the Board of Directors	Total remuneration
Bernhard Burgener, Chairman and Delegate of the BoD, executive member of the BoD (highest remuneration)	1,439	183	30	1,652
Hasan Dilsiz, executive member	575	85	-	660
Total	2,014	268	30	2,312
(TCHF)	2024
	Remuneration	Expenses for pension benefits	Remuneration as a member of the Board of Directors	Total remuneration
Bernhard Burgener, Chairman and Delegate of the BoD, executive member of the BoD (highest remuneration)	1,547	190	20	1,757
Hasan Dilsiz, executive member since July 1, 2024	475	68	-	543
Peter von Büren, executive member until June 30, 2024	440	68	42	550
Total	2,462	326	62	2,850

Please see the remuneration report for further information on the remuneration of the Board of Directors and members of the Group's management and note 9 to the annual financial statements of Highlight Communications AG for details of their shareholdings. There are no deviations between Swiss and international accounting law.

13. EVENTS AFTER THE END OF THE REPORTING PERIOD

The event was classified as a value-creating event after the balance sheet date; therefore, no adjustment to the consolidated financial statements as of December 31, 2025, was necessary. The removal of the PDC World Darts Championship affects a premium right with particularly high reach and strategic significance; however, this is offset by the fact that SPORT1 has simultaneously secured a structurally expanded and long-term darts rights portfolio with year-round free-to-air TV coverage. For these reasons, a reliable quantification of the financial impact is currently not possible.

Consolidated financial statements

164

Report of the statutory auditor to the General Meeting of Highlight Communications AG, Pratteln

Report on the Audit of the Consolidated Financial Statements

Opinion

We have audited the consolidated financial statements of Highlight Communications AG and its subsidiaries (the Group), which comprise the consolidated balance sheet as of 31 December 2025, the consolidated income statement, the consolidated statement of comprehensive income / loss, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the consolidated financial statements, including material accounting policy information.

In our opinion, the consolidated financial statements (pages 86-163) give a true and fair view of the consolidated financial position of the Group as of 31 December 2025, its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with IFRS Accounting Standards and comply with Swiss law.

Basis for the audit opinion

We conducted our audit in accordance with Swiss law, International Standards on Auditing (ISA) and Swiss Standards on Auditing (SA-CH). Our responsibilities under those provisions and standards are further described in the "Auditor's Responsibilities for the Audit of the Consolidated Financial Statements" section of our report. We are independent of the Group in accordance with the provisions of Swiss law, together with the requirements of the Swiss audit profession that are relevant to audits of the financial statements of public interest entities, as well as those of the International Ethics Standards Board for Accountants' International Code of Ethics for Professional Accountants (including International Independence Standards) (IESBA Code), as applicable to audits of financial statements of public interest entities. We have also fulfilled our other ethical responsibilities in accordance with these requirements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Material Uncertainty Related to Going Concern

We draw attention to Note 1.2 to the consolidated financial statements, section "Basis of Presentation" (page 94), which indicates that the Group's ability to continue as a going concern is dependent, in particular, on (i) ensuring sufficient liquidity to finance ongoing operations for at least twelve months, (ii) the refinancing of financial liabilities towards a banking consortium amounting to CHF 74.5 million with a maturity date of 30 November 2026, whereby this credit facility is subject to strict covenants (in particular minimum EBITDA requirements and milestones for the disposal of certain assets) and may become immediately repayable in the event of non-compliance, and (iii) the extension or restructuring of trade payables arising from licensing transactions amounting to EUR 57.5 million. As disclosed in Note 1.2 to the consolidated financial statements, section "Basis of Presentation", these events or conditions indicate the existence of a material uncertainty that may cast significant doubt on the Group's ability to continue as a going concern. Our opinion is not modified in respect of this matter.

Consolidated financial statements

166

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, we do not provide a separate opinion on these matters.

In addition to the matter described in the "Material uncertainty related to going concern" section, we have determined the matter described below to be the key audit matters to be communicated in our report.

Revenue recognition

Key audit matter

a) Revenues from the Film segment

A significant portion of revenue is generated from the exploitation of film rights in the areas of movie theaters, global sales, TV and home entertainment, as well as from third-party productions. Revenue is mainly recognized at a point in time. Only in the case of third-party productions is revenue recognized over time according to the stage of completion. At CHF 310.4 million, revenues in the Film segment represent a significant amount. The correct amount and timing of revenue recognition is therefore of crucial importance. As such, we consider revenue recognition in the Film segment to be a key audit matter.

b) Revenues from the Sports and Event segment

Revenue in the Sports and Event segment include CHF 41.1 million from the product type "Sports and Event" with the agency agreement entered into with UEFA for the marketing of media, sponsoring and licensing rights of the UEFA Champions League and UEFA Europa League. The agreed compensation consists of a fixed and a variable component, which is based on the revenues generated by UEFA. The amount of the variable portion is to be estimated for the tournaments not completed at the reporting date. We therefore consider revenue recognition in this segment to be a key audit matter.

Please refer to page 111 (Note 4.16 - Revenue from contracts with customers), page 114 (Note 5.2.1 - Estimates used to determine the transaction for revenue from contracts with customers) and page 140 (Note 7.1 - Notes to revenue from contracts with customers) in the notes to the consolidated financial statements.

How our audit addressed the key audit matter

We have performed the following audit procedures for the Group companies concerned:

We tested the design of internal controls in connection with the measurement and recognition of the amount and timing of revenue. We assessed the approach to revenue recognition in accordance with the criteria of IFRS 15 "Revenue from contracts with customers".
We assessed compliance with the consistency of the revenue recognition method applied, taking into account the accounting policies in note 4 to the consolidated financial statements.
In the Film segment, we tested revenues on a sample basis with regard to the revenue recognition requirements of IFRS 15. For this purpose, we inspected significant new contracts and evidence of the transfer of rights and obligations and of the acceptance, and examined whether the timing or period-related revenue recognition was correct.
For revenues of the product type "Sports and Event", we tested the amount of the expected agency contracts for the current 2025/2026 season, taking into account the contractual basis and the expected results for this period. We based our assessment on the calculations of the expected revenues from the marketing of the tournaments, which are periodically reconciled with UEFA. In our assessment, we also included the results of our questioning of management on the current status and expected financial results of the current match period, as well as the accuracy of the estimated revenues and accruals from the previous year.

We consider management's approach on revenue recognition in the Film segment and in the product type Sports and Event to be appropriate.

Valuation of film assets

Key audit matter

Film assets, consisting of in-house and third-party productions, represent a significant portion of assets at CHF 229.5 million. The acquisition costs of film assets are amortized on the basis of agreed or planned sales and are also subject to an annual impairment test if there are indications of impairment. For this purpose, the recoverable amounts are determined from the expected revenues using the discounted cash flow method.

Discretionary scope is applied in determining assumptions in connection with the forecast revenues and cash flows in the various evaluation stages, as well as in the discount rates applied. These estimates and margins can have a significant impact on the determination of performance-related amortization and any impairment tests, and therefore have a significant influence on the assessment of the recoverability of the film assets.

Please refer to page 101 (Note 4.4 - Film assets), page 114 (Note 5 - Judgment / estimation uncertainty) and page 116 (Note 6.1 - Note on film assets) in the notes to the consolidated financial statements.

How our audit addressed the key audit matter

We performed the following audit procedures for Group companies reporting significant film assets:

We tested the design of internal controls related to the valuation of film assets.
We tested on a sample basis the determination of the performance-based amortization of individual films. In doing so, we tested the plausibility of the assumptions underlying the amortization by reconciling them to the contractual basis.
We tested the assumptions used, including the discount rate and the impairment test model, for compliance with IAS 36 "Impairment of Assets". We checked the plausibility of the discount rate against the cost of capital of the Group and comparable companies, taking into account country-specific features.
In addition, we tested whether and to what extent results from the initial exploitation of films (movie theaters) or other indicators led to additional impairments in the book values of individual films. For this purpose, we also examined the aging structure of film assets.

We consider the assumptions made by management to determine the performance-related amortization and to perform the impairment test, if any, to be appropriate and suitable to test the recoverability of the film assets.

Consolidated financial statements

Impairment of goodwill from the acquisition of Sport1 Medien GmbH

Key audit matter

The goodwill from the acquisition of Sport1 Medien GmbH is tested for impairment annually. This involves estimates and assumptions in connection with future business results and the discount rates applied to the forecasted cash flows.

The impairment of the goodwill position in the amount of CHF 84.5 was identified as a key audit matter because the impairment of goodwill of Sport1 Medien GmbH represents a significant portion of the income statement and there is considerable judgment in determining assumptions and estimates in connection with future profitability and the discount rates applied.

Please refer to page 103 (Note 4.6 - Goodwill), page 114 (Note 5 - Judgment / estimation uncertainty) and page 117 (Note 6.2 - Note on other intangible assets and goodwill) in the notes to the consolidated financial statements.

How our audit addressed the key audit matter

We have performed the following audit procedures in relation to the impairment test prepared by the Group:

We assessed the technical accuracy of the valuation models used.
We assessed the budgeting process, in particular whether the Group Executive Board and the Board of Directors monitored this process and whether the values used for the impairment test were in line with the budget approved by the Board of Directors. In addition, we performed a benchmarking exercise with comparable companies to verify whether the values were within acceptable ranges.
We checked the plausibility of the discount rate against the cost of capital of the Group and comparable companies, taking into account country-specific characteristics.
We compared the assumptions regarding sales and earnings of the previous year with those of the reporting year, with the aim of identifying in retrospect overly optimistic assumptions in the budgeted sales and earnings. We analyzed reasons for any deviations.

The risk of a wrongly calculated goodwill impairment has been addressed by the procedures described above. We consider management's approach to the calculation of the goodwill impairment to be appropriate. The assumptions used were consistent and within reasonable ranges.

Consolidated financial statements

Other Information

The Board of Directors is responsible for the other information. The other information comprises the information included in the annual report but does not include the consolidated financial statement, the stand-alone financial statements, the audited items of the remuneration report and our auditor's report thereon.

Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Board of Directors' Responsibilities for the consolidated financial statements

The Board of Directors is responsible for the preparation of the consolidated financial statements, which give a true and fair view in accordance with IFRS Accounting Standards and the provisions of Swiss law, and for such internal control as the Board of Directors determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, Board of Directors is responsible for assessing the Group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern, and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

Auditor's Responsibilities for the Audit of the consolidated financial statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with Swiss law and SA-CH will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

A further description of our responsibilities for the audit of the financial statements is located on EXPERTsuisse's website at: http://www.expertsuisse.ch/audit-report. This description forms an integral part of our report.

169

170

Report on Other Legal and Regulatory Requirements

In accordance with Art. 728a para. 1 item 3 CO and PS-CH 890, we confirm that an internal control system exists, which has been designed for the preparation of the consolidated financial statements according to the instructions of the Board of Directors.

We recommend that the consolidated financial statements submitted to you be approved.

Zurich, April 30, 2026

Forvis Mazars SA

Cyprian Bumann
Licensed audit expert
(auditor in charge)

Fabio Cavalieri
Licensed audit expert

Other Matters – Use of the Audit Opinion

The consolidated financial statements and the group management report translated into English are provided for convenience purposes only. They are merely translated reproductions of the audited consolidated financial statements and the group management report included in the German annual report. Only the German version of the annual report has been audited. In the event of any inconsistencies, the audited German annual report shall prevail.

Financial statements

as of December 31, 2025 of Highlight Communications AG, Pratteln

Consolidated financial statements

172

BALANCE SHEET AS OF DECEMBER 31, 2025

Highlight Communications AG, Pratteln

ASSETS (TCHF)	Dec. 31,2025	Dec. 31,2024
Current assets
Cash and cash equivalents	564	82
Other current receivables
from third parties	726	21
from shareholders	8,424	12,756
from Group entities	220	19,157
from related parties	63	53
Current prepaid expenses/accrued income	185	383
	10,182	32,452
Non-current assets
Equity investments	223,557	465,556
	223,557	465,556
Total assets	233,739	498,008

EQUITY AND LIABILITIES (TCHF)
Dec. 31, 2025
Dec. 31, 2024

Liabilities

Trade accounts payable
due to third parties	432	377
due to Group entities	50	28
Current interest-bearing liabilities
due to banks	74,476	81,780
due to Group entities	3,718	7,913
Other current liabilities
due to third parties	2,484	1,021
due to Group entities	5,011	3,579
due to shareholders	191	163
Deferred income/accrued expenses	2,364	2,333
	88,726	97,194

Equity

Subscribed capital	63,000	63,000
Legal capital reserves
Reserves from capital contributions	51,844	51,844
Other legal capital reserves	2,758	2,758
Legal reserves for treasury shares	37,395	37,395
Voluntary retained earnings	30,403	30,403
Profit carryforward	215,786	201,462
Net profit/loss for the year	-255,801	14,324
Treasury shares
Against reserves from capital contributions	-372	-372
	145,013	400,814
Total equity and liabilities	233,739	498,008
---	---	---

Financial statements

174

INCOME STATEMENT 2025

Highlight Communications AG, Pratteln

(TCHF)	2025	2024
License income	8	4
Other income	376	268
Income from equity investments	15,139	25,306
Total income	15,523	25,578
License expenses	-	-
Staff costs	-3,293	-3,430
Office and administrative expense	-3,002	-3,085
Amortization, depreciation and impairment on non-current assets	-261,610	-
Earnings before interest and taxes (EBIT)	-252,382	19,063
Financial expense
Interest expense	-4,708	-5,553
Price losses	-2	-100
Financial income
Interest income	458	465
Price gains	833	449
Profit/loss before taxes	-255,801	14,324
Income taxes	-	-
Net profit/loss for the year	-255,801	14,324

NOTES TO THE FINANCIAL STATEMENTS 2025

Highlight Communications AG, Pratteln

1. ACCOUNTING

These financial statements were prepared in accordance with the provisions on commercial accounting of the Swiss Code of Obligations. The material items of the balance sheet are accounted for as shown below.

Going concern

The accompanying annual financial statements have been prepared on a going concern basis, which assumes that the Company will be able to continue its operations and realise its assets and discharge its liabilities in the normal course of business.

As at December 31, 2025, management is of the view, based on financial forecasts and available cash resources, that the Company will have sufficient financial means to continue its operations for a period of at least twelve months after the date of the approval of the financial statements. This assessment is based in particular on the assumption that existing financing arrangements can be extended or that alternative sources of financing can be obtained.

Management intends to continue actively exploring additional options to secure the necessary financing. Nevertheless, material uncertainties exist that may cast significant doubt on the Company's ability to continue as a going concern. These uncertainties relate in particular to the following matters:

the ability to secure sufficient liquidity to cover ongoing operating activities for at least twelve months;
the refinancing of a financial liability towards a banking consortium amounting to CHF 74.5 million, which falls due for repayment on November 30, 2026; and
the extension or restructuring of licence-related liabilities of Sport1 Medien GmbH (formerly Sport1 Medien AG), amounting to EUR 57.5 million and due as at the balance sheet date.

The credit facility of Highlight Communications AG amounting to CHF 74.5 million is secured by shares in Constantin Film AG and TEAM Holding AG as well as by equity interests in Sport1 Medien GmbH. A single maturity date of November 30, 2026 has been agreed for the entire credit facility. The facility includes strict financial covenants, in particular the requirement to achieve a minimum consolidated EBITDA, as well as defined milestones relating to the sale of specific assets of Highlight Communications AG. In the event of non-compliance with these covenants, the liability may become immediately due and payable.

The licence-related liabilities of Sport1 Medien GmbH amounting to EUR 57.5 million are secured by shares in Sport1 Digital GmbH. In addition, due to a letter of comfort issued by Highlight Communications AG in favour of Sport1 Medien GmbH in connection with the ongoing restructuring process for an amount of EUR 8.6 million, a contingent liability exists which could result in a payment obligation for Highlight Communications AG.

At the date of approval of these annual financial statements, management is in discussions with the banking consortium as well as with relevant contractual partners and suppliers regarding an extension or restructuring of the existing liabilities. Furthermore, the Highlight Group disclosed via an ad hoc announcement on February 2, 2026 that the capital increase at the level of the parent company, Highlight Event and Entertainment AG, which had been announced on August 24, 2025, has not yet been implemented within the originally expected timeframe; the further timetable remains open. Against this background, the Group is evaluating alternative financing options and has engaged an investment bank for this purpose.

These events and conditions indicate the existence of a material uncertainty that may cast significant doubt on the Group's ability to continue as a going concern. The annual financial statements do not include any adjustments that would be necessary if the Group were unable to continue as a going concern.

Foreign currency positions

The functional currency is the Swiss franc (CHF). Transactions in foreign currencies are translated into the functional currency CHF at the exchange rate as of the transaction date. Balance sheet items are translated at the closing rate.

Other current receivables

Other current receivables are recognized at nominal value less any necessary impairment losses. All changes in value are recognized in income.

Equity investments

Equity investments are valued individually. They are recognized at cost less any necessary impairment losses. Additional impairment losses are recognized at the discretion of the Board of Directors.

Treasury shares

Treasury shares are recognized at cost without subsequent remeasurement.

Financial statements

176

2. DETAILS ON INDIVIDUAL ITEMS

Current and non-current interest-bearing liabilities due to banks

In the reporting period, the relevant amortization was taken on the credit agreement. In the financial statements, amortization for FY 2026 is recognized as current.

Equity

The share capital of Highlight Communications AG amounts to CHF 63,000,000 and is divided into 63,000,000 bearer shares with a par value of CHF 1.00 each; all issued shares are fully paid up.

The capital band was approved by the Annual General Meeting on June 22, 2023. The Board of Directors may introduce a capital band with an upper limit of CHF 94,500,000 (corresponding to an increase of 50% of the current share capital) and a lower limit of CHF 50,400,000.

In the reporting period, no dividend negatively impacting reserves from capital contributions was paid.

Income from equity investments

This item contains dividends from Group entities. In the previous year, the investment in Highlight Communications Deutschland GmbH was sold to Constantin Film Vertriebs GmbH. The sale resulted in income from equity investments in the amount of TCHF 2,174.

Office and administrative expense

This item contains management expenses, consulting expenses, investor relations costs and capital taxes.

Amortization, depreciation and impairment on non-current assets

During the reporting period, an impairment charge of TCHF 152,903 was made on the investment in Sport1 Medien GmbH. In addition, an impairment adjustment of TCHF 19,610 was made on receivables from Sport1 Medien GmbH. An impairment charge of TCHF 114,110 was made on the investment in TEAM Holding AG. At the same time, hidden reserves of TCHF 25,014 were released from the TEAM investment.

3. PLEDGED ASSETS AS COLLATERAL FOR OWN OBLIGATIONS

	Dec. 31, 2025	Dec. 31, 2024
Equity interests in Sport1 Medien GmbH
Number of equity interests	93,600,000	93,600,000
Carrying amount in TCHF	0	152,903
Shares in Constantin Film AG
Number of shares	12,742,600	12,742,600
Carrying amount in TCHF	141,994	141,994
Shares in TEAM Holding AG
Number of shares	250	250
Carrying amount in TCHF	72,563	161,660
Credit facility used
TCHF	74,476	81,779

4. CONTINGENT LIABILITIES

Joint liability exists in respect of Group value-added taxation under Section 22 of the Swiss Value-Added Tax Act (Mehrwertsteuerverordnung).

In the previous year, a firm letter of comfort in the amounts of EUR 3.5 million, EUR 4 million, and EUR 1.1 million was issued in favor of Sport1 Medien GmbH in connection with the ongoing restructuring process. In this context, Highlight Communications AG undertakes to pay the amounts due to Sport1 Medien GmbH. Due to the lack of a legal obligation and the current assessment that an outflow of funds is not probable, no provision was recognized. For this reason, the disclosure in the notes is made as a contingent liability.

NOTES ON MATERIAL INVESTMENTS

The list of all companies with their own legal identity, including minority investments held directly or indirectly by the holding company and consolidated at the level of the Highlight Group, can be found in note 3 of the consolidated financial statements in this annual report.

CHANGE IN LEGAL CAPITAL RESERVES

No dividend was paid in the reporting period.

SHAREHOLDER STRUCTURE

Shareholders with holdings of over 5%	Dec. 31, 2025	Dec. 31, 2024
Highlight Event and Entertainment AG	53.50%	53.50%
Stella Finanz AG	11.11%	11.11%
Axxion S.A.	0.00%	9.89%
Sport1 Medien AG	9.81%	9.81%

For the stakes held by members of the Board of Directors and the Group management as well as their related parties, refer to note 9.

The Board of Directors is aware of no other material shareholdings (over 5%).

TREASURY SHARES (HELD DIRECTLY OR INDIRECTLY VIA SUBSIDIARIES)

Directly

	Number of shares	Carrying amount TCHF	Transaction value TCHF
Balance on January 1, 2025	72,000	372	-
Sales	-	-	-
Acquisitions	-	-	-
Balance on December 31, 2025	72,000	372	-
	Number of shares	Carrying amount TCHF	Transaction value TCHF
Balance on January 1, 2024	72,000	372	-
Sales	-	-	-
Acquisitions	-	-	-
Balance on December 31, 2024	72,000	372	-

Indirectly

	Number of shares	Carrying amount TCHF	Transaction value TCHF
Balance on January 1, 2025	6,182,518	37,396	-
Sales	-	-	-
Acquisitions	-	-	-
Balance on December 31, 2025	6,182,518	37,396	-
	Number of shares	Carrying amount TCHF	Transaction value TCHF
Balance on January 1, 2024	6,182,518	37,396	-
Sales	-	-	-
Acquisitions	-	-	-
Balance on December 31, 2024	6,182,518	37,396	-

Financial statements

178

9. INFORMATION ON THE SHAREHOLDINGS OF THE BOARD OF DIRECTORS AND THE GROUP MANAGEMENT

As of December 31, 2025, the individual members of the Board of Directors and the Group management (including related parties) held the following number of shares in the company:

	2025	2024
Bernhard Burgener, Chairman and Delegate, executive member	-	-
Peter von Büren, non-executive member	-	-
Edda Kraft, non-executive member	-	-
Stefan Wehrenberg, non-executive member	-	-
Hasan Dilsiz, Group CFO	500	500

10. NUMBER OF FULL-TIME EQUIVALENTS

The average number of full-time equivalents for the year was not more than ten.

11. ADDITIONAL INFORMATION, STATEMENT OF CASH FLOWS AND MANAGEMENT REPORT

Additional information, the statement of cash flows and the management report have been waived in accordance with Article 961d (1) of the Swiss Code of Obligations as Highlight Communications AG prepares consolidated financial statements in accordance with a recognized accounting standard.

12. EVENTS AFTER THE BALANCE SHEET DATE

After the balance sheet date, it was announced that the broadcasting rights to the PDC World Darts Championship will no longer be part of the rights portfolio of SPORT1 GmbH, a 50% subsidiary of the wholly-owned company Sport1 Medien GmbH, starting with the 2027/2028 rights cycle. The existing rights, particularly for the 2026/2027 event, remain unchanged.

In February 2026, SPORT1 announced that, as part of a new five-year contract with DAZN, extensive darts broadcasting rights remain secured starting with the 2027 rights cycle and beyond. The new contract guarantees year-round free-to-air coverage with a total of 69 broadcast days per year. However, the PDC World Darts Championship will no longer be part of this rights package starting with the 2027/2028 rights cycle. The Board of Directors is currently monitoring the situation.

PROPOSAL FOR THE APPROPRIATION OF RETAINED EARNINGS AND THE LEGAL RESERVES FROM CAPITAL CONTRIBUTIONS

Highlight Communications AG, Pratteln

RESOLUTION ON THE APPROPRIATION OF THE NET RESULT AND RESERVES FROM CAPITAL CONTRIBUTIONS

(TCHF)	2025
Dividend payment	0
Withdrawal from the legal reserves from capital contributions	0

APPROPRIATION OF AVAILABLE RETAINED EARNINGS

(TCHF)	2025
Profit carryforward	215,786
Net loss for the year	-255,801
Net loss	-40,015

The Board of Directors recommends to the Annual General Meeting the following resolution for the appropriation of losses:

(TCHF)
Net loss	-40,015
Offset against the voluntary retained earnings	30,403
Offset against the statutory retained earnings	0
Offset against the statutory capital reserve	0

Carryforward to new account -9,612

The Board of Directors of Highlight Communication AG proposes that the remaining loss for the 2025 fiscal year be carried forward to the new fiscal year.

Financial statements

180

Report of the statutory auditor to the General Meeting of Highlight Communications AG, Pratteln

Report on the Audit of the Financial Statements

Opinion

We have audited the financial statements of Highlight Communications AG (the Company), which comprise the balance sheet as of December 31, 2025, the statement of income for the year then ended, and notes to the financial statements, including a summary of significant accounting policies.

In our opinion, the financial statements (pages 171 to 179) comply with Swiss law and the Company's articles of incorporation.

Basis for the audit opinion

We conducted our audit in accordance with Swiss law and Swiss Standards on Auditing (SA-CH). Our responsibilities under those provisions and standards are further described in the "Auditor's Responsibilities for the Audit of the financial statements section of our report. We are independent of the Company in accordance with the provisions of Swiss law and the requirements of the Swiss audit profession that are relevant to audits of the financial statements of public interest entities. We have also fulfilled our other ethical responsibilities in accordance with these requirements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Material Uncertainty Related to Going Concern

We draw attention to Note 1 to the annual financial statements, section "Accounting", which indicates that the company's ability to continue as a going concern depends, in particular, on (i) ensuring sufficient liquidity to finance its ongoing business operations for at least twelve months, (ii) the refinancing of financial liabilities towards a banking consortium amounting to CHF 74.5 million with a maturity date of 30 November 2026, whereby this credit facility is subject to strict covenants (in particular minimum EBITDA requirements and milestones relating to the disposal of certain assets) and may become immediately repayable in the event of non-compliance, and (iii) the extension or restructuring of trade payables arising from licensing transactions amounting to EUR 57.5 million. As disclosed in Note 1 to the annual financial statements, section "Accounting", these events or conditions indicate the existence of a material uncertainty that may cast significant doubt on the Company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

In addition to the matter described in the "Material uncertainty related to going concern" section, we have determined the matter described below to be the key audit matter to be communicated in our report.

Financial statements

Impairment of equity investments

Key audit matter

We treated the assessment of the recoverability of equity investments amounting to CHF 223.6 million (88% of total assets) as a key audit matter because the position represents a significant portion of total assets and there is considerable scope for judgment and estimation in determining assumptions related to future business results and discount rates applied.

The equity investments are measured individually, and recoverability is assessed by comparing the carrying amount with the recoverable amount. The management of Highlight Communications AG has updated the calculation of the recoverable amount for the investments in Team Holding AG, Constantin Film AG, Constantin Film Vertriebs AG, Sport1 Medien GmbH and Highlight Event AG.

Please refer to page 175 (Note 1 – Accounting) and page 177 (Note 5 – Notes on material investments) in the notes to the financial statements.

How our audit addressed the key audit matter

We performed the following audit procedures in relation to the recoverability of equity investments:

We tested the valuation models used for technical accuracy.
Using sensitivity analyses, we checked whether a significant change in the assumptions would lead to an impairment loss.
We compared the plausibility of the discount rate with the cost of capital of the Group and comparable companies, taking into account country-specific features.

For the investment in Sport1 Medien GmbH and TEAM Holding AG we examined the following points:

We assessed the budgeting process, in particular whether the Group Executive Board and the Board of Directors monitored this process and whether the values used for the impairment test were in line with the budget approved by the Board of Directors.
We compared the assumptions regarding sales and earnings of the previous year with those of the reporting year, with the aim of identifying in retrospect overly optimistic assumptions in the budgeted sales and earnings. We analyzed reasons for any deviations.
In addition, we analysed valuation specific estimations (discount rate, EBITDA margin and long-term sales growth).
For Sport 1 GmbH, we have performed a benchmarking exercise with comparable companies to verify whether the values were within acceptable ranges.

The audit procedures described above address the risk of impairment of the investments. We consider management's approach to the impairment testing of the investments to be appropriate. The assumptions used were consistent and within reasonable ranges.

Financial statements

Other Information

The Board of Directors is responsible for the other information. The other information comprises the information included in the annual report but does not include the consolidated financial statements, the stand-alone financial statements of the Company, the audited items of the remuneration report and our auditor's report thereon.

Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Board of Directors' Responsibilities for the financial statements

The Board of Directors is responsible for the preparation of the financial statements in accordance with the provisions of Swiss law and the Company's articles of incorporation, and for such internal control as the Board of Directors determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, Board of Directors is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern, and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Auditor's Responsibilities for the Audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with Swiss law and SA-CH will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

A further description of our responsibilities for the audit of the financial statements is located on EXPERTsuisse's website at: https://www.expertsuisse.ch/en/audit-report. This description forms an integral part of our report.

183

184

Report on Other Legal and Regulatory Requirements

In accordance with Art. 728a para. 1 item 3 CO and PS-CH 890, we confirm that an internal control system exists, which has been designed for the preparation of the financial statements according to the instructions of the Board of Directors.

We further confirm that the proposed appropriation of available earning complies with the Swiss law and the Company's articles of incorporation. We recommend that the financial statements submitted to you be approved.

Zurich, April 30, 2026

Forvis Mazars SA

Cyprian Bumann
Licensed audit expert
(auditor in charge)

Fabio Cavalieri
Licensed audit expert

Other Matters – Use of the Audit Opinion

The annual financial statements and the management report translated into English are provided for convenience purposes only. They are merely translated reproductions of the audited annual financial statements and the management report included in the German annual report. Only the German version of the annual report has been audited. In the event of any inconsistencies, the audited German annual report shall prevail.

Imprint

Publisher and responsible for content: Highlight Communications AG, Pratteln, April 2026. Design, copy, layout and production: GFD Finanzkommunikation, Frankfurt am Main. Pictures: dpa Picture-Alliance, Frankfurt am Main (cover and pages 2, 3, 88, 89), Constantin Film Group, Munich (cover and pages 4, 5, 36, 37, 38, 39, 40, 41, 42, 43, 44, 45, 46, 47, 60, 61, 62, 63, 64, 65), TEAM Group, Lucerne (cover and pages 4, 48, 49, 50, 51, 52, 53), Brauer Photos (cover and pages 4, 5, 28, 29, 34, 35), EBU (pages 4, 59), Sport1 (page 53), Highlight Event (page 59), IMAGO (pages 54, 55, 58).

Highlight
Highlight Communications AG

EVENTS

2026

CINEMA	Cannes Film Festival	May 12 – 23
	Locarno Film Festival	August 5 – 15
	Venice Film Festival	September 2 – 12
	Toronto Film Festival	September 10 – 20
FOOTBALL	UEFA Europa League final	May 20
---	---	---
	UEFA Conference League final	May 27
	UEFA Champions League final	May 30
EVENTS	Grand Final of the Eurovision Song Contests	May 16
---	---	---
INVESTOR RELATIONS	Interim reports	May/August/November
---	---	---
	Annual General Meeting	Scheduled for June
	German Equity Forum	November 23 – 25

The annual report is published in German and English whereas the German version is binding.

HIGHLIGHT COMMUNICATIONS AG

NETZIBODENSTR. 23B · CH-4133 PRATTELN BL

[email protected] · +41(0)61-816 96 96

highlight-communications.ch

AI assistant

Highlight Communications AG — Annual Report 2025

9321_10-k_2026-04-29_9c492d6e-781d-4137-b4dc-39ef632dcd5e.pdf

CONTENTS

FILM BREIS

EVENTS OF THE YEAR 2025

The Highlight Group

Q1

JANUARY

FEBRUARY

MARCH

MAY

Q2

APRIL

MAY

JUNE

Q.3

JULY

AUGUST

SEPTEMBER

Q.4

OCTOBER

NOVEMBER

Foreword by the Chairman

Members of the Board of Directors

Bernhard Burgener (born 1957) Chairman and Delegate of the Board of Directors

Peter von Büren (born 1955) Non-executive member of the Board of Directors

Edda Kraft (born 1957) Non-executive member of the Board of Directors

Stefan Wehrenberg (born 1965) Non-executive member of the Board of Directors

Corporate governance

INTRODUCTION

1. GROUP STRUCTURE

1.1 Operative Group structure

1.2 Listed companies

Highlight Communications AG

1.3 Non-listed companies

1.4 Principal shareholders

1.5 Cross-holdings

2. CAPITAL STRUCTURE

2.1 Capital

2.2 Capital band

2.3 Changes in capital – changes in nominal value

2.4 Shares, participating and profit-sharing rights

2.5 Restrictions on the transferability of shares and registration of nominees

3. BOARD OF DIRECTORS

3.1 Members of the Board of Directors

Peter von Büren

Edda Kraft

Stefan Wehrenberg

3.2 Election and tenure

3.3 Internal organization

3.3.1 Constituent meeting and allocation of duties

3.3.2 Meetings of the Board of Directors

3.3.3 Committees

3.4 Allocation of duties

3.5 Internal management and supervision instruments

4. MANAGEMENT

4.1 Members of management

4.1.1 Group management

Management of the respective segments

4.1.2 TEAM (Sports and Event segment)

4.1.3 Highlight Event AG (Sports and Event segment)

4.1.4 Constantin Film (Film segment)

4.1.5 Sport1 Medien GmbH (Sports and Event segment)

4.2 Further corporate activities and interests

5. COMPENSATION, SHARES AND LOANS

6. SHAREHOLDERS' RIGHTS

6.1 Restrictions on voting rights, voting by proxy

6.1.1 All restrictions on voting rights

6.1.2 Statutory rules on participation in the Annual General Meeting

6.2 Statutory quorum

6.3 Procedure for convening the Annual General Meeting

6.4 Agenda

6.5 Registration in the share book

7. CHANGE OF CONTROL AND DEFENSE MEASURES

7.1 Duty to bid

8. AUDITORS

8.1 Duration of auditor mandate

8.2 Auditing fees

9. INFORMATION POLICY

Highlight Communications AG Annual Report 2025