Annual report 2024

This is a translation of the German "Geschäftsbericht 2024". Sole authoritative and universally valid version is the German language document.

STS Group CONTENTS

	AT A GLANCE _________________1
	COMPANY PROFILE _________________2
1.	REPORT OF THE SUPERVISORY BOARD__________3
2.	SUMMARISED MANAGEMENT REPORT AND GROUP MANAGEMENT REPORT _______ 11
3.	CONSOLIDATED FINANCIAL STATEMENTS___________ 70
1.	CONSOLIDATED INCOME STATEMENT____________ 70
2.	CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME ________ 71
3.	CONSOLIDATED BALANCE SHEET AS AT 31.12.2024 _________ 72
4.	CONSOLIDATED STATEMENT OF CHANGES IN EQUITY _______ 74
5.	CONSOLIDATED CASH FLOW STATEMENT NG__________ 75
4.	NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS _______ 76
1.	SEGMENT REPORTING _______________ 76
2.	GENERAL INFORMATION _____________ 80
2.1.	Basics of the constellation___________ 80
2.2.	Consolidation principles_______________81
2.3.	Currency conversion____________ 83
3.	NOTES TO THE CONSOLIDATED INCOME STATEMENT ________ 86
3.1.	Sales revenue ____________ 86
3.2.	Changes in inventories_______________ 86
3.3.	Other income_____________ 87
3.4.	Cost of materials_______________ 87
3.5.	Personnel expenses____________ 88
3.6.	Other expenses ________________ 89
3.7.	Depreciation and amortisation ____________ 90
3.8.	Financial income and financial expenses ________ 90
3.9.	Income taxes ______________91

3.10.	Earnings per share _____________ 92
4.	NOTES TO THE CONSOLIDATED BALANCE SHEET ____________ 93
4.1.	Intangible assets_______________ 93
4.2.	Property, plant and equipment____________ 94
4.3.	Other non-current and current financial assets _______ 95
4.4.	Non-current and current income tax receivables ______ 95
4.5.	Other non-current and current non-financial assets ________ 96
4.6.	Deferred tax assets and liabilities _________ 96
4.7.	Inventories and advance payments on inventories _________ 99
4.8.	Contract assets and contract liabilities ________ 100
4.9.	Trade receivables and other receivables other receivables ______ 100
4.10.	Cash and cash equivalents and restricted cash______ 102
4.11.	Equity capital____________ 102
4.12.	Non-current and current financial liabilities ___________110
4.13.	Provisions ________________112
4.14.	Income tax liabilities ___________115
4.15.	Other current liabilities_______________116
5.	Other information ____________117
5.1.	Notes to the cash flow statement_________117
5.2.	Further disclosures on financial instruments and financial risk management _____118
5.3.	Capital management _______________ 126
5.4.	Contingent liabilities and other obligations __________ 126
5.5.	Relationships with related companies and persons_________127
5.6.	Executive Board and Supervisory Board________ 132
5.7.	Additional mandatory disclosures according to HGB _______ 136
6.	Accounting and valuation methods___________ 137
6.1.	Changes in accounting and valuation methods ______ 137
6.2.	MEASUREMENT AT FAIR VALUE IN ACCORDANCE WITH IFRS 13 _________ 138

6.3.	INTANGIBLE ASSETS___________ 139
6.4.	FACILITIES _______________ 140
6.5.	IMPAIRMENTS ____________141
6.6.	ACCOUNTING FOR LEASES___________ 143
6.7.	CASH AND CASH EQUIVALENTS ___________ 145
6.8.	FINANCIAL INSTRUMENTS ___________ 145
6.9.	INVENTORIES AND PREPAYMENTS MADE ON INVENTORIES ________ 150
6.10.	CONTRACT ASSETS AND CONTRACT LIABILITIES ______ 150
6.11.	PENSIONS AND SIMILAR OBLIGATIONS__________ 150
6.12.	OTHER PROVISIONS_____________151
6.13.	REALISATION OF INCOME AND EXPENSES________151
6.14.	Other income and expenses ______________ 153
6.15.	INCOME TAXES___________ 153
6.16.	GOVERNMENT GRANTS_______________ 155
6.17.	SIGNIFICANT ESTIMATES AND JUDGEMENTS __________ 155
6.18.	EVENTS AFTER THE BALANCE SHEET DATE ____________ 159
	OPINION OF THE INDEPENDENT AUDITOR___________ 161

AT A GLANCE

RESULTS OF OPERATIONS

EUR million	2024	2023
Revenues	311.1	277.9
Segment Plastics	247.9	203.1
Segment China	44.1	51.0
Segment Materials	34.5	38.5
Corporate/Consolidation	-15.2	-14.7
EBITDA	23.0	20.5

BALANCE SHEET KEY FIGURES

EUR million	2024	2023
Equity	45.0	46.6
Capital ratio	19.5%	17.5%
Total assets	230.8	266.5
Cash and cash equivalents (unrestricted)	25.6	39.3
Net Financial Debt 1	48.8	30.3

1 Net financial debt = Bank liabilities + Liabilities from loans + Leasing liabilities + Loans from third parties - Cash and cash equivalents – Loans granted to related parties

In the 2024 financial year, the Group generated sales of EUR 311.1 million and an EBITDA margin of 7.4 %.

The sales growth of 12.0 % is primarily attributable to the European units and the start-up of the new plant in the USA. The Plastics segment thus achieved growth of 22.1 % , while the China and Materials segments recorded a decline of 13.6 % and 10.6 % respectively.

COMPANY PROFILE

STS Group AG, www.sts.group (ISIN: DE000A1TNU68), is a leading systems supplier for the automotive industry. The group of companies employs more than 1,400 people worldwide and generated revenue of EUR 311.1 million in the 2024 financial year. At its 12 plants and three development centres in France, Germany, Mexico, China and the USA, STS Group ("STS") produces and develops injection-moulded plastics and components made from sheet moulding compounds (SMC), such as rigid and flexible vehicle and aerodynamic trim, holistic interior systems, as well as lightweight and battery components for electric vehicles. STS is a technological leader in the production of plastic injection moulding and composite components. STS has a large global footprint with plants on three continents. The customer portfolio includes leading international manufacturers of commercial vehicles, passenger cars and electric vehicles.

1.REPORT OF THE SUPERVISORY BOARD

Dear Shareholders,

STS Group recorded a successful business performance in the 2024 financial year despite a more challenging market environment with regional declines and the social, geopolitical and economic uncertainties that continue to exist worldwide. Following the successful integration into the Adler Pelzer Group and the restructuring measures implemented in 2023, the Supervisory Board's activities in 2024 focused in particular on the long-term and sustainable orientation of the STS Group, especially the expansion of the US business.

Monitoring and consulting in continuous dialogue with the Executive Board

In the 2024 financial year, the Supervisory Board of STS Group AG performed the advisory and supervisory duties incumbent upon it in accordance with the law, the Articles of Association, the Corporate Governance Code and the rules of procedure with great care.

The Supervisory Board advised the Executive Board on all matters relating to company management and supported and monitored the management and development of the company. In addition to the strategic focus, the Supervisory Board's advisory and monitoring tasks in the 2024 financial year continued to be strongly focused on the macroeconomic challenges.

As part of a close working relationship, the Management Board reported regularly, promptly and comprehensively to the Supervisory Board in writing, by telephone and in personal meetings on the situation and prospects, the principles of business policy, the company's profitability and the company's key business transactions.

In addition, the Supervisory Board was also in personal dialogue with the Management Board outside of the scheduled meetings and was involved in discussions and decision-making on issues of fundamental importance.

The Chairman of the Executive Board informed the Chairman of the Supervisory Board immediately of all important events that were of material significance for the assessment of the situation and development as well as for the management of the company. All Supervisory Board members were comprehensively informed of these matters by the Chairman of the Supervisory Board at the following meeting at the latest.

In addition, the entire Supervisory Board was continuously informed by the Executive Board about relevant developments and transactions requiring approval. The Supervisory Board was

directly and promptly involved in all decisions of fundamental importance to the company or in which it was required to be involved by law, the articles of association or the rules of procedure.

In urgent cases, the Board also had the option of passing resolutions by written circular if required.

Thanks to the regular, prompt and detailed information provided by the Executive Board, the Supervisory Board was always able to fulfil its monitoring and advisory function. The Supervisory Board is therefore of the opinion that the Executive Board acted lawfully, properly and economically in every respect.

Meetings and key topics discussed by the Supervisory Board

In the reporting year, the Supervisory Board held a total of four meetings, which were held as video or telephone conferences, to discuss the fulfilment of its duties.

The Supervisory Board was fully represented at all meetings. The Supervisory Board also complied with its statutory duty to approve the catalogue of transactions of STS Group AG requiring approval outside the regular Supervisory Board meetings by means of written circular resolutions.

In the following table, the attendance of Supervisory Board members at Supervisory Board and committee meetings is disclosed in individualised form:

Attendance of Supervisory Board members
		Supervisory Board Meeting		Committee meeting
	AR-Sitzung			Ausschuss-Sitzung
	virtual / phone	Circulation	Participation in %	virtual / phone	Circulation	Participation in %
Paolo Scudieri Chairman of the Supervisory Board	4	3	100	-	1	100
Pietro Lardini Deputy Chairman of the Supervisory Board	4	3	100	-	1	100
Pietro Gaeta	4	3	100	-	1	100

The Executive Board participated in the Supervisory Board and committee meetings; however, the Supervisory Board also met regularly without the Executive Board.

At the meetings, the Supervisory Board regularly received reports from the Executive Board in accordance with Section 90 (1) sentence 1 no. 1-3 AktG on the intended business policy, profitability and the course of business, including the market and competitive situation, and discussed these in detail.

In addition, the Management Board reported on transactions that could be of significant importance for the profitability or liquidity of the company and/or the Group in accordance with Section 90 (1) sentence 1 no. 4 AktG.

Finance and controlling, risk management and compliance, sales and marketing, production, quality management, human resources, research and development as well as mergers and acquisitions were also regular topics of discussion at the plenary sessions.

In addition to preparing for the Annual General Meeting on 13 June 2024, the Supervisory Board dealt with STS Group's strategic corporate planning. In this context, the current economic development, possible acquisitions and cooperations as well as future market prospects were examined in detail.

Another focus of the Supervisory Board's deliberations in the 2024 financial year continued to be the consistent realisation of synergy effects at the international locations of STS Group AG in conjunction with the Adler Pelzer Group. As a result of these activities, the improvement of cost structures at the locations was also discussed, reviewed and scrutinised. This was particularly the case in light of the challenging market environment and the fact that the reporting year was influenced by start-up costs for the new plant in the USA. The Supervisory Board also dealt intensively with the rather weak development of the markets, particularly the market in China, due to the many global uncertainties. The STS Group is examining the possible construction of a plant in Taixing in cooperation with the Chinese government and the main shareholder Adler Pelzer Group, among others. Part of the new plant will be used to manufacture SMC products specifically for electric vehicles. Production at the plant is scheduled to start in January 2026. During the year, the Supervisory Board received regular reports on the production progress of the new plant in the USA. The new plant was completed at the end of 2023 and started series production a few months ago. The processes for improving series production are currently being optimised and further projects are being negotiated with new customers.

At its meetings, the Supervisory Board always dealt with securing STS Group's liquidity as part of the necessary strategic measures and monitored the financial, earnings and liquidity forecast of the company and its subsidiaries.

The Supervisory Board also reviewed and discussed the financial planning for the 2025 financial year presented by the Executive Board as well as the medium-term planning for the company's further development.

Report on the work of the Committee

The primary task of the Audit Committee is to prepare decisions and topics for the plenary meetings.

The tasks of the Audit Committee include monitoring the accounting process, the effectiveness of the internal control system, the risk management system and the internal audit system as well as the audit of the financial statements, in particular the selection and independence of the auditor, the quality of the audit and the additional services provided by the auditor.

Due to the size of the Supervisory Board, the Supervisory Board and the Audit Committee are composed of the same members. In the interests of good corporate governance, the Chairman of the Supervisory Board is not also the Chairman of the Audit Committee.

There are currently no other committees.

Corporate Governance and Declaration of Conformity

The implementation of the German Corporate Governance Code is an integral part of the meetings of the Supervisory Board of STS Group AG. In 2024, the Supervisory Board and Executive Board again discussed the recommendations and suggestions of the Code in the version dated 28 April 2022 in detail.

On this basis, the Supervisory Board adopted the declaration of compliance in accordance with Section 161 AktG by way of circulation on 23 February 2024, which is permanently available to our shareholders on the company's website.

In addition to the declaration of compliance, the corporate governance declaration is also available for inspection by our shareholders on the STS Group AG website.

There were no conflicts of interest for members of the Management Board or Supervisory Board in the reporting period.

Audit of the annual and consolidated financial statements for the 2024 financial

year

PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft, Frankfurt am Main, was appointed as auditor and Group auditor for the financial year from 1 January to 31 December 2024 by resolution of the Annual General Meeting on 13 June 2024 and commissioned accordingly by the Chairman of the Supervisory Board. The Supervisory Board satisfied itself of the auditor's independence before appointing the auditor.

The audit covered the annual financial statements of STS Group AG for the financial year from 1 January to 31 December 2024, which were prepared by the Executive Board in accordance with the provisions of the German Commercial Code (HGB), the consolidated financial statements for the financial year from 1 January to 31 December 2024, which were prepared by the Executive Board in accordance with Section 315e HGB on the basis of the International Financial Reporting Standards (IFRS), and the management report of STS Group AG, which was prepared in accordance with the requirements of Section 289a HGB and Section 315a HGB and combined with the Group management report of STS Group.

At the end of the audit, PricewaterhouseCoopers GmbH issued an unqualified audit opinion on the annual financial statements, the consolidated financial statements and the summarised Group management report of STS Group and STS Group AG.

The audit revealed that the Executive Board of STS Group AG has taken the measures required by Section 91 (2) AktG to establish an early risk detection system and an internal control system (ICS) in an appropriate form and that the systems are suitable for recognising developments that could jeopardise the company's continued existence at an early stage.

The auditor reported to the Supervisory Board on the progress and key findings of its audits and was available to answer questions, discuss them and provide additional information. He took part in the Supervisory Board's deliberations on the annual and consolidated financial statements and in a preliminary meeting of the Supervisory Board to adopt the annual and consolidated financial statements and approve the consolidated financial statements on 28 March 2025.

The annual financial statements, the consolidated financial statements, the combined management report and Group management report, the non-financial statement, the remuneration report, the dependent company report and the auditor's report on its audit were available to all Supervisory Board members for approval in good time before the Supervisory Board meeting on 31 March 2025 to approve the financial statements.

At its balance sheet meeting, the Supervisory Board discussed the financial statements of STS Group AG and STS Group as well as the summarised Group management report and the remuneration report. The discussion and review of the non-financial Group report in accordance with Section 315b (1) of the German Commercial Code (HGB) were also the subject of this meeting.

The committee also scrutinised the dependent company report prepared by the Management Board, the accounting process and the company's risk management system, as well as the effectiveness and appropriateness of the internal control systems and compliance with integrity in financial reporting.

After detailed discussion of the audit reports on the separate and consolidated financial statements as at 31 December 2024, the combined management report of the company and the Group and the remuneration report, the Supervisory Board raised no objections. At its Supervisory Board meeting on 31 March 2025, the Supervisory Board approved the annual financial statements of STS Group AG prepared by the Executive Board and the consolidated financial statements of STS Group for the 2024 financial year, including the combined management report and Group management report. The 2024 annual financial statements are thus adopted (Section 172 sentence 1 AktG).

Dependency report

Furthermore, at the meeting on 31 March 2025, the Supervisory Board examined the report of the Executive Board of STS Group AG pursuant to Section 312 AktG on relationships with affiliated companies for the 2024 financial year (dependent company report).

The report on relationships with affiliated companies prepared by the Executive Board in accordance with Section 312 (1) AktG has also been audited by the auditor. The auditor has issued the following unqualified audit opinion in accordance with Section 313 (3) AktG:

"Following our mandatory audit and assessment, we confirm that

the actual disclosures in the report are correct,
the consideration paid by the company for the legal transactions listed in the report was not unreasonably high or disadvantages were compensated."

The audit report on the dependent company report was submitted to the Supervisory Board in good time before its meeting to approve the financial statements. The auditor attended this meeting of the Supervisory Board and reported on the key findings of its audit of the dependent company report.

The Supervisory Board has reviewed the dependent company report of the Executive Board and the audit report of the auditor and concurs with the result of the audit by the auditor. Following the final result of its own examination, the Supervisory Board approves the dependent company report of STS Group AG.

Following the final result of the audit, the Supervisory Board has no objections to the declaration of the Executive Board at the end of the dependent company report.

Dear Shareholders,

The efficiency measures introduced last year led to increased profitability within the STS Group. As a result, the realisation of synergies between the STS Group and Adler Pelzer Group continued in the 2024 financial year. This forms the basis for the continuous improvement of cost structures within the Group.

In addition, market opportunities can be proactively shaped within this group of companies. The STS Group continued to focus on further expansion and development in Europe and China, but above all in North America, in 2024. In this respect, we are particularly pleased that the ramp-up of our new production site in the USA has progressed according to plan and that the first sales have already been recorded in the 2024 financial year.

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Uncertainties arising from geopolitical unrest and global economic uncertainties have unfortunately become the new normal, which are integrated into the day-to-day operations of the Management Board and Supervisory Board and can have an unforeseen impact on business development.

The Supervisory Board would like to express its thanks and appreciation to the Executive Board and the employees of all Group companies for their personal commitment and the work they performed in 2024.

Hagen, 31 March 2025

For the Supervisory Board Paolo Scudieri Chairman of the Supervisory Board

2. SUMMARISED MANAGEMENT REPORT AND GROUP MANAGEMENT REPORT

BASIS OF THE GROUP

BUSINESS MODEL STS offers its customers a wide range of system solutions and components for the interior and exterior panelling of vehicles. STS components enhance the visual appearance of the vehicle design, contribute to the aerodynamics of the vehicle and ensure a significant reduction in weight thanks to their lightweight construction. Due to its high level of vertical integration, STS is able to map the complete manufacturing process of each component from the idea to the finished product. As a one-stop-shop provider with many years of expertise, the Executive Board sees a clear competitive advantage. Production facilities and logistics are mainly designed for small and medium-sized series, as is typical for light to heavy commercial vehicles, but also for special models and electromobility or weight-optimised plastic solutions, as is increasingly the case in the passenger car sector.

The STS production facilities are located close to the respective customer plant sites. This makes all aspects of co-operation simpler, more efficient and more sustainable. Headquartered in Germany, the Group operates a global network in all key markets. At the end of the financial year, STS had twelve plants in five countries on three continents.

STS combines the production technologies of injection moulding and hot and compression moulding of composites. It manufactures the semi-finished products and composite materials itself and can therefore react flexibly to customer-specific requirements.

Page |12

The Group produces parts and systems for trucks, commercial vehicles and cars. Its customer base includes well-known commercial vehicle and car manufacturers, including many market leaders. Numerous manufacturers also rely on STS Group's expertise in the rapidly growing electric vehicle market. The Group has three research and development centers, two in France and one in China, for rapid product development and innovation.

BUSINESS ACTIVITY

STS Group's business activities are managed partly according to product types and partly according to geographical aspects. This principle is reflected in the following segmentation of business activities:

Plastics: This segment manufactures a wide range of exterior body parts and interior modules for trucks, other commercial vehicles and passenger cars. It includes hard trim products made from injection moulding and composite materials such as SMC (Sheet Moulding Compound), glass fibre-reinforced thermoset semi-finished products. The semi-finished product plays an important role in automotive production thanks to its numerous positive properties, such as high rigidity and heat resistance. It often replaces metal structural parts and makes an important contribution to covering battery systems in electric vehicles. The Plastics segment has production facilities in Europe and Mexico, as well as the new plant in the USA. Customers in North America are supplied from Mexico and the USA. Hard trim systems are used in commercial vehicles, e.g. for exterior parts (front modules, roof modules and other aerodynamic panelling) or interior modules ("bunk box" under the driver's bed and shelf elements) and in passenger cars, e.g. for structural parts (tailgate). The segment also has its own capacities for painting plastics.

China: Activities in the Chinese market are bundled in this segment. These include supplying customers with plastic parts for the exterior panelling of vehicles, primarily for the cabins of commercial vehicles, but increasingly also for passenger cars. The product range offers solutions and components for commercial vehicles such as bumpers, front panelling, deflectors, roofs, mudguards and entrances as well as parts for passenger cars, such as battery covers for electric vehicles, through to complex structural parts, such as tailgates for SUVs. Composite moulding processes and injection moulding technology are used here. The segment also has its own capacities for painting plastics.

Materials: This segment comprises the development and production of semi-finished products (Sheet Molding Compound - SMC), fibre molding compounds (Bulk Molding Compound - BMC) and advanced fibre molding compounds (Advanced Molding Compound - AMC). The semifinished products are used both within the Group for hard trim applications and supplied to external third parties. As part of the development of these base materials, it is already possible to influence key parameters of the end product.

In December 2016, the Group acquired the truck business of French automotive supplier Mecaplast France SAS (now Novares France), thereby entering the hard trim business. With the acquisition of the commercial vehicle supplier business of the Plastic Omnium Group in June 2017, STS significantly expanded its product portfolio with semi-finished composite products and composite components for exterior parts for truck cabins and light commercial vehicles as well as structural parts for passenger cars (tailgate). In the fourth quarter of 2018, the Group established a new headquarters in Wuxi for the Chinese market, which also bundles local development activities. In April 2019, STS opened its third production facility in China in Shiyan. The Group is also represented in Qingdao and Jiangyin. As part of its growth strategy for North America, STS opened its first production site in the USA in the city of Salem in the US state of Virginia in March 2023. The first prototypes rolled off the production line in 2023 and series production was ramped up in the second half of 2024. The plant will be operated as a separate company STS Group North America Inc. as a subsidiary of STS Group AG and within BU Plastic and will supply the truck assembly of one of the larger commercial vehicle manufacturers as well as other truck and car plants throughout the Midwest and Southeast of the USA.

The STS Group is pursuing the strategic goal of further expanding its promising lightweight solutions for commercial and electric vehicles. As the majority shareholder, the Adler Pelzer Group1 was able to lay the essential foundations for expanding the STS Group's position as one of the leading system suppliers in the automotive industry, even in these challenging times. Thanks to the Adler Pelzer Group's existing presence in North America, profitability in Mexico has been significantly strengthened and expansion in the US market has also been driven forward. As of 31 December 2024, Adler Pelzer Group holds 74.42 % of the shares in STS Group AG

¹ The Adler Pelzer Group refers to Adler Pelzer Holding GmbH and all of its subsidiaries.

GROUP STRATEGY AND MANAGEMENT

GOALS AND STRATEGY

STS Group AG is one of the leading suppliers of components and systems for the commercial vehicle and automotive industry. The aim is to expand this position. The focus is on components made from composite materials and injection moulding, from the initial idea to the finished product. The company's strategy continues to focus on the future markets of lightweight components and e-mobility.

STS products are designed to make vehicles fit for the future by making a significant contribution to reducing weight and thus CO2 emissions. STS products also improve the look, feel and functionality of vehicles.

The STS Group's growth strategy is based on process optimisation through increased automation of manufacturing processes on the one hand, but also on addressing technological trends such as autonomous driving and e-mobility on the other. STS also supports customers in the commercial vehicle sector in the development of more CO2-efficient and innovative trucks.

In order to expand its competitive position and achieve sustainable profitability, the Group focuses on four strategic pillars: "market leadership", "technology leadership", "customer proximity" and "operational excellence".

CONTROL SYSTEM

All business units and subsidiaries report monthly on their earnings, financial position and net assets, which are included in the company's half-year and annual reports. In addition, the business units provide a monthly assessment of current and expected business development and the business unit managers present monthly variance analyses of certain key operating figures (including productivity, absenteeism rates, rejects) to the Executive Board.

In addition, the following components essentially ensure compliance with the internal control system:

Regular Management Board and Supervisory Board meetings
Regular shareholder meetings at the subsidiaries
Risk and opportunity management
Liquidity planning
Management reporting

FINANCIAL AND NON-FINANCIAL PERFORMANCE INDICATORS

The Group's key financial performance indicators include, in particular, sales, revenue and earnings before interest, taxes, depreciation and amortisation (EBITDA).

EBITDA is used to measure and assess operating performance. The reconciliation of EBITDA to earnings before taxes is as follows:

EUR million	2024	2023
EBITDA Group	23.0	20.5
Depreciation and amortization expenses	-15.5	-13.8
Earnings before interest and income taxes (EBIT)	7.5	6.8
Interest and similar income	0.5	0.2
Interest and similar expenses	-7.6	-6.5
Finance result	-7.1	-6.3
Earnings before income taxes	0.4	0.5

The STS Group does not have any significant non-financial performance indicators that are used for internal management or are relevant to remuneration.

EMPLOYEES

Motivated employees expect an attractive and fair working environment in which they can work independently, contribute their ideas and develop further. The key to successful and respectful cooperation is the joint development of an STS culture and its anchoring in everyday interaction.

STS continues to attach great importance to accident prevention and health promotion. This is reflected, among other things, in accident prevention measures such as employee training, conducting safety audits, sharing best practices across locations, improved process monitoring and technical measures for machine safety. STS promotes health through a variety of local initiatives: there are free vaccinations for employees, cancer screenings and training courses on mindfulness. In addition, the external audits of operational measures addressed in the previous year are being continued. The main individual companies are certified in accordance with ISO 45001 (occupational health and safety).

Due to the wide range of HR requirements and laws, HR work is managed at country level and implemented locally as required. In order to strengthen development and career prospects, managers hold regular appraisal interviews with employees to discuss the issue of future opportunities within and outside the company. The results of these discussions form the basis for individual development plans and the further training measures derived from them. The results of the employee appraisals are supported by regular performance reviews, which are intended to help harmonise the employees' self-assessment and external assessment and define appropriate measures to develop their skills.

As of 31 December 2024, the Group employed a total of 1,402 people (2023: 1,392)

RESEARCH AND DEVELOPMENT

Innovative products are a cornerstone of the Group's strategy and should contribute to achieving the medium-term goals of profitable and sustainable growth. This mainly concerns the STS plants in France. The STS Group's strategy was to use the available resources of the development centers to successfully implement innovation programs.

Our three research and development centers in France and China continue to pool their expertise and exploit synergy effects. Finite element analyses and thermoplastic rheology are carried out internally by the Chinese development center in Wuxi, and the rheology for SMC composites is developed by the French team. This strengthens our simulation capabilities. SMC rheology simulation is now being used to increase the efficiency of material/tool/process development and better solve problems.

Further successful projects for new product lines were realised thanks to R&D activities:

The R&D department for sustainability for SMC, can now propose the introduction of 25 % recycled CaCO₃ material based on shell waste from the food industry and 15 % bio-resin/LPA consisting of bio-based components for the development of new materials in the tender phase.
Development of an automated process which is able to position screw inserts in the inner part of the front panel using a special tool design and process.
IMC process (In Mould Coating) with a large plate, which enables a thin layer of resin to be sprayed onto the SMC surface in order to achieve an optimum surface after painting.

Our R&D department is currently working on the following challenging topics:

Recycling SMC parts at the end of their service life
- SMC integration of 10 % recycled material from painted SMC parts already validated for automotive parts
- SMC integration of 10 % recycled material from painted and bonded SMC parts: POC (proof of concept) validation in 2025
Process and cost efficiency of the battery cover
- Development of an interior module to increase driver comfort on board longdistance lorries

Our vertical integration - materials are developed in-house - enables us to quickly turn ideas into opportunities. The expertise of the research and development team and our well-equipped development centers and prototyping facilities enable us to turn these new opportunities into innovative and reliable solutions.

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At the end of the year, 45 people were employed in the STS Group's research and development centers worldwide (compared to 40 in 2023).

Development costs totaled EUR 5.4 million in the reporting period (2023: EUR 2.9 million). At EUR 3.4 million, non-capitalised development costs were significantly higher than in the previous year (2023: EUR 0.9 million). Development costs of EUR 2.0 million were capitalised in the reporting period (31 December 2023: EUR 2.0 million) and no amortisation was recognised.

ECONOMIC REPORT

MACROECONOMIC AND SECTOR-SPECIFIC FRAMEWORK CONDITIONS

OVERALL ECONOMIC DEVELOPMENT

GLOBAL ECONOMY WITH MODERATE GROWTH

According to the Kiel Institute for the World Economy (IfW), the global economy continued to lack momentum in 2024. Geopolitical and trade conflicts as well as political events, such as the outcome of the US presidential election, proved to be persistent sources of uncertainty. After a positive start to the year, the economy cooled increasingly as the year progressed. Continued strong growth in the USA was offset by only moderate growth momentum in China and Europe. The services sector continued to drive growth, while the manufacturing industry was burdened for large parts of the year by unfavourable financing conditions as a result of the ongoing restrictive monetary policy. Although the European and US Federal Reserve, for example, have now initiated a turnaround in interest rates, global demand for consumer goods and companies' willingness to invest remained subdued and had a dampening effect on industrial production. Although global trade developed favourably, the weak growth in the manufacturing sector meant that this too provided little impetus for the global economy. According to the IfW, global production once again only increased by 3.2 %, as in the previous year. The IfW is forecasting slightly weaker growth of 3.1 % for 2025. 2

DECLINING GROWTH MOMENTUM IN CHINA

The negative factors for the Chinese economy, above all the unresolved crisis in the property sector, consumer uncertainty and the high level of public debt in some regions, have hardly changed in 2024. The Chinese central government attempted to counter these with monetary and fiscal policy measures, although their ultimate success is still uncertain. There was a slight upturn in the economy at the end of the year, although this also included anticipatory effects as a result of the trade policy plans of the new US President Donald Trump. According to the IfW's winter forecast 2024, gross domestic product in the People's Republic of China will therefore only increase by 4.9 % in 2024, following growth of 5.6 % in the previous year. Growth of just 4.4 % is forecast for 2025.3

SLIGHT RECOVERY IN THE EUROZONE

The eurozone overcame the previous year's stagnation in 2024, but is still a long way from a dynamic upturn. The IfW even expects growth to weaken again by the end of the year. In view

² https://www.ifw-kiel.de/de/publikationen/weltwirtschaft-im-winter-2024-im-zeichen-wirtschaftspolitischer-unsicherheit-33587/

³ https://www.ifw-kiel.de/de/publikationen/weltwirtschaft-im-winter-2024-im-zeichen-wirtschaftspolitischer-unsicherheit-33587/

of falling inflation and rising wages, positive impetus came primarily from private consumption, while the willingness to invest still suffered from the long period of unfavourable financing conditions. This can also be seen when looking at the individual countries, where service and tourism-oriented economies in particular developed positively, while production-intensive countries, such as Germany, once again showed weakness.4

Overall, the IfW assumes an increase in gross domestic product within the currency union of 0.8 % in 2024, following an increase of 0.5 % in 2023.5 Growth in the eurozone is expected to accelerate minimally to 0.9 % in 2025, followed by growth of 1.1 % in 2026.6 The protectionist trade policy plans of the new US President Donald Trump in particular pose major risks. Consumer prices rose by an average of 2.3 % in 2024, once again significantly slower than the previous year's 5.47 The unemployment rate averaged 6.4 % in 2024. 8

MEXICO'S GROWTH SLOWS SIGNIFICANTLY

According to GTAI (Germany Trade & Invest), growth in the Mexican economy slowed significantly in 2024 compared to the same period of the previous year, coming in at just 1.6 %. This is primarily due to the political situation in the country. For example, a highly controversial judicial reform was passed in September 2024, which critics believe jeopardises the separation of powers and legal certainty in the country. Companies are increasingly concerned about the power of the ruling Morena party and are reacting by holding back on investment. For example, foreign direct investment actually declined in the first half of 2024, although an increase had actually been expected due to the nearshoring trend.9 Investors' mistrust is also reflected in the performance of the local currency, which depreciated significantly over the course of the year.10 The manufacturing industry in particular performed negatively. Private consumption continued to increase, but the pace of growth slowed here too. Gross fixed capital formation benefited greatly from major government infrastructure projects. Foreign trade, particularly with the USA, also continued to develop positively with rising exports.11 However, in view of the protectionist trade policy statements made by the new US President Donald Trump, there were more and more question marks over the future nature of these trade relations. Donald Trump had announced that he would impose tariffs of 25 % on goods from Mexico. These were implemented at the beginning of March 2025, but were subsequently suspended again until 2 April. There is a risk that such tariffs will make products from Mexico more expensive and lead to a decline in demand. However, given the erratic decisions of the US President, future developments are difficult to predict. Further information on this can also be found in the risk

⁴ https://www.ifw-kiel.de/de/publikationen/weltwirtschaft-im-winter-2024-im-zeichen-wirtschaftspolitischer-unsicherheit-33587/

⁵ https://www.ifw-kiel.de/de/publikationen/weltwirtschaft-im-winter-2024-im-zeichen-wirtschaftspolitischer-unsicherheit-33587/

⁶ https://www.ifw-kiel.de/de/publikationen/weltwirtschaft-im-winter-2024-im-zeichen-wirtschaftspolitischer-unsicherheit-33587/

⁷ https://www.ifw-kiel.de/de/publikationen/weltwirtschaft-im-winter-2024-im-zeichen-wirtschaftspolitischer-unsicherheit-33587/

⁸ https://www.ifw-kiel.de/de/publikationen/weltwirtschaft-im-winter-2024-im-zeichen-wirtschaftspolitischer-unsicherheit-33587/

⁹ https://www.gtai.de/de/trade/mexiko-wirtschaft/wirtschaftsausblick

¹⁰ https://www.fuw.ch/waehrung-mexikos-abwertung-974740103346

¹¹ https://www.gtai.de/de/trade/mexiko-wirtschaft/wirtschaftsausblick

report.12 Mexico continues to play an important role in the commercial vehicle sector. In 2023, the country was once again one of the leading producers13 of heavy trucks and was once again the largest exporter14 of trucks worldwide. This underlines the importance of the country for the industry and the STS Group.

ROBUST US ECONOMY REMAINS THE PILLAR OF THE GLOBAL ECONOMY

Supported by continued strong private consumption and despite the long period of restrictive monetary policy, the US economy remained an important pillar of the global economy in 2024. Overall, gross domestic product in the US grew by 2.8 %15 and thus only slightly slower than in the previous year (+2.9 %). The unemployment rate remained at a relatively low level of 4.0 % and private consumer spending once again recorded stable growth of 2.7 %16. Government spending, on the other hand, declined slightly.17 Although the expiry of government subsidy programs resulted in significantly lower growth in commercial construction, this was offset by an increase in residential construction. Fixed asset investments also developed correspondingly positively.18

¹² https://www.tagesschau.de/wirtschaft/weltwirtschaft/mexiko-usa-zoelle-106.html

¹³ https://www.oica.net/wp-content/uploads/Heavy-Trucks-2023.xlsx

¹⁴ https://www.worldstopexports.com/exported-trucks-country/

¹⁵ https://www.ifw-kiel.de/de/publikationen/weltwirtschaft-im-winter-2024-im-zeichen-wirtschaftspolitischer-unsicherheit-33587/

¹⁶ https://www.ifw-kiel.de/de/publikationen/weltwirtschaft-im-winter-2024-im-zeichen-wirtschaftspolitischer-unsicherheit-33587/

¹⁷ https://www.ifw-kiel.de/de/publikationen/weltwirtschaft-im-winter-2024-im-zeichen-wirtschaftspolitischer-unsicherheit-33587/

¹⁸ https://www.ifw-kiel.de/de/publikationen/weltwirtschaft-im-winter-2024-im-zeichen-wirtschaftspolitischer-unsicherheit-33587/

ECONOMIC DEVELOPMENT IN THE SECTOR

Following the strong growth - due to pent-up demand following the Covid-19 pandemic - in 2023, market observers predicted a normalisation of the commercial vehicle markets and a decline in global sales figures of up to 10 % in 2024.19 In Europe in particular, restrictive monetary policy, weak consumer confidence and the uncertain macroeconomic environment caused hauliers to hold back on investment decisions. Supply chain problems have eased further in 2024 and only rarely cause disruption. Most truck manufacturers are reporting a normalisation of delivery times. According to the manufacturers' association ACEA, new registrations of medium and heavy-duty trucks in the EU fell by 6.3 %.20 In Germany, the decline was 6.9 % and in France 2.9 %, according to ACEA. In the USA, sales of corresponding vehicles were 4.8 % lower.21 In China, sales of commercial vehicles fell by 3.9 %22, with sales of heavy trucks declining by around 1 %.23 24 25 The stable sales of heavy trucks are due in particular to a strong December, which benefited from the expiry of the "scrappage scheme" introduced on 31 July 2023 on 31 December 2024. In Mexico, the commercial vehicle industry was not quite able to match the record figures of the previous year in 2024. Declining demand in key sales markets such as the USA, Colombia, Chile and Peru had a dampening effect. However, with a decline of 4.3 % to 213,241 vehicles produced, the Mexican commercial vehicle industry still achieved the second-best year in its history. 159,466 vehicles (-10 %) were exported. Domestic sales rose by a good 22 %, reaching a new record high of 67,704 units.26

BUSINESS PERFORMANCE

Despite a more challenging market environment with regional declines, the STS Group recorded positive business development overall in the 2024 financial year.

While the China and Materials segments were negatively impacted by the declining markets, the Plastics segment recorded a significant increase in sales. The segment benefited in particular from higher mould sales for newly launched customer projects. The new US plant, which ramped up as planned, also made a relevant contribution to sales for the first time, particularly from the realisation of customer tools. Overall, the expansion of the North American business is and remains highly relevant for the STS Group. The STS Group could therefore also

¹⁹ https://www.spglobal.com/ratings/en/research/articles/241211-2025-global-outlook-for-heavy-duty-trucks-isn-t-rosy-13354457

²⁰ https://www.acea.auto/cv-registrations/new-commercial-vehicle-registrations-vans-8-3-trucks-6-3-buses-9-2-in-2024/

²¹ https://wardsintelligence.informa.com/wi968224/us-bigtruck-sales-end-2024-with-12-decrease-2024-down-48

²² https://autonews.gasgoo.com/m/70035689.html

²³ https://www.steelorbis.com/steel-news/latest-news/heavytrucksalesin-china-up-516-percent-in-december-1373282.htm

²⁴ https://www.steelorbis.com/steel-news/latest-news/heavy-truck-sales-in-china-up-70-in-november-from-october-1368745.htm

²⁵ https://www.shacmaninternational.com/news/the-heavy-truck-industry-is-recovering-and-rising-steadily/

²⁶ All information about Mexico: https://mexico-now.com/mexicos-heavy-vehicle-sales-increase-in-2024/

benefit from a revitalisation of the US market. In addition, a new order was won for the plant in Mexico, which will ensure high capacity utilisation there in the future.

The efficiency measures introduced in 2023 had an impact in the 2024 financial year.

As expected, the STS Group achieved an increase in sales in the high single-digit percentage range of 8.5 % in the 2024 financial year, adjusted for one-off effects of EUR 9.7 million, which are purely attributable to fixed cost reimbursements. Including the aforementioned one-off effects, sales were significantly higher than the previous year at EUR 311.1 million (2023: EUR 277.9 million). The EBITDA margin remains unchanged at 7.4 % . This corresponds to an increase in EBITDA from EUR 20.5 million to EUR 23.0 million. Sales, EBITDA and the EBITDA margin are therefore in line with the forecast issued on 28 March 2024 of sales growth in the high singledigit percentage range and EBITDA and an EBITDA margin in the stated range. STS Group has therefore performed successfully overall in a global economic environment that remains challenging in 2024. This is also reflected in the Group result, which improved to -0.6 million in the reporting year despite higher financial expenses (2023: -1.2 million).

EARNINGS, FINANCIAL POSITION AND NET ASSETS OF THE GROUP

EARNINGS POSITION

In the 2024 financial year, the Group's earnings situation was characterised by the resolution of the pandemic-related demand bottleneck and thus a normalisation with regional declines in demand for commercial vehicles, amid persistently challenging conditions with fluctuating commodity and energy prices as well as increasing geopolitical and economic conflicts.

Sales and earnings of the STS Group segments for the 2024 reporting year compared to the previous year are as follows:

EUR million	2024	2023	Delta	Delta %
Revenue	311.1	277.9	33.3	12.0%
Segment Plastics	247.9	203.1	44.8	22.1%
Segment China	44.1	51.0	-6.9	-13.6%
Segment Materials	34.5	38.5	-4.1	-10.6%
Corporate/Consolidation	-15.2	-14.7	-0.5	-3.7%
EBITDA	23.0	20.5	2.4	11.9%
Segment Plastics	15.7	14.9	0.8	5.6%
Segment China	6.3	7.0	-0.7	-10.6%
Segment Materials	2.2	2.1	0.1	6.3%
Corporate/Consolidation	-1.2	-3.4	2.2	-65.7%
EBITDA (in % of revenue)	7.4%	7.4%

Sales increased by 12.0 % to EUR 311.1 million in the reporting period (2023: EUR 277.9 million). Adjusted for non-recurring effects of EUR 9.7 million attributable purely to fixed cost compensation, sales growth of 8.5 % to EUR 301.5 million was achieved. In the 2024 financial year, the Plastics segment also benefited from higher tool sales in connection with new customer projects and initial sales contributions from the new US plant, among other things. By contrast, the key core market in China experienced a decline in demand, resulting in lower sales revenue in China. The Materials segment also recorded a decline in sales, which was also attributable to the declining commercial vehicle markets.

The negative changes in inventories (inventory reduction in 2024: EUR -15.4 million; 2023: inventory increase: EUR 8.9 million) are primarily due to the completion of customer tools and thus the realisation of revenue for new projects at the subsidiaries in the USA and France.

Other income totaled EUR 9.3 million after EUR 11.3 million in the previous year. This mainly includes capitalised development costs of 6.5 million (2023: EUR 2.0 million). The expansion of the product portfolio with innovative new developments is reflected in both other income and other expenses. Other expenses include R&D costs totaling EUR 3.4 million (2023: EUR 0.9 million).

The cost of materials decreased in both nominal and relative terms in the reporting period. This is due in particular to the reduction in expenses for purchased services in connection with the completion of customer tools in France and the decline in sales in China. By contrast, the cost of raw materials and supplies remained almost stable at the previous year's level of EUR -154.5 million and totaled EUR -157.7 million in the current financial year. In total, the cost of materials totaled EUR -181.4 million (2023 : EUR -186.3 million). This corresponds to a cost of materials ratio of 58.3 % after 67.0 % in the previous year.

As of 31 December 2024 , personnel expenses developed almost in line with the increase in sales, rising by 9.3 % to EUR -64.3 million (2023: EUR -58.8 million). This is mainly due to the start of series production in the USA and the associated personnel costs.

In total, other expenses increased by EUR -4.0 million to EUR -36.4 million and remained unchanged in relation to sales at -11.7 % . In the financial year, research and development expenses in particular increased by EUR -2.5 million (2024: EUR -3.4 million; 2023: EUR -0.9 million), as did fees and contributions by EUR -1.5 million (2024: EUR -2.0 million; 2023: EUR -0.4 million), as well as travel expenses by EUR -1.2 million (2024: EUR -2.7 million; 2023: EUR -1.5 million), partly in connection with the start-up of production at the plant in the USA. Purchased services from related parties also increased by EUR -0.4 million (2024: EUR -3.9 million; 2023: EUR -3.5 million), which also includes the administrative expenses of Adler Pelzer Holding GmbH. Selling expenses decreased by EUR 0.5 million (2024: EUR -1.6 million; 2023: EUR-2.1 million).

Earnings before interest, taxes, depreciation and amortisation (EBITDA) increased to EUR 23.0 million in the 2024 reporting year, up from EUR 20.5 million in the previous year.

Depreciation and amortisation increased to EUR 15.5 million as of 31 December 2024 (2023: EUR 13.8 million). Depreciation of property, plant and equipment amounted to EUR 11.8 million (2023: EUR 10.5 million), of which EUR 4.6 million (2023: EUR 4.0 million) was attributable to capitalised rights of use Amortisation of intangible assets amounted to EUR 3.7 million (2023: EUR 3.2 million), of which capitalised right-of-use assets remained unchanged at EUR 0.3 million.

As a result, earnings before interest and taxes (EBIT) totaled EUR 7.5 million (2023 : EUR 6.8 million).

Page |28

At EUR -7.1 million, the financial result was below the previous year's figure of EUR -6.3 million, due in particular to increased interest on loans from affiliated companies and higher interest on lease liabilities in the USA.

For the 2024 financial year STS Group AG is reporting consolidated net income of EUR -0.6 million (2023 : EUR -1.2 million).

Basic and diluted earnings per share in accordance with IFRS totaled EUR -0.1 (2023 : EUR -0.2).

EARNINGS POSITION BY SEGMENT

PLASTICS SEGMENT

The Plastics segment recorded significant sales growth of 22.1% to EUR 247.9 million. Adjusted for the aforementioned one-off effects totaling EUR 9.7 million, which are purely attributable to fixed cost compensation, sales growth of 17.3% to EUR 238.2 million was achieved. This growth was supported in particular by the sales realisation of customer tools for new projects and the sales contributions from the new US plant. The segment's growth was therefore better overall than in the 2023 financial year, in which sales increased by 13.2 % to 203.1 million. Despite the start-up costs for the new US plant, the segment's earnings also increased further, with the restructuring measures introduced in 2023 contributing to this in particular. The segment's EBITDA totaled EUR 15.7 million in the reporting year after EUR 14.9 million in the previous year.

SEGMENT CHINA

China is an important core market that declined again in the past 2024 financial year following the sharp rise in sales in 2023. This is due to market normalisation following the positive effect of the end of the strict zero-Covid policy in the previous year. Sales in the current financial year totaled EUR 44.1 million (2023: EUR 51.0 million) and were impacted by the negative market development. Thanks to the cost-cutting measures implemented in previous years, the decline in sales is only partially reflected on the earnings side. EBITDA totaled EUR 6.3 million in the 2024 reporting year (2023: EUR 7.0 million).

SEGMENT MATERIALS

The Materials segment was also affected by the declining commercial vehicle markets in the 2024 financial year. As a result, sales decreased by EUR -4.0 million or by -10.6 % and totaled EUR 34.5 million in the 2024 financial year (2023: EUR 38.5 million). The cost-cutting measures introduced in previous years had a positive impact on the earnings situation despite the decline in sales and led to a further improvement in profitability. EBITDA totaled EUR 2.2 million in the reporting year (2023: EUR 2.1 million).

FINANCIAL POSITION

PRINCIPLES AND OBJECTIVES OF FINANCIAL MANAGEMENT AND DIVIDEND POLICY

The Group's financing strategy is geared towards providing the necessary funds for the implementation of the corporate strategy and the requirements of the operating business. The aim is to secure the necessary funds for growth, limit the associated financial risk and optimise the cost of capital. Various financing instruments such as loans, factoring, leasing, credit lines and short-term loans are utilized.

For the 2024 financial year, the payment of the "statutory minimum dividend" of four per cent of the share capital less uncalled contributions, derived from Section 254 AktG, is planned. The company intends to use future potential profits to finance its further growth in the coming financial years and to pay a dividend only to the extent that this is compatible with its business and investment plans.

The Group has fixed and variable-interest loans and credit lines. The variable-interest loans are based on a 1-, 3- and 6-month EURIBOR interest rate plus a margin. Liabilities to banks decreased to EUR 25.3 million (2023: EUR 25.7 million). No loan agreement clauses were breached in the 2024 reporting year (2023: two loans). The carrying amounts of the underlying loans totaled EUR 0.0 million (2023: EUR 0.6 million).

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CASH FLOW

EUR million	2024	2023
Net cash flow from operating activities	7.1	30.5
Net cash flow from investing activities	-15.6	-14.1
Net cash flow from financing activities	-4.6	-3.1
Effect of currency translation on cash and cash equivalents	-0.6	0.5
Net increase/decrease in cash and cash
equivalents	-13.7	13.7

In the 2024 financial year, the STS Group generated a positive net cash flow from operating activities of EUR 7.1 million (2023: EUR 30.5 million). The reduction compared to the previous year resulted in particular from the development of net working capital. The change in net working capital resulted in a cash inflow of EUR 11.2 million in the reporting period (2023: cash inflow 20.2 million). The main causes of the lower cash inflow were the decrease in inventories totaling EUR 37.6 million and the reduction in contract liabilities of EUR 20.5 million. The latter were offset by the decrease in tool inventories and the reduction in advance payments for tools.

In the 2024 financial year, cash flow from investing activities totaled EUR -15.6 million (2023: EUR -14.3 million). Investments were mainly made in property, plant and equipment totaling EUR 11.8 million (2023: EUR 11.2 million) and intangible assets amounting to EUR 2.9 million (2023: EUR -3.7 million).

Financing activities resulted in a cash outflow of EUR -4.6 million in the 2024 financial year (2023: cash outflow -2.9 million). The scheduled repayment of credit lines of EUR 8.6 million (2023: EUR 15.4 million) in the financial year was higher than the borrowing of EUR 5.8 million (2023: EUR 13.3 million). The cash inflow from loans from related parties amounted to EUR 9.2 million (2023: EUR 9.0 million). In addition, interest paid fell from EUR 6.3 million in the previous year to EUR 6.1 million in the financial year.

LIQUID ASSETS

The freely available cash and cash equivalents amounted to EUR 25.6 million as of 31 December 2024 (31 December 2023: EUR 39.3 million) and mainly comprised bank balances.

NET FINANCIAL DEBT

The Group's net financial debt1 increased by EUR 18.5 million to EUR 48.8 million as of 31 December 2024 (31 December 2023: EUR 30.3 million). The EUR 13.7 million decrease in cash and cash equivalents as of 31 December 2024 had a negative impact. The reduction in bank loans by EUR 0.4 million and the EUR 0.5 million decrease in lease liabilities only slightly offset the EUR 9.0 million increase in loans to related parties. Compared to the same period of the previous year, the calculation also includes liabilities to third parties and others as well as loans granted to related parties.

1 Net financial debt = bank liabilities + liabilities from loans + leasing liabilities + loans from third parties - cash and cash equivalents - loans granted to related parties

From a Group perspective, the liquidity situation was weaker than in the previous year. This was due in particular to the fact that the positive sales and earnings performance was not fully reflected in the cash flow, which is also related to the investments for the start-up of the new plant and the sale of tools in the USA that were paid for in the previous year. As a result, the level of freely available cash and cash equivalents declined compared to the previous year. If individual companies required support due to the heterogeneous business development, this was and is provided within the Group or by the majority shareholder and by applying for national, state aid (please refer to the explanations on financial risks in our risk report). In the financial year, the Adler Pelzer Group provided further loans, in particular to equip the new US company. The Executive Board considers the equity capitalisation to be sufficient.

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ASSET POSITION

EUR million	2024	2023
Non-current assets	116.2	111.7
Current assets	114.6	154.9
Total assets	230.8	266.5
Total equity	45.0	46.6
Non-current liabilities	62.6	90.5
Current liabilities	123.2	129.4
Total equity and liabilities	230.8	266.5

Total assets decreased from EUR 266.5 million to EUR 230.8 million as of 31 December 2024.

Non-current assets amounted to EUR 116.2 million as of 31 December 2024. This corresponds to an increase of EUR 4.5 million compared to the previous year. The increase is mainly due to the increase in property, plant and equipment, in particular technical equipment and machinery in the USA, by EUR 3.0 million to EUR 89.9 million (2023: EUR 86.9 million). Intangible assets decreased in the reporting period. They decreased by EUR -0.5 million to EUR 18.6 million (2023: EUR 19.1 million).

The decrease in current assets is primarily due to lower inventories (2024: EUR 22.9 million; 2023: EUR 37.5 million) and a decrease in advance payments on inventories (2024: EUR 0.2 million; 2023: EUR 22.0 million), as well as a lower level of cash and cash equivalents (2024: EUR 25.6 million; 2023: EUR 39.3 million ). Offsetting effects can be seen in trade receivables and other receivables (2024: EUR 47.1 million; 2023: EUR 38.4 million). In total, current assets decreased by EUR -40.3 million to EUR 114.6 million.

Due to the slightly negative consolidated result, equity decreased from EUR 46.6 million to EUR 45.0 million as at the balance sheet date. With a simultaneous reduction in total assets, this corresponds to an improved equity ratio of 19.5 % after 17.5 % in the previous year.

Non-current liabilities decreased from EUR 90.5 million to EUR 62.6 million, which is mainly due to the reduction in contract liabilities resulting from the production of tools for a customer project in the USA.

Current liabilities fell from EUR 129.4 million to EUR 123.2 million. Contract liabilities in connection with tools for new customer projects fell sharply. Liabilities to banks also decreased slightly. Loans to affiliated companies in connection with the new plant in the USA developed in the opposite direction.

OVERALL STATEMENT OF THE MANAGEMENT BOARD ON THE ECONOMIC SITUATION

China remained an important core market in the 2024 financial year, but was unable to build on the previous year's good performance due to the economic and structural problems in the country. This also had a negative impact on the company's earnings situation. The outlook for the Chinese economy is also gloomy in light of the escalating trade tensions with the USA. Nevertheless, the market position there will continue to be expanded in the future with an active R&D policy, as China continues to have a long-term growth trend - both for the economy as a whole and for STS Group. For example, there is potential to make further inroads into the e-mobility market together with the Adler Pelzer Group. With the successful opening and rampup of a production site in the USA, STS Group has also laid an important foundation for further expansion on the North American market.

Profitability developed positively in both the Plastics and Materials segments. The cost-cutting measures implemented with a sense of proportion in the past continued to pay off and both segments made a positive contribution to the Group's overall result.

Due to the overall positive business performance, the STS Group's EBITDA continued to increase nominally in relation to sales. The EBITDA margin in the 2024 reporting year remained constant compared to the previous year at 7.4 %.

The Group's financial position was further improved. This was due in particular to the positive sales and earnings performance, which will also be increasingly reflected in cash flow in the future. At the same time, investments in the Group's future performance were increased. Although the current financial year was associated with a higher working capital burden due to the ramp-up of the new plant in the USA, a positive development is nevertheless expected for the future.

OPPORTUNITY AND RISK REPORT

RISK MANAGEMENT SYSTEM

Risk management, as the entirety of all organisational regulations and measures for the early identification of risks and the adequate handling of the risks of our business activities, plays an important role in our business model. The Management Board has installed an early risk detection system to ensure that developments that could potentially jeopardise the company's continued existence are identified, monitored and managed at an early stage without having to forego entrepreneurial opportunities. All critical business developments and liability risks are scrutinised and reported on regularly in the reviews of the subsidiaries and at the Executive Board and Supervisory Board meetings. The Executive Board monitors the business performance of the subsidiaries in regular reviews and is informed about the sales, earnings and liquidity situation of all segments on the basis of the implemented reporting system. The STS Group maintains sufficient free financial capacity to be able to react flexibly and appropriately if necessary.

In risk assessment, a distinction is made between gross and net assessment. Measures already taken can minimise the gross risk both in terms of the monetary impact and the possible occurrence of the risk. The net risk then represents the amount of loss and probability of occurrence, taking into account the loss-minimising measures already initiated by the reporting date. As part of risk management, only risks that exceed a threshold value of EUR 0.1 million net and EUR 1 million gross in terms of their impact on EBIT are considered. The risks are assessed according to their monetary impact (extent of damage) and their probability of occurrence. When assessing the monetary impact, a distinction is made between four categories: very low, low, medium and high. The assessment is based on the extent of damage in relation to one year. The probability of occurrence is assessed on a percentage scale and divided into four categories: unlikely, possible, likely and very likely. The combination of the extent of damage and the probability of occurrence defines the risk class, which is categorised as low, medium or high in terms of its impact on the net assets, financial position and results of operations. The latter is derived from the key performance indicator EBIT. Risks are categorised into the respective risk classes using the risk matrix.

Page |36

The identified risks must be actively managed by the identified "risk owner" in order to achieve the risk minimisation targeted by the company. All risks for which no suitable countermeasures can be taken are categorised as business risks. The management of risks that have a minor impact on the STS Group is the responsibility of the operational management. Current risks are regularly reported to the Executive Board. Within its respective area of responsibility, the Executive Board is responsible for establishing the system and has overall responsibility for the process. In addition, the Executive Board ensures the implementation of any necessary measures and monitors their continuous implementation.

Internal control and risk management system as part of the accounting process

The internal control and risk management system has an appropriate structure and processes that are defined accordingly. It is organised in such a way as to ensure that all business processes and transactions are recorded promptly, uniformly and correctly in the accounts. For the consolidation of the subsidiaries included in the consolidated financial statements, the internal control system ensures that legal standards, accounting regulations and internal accounting instructions are complied with. Changes to these are continuously analysed with regard to their relevance and impact on the consolidated financial statements and taken into account accordingly. STS Group specifies a schedule for the subsidiaries for the monthly, quarterly and annual preparation of the consolidated financial statements. For the half-year and annual financial statements, instructions are sent to the subsidiaries and additional data / information is requested that is necessary for all relevant topics relating to the content, processes and deadlines for preparing the financial statements. A standardised Group-wide chart of accounts and uniform accounting standards are used for the consolidation of the STS Group. Appropriate consolidation software is used for consolidation. As part of Group accounting, there is a close exchange between the operating units and the central division. The consolidation software introduced in 2020 enabled extensive activities (such as the preparation of the monthly and quarterly reporting package) to be transferred to the local finance departments and the consolidation process to be further automated. The Group headquarters is also supported in its activities by Adler Pelzer Holding GmbH, and external experts are regularly called in to provide support. In addition to defined controls, system-based and manual reconciliation processes, the separation of executive and controlling functions and compliance with guidelines and work instructions are key components of the internal control system. Quality assurance with regard to the accounting data included in the Group is carried out centrally by the central department on a monthly or quarterly basis by means of analyses and plausibility checks.

The Group companies are responsible for compliance with the applicable guidelines and accounting-related processes as well as the proper and timely preparation of the financial statements. The Group companies are supported in the accounting process by central contact persons.

Financial risk management

The management of the STS Group monitors and controls the financial risks associated with the STS Group's business areas with the help of internal risk reporting, which analyses risks by degree and extent. These risks include credit, liquidity and market risks (currency and interest rate risks).

RISK REPORT

Macroeconomic risks

Macroeconomic risks refer to potential dangers and uncertainties that can affect the entire economy of a country or even the global economy. These risks can be triggered by a variety of factors, including geopolitical conflicts, natural disasters, currency fluctuations, trade conflicts, political uncertainties, debt crises and external shocks such as pandemics or wars. They can have an impact on various areas of the economy, including growth, employment, prices and financial stability. Appropriately assessing and managing these risks is crucial for STS Group's strategic planning and risk management.

The global economy continues to be less dynamic, with the USA as the main pillar of growth. Ongoing geopolitical conflicts, economic and trade policy uncertainties and structural problems are weighing on growth in many countries. The decline in inflation is continuing. However, persistently dynamic price increases in the services sector are partially limiting the scope for further monetary easing. Geopolitical conflicts, such as the ongoing war in Ukraine or the war in the Middle East, as well as extreme weather events could also trigger new supply chain problems or price shocks on the energy and commodity markets and fuel inflation again. There are also strong tensions between China and Taiwan regarding Taiwanese independence policy. In the event of a military conflict, numerous branches of industry would have to find alternative sources of supply, e.g. for semiconductors from Taiwan. The tariff plans announced by the new US administration under President Donald Trump, some of which have already been implemented, could further exacerbate existing trade tensions and have a negative impact on global trade and price trends. This also poses a major risk for the export-orientated German economy. Measures against individual countries could also affect STS Group production sites in particular, such as Mexico, and thus result in significant competitive disadvantages for STS Group customers and, as a result, the STS Group itself. There is also a risk that the Chinese economy will weaken in the longer term due to the still unresolved crisis in its property sector. Many countries are in a tense budgetary and debt situation. The risk of payment defaults in low-income countries and emerging economies is increased. Fiscal consolidation measures are urgently needed to regain the ability to act, but must be implemented carefully and in a welldosed manner.27 The aforementioned risks may result in the global economy developing more weakly than expected. As a result of unfavourable economic and political developments in the main regional markets in which the STS Group operates or in which its customers use its products, there could be a decline in demand that would have a negative impact on business activities. The Executive Board estimates the extent of the damage as medium, the probability of occurrence as possible and therefore its impact on the net assets, financial position and results of operations as medium.

²⁷ https://www.imf.org/en/Publications/WEO/Issues/2025/01/17/world-economic-outlook-update-january-2025

ECONOMIC RISKS IN THE SECTOR

Sector-specific economic risks refer to potential dangers and uncertainties that may affect specific sectors or industries. These risks can be triggered by specific factors such as technological change, market saturation, competition, regulation, demand and supply dynamics as well as external influences such as fluctuations in commodity prices or geopolitical developments. Appropriately analysing and managing these risks can be crucial to strengthening the company's competitive position and ensuring its long-term success.

In the automotive sector, further cost increases may occur due to price increases for raw materials and components. This is particularly likely to occur if the challenges in the supply chains intensify again, for example as a result of geopolitical and trade conflicts. In addition, energy and logistics costs could also rise significantly and have a negative impact on the cost situation. Increasing global protectionist tendencies and trade conflicts also pose a risk. There is a risk that automobiles as well as components and raw materials will be subject to additional or rising tariffs. This could in turn lead to a decline in demand for automotive products and have an overall negative impact on the industry. The Executive Board estimates the extent of damage as medium, the probability of occurrence as possible and therefore the impact on the net assets, financial position and results of operations as medium.

FURTHER RISKS

Other risks include individual risks to the STS Group that are directly attributable to internal business activities and decisions. These risks can be diverse and range from operational challenges such as production outages or supply chain disruptions to financial risks such as payment defaults or unexpected cost increases. Thoroughly analysing and proactively managing individual risks is crucial to ensuring the stability, resilience and long-term competitiveness of the STS Group.

LONG-TERM CONTRACTS

The STS Group concludes long-term contracts (LTAs) with its customers. In the course of these activities, obligations or commitments are entered into that must be fulfilled over a longer period of time or may not be honoured as a result of unforeseen events. In retrospect, these activities may prove unfavourable and have a negative impact on the financial and earnings position. The Executive Board considers this risk to be low in terms of the extent of damage, the probability of occurrence to be very likely and the impact on the net assets, financial position and results of operations to be medium.

DEPENDENCE ON MAJOR CUSTOMERS

The STS Group is dependent on a limited number of major customers and its relationships with them. A loss of these business relationships could have a significant negative impact on the business activities and the net assets, financial position and results of operations of the STS Group. The management is proactively in talks with truck manufacturers in order to win new projects and thus reduce its dependence on a limited number of major customers. The Executive Board estimates the extent of damage as very low to low, the probability of occurrence as unlikely and its impact on the net assets, financial position and results of operations as low.

ENVIRONMENTAL PROTECTION LAWS

No specific climate-related risks were identified in the STS Group's risk inventory for the 2024 financial year. The STS Group is aware that both physical and transitory risks can arise as a result of climate change. In order to be able to respond appropriately to potential climate risks, a climate risk analysis was carried out for some STS Group locations in accordance with the EU Taxonomy Regulation, the results of which were not yet available at the end of the financial year. The results will be integrated into the Group's risk assessment system and evaluated in the following financial year.

As part of the classification of the STS Group's business activities as making a significant contribution to the climate goal of "adapting to climate change", the climate-related risks from climate change for the production site in France were identified and assessed. The assessment was generally based on risk reports on the buildings of the insurance company's production facility, the risk exposure of the production facility and its history/experience.

The following risks were identified as a result of the risk assessment:

Temperature fluctuations, heat stress with water shortages and flooding, especially for the production sites in St. Desirat and Tournon.

Risk minimisation measures for flooding have already been implemented:

Structural solutions were created, such as barriers and water tanks. The barrier and the retention system to protect against flooding are also used to generate electricity for the production facilities.

Environmental protection is a high priority for the STS Group. The STS Group's production and manufacturing sites are located in different countries and are subject to a wide range of environmental protection standards. Newly enacted laws or changes to the legal framework at international level can pose risks for production and also result in liability claims. The Executive Board estimates the extent of damage as low, the probability of occurrence as probable and the impact on the net assets, financial position and results of operations as medium.

SUPPLY CHAIN BOTTLENECKS

General disruptions in the automotive and truck supply chain could have a negative impact on STS Group's business, even if STS Group itself is not subject to supply bottlenecks at its suppliers. If STS Group's suppliers are no longer able to supply the raw materials or components required and needed for STS Group's business activities, this could have a negative impact on STS Group's business activities. In addition, short-term production stoppages at OEMs can also lead to an interruption in production. This may be due in particular to supply bottlenecks at OEMs, e.g. in connection with the semiconductor crisis, or temporary lockdowns similar to Covid-19. The Executive Board estimates the extent of damage as very low, the probability of occurrence as unlikely and its impact on the net assets, financial position and results of operations as low.

NEW TECHNOLOGIES

STS Group is dependent on its ability to adapt to changing technologies and new trends and to continue to develop new products. If the STS Group does not succeed in introducing new products for the automotive and truck industry in the future, it could lose its competitiveness and market share. The Executive Board considers the extent of the damage to be very low, the probability of occurrence to be possible and its impact on the net assets, financial position and results of operations to be low.

PRODUCT LIABILITY CLAIMS

STS Group may be subject to product liability claims and claims relating to specific performance or defects in its products, which may result in claims for damages or other claims. STS Group also manufactures its products in accordance with customer specifications and performance and quality requirements. If products are not delivered on time or not to the agreed specification, STS Group may incur considerable contractual penalties and rework costs. The Executive Board estimates the extent of damage as very low, the probability of occurrence as possible and its impact on the net assets, financial position and results of operations as low.

ADJUSTMENT OF THE TAX BASE

STS Group is subject to audits by tax authorities worldwide in which its reporting units operate. In current or future audits, the tax laws or relevant facts could be interpreted or assessed differently by the tax authorities than by the STS Group. As a result, the tax base could be adjusted and the tax liability could increase. An additional payment as a result of the adjustment of the tax base may have an impact on the financial position. The Executive Board estimates the extent of the damage as very low, the probability of occurrence as unlikely and its effect on the net assets, financial position and results of operations as low.

SYSTEM AND NETWORK FAULTS

STS Group relies on complex IT systems and networks that may become vulnerable to damage, disruption or cyber-attack as a result of increased hacker activity or fraud. Although STS Group has taken precautions to manage its risks associated with system and network disruptions, security breaches or similar events, this could result in a prolonged unforeseen disruption to its systems or networks, thereby hindering normal business operations and also leading to the loss of customer data and expertise, which could have a material adverse effect on its business and reputation. The Executive Board estimates the extent of damage as very low, the probability of occurrence as possible and its impact on the net assets, financial position and results of operations as low.

FINANCIAL RISKS

Financial risks can always arise from business activities. The management of the STS Group monitors and controls the financial risks associated with the business areas of the STS Group with the help of internal risk reporting, which analyses risks according to degree and extent. These risks include credit, liquidity and market risks (currency and interest rate risks). In a few cases, the STS Group minimises the effects of these risks through the use of derivative financial instruments. The use of derivative financial instruments is very limited, as there are currently only very low currency and interest rate exposures. There are also guidelines for managing currency, interest rate and default risks. In addition, basic rules have been defined for the execution of derivative and non-derivative financial transactions and for the investment of surplus liquidity. The STS Group does not contract or trade financial instruments, including derivative financial instruments, for speculative purposes. Liquidity management is controlled centrally by STS Group AG with the aim of limiting risks from Group financing. This also includes monitoring compliance with external financing structures and corresponding covenants. The STS Group also implements factoring transactions to optimise and manage the company's

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liquidity position. In order to actively utilise this management tool, regular credit ratings are obtained for STS Group's debtors and credit limits are set. The adequate liquidity of the subsidiaries - in particular the subsidiaries in France - is also monitored by the investment controlling department. Finally, STS Group AG is subject to the financing risk arising from its dependence on further financing from the majority shareholder or via the subsidiaries (by means of management fees and dividends). A dividend payment from China for the past reporting year will be made in the 2025 financial year. In addition, short-term loans are also issued by the majority shareholder as required in order to counteract short-term liquidity bottlenecks.

As at the balance sheet date, the Executive Board therefore the extent of the loss to be low, the probability of occurrence to be probable and its impact on the net assets, financial position and results of operations to be medium.

In the reporting year, there were no significant changes in the risk situation with regard to the extent of damage and the probability of occurrence or with regard to their effect on the net assets, financial position and results of operations compared to the previous year.

OPPORTUNITIES REPORT

MACROECONOMIC OPPORTUNITIES

The IMF currently assumes that global economic growth will remain subdued in 2025. However, the global economy could also develop more sustainably and dynamically than assumed. For example, the new governments that take office could renegotiate existing trade agreements and conclude new agreements. This could resolve uncertainties more quickly and have a far less disruptive effect on growth and inflation than protracted trade conflicts. Such co-operative outcomes could boost confidence and even encourage investment and medium-term growth prospects. Stimulus on other policy fronts could also have a growth-boosting effect. Many countries could introduce structural reforms to prevent the gap with their better performing competitors from widening. Efforts to increase labour supply, reduce misallocation, strengthen competition and promote innovation could accelerate medium-term growth.28

ECONOMIC OPPORTUNITIES IN THE SECTOR

Regulatory requirements strengthen the trend towards zero-emission vehicles

The automotive industry is undergoing multiple transformations. On the one hand, this concerns increasing digitalisation through to autonomous driving and, on the other, the move away from fossil fuels towards emission-free drive technologies. The latter also offers opportunities for the STS Group.

For example, the transition from combustion engines to zero-emission lorries is being driven by increasingly strict legal regulations. Back in 2022, the USA signed a declaration of intent under which all trucks and buses sold are to be emission-free from 2040. An interim target envisages a 30 % share of new sales in 2030.29 In January 2024, the EU Parliament agreed to tighten the CO₂ fleet limits for heavy commercial vehicles. From 2030, emissions must be 45 % lower, from 2035 65 % lower and from 2040 90 % lower than in the base year 2005.30 Even if this decision still leaves a small margin for conventional combustion engines, it can be assumed that the vast majority of vehicles will be battery-electric or fuel cell-powered in the future. The global market for zero-emission commercial vehicles is expected to grow from USD 7.7 billion in 2024 to USD 101.9 billion in 2034, which corresponds to an average annual growth rate of 29.5 %.31

²⁸ https://www.imf.org/en/Publications/WEO/Issues/2025/01/17/world-economic-outlook-update-january-2025

²⁹ https://blogs.edf.org/energyexchange/2022/11/18/u-s-signs-global-commitment-to-100-zero-emission-trucks-buses-at-cop27/

³⁰ https://www.euractiv.de/section/verkehr/news/einigung-eu-setzt-auf-emissionsfreie-lkw-und-busse/

³¹ https://www.precedenceresearch.com/zero-emission-trucks-market

The technical progress in electromobility and the expected investments are likely to open up new opportunities and possibilities for value creation and profit realisation not only for vehicle manufacturers, but also for their suppliers. In addition to the use of electric drives, weightreducing technologies in particular are making an important contribution to reducing emissions in commercial vehicles. With its products and innovations for reducing emissions in commercial vehicles, the STS Group is therefore a potential beneficiary of developments in the sector.

FURTHER OPPORTUNITIES

New opportunities to acquire and retain new customers and thus realise sales growth are being actively sought on an ongoing basis. The further expansion of the product portfolio and the expansion into growth regions harbour medium and long-term growth opportunities for the STS Group.

HELPING TO SHAPE TECHNOLOGY TRENDS

The STS Group's return to growth depends above all on its ability to keep pace with new technology trends such as autonomous driving and e-mobility, develop the right solutions and bring them to market. In addition, STS Group expects that the trend towards autonomous driving will require an adaptation of the product range in order to fulfil the specific characteristics of electronic and electrical devices. Demand in STS Group's key target markets is increasingly influenced by a number of trends, in particular the trends towards reducing emissions and the growing focus on e-mobility, which are driven primarily by the emissions targets required in various regions of the world. The STS Group is responding to these trends by using its materials to manufacture low-weight products that reduce the overall weight of vehicles, resulting in lower emissions and lower product costs for structural parts compared to metal products.

UNIQUE SELLING POINT

The STS Group considers STS Plastics to be the only supplier on the market that can offer both thermoset and thermoplastic technologies and is therefore able to serve all markets for such products or even combine both technologies to create comprehensive system solutions.

VARIABLE BATCH SIZES

The STS Group can scale its batch sizes to the individual needs of its customers. STS Group has the advantage of being able to produce small and large batch sizes for its customers thanks to the technologies it uses, such as composite materials. This allows the STS Group to address a broad range of customers for all of its products and sets it apart from larger automotive and truck parts suppliers who only focus on serving customers for large series orders and are therefore exposed to economic downturns if such major customers reduce the number of car and truck parts they purchase.

BROAD MARKET POSITIONING

The STS Group has a strong globally integrated base in its key markets from which it can generate further international growth. The STS Group operates 14 sites in five countries on three continents with major sites in the most important regional markets of Europe, China and North America. These facilities are strategically located close to or integrated into the sequencing facilities of its major OEM customers and enable STS Group to provide the services and products its customers require in a timely and cost-effective manner by utilising local personnel qualified to operate such facilities and tailored to the needs of local customers. In addition, STS Group can grow organically with its key customers and better respond to the changing needs of its international customers as they know their situation due to their proximity and understanding of their customers' business.

LARGE ORDERS

STS Group AG plans to further develop the North American market with the new plant to be built in the USA in 2023. This will enable the STS Group to build on the world's second-largest commercial vehicle market alongside the Chinese and European markets and gain market share there. The long-nose trucks established there represent a very large sales potential per vehicle for STS products. In addition, the STS Group can draw on existing customer relationships in Europe and use these to its advantage for the acquisition of further projects in the USA.

ABILITY TO ACT QUICKLY

The company has a lean corporate structure with direct reporting to the Executive Board. This enables us to act quickly and react immediately to trends or challenges.

LONG-STANDING CUSTOMER RELATIONSHIPS

The company has a lean corporate structure with direct reporting to the Executive Board. The long-standing customer relationships of more than 20 years on average (Europe > 20 years, China > 10 years and USA > 10 years) support a strong position in a highly competitive market environment on the basis of a high order backlog. In addition, STS Group's experienced management team is able to monetise its long-standing OEM relationships by leveraging strong customer relationships into cross-selling opportunities.

NETWORK WITH THE ADLER PELZER GROUP

With Adler Pelzer Group's acquisition of a majority stake in STS Group AG, the company can count on a strategic majority shareholder with a global presence and in-depth knowledge of the automotive industry. The association with the Adler Pelzer Group offers opportunities primarily in the strategic reorientation of activities in the automotive industry. By bundling economic activities within the STS - Adler Pelzer Group, synergies on the procurement side can be utilised and new and existing markets can be developed and expanded.

OVERALL STATEMENT OF THE MANAGEMENT BOARD ON OPPORTUNITIES AND RISKS

In the opinion of the Executive Board, the risk and opportunity situation of the STS Group did not change significantly overall in the past financial year.

In the view of the Executive Board, the various geopolitical, economic and trade conflicts in particular - including the ongoing war in Ukraine, the conflict in the Middle East and the new protectionist trade policy of the USA as well as their potential impact on the global economy in general and the automotive industry in particular - continue to harbour unpredictable risks for the economic development of STS Group.

The analysis for the reporting year did not reveal any risks that could jeopardise the continued existence of the company or the Group, either individually or as a whole, either on the balance sheet date or at the time the consolidated financial statements were prepared. In the opinion of the Management Board, there are no recognisable risks that could jeopardise the continued existence of the company in the foreseeable future.

Taking into account the main opportunities, the overall risk situation of the STS Group shows a risk and opportunity situation to which the risk-limiting measures and the Group strategy are aligned accordingly.

FORECAST REPORT

MACROECONOMIC FORECAST SUBDUED GROWTH MOMENTUM

Global economic growth will not develop any great momentum in 2025 either. Although the dampening effect of monetary policy is slowly easing and rising real wages are improving the prospects for private consumption, the global economy is being burdened by a high level of economic policy uncertainty - particularly regarding the implementation and consequences of the announced US tariffs - and structural problems that remain unresolved, particularly in China. Following the change of government in the USA, there are also risks with regard to the further development of geopolitical trouble spots. According to the IMF forecast, global growth will therefore only improve slightly to the previous year's level of 3.3 % in 2025. Stabilisation at this level is currently expected in 2026, meaning that the global economic environment will remain subdued overall. The IMF expects inflation rates to fall steadily over the next few years. From a global inflation rate of 5.7 % in 2024, inflation is expected to fall to 4.2 % in 2025 and 3.2 % in 2026.32

CHINESE ECONOMY SUFFERS FROM THE PROPERTY CRISIS

The Chinese economy continues to struggle with unresolved structural problems, such as the ongoing property crisis. Uncertainty among consumers and companies is high and sentiment is poor. Trade tensions with the USA and Europe are likely to slow down the export economy and have a correspondingly negative impact on the manufacturing industry. Against this backdrop, the IMF is forecasting a further slowdown in growth to 4.6 % in 2025.33 A growth rate of 4.5 % is expected for 2026.34

MUTED ACCELERATION OF GROWTH IN THE EUROZONE

In January 2025, the IMF lowered its growth forecast for the eurozone and now expects slightly accelerated growth of 1.0 % for the year as a whole. The ongoing weakness in the manufacturing sector and political uncertainties were the main factors behind this adjustment. The growth expectations for the two heavyweights Germany (-0.5 percentage points) and France (-0.3 percentage points) have been significantly reduced. Positive impetus is likely to

³² https://www.imf.org/en/Publications/WEO/Issues/2025/01/17/world-economic-outlook-update-january-2025

³³ https://www.imf.org/en/Publications/WEO/Issues/2025/01/17/world-economic-outlook-update-january-2025

³⁴ https://www.imf.org/en/Publications/WEO/Issues/2025/01/17/world-economic-outlook-update-january-2025

come mainly from private consumption, but investments could also benefit from the looser monetary policy.35

US ECONOMY REMAINS STRONG

The US economy will continue to be a key pillar of the global economy in 2025. In January 2025, the IMF raised its growth expectations by a significant 0.5 percentage points. Despite the relatively late monetary easing (first interest rate cut in September 2024), demand is stable, which is due to strong wealth effects, robust labour markets, favourable financing conditions and rising investment, among other things. By contrast, a gradual tightening of fiscal policy is likely to slow the growth of government spending. The IMF is forecasting stable growth of 2.7 % for the year as a whole.36 According to the IMF, the Mexican economy will continue to lose momentum in 2025. Mexico, which has become the USA's most important trading partner thanks to the nearshoring trend of recent years, could come under pressure from the economic policy plans of the new US government. In addition, political dissatisfaction in the country is continuing to depress sentiment and the necessary fiscal consolidation will further slow down growth.37 The IMF only expects growth of 1.4 % for 2025.38

GERMAN ECONOMY NOT VERY DYNAMIC

The German economy will not improve significantly in 2025 either. According to the IfW, growth impetus will only come from the service sector, while the manufacturing industry is stuck in the crisis. Capacity utilisation is significantly lower than in previous phases of recession. The IfW believes that this is no longer only due to economic factors, but also to specific locational disadvantages. Real incomes are unlikely to improve any further after the last increase, meaning that private consumption is also unlikely to develop much momentum. Investments could see a slow turnaround due to improved financing conditions. The annual inflation rate is forecast to remain stable at 2.2 %. The global economy is still hardly expected to have any revitalising effects. On the contrary, the US tariff announcements represent a further risk for the German export industry. According to the IfW's winter forecast, exports are likely to fall by a further 0.9 % in 2025 following a decline of 0.9 % last year. Exports are not expected to rise again by 1.8 % until 2026, although the trade balance would remain negative even then, as imports are expected to increase even more strongly.39 The labour market will be increasingly affected by the weak economy. Employment is expected to decline and the unemployment rate is likely to rise from 6.0 % (2024) to 6.3 % (2025), according to the IfW. Overall, the IfW is

³⁵ https://www.imf.org/en/Publications/WEO/Issues/2025/01/17/world-economic-outlook-update-january-2025

³⁶ https://www.imf.org/en/Publications/WEO/Issues/2025/01/17/world-economic-outlook-update-january-2025

³⁷ https://www.gtai.de/de/trade/mexiko-wirtschaft/wirtschaftsausblick

³⁸ https://www.imf.org/en/Publications/WEO/Issues/2025/01/17/world-economic-outlook-update-january-2025

³⁹ https://www.ifw-kiel.de/fileadmin/Dateiverwaltung/IfW-Publications/fis-import/6d1b5ad6-1bca-478a-8890-232b6c115e0f-KKB_120_2024- Q4_Deutschland_DE..pdf

forecasting economic growth of 0.0 % for 2024, which is merely stagnation.40 The IMF is somewhat more optimistic, adjusting its expectations downwards by 0.5 percentage points in January 2025 but still forecasting small growth of 0.3 %.41

INDUSTRY FORECAST

Market observers see several factors for the further development of sales of heavy commercial vehicles. For example, increasing capacity utilisation and rising freight rates could boost sales in the second half of 2025. A renewal of outdated vehicle fleets could also have a positive effect on sales, after haulage companies have been reluctant to invest in the past two years. In addition, there is a longer-term development with regard to stricter emission values in the coming years. Experts are already anticipating a significant increase in investment in zeroemission vehicles. This will be supported by falling costs for battery cells, higher energy densities, a growing charging infrastructure and increasing demand for zero-emission transport.

For 2025, the experts at S&P Global Mobility, S&P Global Ratings therefore expect sales figures to rise by up to 5 % in each of the regions North America, South America, Asia-Pacific and worldwide. Only in the EU+EFTA region is a decline of up to 5 % forecast.42

The VDA (German Association of the Automotive Industry) expects a decline of around 2 % for heavy commercial vehicles in Europe, growth of 7 % in the USA and 3 % in China.43

GROUP FORECAST FOR 2025, ACHIEVEMENT OF THE FORECAST FOR 2024

In the annual report for the 2023 financial year, which was published on 28 March 2024, the Executive Board had forecast renewed sales growth in the high single-digit percentage range and an EBITDA margin in the high single-digit percentage range for the 2024 financial year, in particular due to the start-up of the new plant in the USA. No relevant extraordinary expenses are expected for the financial year.

In the reporting year, sales totaled EUR 311.1 million. Adjusted for one-off effects totaling EUR 9.7 million, which are attributable to fixed cost compensation from customers, sales of EUR 301.5 million were achieved, representing growth of 8.5 %. Sales growth was therefore within the range forecast without one-off effects. The sales growth is primarily attributable to the Plastics segment and the first-time sales contributions from the new US plant. The efficiency measures introduced in previous years continued to have an impact in the 2024 financial year.

⁴⁰ https://www.ifw-kiel.de/fileadmin/Dateiverwaltung/IfW-Publications/fis-import/6d1b5ad6-1bca-478a-8890-232b6c115e0f-KKB_120_2024- Q4_Deutschland_DE..pdf

⁴¹ https://www.imf.org/en/Publications/WEO/Issues/2025/01/17/world-economic-outlook-update-january-2025

⁴² https://www.spglobal.com/ratings/en/research/articles/241211-2025-global-outlook-for-heavy-duty-trucks-isn-t-rosy-13354457

⁴³ https://www.vda.de/de/presse/Pressemeldungen/2025/250121_PM_Jahrespressekonferenz_2025_DE

EBITDA improved from EUR 20.5 million in the previous year to EUR 23.0 million in the reporting year. At 7.4 % , the EBITDA margin also met the forecast for the year.

In the 2024 financial year, Group sales were also driven by above-average sales from tools for new projects. For the 2025 financial year, the Executive Board is forecasting a stabilisation of Group sales due to lower sales from tools, which will be partially offset by additional series sales from the new plant in the USA. Group sales are therefore expected to be roughly on a par with sales from the 2024 financial year adjusted for one-off effects (2024: around EUR 300 million). The EBITDA margin should also continue to stabilise at a high single-digit percentage and EBITDA should be around the previous year's level.

GENERAL RISK WARNING

A forecast is subject to uncertainties that can have a significant impact on the projected sales and earnings performance. Due to current geopolitical conflicts such as the war in Ukraine or the conflict in the Middle East, as well as protectionist endeavours in global trade, it is not possible to estimate the corresponding effects at this time.

TAKEOVER-RELATED DISCLOSURES

GEM. § 289 A AND § 315 A HGB

As a listed company whose voting shares are listed on an organised market within the meaning of Section 2 (7) of the German Securities Acquisition and Takeover Act (WpÜG), STS Group AG is obliged to disclose the information specified in Section 289a and Section 315a of the German Commercial Code (HGB) in the management and Group management report. This information is intended to enable third parties interested in taking over a listed company to gain an impression of the company, its structure and potential obstacles to a takeover.

COMPOSITION OF THE SUBSCRIBED CAPITAL

The subscribed capital of STS Group AG totaled EUR 6,500,000.00 as of 31 December 2024 (31 December 2023: EUR 6,500,000.00) and was divided into 6,500,000 no-par value bearer shares with a notional interest in the share capital of EUR 1.00 per share.

Pursuant to Section 5 (2) of the Articles of Association of STS Group AG, shareholders are not entitled to securitisation of their shares unless this is legally permissible and securitisation is required in accordance with the rules of a stock exchange on which the shares are admitted to trading. STS Group AG is authorised to issue individual certificates or global certificates for the shares. Bearer shares do not have to be entered in a share register in accordance with Section 67 (1) of the German Stock Corporation Act (AktG).

All shares carry the same rights and obligations. The rights and obligations of shareholders are set out in detail in the provisions of the German Stock Corporation Act (AktG), in particular Sections 12, 53a ff., 118 ff. and 186 AktG.

As of 31 December 2024, the company held 50,000 treasury shares. The company is not entitled to any rights from treasury shares in accordance with Section 71b AktG.

RESTRICTIONS AFFECTING VOTING RIGHTS OR THE TRANSFER OF SHARES

In accordance with Section 21 (1) of the Articles of Association of STS Group AG, each share grants one vote at the Annual General Meeting and, in accordance with Section 24 (2) of the Articles of Association of STS Group AG, is decisive for the shareholders' share in the profits of STS Group AG. This does not apply to treasury shares held by STS Group AG, which do not entitle STS Group AG to any rights. Restrictions on the voting rights of shares may arise in particular from provisions of stock corporation law, such as Section 136 AktG. Violations of notification obligations within the meaning of Sections 33 (1), 38 (1) and 39 (1) of the German Securities Trading Act (WpHG) may result in rights from shares and also voting rights not existing, at least temporarily, in accordance with Section 44 WpHG. STS Group AG is not aware of any contractual restrictions on voting rights.

The company's shares are freely transferable in accordance with the statutory regulations for the transfer of bearer shares and there are no restrictions on transferability.

Please also refer to the information provided in section 4.11. Equity in the notes to the consolidated financial statements.

SHAREHOLDINGS EXCEEDING 10 % OF THE VOTING RIGHTS

As of 31 December 2024, the following direct and indirect shareholdings in the capital of STS Group AG exceeded the threshold of 10 % of the voting rights

The largest shareholder of STS Group AG, Adler Pelzer Holding GmbH, based in Hagen (Germany), was last represented at the Annual General Meeting on 13 June 2024 with 74.42 % of the voting rights in STS Group AG.

No further voting rights notifications were made by Adler Pelzer GmbH, as no new relevant thresholds were exceeded or fell below.

In addition, STS Group AG has not been notified of any direct or indirect shareholdings in the company's capital that reach or exceeds 10 % of the voting rights and is not otherwise aware of any such shareholdings.

SHARES WITH SPECIAL RIGHTS CONFERRING POWERS OF CONTROL

No shares with special rights conferring powers of control were issued.

CONTROL OF VOTING RIGHTS IN THE CASE OF EMPLOYEE SHAREHOLDINGS

Insofar as STS Group AG has issued or issues shares to employees as part of employee share ownership programs, these are transferred directly to the employees. The beneficiary employees can exercise the control rights to which they are entitled from the employee shares directly in accordance with the statutory provisions and the provisions of the Articles of Association, just like other shareholders.

APPOINTMENT AND DISMISSAL OF MEMBERS OF THE MANAGEMENT BOARD; AMENDMENTS TO THE ARTICLES OF ASSOCIATION

The appointment and dismissal of members of the Executive Board are governed by Sections 84 and 85 AktG. In accordance with Section 7 (1) of the Articles of Association of STS Group AG, the Executive Board consists of one or more persons. The exact number is determined by the Supervisory Board. The Supervisory Board may appoint a Chairman of the Executive Board and a Deputy Chairman in accordance with Section 7 (2) of the Articles of Association of STS Group AG.

Any amendment to the Articles of Association requires a resolution by the Annual General Meeting in accordance with Sections 119 (1) No. 5 and 179 AktG. The authorisation to amend the Articles of Association, which only affect the wording, has been transferred to the Supervisory Board in accordance with Section 179 (1) sentence 2 AktG in conjunction with Section 12 (4) of the Articles of Association of STS Group AG. In addition, the Supervisory Board was authorised by resolution of the Annual General Meeting on 3 May 2018 to amend Section 4 (3) of the Articles of Association in accordance with the respective utilisation of Contingent Capital 2018/I and after the expiry of all option and conversion periods. In addition, the Supervisory Board was authorised by resolution of the Annual General Meeting on 7 July 2023 to amend Section 4 (5) of the Articles of Association following the full or partial implementation of the increase in share capital from Authorised Capital 2023/I or following the expiry of the authorisation period in accordance with the extent to which Authorised Capital 2023/I has been utilised up to that point.

Resolutions of the Annual General Meeting require a simple majority of votes and, if a capital majority is required, a simple majority of the share capital represented when the resolution is passed, unless a larger majority is prescribed by law (Section 21 (2) of the Articles of Association of STS Group AG). Accordingly, in deviation from Section 179 para. 2 sentence 1 AktG, resolutions of the Annual General Meeting amending the Articles of Association also require a majority of the share capital represented when the resolution is passed in addition to a simple majority of votes, unless a larger majority is prescribed by law. In addition, in accordance with Section 21 (2) of the Articles of Association of STS Group AG - in deviation from Section 103 (1) sentence 2 AktG - a majority of votes is sufficient for the dismissal of Supervisory Board members.

AUTHORISATIONS OF THE MANAGEMENT BOARD TO ISSUE OR BUY BACK SHARES

a) AUTHORISED CAPITAL

By resolution of the Annual General Meeting on 7 July 2023, the Executive Board is authorised, with the approval of the Supervisory Board, to increase the share capital by up to EUR 3.25 million on one or more occasions by issuing up to 3,250,000 new no-par value bearer shares at in return for cash and/or non-cash contributions for a period of five years from the date on which this authorised capital is entered in the commercial register ("Authorised Capital 2023/I").

Shareholders must generally be granted subscription rights. However, the Executive Board is authorised, with the approval of the Supervisory Board, to exclude shareholders' subscription rights for one or more capital increases within the scope of Authorised Capital 2023/I,

(i) for fractional amounts;

(ii) in the case of capital increases against cash contributions, provided that the total pro rata amount of the share capital attributable to the new shares for which the subscription right is excluded does not exceed 10% of the share capital existing at the time the resolution is adopted by the Annual General Meeting or - if this amount is lower - at the time the present authorisation is exercised and the issue price of the new shares is not significantly lower than the stock exchange price of the shares of the same class and features already listed on a stock exchange at the time the final issue price is determined by the Management Board within the meaning of Sections 203 para. 1 and 2, 186 para. 3 sentence 4 AktG. When calculating the 10% limit, shares that have already been issued or sold during the term of this authorisation at the time it is exercised in direct or analogous application of Section 186 para. 3 sentence 4 AktG with the exclusion of subscription rights must be included. Furthermore, shares to be issued to service option and/or conversion rights or option and/or conversion obligations from convertible bonds and/or bonds with warrants are to be counted, provided that these bonds were issued during the term of this authorisation with the exclusion of subscription rights in analogous application of Section 186 para. 3 sentence 4 AktG;

(iii) in the case of capital increases against contributions in kind to grant new shares in connection with business combinations for the purpose of acquiring companies, parts of companies or equity interests in companies or other assets eligible for contribution in connection with such a merger or acquisition, including the acquisition of receivables from the company or other assets;

(iv) insofar as this is necessary with regard to dilution protection in order to grant the holders or creditors of bonds with warrants and/or convertible bonds that are or were issued by the company or its subsidiaries within the scope of an authorisation granted to the Management Board by the Annual General Meeting a subscription right to the extent to which they would be entitled after exercising option and/or conversion rights or after fulfilling option and/or conversion obligations;

(v) to service option and/or conversion rights or option and/or conversion obligations from bonds with warrants and/or convertible bonds issued by the company;

(vi) in the case of cooperation with another company, if the cooperation serves the interests of the company and the cooperating company requests a participation;

(vii) to be able to issue shares to members of the Executive Board and employees of the company as well as to members of the management and employees of companies affiliated with the company to fulfil a share option program or other employee participation program. The new shares can also be issued to an intermediary or an equivalent company, which takes over these shares with the obligation to pass them on exclusively to the beneficiaries.

Further details can be found in Section 4 (4) of the Articles of Association of STS Group AG.

Due to the lack of capital increases carried out to date and the lack of associated utilisation of Authorised Capital 2023/I, Authorised Capital 2023/I has not been reduced and continues to exist in the amount of EUR 3.25 million.

b) CONDITIONAL CAPITAL 2018/I

By resolution of the Annual General Meeting on 3 May 2018, the company's share capital was conditionally increased by up to EUR 2,000,000.00 by issuing up to 2,000,000 new no-par value bearer shares with a pro rata amount of the company's share capital of EUR 1.00 per no-par value share ("Conditional Capital 2018/I"). The Contingent Capital 2018/I serves to grant shares upon the exercise of option or conversion rights or upon fulfilment of option or conversion obligations to the holders or creditors of convertible bonds, bonds with warrants, profit participation rights and/or participating bonds (or combinations of these instruments) issued on the basis of the authorisation resolution of the Annual General Meeting on 3 May 2018. Further details can be found in the authorisation resolution and in Section 4 (3) of the Articles of Association of STS Group AG.

No convertible bonds, bonds with warrants, profit participation rights and/or income bonds had been issued by the end of the authorisation period on 2 May 2023 and, accordingly, no creditors or holders of bonds were granted conversion or option rights to shares.

In Section 4 (3) of the company's Articles of Association, the Supervisory Board is authorised to amend Section 4 (3) of the company's Articles of Association in accordance with the respective utilisation of Contingent Capital 2018/I and after the expiry of all option and conversion periods. In view of the expiry of the authorisation period and based on the authorisation of the Supervisory Board, the Supervisory Board will adopt a corresponding resolution in the 2025 financial year to delete Section 4 (3) of the Articles of Association.

c) CONDITIONAL CAPITAL 2018/II

By resolution of the Annual General Meeting on 3 May 2018, the company's share capital is conditionally increased by up to EUR 500,000.00 by issuing up to 500,000 new no-par value bearer shares with a pro rata amount of the company's share capital of EUR 1.00 per no-par value share ("Conditional Capital 2018/II"). Conditional Capital 2018/II will only be implemented to the extent that subscription rights have been issued in accordance with the 2018 share option program in accordance with the resolution of the Annual General Meeting on 3 May 2018, the holders of the subscription rights exercise their subscription rights and the company does not grant any treasury shares to fulfil the subscription rights.

The total volume of subscription rights is distributed among the authorised groups of persons as follows:

Members of the Executive Board receive a maximum total of up to 200,000 subscription rights
Members of the management of affiliated companies receive a maximum total of up to 100,000 subscription rights
Employees of the company receive a maximum total of up to 150,000 subscription rights
Employees of affiliated companies receive a maximum total of up to 50,000 subscription rights.

Further details can be found in the authorisation resolution and in Section 4 (4) of the Articles of Association of STS Group AG.

The Executive Board was authorised to issue the aforementioned subscription rights until 2 May 2023. However, no subscription rights were issued by the end of the authorisation period on 2 May 2023, which is why the provision in Section 4 (4) of the company's Articles of Association was not applicable.

§ Section 4 (4) of the company's Articles of Association did not provide for any authorisation of the Supervisory Board to amend the aforementioned provision of the Articles of Association in accordance with the respective utilisation of the Contingent Capital 2018/II and/or after the expiry of the authorisation period.

Accordingly, the Annual General Meeting on 13 June 2024 resolved, as a precautionary measure, to delete the provision on Conditional Capital 2018/II in Section 4 para. 4 of the company's Articles of Association without substitution. § Section 4 (5) of the company's Articles of Association regarding Authorised Capital 2023/I consequently became the new Section 4 (4) of the company's Articles of Association without any changes to its content.

d) SHARE repurchase

The Executive Board of STS Group AG is authorised to buy back treasury shares and to sell repurchased shares in the cases regulated by law in Section 71 AktG. By resolution dated 3 May 2018, the Annual General Meeting authorised the Executive Board, with the approval of the Supervisory Board, to acquire treasury shares in the company until the end of 2 May 2023 up to a total of 10% of the company's share capital existing at the time of the resolution or - if this value is lower - at the time the authorisation is exercised. The shares acquired on the basis of this authorisation, together with other treasury shares of the company that the company has acquired and still holds or are attributable to it in accordance with Sections 71a et seq. of the German Stock Corporation Act (AktG), may not exceed 10% of the company's share capital at any time. At the discretion of the Management Board, treasury shares may be acquired via the stock exchange or by means of a public purchase offer addressed to all shareholders or by means of a public invitation to shareholders to submit offers to sell.

By resolution of the Annual General Meeting on 3 May 2018, the Executive Board was authorised to use the treasury shares for any permissible purpose in addition to a sale via the stock exchange or by means of an offer to all shareholders, in particular also as follows:

(i) They may be cancelled and the share capital of the company may be reduced by the portion of the share capital attributable to the cancelled shares.

(ii) They may be offered and transferred to third parties in return for contributions in kind.

(iii) They may be sold to third parties for cash if the price at which the company's shares are sold is not significantly lower than the stock market price of a company share at the time of sale (Section 186 para. 3 sentence 4 AktG). The proportionate amount of the share capital attributable to the number of shares sold on the basis of this authorisation may not exceed 10%.

(iv) They can be used to service acquisition obligations or acquisition rights to shares in the company arising from and in connection with convertible bonds or bonds with warrants or profit participation rights with conversion or option rights issued by the company or one of its Group companies.

Further details can be found in the authorisation resolution.

By resolution of the Annual General Meeting on 3 May 2018, the Executive Board was also authorised, with the approval of the Supervisory Board, to acquire treasury shares up to a total of 5 % of the share capital existing at the time of the resolution through the use of derivatives (put or call options or a combination of both). The term of the options must be selected in such a way that the shares are acquired by exercising the options on 2 May 2023 at the latest. The shareholders are not entitled to conclude such option transactions with the company in accordance with Section 186 para. 3 sentence 4 AktG. Further details can be found in the authorisation resolution.

For further details and information, please refer to section 4.11. Equity in the notes.

By the end of the authorisation period on 2 May 2023, the company bought back a total of 50,000 treasury shares in the company in the period from 22 November 2018 to 21 May 2019 as part of the 2018/I share buy-back program by resolution of the Management Board and with the approval of the Supervisory Board on 21 November 2018. To date, the company holds 50,000 treasury shares for which it has no voting rights.

MATERIAL AGREEMENTS THAT ARE SUBJECT TO THE CONDITION OF A CHANGE OF CONTROL FOLLOWING A TAKEOVER BID

STS Group AG has not concluded any significant agreements that contain provisions for the event of a change of control.

COMPENSATION AGREEMENTS CONCLUDED WITH MEMBERS OF THE MANAGEMENT BOARD OR EMPLOYEES IN THE EVENT OF A TAKEOVER BID

No compensation agreements have been made with the Executive Board in the event of a change of control

CORPORATE GOVERNANCE

CORPORATE GOVERNANCE DECLARATION PURSUANT TO SECTION 289F HGB AND SECTION 315D HGB

STS Group AG reports on the working methods of the Executive Board and Supervisory Board as part of the corporate governance declaration. The corporate governance declaration in accordance with Section 289f HGB and Section 315d HGB is publicly available at:

https://www.sts.group/de/investor-relations/corporate-governance

DECLARATION OF COMPLIANCE IN ACCORDANCE WITH SECTION 161 OF THE GERMAN STOCK CORPORATION ACT

In February 2025, the Executive Board and Supervisory Board of STS Group AG issued the declaration required by Section 161 of the German Stock Corporation Act (AktG). It is publicly available at:

https://www.sts.group/de/investor-relations/corporate-governance

DEPENDENCY REPORT

Our company, STS Group AG, received appropriate consideration for each legal transaction listed in the report on relationships with affiliated companies for the reporting period from 1 January to 31 December 2024 according to the circumstances known to us at the time the legal transactions were carried out or omitted. No other measures were taken or omitted in the reporting period at the instigation of or in the interests of the controlling companies or a company affiliated with the controlling companies.

NON-FINANCIAL GROUP STATEMENT

STS Group AG fulfils the obligation to issue a non-financial statement (NFS) in accordance with Sections 315b and 289b of the German Commercial Code (HGB) by publishing a separate nonfinancial Group report on the STS Group AG website at https://www.sts.group/de/investorrelations/publikationen.

In addition to a description of the business model, the NFE also includes information on the following aspects insofar as these are necessary for an understanding of the course of business, the business results, the situation of the Group and the effects of the course of business on these aspects:

Environmental concerns
Employee concerns
Respect for human rights
Combating corruption and bribery
Customer and supplier relationships

STS GROUP AG

In addition to reporting on the STS Group, we explain the development of STS Group AG below.

STS Group AG is the parent company of the STS Group and performs the corresponding management and central functions. The management and central functions performed by STS Group AG include Group-wide finance and accounting, the provision of management and services in the areas of strategic corporate development and global corporate and marketing communications. As of 31 December 2024, one employee (2023: one) was employed by STS Group AG for these tasks.

STS Group AG directly or indirectly holds shares in eight companies. The economic conditions of STS Group AG essentially corresponded to those of the STS Group, as described in the Group's basic principles and in the economic report.

In contrast to the consolidated financial statements, STS Group AG does not prepare its annual financial statements in accordance with International Financial Reporting Standards ("IFRS"), but in accordance with the provisions of the German Commercial Code ("HGB"). The complete annual financial statements are published separately at https://www.sts.group/de/investor relations/publikationen .

The key performance indicators for STS Group AG are revenue from management and service fees and the annual result, which is largely characterised by income from dividend payments from subsidiaries.

EARNINGS POSITION

The economic situation of STS Group AG is essentially characterised by the operating activities of its subsidiaries. STS Group AG participates in the operating results of the subsidiaries through their distributions. The economic situation of STS Group AG is therefore determined indirectly via the STS Group, which is explained in the economic report.

INCOME STATEMENT OF STS GROUP AG IN ACCORDANCE WITH HGB

in kEUR	2024	2023
Revenues	371	185
Other operating income	2,542	496
Personnel expenses	-170	-160
Amortization of intangible assets and depreciation
of tangible assets	-36	-39
Other operating expenses	-3,905	-3,896
Income from equity investments	2,631	3,949
Income from loans of financial assets	1	1
Other interest and similar income	180	135
Interest and similar expenses	-960	-575
Taxes on income	-198	0
Profit after taxes on income	456	96
Net profit/ loss for the year	456	96
Profit carried over from the previous year	2,331	2,235
Withdrawal for dividend distribution	-264	0
Allocation into revenue reserves	-2,067	0
Accumulated gains/losses carried forward	456	2,331

In the 2024 financial year, revenue increased to EUR 371 thousand (2023: EUR 185 thousand) due to normalised allocations for management and corporate services invoiced to the subsidiaries. This is related to the successful completion of the corporate financial reorganisation process, which meant that management services could be charged to the French companies again in the current financial year.

Other operating income was significantly higher than in previous periods (2024: EUR 2,542 thousand; 2023: EUR 496 thousand). This item mainly includes income for the recharging of the Adler Pelzer Group's administrative cost allocation to STS Group AG in the amount of EUR 2,497 thousand.

Personnel expenses increased slightly in the 2024 financial year. Personnel expenses amounted to EUR 170 thousand as at 31 December 2024 after EUR 160 thousand in the previous year.

Other operating expenses increased by EUR 9 thousand compared to the previous year to EUR 3,905 thousand in the 2024 financial year. The increase in this item was due in particular to expenses for affiliated companies, which primarily include the services provided by the majority shareholder.

Income from investments amounted to EUR 2,631 thousand as of 31 December 2024 (2023: EUR 3,949 thousand). Dividend payments from subsidiaries are recognised in this item.

Income from loans of financial assets amounted to EUR 1 thousand as at 31 December 2024 (2023: EUR 1 thousand).

Other interest and similar income totaled EUR 180 thousand (2023: EUR 135 thousand) as at the reporting date.

At EUR 960 thousand, interest expenses were significantly higher than the previous year's level of EUR 575 thousand. This is mainly due to interest paid to affiliated companies.

Taxes on income amounted to EUR 198 thousand as of 31 December 2024 (2023: EUR 0 thousand), which mainly resulted from the dividend payment of EUR 3,949 thousand from the foreign subsidiary in the previous year.

After deducting taxes, the net profit for the year amounted to EUR 456 thousand (2023: net profit of EUR 96 thousand), which also corresponds to the net retained profits for 2024.

NET ASSETS AND FINANCIAL POSITION

BALANCE SHEET OF STS GROUP AG IN ACCORDANCE WITH HGB

	31. December
in kEUR	2024	2023
Assets
Fixed assets	19,098	19,133
Intangible assets	0	36
Financial assets	19,098	19,097
Current assets	9,093	8,014
Trade receivables	0	10
Receivables and other assets	7,722	7,991
Cash and cash equivalents	1,371	23
Prepaid expenses	13	9
Total assets	28,204	27,156
Liabilities
Share Capital	16,285	16,094
Provisions	859	727
Other provisions	859	727
Liabilities	11,060	10,336
Trade payables	81	190
Liabilities to affiliated companies	10,976	10,142
Other liabilities	3	3
Total equity and liabilities	28,204	27,156

Total assets increased to EUR 28,204 thousand as of 31 December 2024 (2023: EUR 27,156 thousand). The increase in total assets is mainly due to the increase in cash in hand and bank balances. This is mainly due to the dividend distribution of a subsidiary, which was paid out in 2024. On the liabilities side, equity increased slightly due to the positive annual result, while liabilities to affiliated companies also increased.

Intangible assets decreased due to amortisation (2024: EUR 0 thousand; 2023: EUR 36 thousand). Financial assets totaled EUR 19,098 thousand as at the reporting date (2023: EUR 19,097 thousand).

Under receivables and other assets, receivables from affiliated companies decreased to EUR 7,722 thousand as at the reporting date (2023: EUR 7,991 thousand).

Cash and cash equivalents increased by EUR 1,348 thousand to EUR 1,371 thousand (2023: EUR 23 thousand). Cash and cash equivalents comprise bank balances and cash on hand. The increase in cash and cash equivalents is due to the dividend payment from a subsidiary for the 2023 financial year.

Equity increased by EUR 191 thousand and amounted to EUR 16,285 thousand (previous year: EUR 16,094 thousand). Following the dividend distribution of EUR 264.5 thousand in the 2024 reporting year for the 2023 financial year, the remaining retained earnings from the previous year were transferred in full to revenue reserves. With a simultaneous increase in total assets, the equity ratio decreased to 57.7 %, compared to 59.3 % in the previous year.

Provisions increased from EUR 727 thousand in the previous year to EUR 859 thousand as of 31 December 2024. The increase in this item is due to the recognition of provisions for higher financial statement and audit costs.

Liabilities to affiliated companies increased by EUR 834 thousand to EUR 10,976 thousand as at the balance sheet date. This change is mainly due to interest on a loan granted by the majority shareholder.

Other liabilities remained unchanged at EUR 3 thousand as of 31 December 2024 (2023: EUR 3 thousand).

OPPORTUNITIES AND RISKS

The business development of STS Group AG is essentially subject to the same opportunities and risks as the STS Group. STS Group AG generally participates directly or indirectly in the risks of its subsidiaries. The relationships with the subsidiaries can also result in charges from contractual contingent liabilities (in particular financing) and write-downs on shares in affiliated companies. STS Group AG is ultimately subject to the financing risk and the dependence of STS Group AG on further financing by the majority shareholder or via the subsidiaries (by means of management fees and dividends). Please refer to the explanations on financial risks in the risk report.

As the parent company, STS Group AG is integrated into the group-wide risk management system of the STS Group. The description of the internal control system for STS Group AG required by Section 289 (4) HGB is provided in the "Risk and opportunity report" section.

PROGNOSIS

The company had assumed a slight increase in income from management services for the 2024 financial year, as the French units could be invoiced again. As expected, a dividend of around EUR 3.9 million was also paid from the Chinese subsidiary.

For the 2025 financial year, the management expects income from management services to be at the previous year's level. Based on the expected dividend income from the Chinese subsidiary, the management expects net income for the year to be at the previous year's level.

General risk warning

A forecast is subject to uncertainties that can have a significant impact on the forecast sales and earnings performance.

Hagen, 31 March 2025

Alberto Buniato (CEO

3. CONSOLIDATED FINANCIAL STATEMENTS

1. CONSOLIDATED INCOME STATEMENT

FOR THE FINANCIAL YEAR FROM JANUARY 1 TO DECEMBER 31, 2024 Note

EUR million	Anhang	2024	2023
Revenues	3.1.	311.1	277.9
Increase (+) or decrease (-) of finished goods and work in progress	3.2.	-15.4	8.9
Other operating income	3.3.	9.3	11.3
Material expenses	3.4.	-181.4	-186.3
Personnel expenses	3.5.	-64.3	-58.8
Other operating expenses	3.6.	-36.4	-32.4
Earnings from operations before depreciation and amortization expenses (EBITDA)		23.0	20.5
Depreciation and amortization expenses	3.7.	-15.5	-13.8
Earnings before interest and income taxes (EBIT)		7.5	6.8
Financial earnings	3.8.	0.5	0.2
Financial expenses	3.8.	-7.6	-6.5
Earnings before income taxes		0.4	0.5
Income taxes	3.9.	-1.0	-1.7
Net income		-0.6	-1.2
Thereof attributable to owners of STS Group AG		-0.6	-1.2
Earnings per share in EUR (undiluted)	3.10.	-0.1	-0.2
Earnings per share in EUR (diluted)	3.10.	-0.1	-0.2

2. CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE FINANCIAL YEAR FROM JANUARY 1 TO DECEMBER

31, 2024

EUR million	2024	2023
Net income	-0.6	-1.2
Currency translation differences	-0.5	-1.6
Items that may be reclassified subsequently to profit or loss
	-0.5	-1.6
Remeasurements of defined benefit plans, net of tax	-0.4	-0.1
Deferred taxes from the revaluation of defined benefit pension
plans	0.1	0.0
Items that will not be reclassified to profit or loss
	-0.3	-0.1
Other comprehensive income	-0.7	-1.7
Total comprehensive income	-1.3	-2.9
Thereof attributable to owners of STS Group AG
	-1.3	-2.9

Page |72

3. CONSOLIDATED BALANCE SHEET AS AT 31.12.2024

Assets

EUR million	Note	31.12.2024	31.12.2023
Intangible assets	4.1.	18.6	19.1
Property, plant and equipment	4.2.	89.9	86.9
Contract assets	4.8.	0.0	0.4
Other financial assets	4.3.	1.1	1.5
Other non-financial assets	4.5.	1.7	0.0
Deferred tax assets	4.6.	4.9	3.8
Non-current assets		116.2	111.7
Inventories	4.7.	22.9	37.5
Advance payments made on inventories	4.7.	0.2	22.0
Contract assets	4.8.	3.6	0.9
Trade and other receivables	4.9.	47.1	38.4
Other financial assets	4.3.	9.1	6.0
Income tax receivables	4.4.	0.1	1.4
Other non-financial assets	4.5.	6.0	9.3
Cash and cash equivalents	4.10.	25.6	39.3
Current assets		114.6	154.9
Total assets		230.8	266.5

Page |73

Equity and liabilities

		December 31,	December 31,
EUR million	Note	2024	2023
Share capital	4.11.1.	6.5	6.5
Capital reserve	4.11.8.	5.4	5.4
Retained earnings	4.11.9.	33.4	34.3
Other reserves	4.11.10.	0.2	1.0
Own shares at acquisition cost	4.11.7.	-0.5	-0.5
Equity attributable to owners of STS Group AG
Total equity	4.11.	45.0 45.0	46.6 46.6
Liabilities to banks	4.12.2.	11.1	10.6
Liabilities from leases	4.12.1.	27.7	28.2
Other financial liabilities	4.12.3 - 4	13.4	14.8
Contract liabilities	4.8.	0.3	27.0
Provisions	4.13.	10.0	9.9
Non-current liabilities		62.6	90.5
Liabilities to banks	4.12.2.	14.2	15.1
Liabilities from leases	4.12.1.	4.9	4.9
Other financial liabilities	4.12.	9.8	0.0
Contract liabilities	4.8	1.6	21.6
Trade and other payables
		67.1	61.2
Provisions	4.13.	0.2	0.1
Income tax liabilities	4.14.	5.2	4.5
Other non-financial liabilities	4.15.	20.1	21.9
Current liabilities		123.2	129.4
Total equity and liabilities		230.8	266.5

4. CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE FINANCIAL YEAR FROM JANUARY 1 TO DECEMBER 31, 2024

	Equity attributable to owners of STS Group AG
	Number of shares	Share capital	Capital reserves	Retained earnings		Other reserves		Treasury shares, at cost	Total
					Remeasuring gains/losses	Foreign currency translation	Total
EUR million
Balance at January 1, 2023	6,450,000	6.5	5.4	35.5	0.7	1.9	2.6	-0.5	49.5
Rebooking of the revaluation of performance-oriented obligations with no impact
on income	0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0
Rebookings	0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0
Income after income tax expense	0	0.0	0.0	-1.2	0.0	0.0	0.0	0.0	-1.2
Dividend payments	0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0
Other comprehensive income	0	0.0	0.0	0.0	-0.1	-1.6	-1.7	0.0	-1.7
Balance at December 31, 2023	6,450,000	6.5	5.4	34.3	0.7	0.3	0.9	-0.5	46.6
Balance at January 1, 2024	6,450,000	6.5	5.4	34.3	0.7	0.3	0.9	-0.5	46.6
Rebooking of the revaluation of performance-oriented obligations with no impact
on income	0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0
Rebookings	0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0
Income after income tax expense	0	0.0	0.0	-0.6	0.0	0.0	0.0	0.0	-0.6
Dividendpayments	0	0.0	0.0	-0.3	0.0	0.0	0.0	0.0	-0.3
Other comprehensive income	0	0.0	0.0	0.0	-0.3	-0.5	-0.7	0.0	-0.7
Balance at December 31, 2024	6,450,000	6.5	5.4	33.5	0.4	-0.2	0.2	-0.5	45.0

5. CONSOLIDATED CASH FLOW STATEMENT NG

FOR THE FINANCIAL YEAR FROM JANUARY 1 TO DECEMBER 31, 2024

EUR million	2024	2023
Net income	-0.6	-1.2
Income taxes	2.0	1.3
Net interest expense	7.1	6.3
Depreciation of property, plant and equipment	11.8	10.5
Depreciation of property, plant and equipment	3.7	3.2
Other non-cash income (-) and expenses (+)	0.8	1.3
Change in net working capital	11.2	20.2
Inventories	37.6	-11.4
Contract assets	-2.7	0.1
Trade and other receivables	-7.6	1.7
Contract liabilities	-20.5	18.2
Trade and other payables	4.3	11.5
Other receivables	0.9	-8.1
Other liabilities	-29.0	-1.9
Provisions	0.7	-1.1
Income tax receivables and liabilities	0.0	0.1
Income tax receivables and liabilities	-1.4	-0.3
Net cash flows from operating activities	7.1	30.5
Proceeds from sale of property, plant and equipment	0.9	0.5
Proceeds from disposals of intangible assets	0.0	0.1
Disbursements for investments in property, plant and equipment	-11.8	-11.2
Disbursements for investments in intangible assets	-2.9	-3.7
Payments for granting loans to related parties	-2.3	0.0
Interest received*	0.5	0.2
Net cash flows from investing activities	-15.6	-14.1
Proceeds from borrowings	2.9	13.3
Proceeds from loans granted by related parties	9.2	9.0
Repayments made on loans	-5.7	-15.4
Repayments of lease liabilities	-4.6	-3.8
Dividends paid to shareholders of the parent company	-0.3	0.0
Interest paid	-6.1	-6.3
Net cash flows from financing activities for the Group as a whole	-4.6	-3.1
Effect of currency translation on cash and cash equivalents	-0.6	0.5
Net increase/decrease in cash and cash equivalents	-13.7	13.7
Cash and cash equivalents at the begining of the period	39.3	25.6
Cash and cash equivalents at the end of the period	25.6	39.3
*In the previous period, the interest received was recognised in the net cash flow from financing activities.

4. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. SEGMENT REPORTING

FOR THE FINANCIAL YEAR FROM JANUARY 1 TO DECEMBER 31, 2024

	Plastics		China		Materials
EUR million	2024	2023	2024	2023	2024	2023
Revenue - third parties	246.6	201.8	44.1	51.0	19.0	23.5
Sales revenues from other Group companies	1.3	1.2	0.0	0.0	0.2	0.4
Revenue - inter-segment	0.0	0.0	0.0	0.0	15.2	14.7
Revenue segment	247.9	203.1	44.1	51.0	34.5	38.5
Material costs	-147.0	-138.1	-22.9	-31.6	-26.7	-31.3
Personnel costs	-52.4	-46.7	-8.6	-8.6	-3.2	-3.4
Other operating expenses	-27.7	-21.3	-6.3	-6.8	-2.2	-2.0
EBITDA	15.7	14.9	6.3	7.0	2.2	2.1
EBITDA in % of revenue	6.3%	7.3%	14.2%	13.7%	6.3%	5.3%
Depreciation and amortization	-9.9	-8.3	-4.8	-4.7	-0.7	-0.7
EBIT	5.8	6.6	1.4	2.3	1.5	1.3
CAPEX*	12.8	10.6	1.7	4.1	0.1	0.1

¹ Cash-effective for investments in property, plant and equipment and intangible assets, excluding investments in leasing

	Unternehmen/sonstige		Konsolidierung		Konzern
EUR million	2024	2023	2024	2023	2024	2023
Revenue - third parties	0.0	0.0	0.0	0.0	309.6	276.3
Sales revenues from other Group companies	0.0	0.0	0.0	0.0	1.5	1.6
Revenue - inter-segment	0.0	0.0	-15.2	-14.7	0.0	0.0
Revenue segment	0.0	0.0	-15.2	-14.7	311.1	277.9
Material costs	0.0	0.0	15.2	14.7	-181.4	-186.3
Personnel costs	-0.2	-0.2	0.0	0.0	-64.3	-58.8
Other operating expenses	-4.0	-3.9	3.7	1.5	-36.5	-32.5
EBITDA	-1.2	-3.4	0.0	0.0	23.0	20.5
EBITDA in % of revenue	0.0%	0.0%	0.0%	0.0%	7.4%	7.4%
Depreciation and amortization	0.0	0.0	0.0	0.0	-15.5	-13.8
EBIT	-1.2	-3.4	0.0	0.0	7.5	6.8
CAPEX*	0.0	0.0	0.0	0.0	14.6	14.9

¹ Cash-effective for investments in property, plant and equipment and intangible assets, excluding investments in leasing

IFRS 8 Operating Segments requires the disclosure of information per operating segment; in particular, since 2024, significant segment expenses are also to be presented due to an IFRIC agenda decision. Disclosures on the cost of materials, personnel expenses and other operating expenses have therefore also been added. The definition of operating business segments and the scope of the information provided as part of segment reporting are based, among other things, on the information regularly provided to the Executive Board as the chief operating decision maker and thus on the company's internal management.

The company's Executive Board decided to categorise and manage reporting partly by product type and partly geographically. The key performance indicators used by the Executive Board to manage the Group segments are sales and EBITDA.

These financial performance indicators are provided for the following areas:

▪ Plastics

The segment manufactures a wide range of exterior body parts and interior modules for trucks, other commercial vehicles and passenger cars. It includes hard trim products made from injection moulding and composite materials such as SMC (Sheet Moulding Compound), glass fibre-reinforced thermoset semi-finished products. The semi-finished product plays an important role in automotive production thanks to its numerous positive properties, such as high rigidity and heat resistance. It often replaces metal structural parts and makes an important contribution to covering battery systems in electric vehicles. The Plastics segment has production facilities in Europe and Mexico, as well as the new plant in the USA. Customers in North America are supplied from Mexico and the USA. Hard trim systems are used in commercial vehicles, e.g. for exterior parts (front modules, roof modules and other aerodynamic panelling) or interior modules ("bunk box" under the driver's bed and shelf elements) and in passenger cars, e.g. for structural parts (tailgate). The segment also has its own capacities for painting plastics.

▪ China

Activities in the Chinese market are bundled in this segment. These include supplying customers with plastic parts for the exterior panelling of vehicles, primarily for the cabins of commercial vehicles, but increasingly also for passenger cars. The product range offers solutions and components for commercial vehicles such as bumpers, front panelling, deflectors, roofs, mudguards and entrances as well as parts for passenger cars, such as battery covers for electric vehicles, through to complex structural parts, such as tailgates for SUVs. Composite moulding processes and injection moulding technology are used here. The segment also has its own capacities for painting plastics.

▪ Materials

This segment comprises the development and production of semi-finished products (Sheet Molding Compound - SMC), fibre molding compounds (Bulk Molding Compound - BMC) and advanced fibre molding compounds (Advanced Molding Compound - AMC). The semi-finished products are used both within the Group for hard trim applications and supplied to external third parties. As part of the development of these base materials, it is already possible to influence key parameters of the end product.

The Group is thus managed in a total of three (2023: three) segments. The "Companies / other" column mainly includes the activities of STS Group AG as the Group's parent company. Only the consolidation is shown in the "Consolidation" column. No operating business segments were summarised in order to arrive at the level of the Group's reportable segments.

The breakdown of sales with third parties in accordance with IFRS 15 is as follows:

The following table breaks down revenue with third parties according to IFRS 15:

	Plastics		China		Materials		Group
EUR million	2024	2023	2024	2023	2024	2023	2024	2023
Timing of revenue recognition with third parties
Transferred at a point of time	91.2	20.4	40.5	48.5	19.2	23.8	150.9	92.8
Transferred over time	156.7	182.6	3.6	2.5	0.0	0.0	160.2	185.1
Revenue - third parties	247.9	203.1	44.1	51.0	19.2	23.8	311.1	277.9

Sales between the segments are recognised at standard market transfer prices.

The same accounting principles apply to the segments as explained in section 6 Accounting policies.

The reconciliation of the reported segment results to earnings before taxes is as follows:

EUR million	2024	2023
EBITDA Group	23.0	20.5
Depreciation and amortization expenses	-15.5	-13.8
Earnings before interest and income taxes (EBIT)	7.5	6.8
Interest and similar income	0.5	0.2
Interest and similar expenses	-7.6	-6.5
Finance result	-7.1	-6.3
Earnings before income taxes	0.4	0.5

Non-current segment assets by company location are broken down as follows:

EUR million	2024	2023
Europe	46.5	44.9
France	45.8	43.9
Germany	0.7	1.0
China	23.7	25.8
America	38.3	35.6
USA	37.8	34.7
Mexico	0.6	0.9
Non-current segment assets	108.5	106.4

Non-current segment assets comprise property, plant and equipment, intangible assets, rightof-use assets for leased assets and other non-financial assets.

Turnover by location of the customer receiving the service is as follows

EUR million	2024	2023
Europe	213.7	216.2
France	125.8	141.0
Germany	50.7	52.1
Others	37.2	23.2
Asia	43.4	50.2
China	40.6	48.7
Others	2.8	1.5
America	54.0	11.4
USA	52.7	8.6
Mexico	1.0	2.4
Others	0.4	0.4
Revenue by location of customer	311.1	277.9

In Europe, revenue in 2024 is highest in France and Germany, followed by Belgium (EUR 9.2 million) and Spain (EUR 9.0 million).

Revenue from three customers (2023 : three customers) each accounted for more than 15% of total third-party revenue in the 2024 financial year. Revenue from the largest and secondlargest customer is attributable to the Plastics BU. The largest customer's sales totaled EUR 108.2 million (2023 : EUR 59.8 million) and the second-largest customer's sales totaled EUR 68.2 million (2023: EUR 74.7 million). The third-largest customer's sales relate to BU Plastics and China and totaled EUR 50.5 million (2023 : EUR 52.4 million). The reporting year was also characterised in particular by price increases on the procurement markets, some of which STS was able to pass on to customers.

Compared to the previous year, the development of sales is clearly positive with an increase from EUR 277.9 million to EUR 311.1 million. BU Plastics in particular recorded strong growth in sales from EUR 203.1 million to EUR 247.9 million, which is attributable in particular to the US subsidiary and its realisation of sales from tool inventories built up in previous years (EUR + 43.5 million), while the unit in Mexico made a negative contribution (EUR - 0.8 million) and the units in France and Germany (EUR + 2.0 million) contributed only slightly to the increase. In addition, the sales of BU Plastics include one-off fixed cost compensation totaling EUR 9.7 million. By contrast, BU Materials and BU China showed a negative trend. Sales in BU Materials fell from EUR 38.5 million to EUR 34.5 million. The China segment also recorded a decline from EUR 51.0 million to EUR 44.1 million.

2. GENERAL INFORMATION

STS Group AG (hereinafter also referred to as the "Company" and, together with its subsidiaries, the "Group") is a listed stock corporation domiciled in Germany with its registered office in Hagen and its business address at Kabeler Strasse 4, 58099 Hagen. It is entered in the commercial register of Hagen Local Court under HRB 12420. The company is listed on the regulated market of the Frankfurt Stock Exchange (General Standard) under the securities identification number ISIN DE000A1TNU68. The share capital amounts to EUR 6.5 million (2023 : EUR 6.5 million) and is divided into 6,500,000 (2023 : 6,500,000) no-par value shares.

The majority shareholder of STS Group AG is Adler Pelzer Holding GmbH, with its registered office at Kabeler Strasse 4, 58099 Hagen, Germany. The consolidated financial statements for the largest group are prepared by G.A.I.A. Holding S.r.l., based in Via Gaetano Agnes 251, 20832 Desio (MB), Italy.

The consolidated financial statements of STS Group AG as of 31 December 2024 comprise STS Group AG and its subsidiaries. The Group is one of the leading system providers of interior and exterior parts for commercial vehicles. The Group develops, produces and supplies products and solutions for components made of plastic or composite material (so-called "hard trim products") for the automotive and lorry (truck) industry.

The Executive Board prepared the consolidated financial statements on 31 March 2025 and approved them for publication. The value adjustment period ends on this date.

2.1. Basics of the constellation

The consolidated financial statements for the financial year ending 31 December 2024 have been prepared on the assumption that the company will continue as a going concern. They were prepared in accordance with the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB), as applicable in the European Union (EU), and in accordance with Section 315e (1) of the German Commercial Code (HGB). The Group therefore applies all IFRS published by the IASB and interpretations issued by the IFRS Interpretations Committee (IFRIC) that were effective as at 31 December 2024, have been adopted by the EU and are applicable to the Group. The term IFRS also refers to all valid International Accounting Standards (IAS) and all interpretations and amendments to International Financial Reporting Standards.

The Group's financial year comprises twelve months and ends on 31 December.

The consolidated financial statements are prepared in euros (EUR). Unless otherwise stated, all amounts have been rounded up or down to millions of euros (EUR million) in accordance with commercial rounding. Totals in tables were calculated on the basis of exact figures and rounded to EUR million. Differences of up to one unit (million, %) are due to rounding. The consolidated financial statements of the Group were prepared in accordance with uniform accounting and consolidation principles for all reporting periods presented. The consolidated financial statements have been prepared using the historical cost convention. This excludes certain financial assets and liabilities (including derivative instruments) and share-based payments, which were measured at fair value. The Group classifies assets and liabilities as current if they are expected to be realised or settled within twelve months of the balance sheet date. If assets and liabilities have both a current and a non-current portion, they are divided into their maturity components and recognised as current and non-current assets and liabilities in accordance with the balance sheet classification. The consolidated income statement is prepared using the nature of expense method.

2.2. Consolidation principles

All subsidiaries that STS Group AG controls in accordance with the provisions of IFRS 10 "Consolidated Financial Statements" are included in the consolidated financial statements and are fully consolidated. A parent company obtains control when it can exercise power over the investee, is exposed to variable returns from its involvement with the investee and has the ability to use its power over the investee in a way that affects the amount of the investee's returns. The company reassesses control if facts and circumstances indicate that one or more of the aforementioned control criteria have changed.

Intra-group transactions, balances and intra-group profits or losses from transactions between STS Group AG and its subsidiaries and between subsidiaries are eliminated on consolidation.

The results of subsidiaries acquired or sold during the year are recognised in the consolidated income statement and other comprehensive income with effect from the actual date of acquisition or until the actual date of disposal.

Scope of consolidation

As of 31 December 2024, the scope of consolidation comprised eight (2023 : eight) fully consolidated subsidiaries in addition to the parent company. In addition to the parent company, there was one (2023 : one) further company in Germany and seven (2023 : seven) companies abroad.

As of 31 December 2024 , the scope of consolidation comprised STS Group AG and the following fully consolidated subsidiaries:

		Shares in %
Company	Domicile	31.12.2024	31.12.2023
STS Plastics SAS	Saint-Désirat, France	100.0	100.0
STS Composites France SAS	Saint-Désirat, France	100.0	100.0
STS Composites Germany GmbH	Kandel, Germany	100.0	100.0
Inoplast Truck S.A. de C.V. 1)	Ramos, Mexico	100.0	100.0
STS Plastics Co., Ltd.	Jiangyin, China	100.0	100.0
STS Plastics (Shi Yan), Ltd. 2)	Shi Yan, China	100.0	100.0
MCR SAS	Tournon, France	100.0	100.0
STS Group North America Inc.	Troy, Michigan, USA	100.0	100.0

1) 0.02 % of the shares in Inoplast Truck S.A. de C.V., Mexico are held indirectly by STS Plastics Holding SAS, France.

2) 100% of the shares in STS Plastics (Shi Yan) Ltd, Shi Yan, China, are held indirectly by STS Plastics Co. Ltd, Jiangyin, China.

Business combinations and goodwill

Business combinations are recognised in accordance with IFRS 3 "Business Combinations" using the acquisition method. The consideration transferred in a business combination is the fair value of the assets given, the equity instruments issued and the liabilities incurred or assumed at the date of the transaction. It also includes the fair value of any recognised assets or liabilities resulting from a contingent consideration agreement. Acquisition-related costs are recognised as expenses when they are incurred. Assets, liabilities and contingent liabilities identifiable as part of a business combination are measured at their fair values at the acquisition date on initial consolidation.

Goodwill is recognised and tested for impairment at least once a year as the excess of the cost of the acquisition, the amount of non-controlling interests in the acquired company and the fair value of any previously held equity interests at the acquisition date over the Group's share of the net assets measured at fair value. If the acquisition costs are lower than the net assets of the acquired subsidiary measured at fair value, the difference is recognised directly in the consolidated income statement following a further review.

The tax deferrals required by IAS 12 "Income Taxes" were recognised on temporary differences arising from consolidation.

Acquisitions

There were no acquisitions in the reporting period or the previous period.

Disposals

There were no disposals in the reporting period or the previous period.

New foundation

No new companies were founded in the reporting period or the previous period.

2.3. Currency conversion

2.3.1. Functional currency and reporting currency

The consolidated financial statements have been prepared in accordance with the functional currency concept. The functional currency is the primary currency of the economic environment in which STS Group AG operates. It corresponds to the euro, which is also the presentation currency of the consolidated financial statements. The functional currency of the subsidiaries is generally the national currency of the economic environment in which the subsidiaries operate independently. An exception to this is the Mexican subsidiary, whose functional currency is the currency that prevailed in the primary economic environment of its independent operations. The functional currency of the Mexican subsidiary is the US dollar. The functional currency of the Chinese subsidiaries is the renminbi yuan and that of the US subsidiaries is the US dollar.

2.3.2. Transactions and balances

In the financial statements of the individual Group companies, transactions in foreign currencies are translated into the functional currency at the exchange rate applicable at the time of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the middle rate on the balance sheet date (closing rate). Non-monetary items that are measured in terms of their historical cost in a foreign currency are translated at the exchange rate on the date of the original transaction. Foreign currency gains and losses from these transactions are recognised in the consolidated income statement under "Other income" or "Other expenses". This procedure also applies to the foreign currency translation of the Mexican subsidiary from the Mexican peso into the functional currency, the US dollar. In preparing the consolidated financial statements, the assets and liabilities of foreign subsidiaries whose functional currency is not the euro are translated into euros at the exchange rates prevailing on the balance sheet date. Income and expenses are translated at the average exchange rate for the quarters, unless the exchange rates are subject to significant fluctuations during the period. In this case, the exchange rates at the time of the transaction would be used. Translation differences from currency translation into the functional currency of the company are recognised directly in equity under other comprehensive income until the disposal of the subsidiary.

Goodwill arising on the acquisition of a foreign operation and any adjustments to the carrying amount of the assets and liabilities resulting from the acquisition are treated as assets and liabilities of the foreign operation and translated at the closing rate.

The average exchange rates shown for 2024 are derived from the average exchange rates for the quarters. In previous years, the annual average exchange rates were calculated using the monthly average exchange rates. The change in the calculation method has no material impact on the earnings situation.

The exchange rates used for currency translation were as follows in the reporting year:

		Spot rate		Avarage rate
1 EUR in	Code	December 31, 2024	December 31, 2023	2024	2023
China	CNY	7.583	7.851	7.786	7.659
Mexiko & USA	USD	1.039	1.105	1.082	1.081

3. NOTES TO THE CONSOLIDATED INCOME STATEMENT

3.1. Sales revenue

Sales are broken down as follows:

EUR million	2024	2023
Revenues from sales	304.8	270.1
Revenues from services	4.8	6.2
Revenues from other intercompany	1.5	1.6
Revenues	311.1	277.9

The development of sales by region and product group is described in the segment reporting in accordance with IFRS 8, see section 1. All sales recognised as revenue are derived from revenue from contracts with customers.

3.2. Changes in inventories

As at the reporting date, there was a significant reduction in inventories of EUR -15.4 million (inventory build-up in 2023: EUR 8.9 million). This is primarily attributable to BU Plastics, in particular due to the realisation of sales of manufactured tools for production requirements at the subsidiaries in France in the amount of EUR 16.3 million. This is offset by a compensating effect of EUR 1.6 million from the US subsidiary, meaning that BU Plastics recorded a decline of EUR 14.6 million in total as well as a general decline in finished goods of EUR 0.4 million (2023: EUR +0.8 million) and work in progress of EUR 0.3 million (2023: EUR +0.4 million). In particular, BU Plastics reduced inventories by EUR 13.4 million, while BU China reduced inventories by EUR 1.7 million. Inventories in BU Materials remained almost constant with a slight reduction of EUR 0.3 million.

3.3. Other income

Other income is broken down as follows:

EUR million	2024	2023
Income from other services	0.1	0.0
Income from raw material and waste recycling	0.5	0.8
Capitalized self-produced assets	6.5	2.0
Income from exchange rate differences	0.4	0.9
Income from subsidies	0.1	0.1
Other operating income	1.8	7.5
Other operating income	9.3	11.3

Other income totalled EUR 9.3 million after EUR 11.3 million in the previous year. This includes own work capitalised of EUR 6.5 million (2023: EUR 2.0 million), including EUR 2.0 million in development costs (2023: EUR 2.0 million). At EUR 3.4 million, non-capitalised development costs were significantly higher than in the previous year (2023: EUR 0.9 million).

3.4. Cost of materials

The cost of materials breaks down as follows:

EUR million	2024	2023
Cost of raw materials, consumables and supplies	-157.7	-154.5
Cost of purchased services	-23.6	-31.4
Material expenses	-181.4	-186.3

3.5. Personnel expenses

Personnel expenses are broken down as follows:

EUR million	2024	2023
Wages and salaries	-47.4	-43.9
Social contributions	-16.9	-14.9
of which social security contributions	-15.3	-14.7
of which expenses for pensions	-1.6	-0.2
Personnel expenses	-64.3	-58.8

The Group's personnel expenses for the 2024 financial year amount to EUR 64.3 million (2023: EUR 58.8 million) and include wages and salaries as well as social security contributions. Social security contributions totaled EUR 16.9 million in the reporting year (2023: EUR 14.9 million) and are divided into social security contributions and pension expenses. Social security contributions totaled EUR 15.3 million in the reporting year (2023: EUR 14.7 million). Pension expenses for the 2024 financial year totaled EUR 1.6 million (2023 : EUR 0.2 million).

The average number of own employees is as follows:

Average number of employees by group	2024	2023
Production	1,001	919
Administration	361	304
Total	1,362	1,222

The total number of own employees at the end of 31 December 2024 was 1,402, of which 894 employees are geographically distributed across Europe and 508 across the rest of the world. The increase in the total number of own employees is due to the increase in the USA.

Page |89

3.6. Other expenses

Other expenses break down as follows:

EUR million	2024	2023
Packaging materials and outgoing freight	-1.6	-2.1
Legal and consulting costs	-1.3	-3.8
Rental and leasing	-1.4	-0.9
Occupancy costs	-1.4	-1.4
Fleet	-0.3	-0.3
Advertising and travel expenses	-2.7	-1.5
Maintenance and repairs	-9.0	-7.6
Administration	-1.9	-2.0
Additions to allowances on receivables IFRS 9	-0.9	-0.1
Base levies and other taxes	-1.8	-1.7
Insurance premiums	-1.0	-0.8
Losses from claims and onerous contracts	-0.6	-0.8
Fees and contributions	-2.0	-0.4
Occupational health and safety	-0.8	-0.9
Research and development expenses	-3.4	-0.9
Services received from related parties	-3.9	-3.5
Low-value assets	-0.1	-0.1
Expenses from foreign currency translation	0.0	-1.0
Miscellaneous expenses	-2.3	-2.6
Other operating expenses	-36.4	-32.4

Please refer to section 5.5.1. for details on services provided by related parties.

3.7. Depreciation and amortisation

Depreciation and amortisation are broken down as follows:

EUR million	2024	2023
Amortisation of intangible assets	-3.7	-3.2
Depreciation of property, plant and equipment	-11.8	-10.5
Depreciation and amortization expenses	-15.5	-13.8

3.8. Financial income and financial expenses

Financial income and financial expenses break down as follows:

EUR million	2024	2023
Miscellaneous interest and similar income	0.5	0.2
Interest and similar income	0.5	0.2
Interest expense from banks/lenders	-3.6	-0.9
Interest expense from factoring	-2.0	-2.3
Interest expense from discounting provisions	-0.4	-0.4
Interest expense from leases	-0.4	-1.5
Miscellaneous interest and similar expenses	-1.2	-1.4
Interest and similar expenses	-7.6	-6.5

Interest expenses from the discounting of provisions mainly include interest expenses for pensions totaling EUR 0.4 million.

Page |91

3.9. Income taxes

Income taxes are broken down as follows:

EUR million	2024	2023
Current income tax expense	-2.0	-1.3
Deferred tax income	1.0	-0.4
Income tax expense	-1.0	-1.7

The following table shows the reconciliation of the tax rate from the expected tax expense to the respective recognised tax expense in each financial year.

Based on the actual tax rate applicable to the consolidated result in Germany, taking into account the corporation tax rate of 15.0% (2023: 15.0 %) plus the solidarity surcharge of 5.5 % (2023: 5.5 %) on the tax liability and trade tax of 18.2 % (2023: 11.2 %), the total tax rate is 34.0 % (2023: 27.0 %). The change in the trade tax rate is due to the trade tax rate in Hagen.

EUR million	2024	2023
Earnings before income taxes	0.4	0.5
Weighted average tax rate (in %)	34.0%	27.0%
Tax income at the weighted average tax rate	-0.1	-0.1
Tax rate differences and tax rate changes	0.1	0.1
Usage of unrecognized loss carryforward	0.6	0.3
Effects from change in unrecognized deferred taxes on temporary differences and tax loss carryforwards	-1.7	-1.7
Subsequently capitalised deferred taxes on temporary differences and losses carried forward	0.2	0.4
Other non tax-deductible expenses including witholding tax	-0.5	-0.7
Tax-exempt income	0.0	0.0
Additional payment of taxes and refunds from previous years	0.0	-0.3
Effect of tax concessions granted (research and development and other concessions)	0.4	0.3
Other effects	0.0	0.0
Reported income tax expense (–)/income (+)	-1.0	-1.7

The applicable tax rates of the Group companies are between 15.0 % and 34.0 % (2023: 15.0 % and 30.0 %).

3.10. Earnings per share

Earnings per share are as follows:

		2024	2023
Net income attributable to owners of STS Group AG	EUR million	-0.6	-1.2
Weighted average number of ordinary shares to calculate earnings per share
Basic	Number	6,450,000	6,450,000
Diluted	Number	6,450,000	6,450,000
Earnings per share
Basic	in EUR	-0.09	-0.18
Diluted	in EUR	-0.09	-0.18

Earnings per share are calculated on the basis of consolidated net income and the average number of ordinary shares totaling 6,500,000 less treasury shares of 50,000.

4. NOTES TO THE CONSOLIDATED BALANCE SHEET

4.1. Intangible assets

The development of intangible assets is as follows:

EUR million	Internally generated intangible rights and assets	Customer relationships	Production technologies	Patents, concessions, other rights including Software	Right of use assets intangible assets	Prepayments and intangible assets under development	Total
Historical cost
Balance as of 1 January 2023	0.0	12.0	11.6	10.5	2.0	4.3	40.4
Additions	0.0	0.0	0.0	0.1	0.0	3.7	3.7
Reclassifications	0.0	0.0	0.0	0.7	0.0	-0.7	0.0
Disposals	0.0	0.0	0.0	0.0	0.0	-0.1	-0.1
Exchange rate differences	0.0	-0.1	0.0	0.0	0.0	-0.1	-0.3
Balance as of 31 December 2023	0.0	11.9	11.6	11.2	2.0	7.1	43.8
Balance as of 1 January 2024	0.0	11.9	11.6	11.2	2.0	7.1	43.8

Additions	0.0	0.0	0.0	2.7	0.0	0.2	2.9
Reclassifications	0.0	0.0	0.0	1.6	0.0	-1.6	0.0
Disposals	0.0	0.0	0.0	0.0	0.0	0.0	0.0
Exchange rate differences	0.0	0.2	0.0	0.0	0.0	0.3	0.6
Balance as of 31 December 2024	0.0	12.1	11.6	15.6	2.0	6.0	47.3
Cumulative amortization and impairment
Balance as of 1 January 2023	0.0	-8.4	-6.9	-5.2	-1.2	0.0	-21.7
Amortization	0.0	-0.8	-0.6	-1.5	-0.3	0.0	-3.2
Exchange rate differences	0.0	0.1	0.0	0.0	0.0	0.0	0.2
Balance as of 31 December 2023	0.0	-9.0	-7.5	-6.8	-1.5	0.0	-24.7
Balance as of 1 January 2024	0.0	-9.0	-7.5	-6.8	-1.5	0.0	-24.7
Amortization	0.0	-0.8	-0.6	-2.0	-0.3	0.0	-3.7
Exchange rate differences	0.0	-0.2	0.0	0.0	0.0	0.0	-0.3
Balance as of 31 December 2024	0.0	-10.1	-8.1	-8.8	-1.8	0.0	-28.7
Net carrying amounts
As of 31 December 2023	0.0	2.9	4.1	4.5	0.5	7.1	19.1
As of 31 December 2024	0.0	2.1	3.5	6.8	0.2	6.0	18.6

4.2. Property, plant and equipment

The development of property, plant and equipment is as follows:

EUR million	Land and buildings	Right of use land and buildings	Technical equipment and machinery	Right of use technical equipment and machinery	Operating and office equipment	Right of use vehicles	Advance payments and assets under developmen t	Total
Historical cost
Balance as of 1 January 2023	31.1	17.4	43.3	6.0	2.6	1.2	9.5	111.1
Additions	1.4	24.5	4.8	3.3	0.1	0.2	4.8	39.1
Reclassifications	0.4	0.0	3.3	0.0	0.3	0.0	-4.0	0.0
Disposals	0.0	-0.3	-0.1	-0.1	-0.1	0.0	0.0	-0.7
Exchange rate differences	0.0	-1.1	-1.1	-0.2	0.0	0.0	-0.6	-3.0
Balance as of 31 December 2023	32.9	40.6	50.1	8.9	2.8	1.4	9.8	146.4
Balance as of 1 January 2024	32.9	40.6	50.1	8.9	2.8	1.4	9.8	146.4
Additions	0.3	1.1	4.5	0.6	0.1	0.1	6.9	13.6
Reclassifications	0.0	0.0	7.2	0.0	0.0	0.0	-7.2	0.0
Disposals	0.0	-0.6	0.0	-0.3	0.0	-0.1	-0.3	-1.3
Exchange rate differences	-0.2	1.7	0.8	0.1	0.0	0.0	0.3	2.7
Balance as of 31 December 2024	33.0	42.8	62.6	9.3	2.9	1.5	9.4	161.5
Cumulative amortization and impairment Balance as of 1 January 2023	-8.1	-9.8	-24.8	-5.0	-2.3	-1.0	0.1	-50.9
Amortization	-1.3	-2.7	-5.1	-1.1	-0.2	-0.2	0.0	-10.5
Impairments	0.0	0.1	0.0	0.0	0.0	0.0	0.0	0.1
Reclassifications	0.1	-0.1	0.0	0.0	0.0	0.0	0.0	0.0
Disposals	-0.4	0.0	0.4	0.1	0.0	0.0	0.0	0.1
Exchange rate differences	0.3	0.6	0.5	0.4	0.1	0.0	0.0	1.8
Balance as of 31 December 2023	-9.5	-11.9	-29.0	-5.6	-2.4	-1.2	0.1	-59.5
Balance as of 1 January 2024	-9.5	-11.9	-29.0	-5.6	-2.4	-1.2	0.1	-59.5
Amortization	-1.4	-3.5	-5.6	-1.0	-0.2	-0.2	0.0	-11.8
Impairment	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0
Reclassifications	0.1	-0.1	0.0	0.0	0.0	0.0	0.0	0.0
Disposals	0.0	-0.1	0.0	0.3	0.0	0.1	0.0	0.3
Exchange rate differences	0.0	-0.2	-0.3	-0.1	0.0	0.0	0.0	-0.5
Balance as of 31 December 2024	-10.8	-15.8	-34.8	-6.4	-2.6	-1.3	0.1	-71.6
Net carrying amounts
As of 31 December 2023	23.3	28.6	21.2	3.3	0.4	0.2	9.9	86.9
As of 31 December 2024	22.2	27.0	27.8	2.9	0.3	0.2	9.5	89.9

As part of the regular annual impairment test in accordance with IAS 36, STS Group tested the recoverable amount for several cash-generating units (CGUs) in the reporting year 2024 and in the previous year as a precautionary measure and due to the revised CGU definition (Europe, USA and Mexico as separate CGUs instead of a Plastics CGU) and did not identify any triggering events for any of these CGUs that would have required the recognition of an impairment loss.

4.3. Other non-current and current financial assets

Other non-current and current financial assets are as follows:

	December 31, 2024
EUR million	Non-current	Current	Total
Supplier bonuses	0.0	0.8	0.8
loas to affiliated companies	0.0	6.3	6.3
Security deposits	1.1	0.0	1.1
Receivable from factoring institution	0.0	1.9	1.9
Other financial assets	1.1	9.1	10.1

	December 31, 2023
EUR million	Non-current	Current	Total
Supplier bonuses	0.0	0.2	0.2
loas to affiliated companies	0.0	3.8	3.8
Security deposits	1.3	0.0	1.3
Receivable from factoring institution	0.0	2.1	2.1
Other financial assets	1.5	6.0	7.6

As of 31 December 2024 and 2023, receivables from factoring institutions comprised the institutions' security retentions against the STS Group from the purchased receivables.

4.4. Non-current and current income tax receivables

Current income tax receivables amounted to EUR 0.1 million as of 31 December 2024 (31 December 2023: EUR 1.4 million). As in the previous year, there were no non-current income tax receivables as of 31 December 2024.

4.5. Other non-current and current non-financial assets

		December 31, 2024
EUR million	Non-current	Current	Total
VAT receivables	0.0	2.6	2.6
Other tax refund claims	1.7	1.8	3.5
Prepaid expenses	0.0	1.6	1.6
Other non-financial assets	1.7	6.0	7.7

	December 31, 2023
EUR million	Non-current	Current	Total
VAT receivables	0.0	0.5	0.5
Other tax refund claims	0.0	3.2	3.2
Prepaid expenses	0.0	5.7	5.7
Other non-financial assets	0.0	9.3	9.3

4.6. Deferred tax assets and liabilities

Deferred tax assets and liabilities as of 31 December 2024 and 31 December 2023 break down as follows:

EUR million	Deferred taxes at the beginning of the year	Recognised in the income statement with an effect on profit or loss	Recognised in other comprehensiv e income	Closing balance of deferred taxes
Property, plant and equipment	0.4	0.0	0.0	0.4
Inventories	0.4	0.0	0.0	0.4
Trade receivables	0.1	0.2	0.0	0.3
Non-current liabilities from finance leases	0.3	0.0	0.0	0.3
Pension obligations	2.2	0.0	0.1	2.3
Current liabilities from finance leases	0.3	-0.1	0.0	0.2
Current provisions	0.2	0.1	0.0	0.3
Current other liabilities	0.9	0.7	0.0	1.6
Subtotal	4.8	0.9	0.1	5.8
Tax losses	1.5	-0.3	0.0	1.2
Other deferred taxes	0.0	0.1	0.0	0.1
Total	6.3	0.7	0.1	7.1
Netting of deferred tax assets	-2.5	-	-	-2.2
Total	3.8			4.9

Positive values correspond to deferred tax assets, negative values to deferred tax liabilities.

EUR million	Deferred taxes at the beginning of the year	Recognised in the income statement with an effect on profit or loss	Closing balance of deferred taxes
Other intangible assets	-0.4	0.2	-0.2
Property, plant and equipment	-1.9	0.1	-1.8
Non-current liabilities from finance leases	-0.1	0.0	-0.1
Trade payables	-0.1	0.0	-0.1
Subtotal	-2.5	0.3	-2.2
Total	-2.5	0.3	-2.2
Netting of deferred tax liabilities	2.5	-	2.2
Total	0.0		0.0

Positive values correspond to deferred tax assets, negative values to deferred tax liabilities.

In principle, companies that have sufficient taxable income in future periods must recognise deferred tax assets on deductible temporary differences and tax loss carryforwards in order to be able to utilise the tax benefits from temporary differences and loss carryforwards.

The recognised deferred tax assets of EUR 7.1 million are broken down into EUR 4.2 million of which non-current and EUR 2.9 million of which current. The recognised deferred tax liabilities of EUR 2.2 million are broken down into EUR 2.1 million of which non-current and EUR 0.1 million of which current. The breakdown into non-current and current deferred taxes is based on an estimated realisation period of up to 12 months (current) and more than 12 months (noncurrent).

Offsetting refers to the netting of deferred tax assets and liabilities within individual companies or tax groups, provided they relate to the same tax authorities.

Of the total tax loss carryforward of EUR 83.9 million (of which EUR 53.3 million for corporation tax and other comparable foreign taxes and EUR 30.6 million for trade tax) (2023: EUR 37.1 million), an amount of EUR 6.1 million (2023: EUR 6.5 million) is expected to be utilisable within a reasonable period. The underlying planning horizon is 5 years. Deferred tax assets of EUR 1.2 million (2023: EUR 1.5 million) were recognised in the amount of the expected usable tax loss carryforwards. The non-capitalised deferred tax assets for temporary differences and tax loss carryforwards amount to EUR 13.2 million (of which EUR 9.8 million for corporation tax and other comparable foreign taxes and EUR 3.4 million for trade tax) (2023: EUR 6.0 million).

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With regard to the change in ownership that took place in the 2021 financial year, tax assessments were issued in 2024 for the years 2021 and 2022, which show a loss carryforward of EUR 51.3 million (of which EUR 26.1 million for corporate income tax and EUR 25.2 million for trade tax) that is not tied to continuation in accordance with Section 8d KStG. Appeals are currently pending for the tax assessments for 2021 and 2022 in order to delimit the loss carryforward as at the date of the change of ownership. If the appeal is successful, the current loss carryforward of EUR 51.3 million should, as expected, be divided into EUR 44.2 million (of which EUR 22.2 million for corporation tax and EUR 22 million for trade tax) loss carryforward before the change of ownership and EUR 7.1 million loss carryforward after the change of ownership. The amount of a future loss carryforward subject to continuation remains to be seen until the final decision on the appeals.

Loss carryforwards in the amount of EUR 0.0 million (2023: EUR 0.0 million) will expire in the years 2024 to 2027 if they cannot be utilised through sufficient available taxable income.

As at 31 December 2024, deferred taxes of EUR 0.0 million (2023: EUR 0.0 million) from the measurement of the defined benefit obligation in accordance with IAS 19 were offset against equity and deferred taxes of EUR 0.1 million (2023: EUR 0.0 million) were recognised in other comprehensive income, resulting in a balance of EUR -0.1 million in other comprehensive income (2023: EUR 0.0 million). Deferred tax liabilities of EUR 0.8 million (2023: EUR 0.3 million) on taxable temporary differences of EUR 44.9 million (2023: EUR 20.6 million) for undistributed profits of the Group's subsidiaries were not recognised due to the existing control over the reversal of the temporary differences and the unlikelihood of their reversal in the foreseeable future in accordance with IAS 12.39.

4.7. Inventories and advance payments on inventories

Inventories break down as follows:

EUR million	2024	2023
Raw materials, consumables and supplies	12.8	12.0
Work in progress	5.8	20.6
Finished goods and goods for resale	4.4	4.9
Inventories	22.9	37.5
EUR million	2024	2023
Inventories	0.2	22.0

The valuation of inventories takes into account marketability, age and all recognisable price, quality and storage risks.

The acquisition or production costs of the individual inventories are determined on the basis of weighted average costs.

Of the work in progress and unfinished services, EUR 5.0 million (2023: EUR 19.4 million) and EUR 3.3 million (2023: EUR 2.4 million) of the finished goods are attributable to the Plastics segment, which realises the majority of its sales over time using the output method. The decline in work in progress is due to the completion and subsequent revenue recognition for customer tools in France.

In the financial year 2024, write-downs of inventories include the scrap in the amount of EUR 0.7 million (2023: 0.8 million) and are included in the cost of materials. This was offset in the cost of materials by write-ups of EUR 0.1 million (2023: 0.1 million) resulting from changed economic circumstances and an increase in net realisable values.

Advance payments on inventories totaled EUR 0.2 million as at the reporting date (2023: EUR 22.0 million). In the 2023 financial year, the prepayments shown were used for tool production at the US subsidiaries. The production of the tools was completed and sold in the 2024 reporting year, meaning that the prepayments recognised are declining sharply.

4.8. Contract assets and contract liabilities

The following table contains the closing balances of contract assets and contract liabilities from contracts with customers:

EUR million	December 31, 2024	December 31, 2023
Non-current contract assets	0.0	0.4
Current contract assets	3.6	0.9
Non-current contract liabilities	0.3	27.0
Current contract liabilities	1.6	21.6

In the financial years 2024 and 2023, no impairment losses were recognised on contract assets in accordance with IFRS 9. The change in contract assets in the current period is mainly due to changes in inventories from tooling production that meet the criteria for revenue recognition over time.

In the current reporting period, sales of EUR 46.7 million (2023: EUR 5.0 million) were realised from contracts with customers that were included in contract liabilities at the beginning of the period. This mainly relates to tooling sales in France and the USA. A total transaction price of EUR 1.9 million (2023: EUR 48.6 million) is allocated to the performance obligations that had not been fully or partially fulfilled at the end of the reporting period. The Group expects to realise these performance obligations in the amount of EUR 1.6 million (2023: EUR 21.6 million) in the subsequent period and in the amount of EUR 0.3 million (2023: EUR 27.0 million) in the following periods. The transaction prices stated are mainly prices for first-series moulds. In accordance with IFRS 15, the transaction price is not disclosed for performance obligations with a term of one year or less.

4.9. Trade receivables and other receivables other receivables

EUR million	December 31, 2024	December 31, 2023
Trade and other receivables before risk allowances	48.2	38.7
Less risk allowances – bucket 2	-0.1	-0.1
Less risk allowances – bucket 3	-1.0	-0.1
Trade and other receivables	47.1	38.4

Trade receivables and other receivables are non-interest-bearing and have a term of less than one year.

The Group recognises impairments for general credit risks using the expected loss model in accordance with IFRS 9.5.5. They are initially recognised in allowance accounts unless it can already be assumed when the reason for the impairment arises that the receivable will be fully or partially irrecoverable. In such cases, the carrying amount of the receivables is written off directly through profit or loss.

Please refer to section 6.8.2 for information on the calculation of impairments.

As in the previous year, there were no trade receivables measured at fair value through other comprehensive income as of 31 December 2024.

Changes in expected credit losses for trade receivables and other receivables

EUR million	2024	2023
Risk provisioning level 2 (as at 1 January)	0.1	0.1
Addition	0.0	0.0
Utilisation	0.0	0.0
Reversal	0.0	0.0
Currency translation and other effects	0.0	0.0
Risk provisioning level 2 (as at 31 December)	0.1	0.1
Risk provisioning level 3 (as at 1 January)	0.1	0.0
Addition	1.0	0.1
Utilisation	0.0	0.0
Reversal	-0.1	0.0
Currency translation and other effects	0.0	0.0
Risk provisioning level 3 (as at 31 December)	1.0	0.1

Transfer of trade receivables

As in the previous year, the Group sells trade receivables to factoring companies as part of non-recourse factoring. In the 2024 financial year, there are only genuine factoring agreements, while in the previous year the Group also reported non-genuine factoring agreements, although these were not utilised.

Sale of receivables as part of factoring with transfer of opportunities and risks

The Group has sold trade receivables with a carrying amount of EUR 32.7 million (2023: EUR 31.5 million) to third parties on the basis of factoring agreements, for which no significant opportunities and risks remain for the Group. These receivables were therefore derecognised in accordance with IFRS 9.3.2.6 (a). The Group recognised the factoring company's retention of security for the assigned receivables as other current financial assets as of 31 December 2024 in the amount of EUR 1.9 million (2023: EUR 2.1 million); these also represent the maximum risk of loss. Due to the short-term nature of the trade receivables sold and the advances received, the fair value approximates the carrying amount. In the event of late payment by the customer, the Group is exposed to a residual payment risk of EUR 0.0 million to the factoring company, similar to the previous year.

4.10. Cash and cash equivalents and restricted cash

Bank balances were not pledged as of 31 December 2024 or 31 December 2023.

Please refer to section 5.2.2 Financial risk management "Credit and default risk" for information on credit risks.

4.11. Equity capital

The individual components of equity and their development for the financial years 2024 and 2023 are presented in the consolidated statement of changes in equity.

4.11.1. Composition of the subscribed capital

As of 31 December 2024, the subscribed capital of STS Group AG totalled EUR 6.5 million (31 December 2023: EUR 6.5 million) and was divided into 6,500,000 (31 December 2023: 6,500,000 ) no-par value bearer shares with a notional interest in the share capital of EUR 1.00 per share. Pursuant to Section 5 (2) of the Articles of Association of STS Group AG, shareholders are not entitled to securitisation of their shares insofar as this is legally permissible and securitisation is not required in accordance with the rules of a stock exchange on which the shares are admitted to trading. STS Group AG is authorised to issue individual certificates or global certificates for the shares. Bearer shares do not have to be entered in a share register in accordance with Section 67 (1) of the German Stock Corporation Act (AktG).

All shares carry the same rights and obligations. Only the shares held by the company itself do not give rise to any rights. The rights and obligations of shareholders are set out in detail in the provisions of the German Stock Corporation Act (AktG), in particular Sections 12, 53a ff., 118 ff. and 186 AktG.

All shares are fully paid as at the balance sheet date.

As of 31 December 2024, the company held 50,000 shares in treasury (31 December 2023: 50,000.

4.11.2. Change in subscribed capital

There were no changes in subscribed capital in the reporting period.

After expiry of the authorisation period on 2 May 2023 for the Authorised Capital 2018/I resolved on 3 May 2018, the Executive Board is authorised by resolution of the Annual General Meeting on 7 July 2023, with the approval of the Supervisory Board, to increase the share capital by up to EUR 3.25 million once or several times until the end of five years, calculated from the date of entry of this authorised capital in the commercial register, by issuing up to 3.250,000 new no-par value bearer shares in return for cash and/or non-cash contributions ("Authorised Capital 2023/I"). EUR 3.25 million on one or more occasions by issuing up to 3,250,000 new no-par value bearer shares against cash and/or non-cash contributions ("Authorised Capital 2023/I").

Restrictions relating to voting rights or the transfer of shares

The company's shares are freely transferable in accordance with the statutory regulations for the transfer of bearer shares and there are no restrictions on transferability.

4.11.3. Shareholdings exceeding 10% of the voting rights

As of 31 December 2024, the following direct and indirect shareholdings in the capital of STS Group AG exceeded the threshold of 10 % of voting rights The largest shareholder of STS Group AG, Adler Pelzer Holding GmbH, based in Hagen (Germany), last announced on 2 July 2021 that it held the majority of voting rights in STS Group AG. Beyond this, STS Group AG has not been notified of any direct or indirect shareholdings in the company's capital that reach or exceed 10 % of the voting rights and is not otherwise aware of any such shareholdings.

4.11.4. Shares with special rights that confer powers of control

No shares with special rights conferring powers of control were issued.

4.11.5. Control of voting rights in the case of employee participation

There were no active employee share ownership programs as of 31 December 2024. Insofar as STS Group AG has issued or issues shares to employees as part of employee share ownership programs, these are generally transferred directly to the employees. The beneficiary employees can exercise the control rights to which they are entitled from the employee shares directly like other shareholders in accordance with the statutory provisions and the provisions of the Articles of Association.

4.11.6. Appointment and dismissal of members of the Executive Board; amendment of the Articles of Association

Any amendment to the Articles of Association requires a resolution by the Annual General Meeting in accordance with Sections 119 (1) No. 5 and 179 AktG. The authorisation to amend the Articles of Association, which only concern the wording, has been transferred to the Supervisory Board in accordance with Section 179 (1) sentence 2 AktG in conjunction with Section 12 (4) of the Articles of Association of STS Group AG. In addition, the Supervisory Board was authorised by resolution of the Annual General Meeting on 3 May 2018 to amend Section 4 (3) of the Articles of Association in accordance with the respective utilisation of Contingent Capital 2018/I and after the expiry of all option and conversion periods. In addition, the Supervisory Board was authorised by resolution of the Annual General Meeting on 7 July 2023 to amend Section 4 (5) of the Articles of Association following the full or partial implementation of the increase in share capital from Authorised Capital 2023/I or following the expiry of the authorisation period in accordance with the extent to which Authorised Capital 2023/I has been utilised up to that point.

4.11.7. Authorisation of the Management Board to issue or buy back shares

a) Authorised capital 2023/I

By resolution of the Annual General Meeting on 7 July 2023, the Executive Board is authorised, with the approval of the Supervisory Board, to increase the share capital by up to EUR 3.25 million on one or more occasions by issuing up to 3,250,000 new no-par value bearer shares against cash and/or non-cash contributions for a period of five years from the date on which this authorised capital is entered in the commercial register ("Authorised Capital 2023/I").

(i) for fractional amounts;

(iv) insofar as this is necessary with regard to dilution protection in order to grant the holders or creditors of bonds with warrants and/or convertible bonds that are or were issued by the company or its subsidiaries as part of an authorisation granted to the Management Board by the Annual General Meeting a subscription right to the extent to which they would be entitled after exercising option and/or conversion rights or after fulfilling option and/or conversion obligations;

(v) to service option and/or conversion rights or option and/or conversion obligations from bonds with warrants and/or convertible bonds issued by the company;

(vi) in the case of cooperation with another company, if the cooperation serves the interests of the company and the cooperating company requests a participation;

(vii) to be able to issue shares to members of the Executive Board and employees of the company as well as to members of the management and employees of companies affiliated with the company to fulfil a share option programme or other employee participation programme. The new shares can also be issued to an intermediary or an equivalent company, which takes over these shares with the obligation to pass them on exclusively to the beneficiaries.

Further details can be found in Section 4 (4) of the Articles of Association of STS Group AG.

b) Conditional capital 2018/I

No convertible bonds, bonds with warrants, profit participation rights and/or participating bonds were issued before the authorisation period expired on 2 May 2023 and, accordingly, no creditors or holders of bonds were granted conversion or option rights to shares.

In accordance with Section 4 (3) of the company's Articles of Association, the Supervisory Board is authorised to amend Section 4 (3) of the company's Articles of Association in line with the respective utilisation of Contingent Capital 2018/I and after the expiry of all option and conversion periods. In view of the expiry of the authorisation period and based on the authorisation of the Supervisory Board, the Supervisory Board will adopt a corresponding resolution in the 2025 financial year to delete Section 4 (3) of the Articles of Association.

c) Conditional capital 2018/II

By resolution of the Annual General Meeting on 3 May 2018, the company's share capital is conditionally increased by up to EUR 500,000.00 by issuing up to 500,000 new no-par value bearer shares with a pro rata amount of the company's share capital of EUR 1.00 per no-par value share ("Conditional Capital 2018/II"). Conditional Capital 2018/II will only be implemented to the extent that subscription rights have been issued in accordance with the 2018 share option programme in accordance with the resolution of the Annual General Meeting on 3 May 2018, the holders of the subscription rights exercise their subscription rights and the company does not grant any treasury shares to fulfil the subscription rights.

The total volume of subscription rights is distributed among the authorised groups of persons as follows:

Members of the Executive Board receive a maximum total of up to 200,000 subscription rights
Members of the management of affiliated companies receive a maximum total of up to 100,000 subscription rights
Employees of the company receive a maximum total of up to 150,000 subscription rights
Employees of affiliated companies receive a maximum total of up to 50,000 subscription rights.

Further details can be found in the authorisation resolution and in Section 4 (4) of the Articles of Association of STS Group AG.

d) SHARE repurchase

The Executive Board of STS Group AG is authorised to buy back treasury shares and to sell repurchased shares in the cases regulated by law in Section 71 AktG. By resolution dated 3 May 2018, the Annual General Meeting authorised the Executive Board, with the approval of the Supervisory Board, to acquire treasury shares in the company until the end of 2 May 2023 up to a total of 10 % of the company's share capital existing at the time of the resolution or - if this value is lower - at the time the authorisation is exercised. The shares acquired on the basis of this authorisation, together with other treasury shares of the company that the company has acquired and still holds or are attributable to it in accordance with Sections 71a et seq. of the German Stock Corporation Act (AktG), may not exceed 10% of the company's share capital at any time. At the discretion of the Management Board, treasury shares may be acquired via the stock exchange or by means of a public purchase offer addressed to all shareholders or by means of a public invitation to shareholders to submit offers to sell.

(i) They may be cancelled and the share capital of the company may be reduced by the portion of the share capital attributable to the cancelled shares.

(ii) They may be offered and transferred to third parties in return for contributions in kind.

Further details can be found in the authorisation resolution.

By resolution of the Annual General Meeting on 3 May 2018, the Management Board was also authorised, with the approval of the Supervisory Board, to acquire treasury shares up to a total of 5 % of the share capital existing at the time of the resolution by using derivatives (put or call options or a combination of both). The term of the options must be selected in such a way that the shares are acquired by exercising the options on 2 May 2023 at the latest. The shareholders are not entitled to conclude such option transactions with the company in accordance with Section 186 para. 3 sentence 4 AktG. Further details can be found in the authorisation resolution.

4.11.8. Capital reserve

As of 31 December 2024, the capital reserve amounted to EUR 5.4 million (2023: EUR 5.4 million). It is used to recognise additional payments by shareholders into equity.

There was no change in the reporting year.

4.11.9. Retained earnings

Retained earnings as at 31 December 2024 amounted to EUR 33.4 million (2023: EUR 34.3 million). The decrease is mainly due to the consolidated net profit for the current reporting period. For the 2024 financial year, the company plans to pay out the "statutory minimum dividend" of four per cent of the share capital less uncalled capital contributions, derived from Section 254 AktG (2023: EUR 0.3 million). The revenue reserve is used to retain profits after allocation from the net profit for the year.

4.11.10. Other equity components

Other equity components include actuarial gains and losses for pension obligations and the foreign currency translation reserve. The development in the 2024 financial year and 2023 is presented in total in the consolidated statement of changes in equity.

Compared to the previous year, there was a change in the difference from currency translation from EUR 0.3 million as at the 2023 reporting date to EUR - 0.2 million as at the 2024 reporting date. The difference is mainly due to foreign currency effects in BU Plastics.

4.12. Non-current and current financial liabilities

Non-current and current financial liabilities are as follows:

EUR million	December 31, 2024
	Non-current	Current	Total
Liabilities from leases	27.7	4.9	32.6
Liabilities to banks	11.1	14.2	25.3
Liabilities from loans from related companies	9.2	9.6	18.8
Other financial liabilities	4.2	0.1	4.3
Financial liabilities	52.2	28.9	81.1

	December 31, 2023
EUR million	Non-current	Current	Total
Liabilities from leases	28.2	4.9	33.1
Liabilities to banks	10.6	15.1	25.7
Liabilities from loans from related companies	9.8	0.0	9.8
Other financial liabilities	5.0	0.0	5.1
Financial liabilities	53.6	20.1	73.7

4.12.1. Leasing liabilities

Please refer to section 5.2.2 for information on the due date of outstanding payments from leases.

4.12.2. Liabilities to banks

Liabilities to banks decreased from EUR 25.7 million to EUR 25.3 million.

No loan covenants were breached in the 2024 reporting year (2023: two loans). In total, the carrying amounts of the loans with breached covenants amount to EUR 0.0 million (2023: EUR 0.6 million). The loans for which covenants have been defined are already defined as current due to their contractual terms, which end in 2025. The same covenants apply to all loans. The first clause requires that equity as at the balance sheet date is not less than 90 % of equity as of 31 December 2017. The second clause defines that the ratio of equity to debt must be at least 1 and the third clause stipulates that net financial liabilities may not exceed the value of net assets by a factor of 2

For the reporting year, the covenant breaches did not result in any indicators that would lead to a departure from the going concern premise. As of 31 December 2023, the carrying amounts of the loans concerned were EUR 0.2 million, which would not lead to a liquidity shortfall even if the corresponding residual debt were repaid immediately.

4.12.3. Liabilities from loans from third parties

No liabilities from loans from third parties were recognised in the 2024 financial year. Loans from related parties totaling EUR 18.8 million (2023: EUR 9.8 million) are reported for the reporting year, which were issued by the main shareholder Adler Pelzer Holding GmbH and its subsidiary HP Pelzer Automotive System Inc.

4.12.4. Other financial liabilities

In the 2024 reporting year, there are other financial liabilities in the amount of EUR 4.3 million (2023: EUR 5.1 million), which mainly consist of liabilities to a third party for machines supplied, for which a corresponding promissory note was issued.

4.12.5. Pledges

The following amounts were pledged in relation to bank and third-party loans:

EUR million	December 31, 2024	December 31, 2023
Property, plant and equipment	3.8	8.1
Pledged assets	3.8	8.1

EUR 3.8 million (2023: EUR 3.4 million) of the pledged amounts are attributable to BU China. The pledged property, plant and equipment in the China segment consists of land and buildings totaling EUR 3.8 million as collateral for bank loans. In the event of default on the loans, the bank has the right to sell them. In the event of an unauthorised sale of the land and buildings, the bank can demand between 10 % and 30 % of the remaining debt as a penalty payment. The liens expire in December 2025.

4.13. Provisions

The provisions are made up as follows:

EUR million	2024	2023
Provisions for pensions and similar obligations	9.4	9.2
Other provisions	0.9	0.9
Provisions	10.3	10.0

4.13.1. Pensions and similar obligations

Defined benefit plans

The provision for pensions and similar obligations is based on country-specific legal obligations in France and Mexico. These are primarily based on the remuneration and length of service of the employees. In the case of France and Mexico, these are one-off payments on retirement of the employee. The plans are defined as defined benefit plans in both countries. These are unfunded plans whose obligations are fulfilled by the company itself as soon as they fall due.

The provision for pensions and similar obligations is calculated in accordance with IAS 19 using the projected unit credit method for defined benefit plans. The calculation is based on actuarial reports as of 31 December 2024.

The following table shows the development of the defined benefit obligation (DBO) as of 31 December 2024.

EUR million	2024	2023
DBO as of January 1	9.1	10.5
Effect of change in accounting policy	0.0	0.0
Service cost	0.2	-1.1
current service costs	0.4	0.5
gains (-) / losses (+) from plan amendments	-0.2	-1.6
Interest expenses	0.3	0.4
Actuarial gains (+) / losses (-)	0.4	0.1
from changes in experience assumptions	0.2	0.3
from changes in demographic assumptions	-0.2	0.0
from changes in financial assumptions	0.4	-0.1
Benefits paid	-0.8	-0.8
Change in scope of consolidation	0.0	0.0
DBO as of December 31	9.3	9.1

The high gains from plan amendments/curtailments in the 2023 financial year relate firstly to a plan amendment in France due to an amended works agreement and secondly to employees who left the company before the start of their pension and therefore lost their subscription rights. There was no such change in the 2024 reporting year.

The amounts recognised in the consolidated income statement and in other comprehensive income are as follows:

EUR million	2024	2023
Service cost	0.2	-1.1
current service costs	0.4	0.5
gains (-) / losses (+) from plan amendments	-0.2	-1.6
Interest expenses	0.3	0.4
Total amount recognized in the statement of profit or loss	0.5	-0.8
Actuarial gains (-) / losses (+)	0.4	0.1
Tax effects	0.0	0.0
Total amount recognized in other comprehensive income	0.4	0.1

The interest expense is recognised in the expenses for discounting provisions within financial expenses.

Actuarial assumptions

Pension obligations are measured on the basis of actuarial assumptions using the following key measurement parameters:

Plans France			Plans Mexico
in %	2024	2023	2024	2023
Discount rate	3.25%	3.80%	11.25%	9.25%
Salary trend	2.50%	2.50%	4.50%	4.50%
Pension trend	n/a	n/a	n/a	n/a

With regard to life expectancy in France, the tables of the Institut national de la statistique et des études économiques ("INSEE") 2018 - 2020 and in Mexico the tables Experiencia Mexicana del Seguro Social para Activos ("EMSSA") 2022 are used.

Sensitivity analysis

The following tables show the effects on the DBO of changes to the key actuarial assumptions. In each case, the effect on the DBO of a change in an assumption is shown, while the other assumptions remain unchanged compared to the original calculation. Consequently, correlation effects between the assumptions are not taken into account. The change in the DBO shown only applies to the specific size of the change in the individual assumptions. A linear effect on the defined benefit obligation cannot be assumed if the assumptions change by a different amount.

		Plans France		Plans Mexico
EUR million		31.12.2024	31.12.2023	31.12.2024	31.12.2023
DBO as of reporting date		9.0	8.8	0.4	0.4
Discount rate	+50bp	8.6	8.4	0.4	0.4
	-50bp	9.4	9.2	0.4	0.5
Salary trend	+50bp	9.4	9.2	n/a	n/a
	-50bp	8.6	8.4	n/a	n/a
Pension trend	+25bp	n/a	n/a	n/a	n/a
	-25bp	n/a	n/a	n/a	n/a
Life expectancy	+1 year	8.9	8.8	n/a	n/a
	-1 year	9.0	8.9	n/a	n/a

When calculating the effects on the defined benefit obligation, the same calculation method was used as for the calculation of pension provisions as of 31 December 2024.

Expected pension payments

The following table shows the expected pension payments for the next five years:

EUR million	2024	2023
within 1 year	0.4	0.4
between 1 and 2 years	0.3	0.4
between 2 and 3 years	0.8	0.5
between 3 and 4 years	1.1	0.9
between 4 and 5 years	0.9	1.1

The average term of the pension obligation as of 31 December 2024 is 8.6 years (2023: 10.6 years).

Defined contribution plans

There are also defined contribution plans for employees in Germany and France as part of statutory pension insurance schemes. The expenses totaling EUR 2.2 million (2023: EUR 2.1 million) recognised in the consolidated income statement represent the Group's contributions due to these pension plans.

4.13.2. Other provisions

Other provisions are broken down as follows:

EUR million	Jubilee benefits	Other	Total
Balance as of 1 January 2024	0.7	0.1	0.8
current	0.0	0.1	0.1
non-current	0.7	0.0	0.7
Exchange rate differences	0.0	-0.1	-0.1
Provisions made during the year	0.0	0.2	0.2
Stand zum 31. Dezember 2024	0.7	0.2	0.9
current	0.0	0.2	0.2
non-current	0.7	0.0	0.7

The provisions for long-service awards relate to France and are recognised in accordance with the employees' length of service to date; they are not discounted. The provision is recognised on the basis of the current number of employees and future entitlements to payments. The values determined are based on expert opinions that apply recognised actuarial principles using the projected unit credit method (PUC method), a fluctuation rate of 0.0 % to 5.0 % depending on age and the INSEE 2018-2020 mortality tables as the biometric calculation basis.

4.14. Income tax liabilities

As of 31 December 2024, income tax liabilities amounted to EUR 5.2 million (31 December 2023: EUR 4.5 million).

The EUR 5.2 million includes a risk provision for potential income taxes totaling EUR 3.7 million. The underlying matter relates to the recognition of tax deductions in the context of an asset transfer, the declaration of which has not yet been taken up by the tax authorities. An objection before the statute of limitations expires is still considered likely at the time of preparation, which is why the potentially objectionable tax amount is recognised as a liability.

4.15. Other current liabilities

Other current liabilities are broken down as follows:

EUR million	2024	2023
Employee related liabilities	11.1	10.4
Social security	5.7	6.8
VAT liabilities	1.5	1.6
Liabilities from payroll and church taxes	0.1	0.2
Miscellaneous other liabilities	1.4	1.5
Other levies	0.2	0.3
Advance payments received on orders	0.2	0.0
Accruals and deferred income	0.2	1.2
Other non-financial liabilities	20.2	21.9

Liabilities to employees mainly relate to holiday provisions and provisions for overtime totaling EUR 5.8 million (2023: EUR 5.1 million) and variable remuneration of EUR 3.1 million (2023: EUR 2.8 million).

5. Other information

5.1. Notes to the cash flow statement

The development of financial liabilities, broken down into cash and non-cash components, is as follows:

The following table shows the financial liabilities:

FOR THE FINANCIAL YEAR FROM 1 JANUARY TO 31 DECEMBER 2023

		Cash-effective		Not-cash-effective
Finance liabilities	2022	Incoming payments	Payouts	Additions and other*	Exchange rate effects	2023
Liabilites to banks	25.8	13.3	-15.2	2.6	-0.9	25.7
Liabilities from leases	9.6	0.0	-3.8	27.9	-0.5	33.1
Loans from affiliated companies	1.0	9.0	-0.2	0.0	0.0	9.8
Third party loans and other financial liabilities	0.0	0.0	0.0	5.2	-0.1	5.1
Liabilities from factoring	0.0	0.0	0.0	0.3	0.0	0.3
Total financial liabilities	36.4	22.3	-19.2	35.4	-1.5	73.4
*Additions and other include interest payments.

FOR THE FINANCIAL YEAR FROM 1 JANUARY TO 31 DECEMBER 2024

		Cash-effective			Not-cash-effective
Finance liabilities	2023	Incoming payments	Payouts	Additions and other*	Exchange rate effects	2024
Liabilites to banks	25.7	2.8	-3.9	0.0	0.7	25.3
Liabilities from leases	33.1	0.0	-4.6	2.5	1.6	32.6
Loans from affiliated companies	9.8	9.2	-0.5	0.0	0.3	18.8
Third party loans and other financial liabilities	5.1	0.0	-1.1	0.0	0.3	4.3
Liabilities from factoring	0.3	0.0	0.0	0.0	0.0	0.3
Total financial liabilities	73.4	12.0	-10.1	2.5	2.9	80.7
*Additions and other include interest payments.

The increase in financial liabilities was mainly due to the increase in loans to related parties. See section 5.5.

Cash and cash equivalents fell from EUR 39.3 million to EUR 25.6 million in the 2024 reporting year.

Net financial liabilities are calculated as liabilities to banks plus liabilities from loans, lease liabilities and loans from third parties (see table above) less cash and cash equivalents (EUR 25.6 million) and loans issued to related parties (EUR 6.3 million).

Net financial debt increased to EUR 48.8 million in the 2024 financial year (2023: EUR 30.3 million). Compared to the same period of the previous year, the calculation also includes liabilities to third parties and others as well as loans granted to related parties. Further information on financial liabilities can be found in section 4.12.

5.2. Further disclosures on financial instruments and financial risk management

5.2.1. Financial instruments

A breakdown of the financial assets and liabilities according to the IFRS 9 measurement categories as of 31 December 2024 and 31 December 2023 is shown below:

BOOK VALUES BY CATEGORY

		December 31,
EUR million	Category	2024
Financial assets at cost	AC	81.7
Financial liabilities at cost	FLAC	115.5

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	Category according to IFRS 9	Carrying amount	Valuation according to IFRS 9			Valuation according to IFRS 16	Fair value
EUR million		December 31, 2023	Amortized costs	Fair value OCI	Fair Value PL		December 31, 2023	Hierachy
Financial assets by category
Other non-current financial assets		1.5	1.3				1.3
Security deposits	AC	1.3	1.3				1.3	Stufe 3
Securities	AC	0.0					0.0	Stufe 3
Current financial assets
Trade and other receivables	AC	38.4	38.4				38.4
Trade and other receivables	FVOCI	0.0		0.0			0.0	Stufe 2
Other current financial assets		6.0	5.9				5.9
Creditors with debit balances	AC	0.0	0.0				0.0
Receivables from factorer	AC	2.1	2.1				2.1
Loans to affiliated companies	AC	3.8	3.8				3.8
Other financial assets	AC	0.1	0.1				0.1
Cash and cash equivalents	AC	39.3	39.3				39.3
Restricted cash	AC	0.0	0.0				0.0
non-current financial liabilities
Liabilities to banks	FLAC	10.6	10.6				8.7	Stufe 3
Third party loans	FLAC	0.0	0.0				0.0	Stufe 3
Liabilities from leases		28.2				28.2	28.2
Liabilities from loans from affiliated companies	FLAC	9.8	9.8				9.8	Stufe 3
Other financial liabilities	FLAC	0.2	0.2				0.2	Stufe 3
Miscellaneous		0.2	0.2				0.2	Stufe 3
Derivate instruments	FLFVPL	0.0	0.0		0.0		0.0	Stufe 2
Trade and other payables	FLAC	0.0	0.0				0.0
current financial liabilities
Liabilities to banks	FLAC	15.1	15.1				15.2	Stufe 3
Liabilities from factoring	FLAC	0.0	0.0				0.0
Third party loans	FLAC	0.0	0.0				0.0	Stufe 3
Liabilities from leases		4.9				4.9	4.9
Liabilities from loans from affiliated companies	FLAC	0.0	0.0				0.0
Other financial liabilities		0.0	0.0				0.0
Other financial liabilities	FLAC	0.0	0.0				0.0
Liabilities from loans from related parties	FLAC	0.0	0.0				0.0	Stufe 3
Trade and other payables	FLAC	61.2	61.2				61.2

BOOK VALUES BY CATEGORY

Category	December 31, 2023
AC	85.0
FLAC	96.9

The three levels for determining the fair value of financial instruments are described in the section 6.2 Fair value measurement in accordance with IFRS 13. The fair value of financial instruments is calculated based on current parameters such as interest and exchange rates on the balance sheet date and by using accepted models such as the discounted cash flow (DCF) method and taking into account the credit risk. The market values for derivatives are determined on the basis of bank valuation models. As in the previous year, there were no derivatives in the portfolio as of 31 December 2024.

There were no transfers between the fair value levels in the reporting period or in the comparative period.

For financial instruments with short-term maturity, the carrying amount represents a reasonable approximation of the fair value.

Page |120

The net gains or losses of the individual categories in accordance with IFRS 7.20 are as follows:

EUR million	2024	2023
from financial assets at amortized costs	-0.3	-0.2
from financial liabilities at amortized costs	-4.1	-1.7
from financial assets at fair value through OCI (debt instruments)	-2.0	-2.3
Total	-6.4	-4.2

The net gains and net losses from financial instruments generally arise from changes in the fair value of financial instruments measured at fair value through profit or loss, expenses and income for expected credit losses for assets measured at amortised cost, expenses for interest for financial liabilities measured at amortised cost and from expenses and income for expected credit losses as well as expenses for interest from financial assets measured at fair value through other comprehensive income (debt instruments). The expenses for interest from financial assets measured at fair value through other comprehensive income (debt instruments) totaling EUR 2.0 million (2023: EUR 2.3 million) relate to interest expenses from the Group's "genuine" factoring. See also section 4.9.

The net losses in the 2024 financial year are mainly attributable to expenses for interest on financial liabilities totaling EUR 3.6 million (previous year: EUR 1.9 million).

The unnetted total interest income and expenses are as follows:

EUR million	2024	2023
Financial assets measured at amortised cost	0.5	0.2
Financial assets measured at fair value through other comprehensive income (without recycling)	-2.0	-2.3
Financial liabilities not measured at fair value through profit or loss	-4.1	-1.7

Please refer to section 4.12.5 for information on assets pledged in connection with financial liabilities. There was no collateral received as at the balance sheet date.

5.2.2. Financial risk management

The Group's management monitors and controls the financial risks associated with the Group's business areas with the help of internal risk reporting, which analyses risks by degree and extent. These risks include credit, liquidity and market price risks (currency and interest rate risks).

In a few cases, the Group minimises the effects of these risks by using derivative financial instruments. There were no derivative financial instruments as at the balance sheet date, as there are currently only very low currency and interest rate exposures. In addition, there are guidelines for the management of the currency, interest rate and default risks. In addition, basic rules have been defined for the execution of derivative and non-derivative financial transactions and for the investment of surplus liquidity. Compliance with the guidelines and risk limits is monitored on an ongoing basis. The Group does not contract or trade financial instruments, including derivative financial instruments, for speculative purposes.

Credit and default risk

Credit risks exist in particular with regard to trade receivables and other receivables, including cash investments. Credit risks are monitored, particularly in the area of trade receivables, by regularly analysing receivables due and collecting up-to-date information on customers' individual creditworthiness. These risks are limited by setting limits and continuously monitoring individual receivables. There are no particular credit risks for customers. Risks arising from the deterioration of customers' solvency and creditworthiness are already actively countered and are monitored on an ongoing basis. There have been no major defaults on receivables in the past. Details on the concentration of sales can be found in section 1 Segment reporting.

To apply the expected credit loss model in accordance with IFRS 9.5.5, the Group uses the general approach for bank balances and financial assets and the simplified approach for trade receivables and contract assets. For this purpose, probabilities of default are determined for individual customers or customer groups. These are based either on individual external rating information of the customer or the customer group to which a corresponding probability of default is assigned. No other forward-looking elements are taken into account. To determine the expected credit losses, the loss given default is also recognised in addition to the probability of default. The Group generally measures this at a value of 100 %, which in the Group's experience corresponds to the default amount.

Based on the risk classifications, the gross carrying amounts per rating class are shown below:

Gross book value of financial assets per default risk rating class as of December 31, 2024

	as of December 31, 2024

EUR million	Trade and other receivables	Contract assets	Other financial assets	Cash and cash equivalents and restricted cash
Rating level
Rating level I	44.1	3.6	10.1	4.2
Rating level II	0.1	0.0	0.0	21.5
Rating level III	3.1	0.0	0.0	0.0
Total	47.2	3.6	10.1	25.6

Gross book value of financial assets per default risk rating class as of December 31, 2023

EUR million	Trade and other receivables	Contract assets	Other financial assets	Cash and cash equivalents and restricted cash
Rating level
Rating level I	35.6	1.3	7.4	6.5
Rating level II	0.0	0.0	0.0	32.9
Rating level III	3.0	0.0	0.0	0.0
Total	38.6	1.3	7.4	39.3

The rating classifications are based both on an individually assigned probability of default and a risk classification for individual customer groups with a comparable risk structure. The following table shows the probabilities of default or rating classes assigned to the individual rating levels:

	Default rates in %	Rating
Rating level
Rating level I	0,0 – 0,0286	AAA - AA
Rating level II	0,0286 – 0,52	A - BBB
Rating level III	0,52 –100	BB - D

The valuation allowances for trade receivables have changed as shown in section 4.9. All assets shown, with the exception of trade receivables and contract assets, are allocated to the first stage of the general impairment model.

For all other assets subject to the impairment model in accordance with IFRS 9.5.5, there were no significant expected credit losses.

The maximum default risk of the recognised assets corresponds to their carrying amount.

Liquidity and financing risk

Liquidity risk comprises the following risks:

Not being able to fulfil potential payment obligations at the time they fall due.
Not being able to procure sufficient liquidity at the expected conditions if required

(refinancing risk).

▪ The risk of not being able to cancel, extend or close out transactions due to marketrelated inadequacies or market disruptions, or only at a loss or at excessive cost (market liquidity risk).

Prudent liquidity management includes maintaining a sufficient reserve of cash and cash equivalents as well as the possibility of financing through committed credit lines. Due to the dynamic nature of the business environment in which the Group operates, the Group's finance department aims to maintain the necessary flexibility in financing by maintaining sufficient unutilised credit lines and factoring options.

In principle, the STS Group continuously analyses all relevant risks for business development and the liquidity and financing risk in order to be able to initiate any necessary measures at short notice.

The 2024 financial year was characterised by ongoing geopolitical tensions, a still relatively weak global economy and declining commercial vehicle markets. Although major central banks began to ease monetary policy in the second half of the year, this did not result in a noticeable economic upturn. In Europe in particular, economic development was burdened by the ongoing effects of the war in Ukraine. Nevertheless, the additional sales contributions from the new US plant allowed the STS Group to continue to grow. The STS Group has so far been able to cope well with the energy risks since the outbreak of the war in Ukraine and also as a result of the energy transition, particularly in Europe. Conditions on the materials procurement and energy markets in China and North America have remained stable to date and continue to give no cause for concern. The availability of required raw materials or components continues to be monitored. The STS Group counters procurement and supply risks at the production sites through largely local sourcing. The customs policy of the new US government or a further escalation of geopolitical conflicts, such as the war in Ukraine, could nevertheless have a negative impact on both material prices and customer demand and thus adversely affect the STS Group's liquidity situation.

However, as in the previous period, there is no material uncertainty in the reporting period that raises significant doubts about the company's ability to continue as a going concern and represents a going concern risk.

For the assessment of the going concern premise, unlikely scenarios were also considered in which it would have been conceivable or necessary to abandon the going concern premise as a result. These essentially include massive energy price increases and the resulting uncompetitive supply prices. In addition, a further escalation of the Russia/Ukraine war and the Middle East conflict, with potentially far-reaching effects on the global economy, was taken into consideration. The unforeseen default of significant receivables items and a comprehensive and unforeseen default on external financing should also be mentioned.

Irrespective of this, STS Group AG is part of the Adler Pelzer Holding GmbH Group and is currently supported by it in terms of liquidity and financing.

However, in its assessment, the management came to the conclusion that such scenarios regarding a departure from the going concern premise are very unlikely and that there is no foreseeable threat to the company as a going concern. If, contrary to expectations, a negative scenario were to materialise, this would have a significant impact on the Group's net assets, financial position and results of operations. In general, the ability to forecast is currently characterised by the current high level of uncertainty and is therefore limited.

The risk from contractually agreed cash flows for financial liabilities is also presented below:

	December 31, 2024
EUR million	Due within one year	Due in one to five years	Due in over five years	Total
Cash outflows from non-derivative financial liabilities	101.0	33.9	24.3	159.2
Leasing liabilities	4.9	6.6	20.8	32.3
Other non-derivative financial liabilities Total	96.0 101.0	27.4 33.9	3.5 24.3	126.9 159.2

	December 31, 2023
EUR million	Due within one year	Due in one to five years	Due in over five years	Total
Cash outflows from non-derivative financial liabilities	81.3	18.7	20.8	120.7
Leasing liabilities	4.9	3.1	20.8	28.8
Other non-derivative financial liabilities	76.3	15.6	0.0	91.9
Total	81.3	18.7	20.8	120.7

Market price risk

The Group's activities expose it to only minor financial risks from changes in exchange rates and interest rates. It selectively concludes derivative financial instruments in order to manage its existing interest and exchange rate risks. As at the balance sheet date, there were no corresponding derivatives in the portfolio due to the low existing risks.

Exchange rate risk

The Group's operating business is subject to minor exchange rate risks against the euro and the US dollar from both sales and procurement transactions.

The effects on earnings before taxes in the event of changes in exchange rates against the euro are as follows:

		10% revaluation of the foreign currency		10% Devaluation of the foreign currency
EUR million	2024	2023	2024	2023
USD	0.5	0.5	-0.5	-0.5
CNY	0.1	0.0	-0.1	0.0
Total	0.6	0.5	-0.6	-0.5

The existing risk positions are monitored on an ongoing basis and minimised by offsetting existing foreign currency cash flows. Due to the low currency exposure, there is currently no active currency risk management through the use of derivative financial instruments.

Interest rate risk

The Group is exposed to interest rate risk from variable-interest loans as well as interest rate risk for fixed-interest loans at the time of refinancing. The majority of the loans have fixed interest rates.

EUR million	December 31, 2024	December 31, 2023
Carrying amount of fixed-interest loans	36.3	20.8
Carrying amount of floating rate loans	7.6	12.6
Total	43.9	33.4

The variable-interest loans are based on the 1-month, 3-month and 6-month EURIBOR and in some cases provide for floors at 0.0 %.

The development of interest rates and possible expiring loans are continuously monitored by the management. Depending on the individual case, it concludes transactions to minimise the risk position if necessary. Due to the low exposure, no active interest rate risk management is currently carried out through the use of derivative financial instruments.

There is also an interest rate risk from the receivables sold as part of "genuine" factoring but still outstanding, which are subject to variable interest rates.

Changes in interest rates would have had the following effects on earnings before taxes:

	2024		2023
EUR million	-100bp	+100bp	-100bp	+100bp
Effect on profit before tax	0.4	-0.4	0.2	-0.2

5.3. Capital management

The Group's objectives with regard to capital management are, on the one hand, to ensure the company's ability to continue as a going concern in order to continue to provide shareholders with income and other interested parties with the services to which they are entitled and, on the other hand, to maintain an optimal capital structure in order to reduce the cost of capital. In order to maintain or change the capital structure, the Group adjusts dividend payments to shareholders as required, makes capital repayments to shareholders or sells assets in order to repay liabilities.

	December 31, 2024		December 31, 2023
	in Mio. EUR	in %	in Mio. EUR	in %
Equity	45.0	23.3	46.6	25.7
Current financial liabilities	96.0	49.7	81.3	44.8
Non-current financial liabilities	52.1	27.0	53.6	29.5
Financial liabilities	148.1	76.7	134.8	74.3
Total equity and financial liabilities	193.2	100.0	181.5	100.0

5.4. Contingent liabilities and other obligations

Contingent liabilities

There were no significant contingent liabilities in the reporting period.

Other obligations

With the exception of short-term leases and leases for low-value leased assets, there are no other obligations that are not recognised in the balance sheet.

5.5. Relationships with related companies and persons

In accordance with IAS 24, related parties are companies and persons belonging to the Group:

Since 1 July 2021, the Group parent company G.A.I.A. Holding Srl, Desio, Italy, and its subsidiaries, in particular the Adler Pelzer Holding GmbH Group, as well as significant investments outside the Group;
Other persons or companies that can be influenced by the reporting company or that can influence the reporting company, such as
- the members of the company's Management Board and Supervisory Board
- the members of the management of G.A.I.A. Holding Srl and its bodies and bodies of its subsidiaries
- Shareholdings of members of the management of G.A.I.A. Holding Srl, members of the Executive Board or Supervisory Board of the company

Balances and transactions between the company and its subsidiaries, which are related parties, were eliminated in the course of consolidation and are not explained in these notes. Details of transactions between the Group and other related parties are provided below. The terms and conditions of these transactions were at arm's length.

5.5.1. Business relationships with the G.A.I.A. Holding Srl Group and other subsidiaries and not belonging to the Group

As of 31 December 2024, Group companies carried out the following transactions with related parties that are not included in the scope of consolidation. The outstanding items and transactions from business transactions in the financial years 2024 and 2023 are as follows:

Related party transactions with G.A.I.A. Holding SRL Group

EUR million	2024	2023
Goods and services provided	1.5	1.6
Goods and services received	3.9	3.7
of which expenses for management services received	2.5	2.5

EUR million	2024	2023
Liabilities	3.3	2.9
Receivables	1.2	1.2
Loans received	18.8	9.8
Loans granted	6.3	3.8

G.A.I.A. Holding Srl is recognised here as the ultimate parent company of the entire group. It is 35 % owned by the Scudieri family, with the remaining 65 % held by the Global Automotive Interior Alliance (GAIA), a joint venture in which 61.58 % is held by the Scudieri family and the remaining 38.42 % by Hayashi Telempu Corporation. There are no service relationships with G.A.I.A. Holding Srl as of 31 December 2024.

The items shown with and vis-à-vis the G.A.I.A. Holding Srl Group include all subsidiaries of the Group, in particular the Adler Pelzer Holding GmbH Group and its subsidiaries.

Services totaling EUR 1.5 million (2023: EUR 1.6 million) were rendered to the G.A.I.A. Group in the reporting year. This mainly relates to work in progress that is used for further processing or production within the G.A.I.A. Group.

The goods and services purchased by the G.A.I.A. Group in the 2024 reporting year totaled EUR 3.9 million (2023: EUR 3.7 million). The goods and services purchased mainly relate to sales, management and consulting services provided by Adler Pelzer Holding GmbH in the amount of EUR 2.5 million (2023: EUR 2.5 million).

No impairment losses were recognised for uncollectible or doubtful receivables from related parties in the current or previous year.

As of 31 December 2024, there were liabilities from loans from affiliated companies in the amount of EUR 18.8 million (2023: EUR 9.8 million). In the 2024 reporting year, STS Group North America Inc. received a loan from Adler Pelzer Holding GmbH for EUR 1.4 million with a term until December 2025 and an interest rate of 9.66 %, as well as another loan from an affiliated company of Adler Pelzer Holding GmbH, HP Pelzer Automotive Systems Inc. in the amount of USD 8.5 million. The loan has a term of one year and also bears interest at 9.66 %. In 2023, STS Group AG also received a loan from Adler Pelzer Holding GmbH in the amount of EUR 9 million with a term until April 2027 and an annual interest rate of 10.38 %.

In the financial year, a loan of USD 0.4 million was also received from Pelzer de Mexico SA, Puebla, Mexico, of which USD 0.2 million had a term of 3 months and was repaid. The remaining loan amount of USD 0.2 million has an indefinite term and bears interest at 7.62 %.

In the 2021 financial year, a subsidiary of STS Group AG also granted a loan of EUR 3.8 million to Taicang RAT Trading Co., a subsidiary of the G.A.I.A. Group, of the shareholder Adler Pelzer Holding GmbH, Hagen, Germany. The loan agreement had a term of one year at a fixed interest rate of 3.7 % and was extended by a further year in the 2024 reporting year. In the 2024 financial year, the subsidiaries of STS Group AG, STS Composites France SAS and STS Plastics SAS each also granted a loan to Adler Pelzer Holding GmbH in the amount of EUR 1.2 million with a term until May 2027. The annual interest rate is 10.38 %.

5.5.2. Business relationships with and payments to members of the Management Board and Supervisory Board

The following business relationships with the Management Board existed in the reporting period and the comparative period:

EUR million 2024 2023 Current benefits due 0.2 0.2 Share-based payment 0.0 0.0 Total benefits 0.2 0.2

BENEFITS TO MEMBERS OF THE BOARD OF DIRECTORS

The short-term benefits due in the amount of EUR 0.2 million relate to the remuneration paid to the Executive Board in the financial year ended 31 December 2024 (2023: EUR 0.2 million). In

the reporting period, no further services were rendered and remunerated in addition to the remuneration shown from the existing business relationships with the Management Board.

Executive Board remuneration according to HGB

The total remuneration of the Executive Board in accordance with Section 314 para. 1 no. 6a sentences 1 to 4 HGB is shown in the following overview.

BENEFITS TO MEMBERS OF THE BOARD OF DIRECTORS

EUR million	2024	2023
Short-term benefits due
Fixed remuneration	0.2	0.2
Total remuneration	0.2	0.2

As in the previous year, there was no remuneration for former members of the Management Board in accordance with Section 314 para. 1 no. 6b sentences 1 to 2 HGB in the reporting period.

Remuneration of the Supervisory Board

The total remuneration of the Supervisory Board totaled EUR 0.2 million (2023: EUR 0.3 million). There was no long-term remuneration at the end of the reporting period.

REMUNERATION OF THE MEMBERS OF THE SUPERVISORY BOARD

	2024		2023
in kEUR	Fixed Compensation	in%	Total Compensation	Fixed Compensation	in%	Total Compensation
Paolo Scudieri - Chairman of the Supervisory Board since 23. Jully 2021		100 100%	100		144 100%	144
Pietro Gaeta - Dep. Chairman of the Supervisory Board since 23. July 2021		60 100%	60		87 100%	87
Pietro Lardini - Member of the Supervisory Board since 23 July 2021		60 100%	60		87 100%	87
Total		220 100%	220		334 100%	334

There are no receivables from members of the Executive Board and the Supervisory Board as of 31 December 2024 and 31 December 2023. There are obligations to members of the Supervisory Board arising from Supervisory Board remuneration in the amount of EUR 0.2 million.

The Group neither granted loans to nor received loans from members of the Management Board and Supervisory Board in the periods presented.

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There are no pension obligations to members of the Executive Board and Supervisory Board as of 31 December 2024 and 31 December 2023.

5.6. Executive Board and Supervisory Board

Management Board

Alberto Buniato

Master of Business Administration (MBA)

Chairman of the Management Board: Chief Executive Officer (CEO)

Chairman of the Board of Directors of:

STS Plastics S.A.S. STS Composites France S.A.S. HPP Systems de Mexico S.A de C.V. Pachuca/Mexico

Chairman of the Management Board of:

STS Plastics Co., Ltd. HP Pelzer Automotive Systems Inc. Pelzer de Mexico S.A. de. C.V.

Member of the Management Board of:

STS Composites Germany GmbH MCR S.A.S. HP Carpets , LLC RAT de Mexico de S.A. de C.V.

Supervisory Board

Paolo Scuderi

Industrial engineer Chairman of the Supervisory Board

Chairman of the Management Board of:

Adler Plastic S.p.A. AdlerGroup S.p.A. G.A.I.A. Holding S.r.l.

STOA Istituto di Studi per la Direzione e gestione di impresa - Società consortile a responsabilità limitata

Tecno Tessile Adler s.r.l. Mercato s.r.l. Adler Aero S.p.A. Napolicrea s.r.l. Almas Partecipazioni Industriali S.p.A. Future Around Liberty Community s.r.l. SRM Services s.r.l. C.F. Italia s.r.l. - Challenger Foam Italia s.r.l. Anfia Automotive Società Consortile a Responsabilità Limitata La.mm. Lavorazioni Meccaniche Metalli s.r.l.

Member of the Management Board of:

Adler Pelzer Swiss AG

Tenuta La Fratta società agricola a responsabilità limitata

Me.res. Meridionale Resine Società a Responsabilità Limitata in sigla Me.res. s.r.l.

Formula Centre Italia s.r.l. Essere S.p.A. Almas Real Estate s.r.l. Lo Spolino 1972 Società a Responsabilità Limitata Adlergroup Holding s.r.l. Dattilo - Distretto Alta Tecnologia Trasporti e Logistica S.c. a r.l.

Member of the Advisory Board of:

Adler Pelzer Holding GmbH

Pietro Lardini

Master of Business Administration (MBA (Bocconi)) Deputy Chairwoman of the Supervisory Board

Member of the Management Board of:

Adler Pelzer Holding GmbH HP Pelzer Automotive GmbH Adler Pelzer Clion GmbH RAT-Spezialmaschinen GmbH Vegroteppichboden GmbH HP Pelzer Min GmbH HP Pelzer Projektführungs GmbH HP-chemie Pelzer (UK) Ltd CAB Automotive Ltd. HP-Pelzer s.r.o. Adler Pelzer Swiss AG Hankook Pelzer Ltd. Chongqing HP Pelzer Automotive Interior Systems Co., Ltd. Hangzhou HP Pelzer Automotive Interior Systems Co., Ltd. Nanjing HP Pelzer Automotive Interiors System Co. Ltd HP Pelzer Automotive Interiors Systems (Taicang)Co. Ltd Taicang RAT Machinery & Technology Co. LTD. Pimsa Adler Otomotiv A.S., HP Pelzer Pimsa Otomotiv A.S. Pimsa Otomotiv Tekstilleri Sanayi ve Tikaret A.S. HP Pelzer Automotive Systems Inc.

Pietro Gaeta

Lawyer

Board member of the:

AdlerGroup S.p.A. Adler Plastic S.p.A. G.A.I.A. Holding S.r.l. Tecno Tessile Adler S.r.l. Tenuta La Fratta società agricola a responsabilità limitata Mercato S.r.l. Almas Partecipazioni Industriali S.p.A.

Page |135

Chairman of the Board of Directors of the Auditors of:

Società Nolana per Imprese Elettriche - S.N.I.E. S.p.A. Mandara Group S.p.A. G-Box S.p.A. Vrent S.p.A. VFM Technik S.p.A.

Member of the Management Board of:

Avvocato Gaeta S.t.a.p.a. Faurema Holding S.r.l.

Member of the Advisory Board of:

Adler Pelzer Holding GmbH

5.7. Additional mandatory disclosures according to HGB

Declaration of conformity

The Executive Board and the Supervisory Board of STS Group AG have issued the prescribed declaration of conformity in accordance with Section 161 AktG and made it available to shareholders on the STS Group website. The full text of the declaration of conformity is available on the STS Group website at https://www.sts.group/de/investor-relations/corporategovernance.

Group affiliation

The Group is included in the consolidated financial statements of Adler Pelzer Holding GmbH, Hagen, Germany. The latter prepares the consolidated financial statements for the smallest group of companies. Adler Pelzer Holding GmbH, Hagen is in turn included in the consolidated financial statements of G.A.I.A. Holding S.r.l., Desio, Italy. This company

the consolidated financial statements for the largest group of companies. The consolidated financial statements of G.A.I.A. Holding S.r.l. are available at the company's registered office in Desio, Italy, and will be published in the electronic Federal Gazette for 2024.

Auditors' fees

PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft ("PwC") was appointed as the Group's auditor in the financial year ended 31 December 2024 and 2023. Their total fee is included in the legal and consulting costs as part of other expenses and is broken down as follows:

EUR million	2024	2023
Audits of financial statements	0.4	0.4
Total	0.4	0.4

The fees for auditing services include, in particular, fees for the statutory audit of the annual and consolidated financial statements and for the audit of Group reporting packages. For the list of shareholdings and the scope of consolidation, please refer to section 2.2 Consolidation principles.

List of shareholdings

Please refer to section 2.2 for the list of shareholdings and the scope of consolidation.

6. Accounting and valuation methods

6.1. Changes in accounting and valuation methods

6.1.1. New standards and interpretations to be applied for the first time

The following standards and amendments were applied by the Group for the first time in the financial year ended 31 December 2024:

Standard/ Interpretation		Mandatory application	Impacts
Amendments to IAS 1	Classification of liabilities as current or non current (including a delay in the date of initial application) and non-current liabilities with covenants	01.01.2024	no material impacts
Amendments to IFRS 16	Lease liability in a sale and leaseback transaction	01.01.2024	no material impacts
Amendments to IAS 7 and IFRS 7	Supplier financing agreements	01.01.2024	no material impacts

The regulations applied for the first time had no material impact on these consolidated financial statements.

As part of an agenda decision by the IFRS IC from June 2024 to clarify the term material in relation to the disclosure of income and expenses in segment reporting, STS Group now additionally discloses the cost of materials, personnel expenses and other operating expenses in segment reporting.

6.1.2. New standards and interpretations to be applied in the future

The following new or amended standards and interpretations have already been adopted by the IASB, but are not yet mandatory or have not yet been adopted into European law. The Group has not applied the regulations early.

The effects on the consolidated financial statements of the amendments and changes that have not yet been adopted into EU law are still being examined.

In particular, the expected comprehensive changes due to IFRS 18 are expected to have a significant impact on the presentation and disclosure in the financial statements. The company is currently still analysing the effects, but the presentation of the STS Group's income statement will be affected by the introduction of the five categories of operating activities, investing activities, financing activities, income taxes and discontinued operations in terms of their structure and information function.

6.2. MEASUREMENT AT FAIR VALUE IN ACCORDANCE WITH IFRS 13

The fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction in a principal market at the measurement date under current market conditions (e.g. an exit price), regardless of whether the price is directly observable or estimated using another valuation technique.

In accordance with IFRS 13 "Fair Value Measurement", a measurement hierarchy (fair value hierarchy) was defined. The measurement hierarchy categorises the input factors used in the valuation techniques to measure fair value into three levels:

▪ Level 1: Input parameters are quoted prices (unadjusted) on active markets for identical assets or liabilities that can be accessed on the measurement date.

Level 2: Input parameters are prices other than those quoted in Level 1 that are either directly observable for the asset or liability or can be derived indirectly.
Level 3: Input parameters are unobservable parameters for the asset or liability.

In this context, the Group determines whether transfers have occurred between the hierarchy levels at the end of the respective reporting period. Share-based payment components are measured at fair value, but do not fall within the scope of IFRS 13.

6.3. INTANGIBLE ASSETS

Acquired intangible assets, including software and licences, are capitalised at acquisition cost, internally generated intangible assets at production cost.

In order to determine whether internally generated intangible assets can be capitalised, research and development expenses must be separated. Expenditure on research activities with the prospect of gaining new scientific or technical knowledge is recognised as an expense in the period in which it is incurred.

The recognition of internally generated intangible assets requires the cumulative fulfilment of the capitalisation criteria of IAS 38: the technical feasibility of the development project and a future economic benefit from the development project must be demonstrated and the company must intend and be able to complete the intangible asset and use or sell it. Furthermore, adequate technical, financial and other resources must be available and the expenditure attributable to the intangible asset during its development must be reliably measurable.

The capitalised production costs comprise the costs directly attributable to the development process as well as development-related overheads. Borrowing costs that can be directly allocated to the acquisition, construction or production of a qualifying asset must be capitalised as part of the acquisition or production costs in accordance with IFRS. In the reporting period and in the comparative period, no qualifying assets were acquired or produced for which borrowing costs should be capitalised.

If a useful life can be determined, these intangible assets are amortised on a straight-line basis over their respective useful lives. Scheduled amortisation is based on the following useful lives:

Intangible assets

	Useful life in years
Internally generated intangible assets	1 - 10
Customer base	5 - 11
Production technologies	10 - 20
Patents, concessions and other rights as well as software	2 - 20

The Group does not currently have any intangible assets with an indefinite useful life. However, it does have development costs that are not yet amortised and are therefore treated as intangible assets with an indefinite useful life.

6.4. FACILITIES

Property, plant and equipment are measured at cost less accumulated depreciation, if the assets are depreciable, and impairment losses.

The cost of an item of property, plant and equipment comprises all costs directly attributable to the acquisition of the asset. Repairs and maintenance are recognised as an expense in the consolidated income statement in the reporting period in which they are incurred. Internally generated assets are initially measured at the directly attributable production costs and production-related overheads.

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Scheduled depreciation is recognised in the consolidated income statement on a straight-line basis over the estimated useful life of the asset. The following useful lives are mainly applied:

Fixed Assets

	Useful life in years
Land and buildings	10 - 50
Technical equipment and machinery	5 - 30
Operating and office equipment	1 - 13

Leased assets are amortised over the shorter of the lease term or useful life. Land is not depreciated or amortised.

If significant parts of property, plant and equipment contain components with significantly different useful lives, these are recognised separately and depreciated over their respective useful lives.

Borrowing costs that can be directly allocated to the acquisition, construction or production of a qualifying asset must be capitalised as part of the cost of acquisition or production in accordance with IFRS. In the reporting period and in the comparative period, no qualifying assets were acquired or produced for which borrowing costs would have to be capitalised.

The residual values and economic useful lives are reviewed at each balance sheet date and adjusted if necessary. The useful lives are based on estimates and are largely based on experience with regard to historical utilisation and technical development.

Gains and losses from the disposal of assets are calculated as the difference between the net disposal proceeds and the carrying amount of the asset and recognised in profit or loss.

If there are indications of impairment and the carrying amount of property, plant and equipment exceeds the recoverable amount, impairment losses are recognised. The recoverable amount is the higher of the fair value less costs to sell and the value in use. If the reason for an impairment no longer exists, the impairment loss is reversed to amortised cost.

6.5. IMPAIRMENTS

In accordance with IAS 36, assets with a finite useful life are reviewed at each balance sheet date to determine whether there are any indications of possible impairment, e.g. specific events or market developments that indicate a possible decline in value. There were no indications of impairment of intangible assets subject to amortisation in the reporting period.

There were no indications of impairment of property, plant and equipment to be depreciated in the reporting period for any of the five CGUs. The impairment tests carried out did not result in any need for amortisation or depreciation.

Intangible assets with an indefinite useful life and internally generated assets or assets under development must also be tested for impairment at each reporting date. There were no intangible assets with indefinite useful lives in the reporting period. Only development costs that are not yet subject to amortisation.

If there are indications of impairment or during the mandatory annual impairment test for intangible assets with an indefinite useful life, the recoverable amount of the asset is determined. The recoverable amount of an asset is the higher of an asset's or CGU's fair value less costs to sell and its value in use. The recoverable amount must be determined for each individual asset, unless an asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. In the latter case, the recoverable amount is to be determined on the basis of a CGU to which assets or groups of assets are allocated until they together generate largely independent cash inflows. This also applies to goodwill. If it results from a business combination, it is allocated from the acquisition date to the CGU or group of CGUs that can benefit from the synergies of the combination and at whose level the goodwill is monitored for internal management purposes. The Group has five (2023: three) CGUs, three of which are within the Plastics segment (USA, Mexico and France with Germany). BU China and BU Materials each represent a separate CGU. Goodwill was not allocated to any of the five CGUs. Compared to the previous year, BU Plastics is therefore divided into three CGUs.

To determine the value in use, the expected future cash flows are generally discounted to their present value using a pre-tax discount rate that reflects current market expectations with regard to the interest effect and the specific risks of the asset. When determining the value in use, the current and expected future earnings level as well as technological, economic and general development trends are taken into account on the basis of approved financial plans. To determine the fair value less costs to sell, recent market transactions, if any, are taken into account.

If the carrying amount exceeds the recoverable amount of the asset or CGU, an impairment loss is recognised in profit or loss in the amount by which the carrying amount exceeds the recoverable amount.

If the impairment requirement for goodwill is higher than the carrying amount of the CGU carrying the goodwill, the goodwill is initially written off in full and the remaining impairment requirement is allocated to the other assets of the CGU. Any necessary impairment losses on

individual assets of this CGU are recognised in advance of the goodwill impairment test. There is currently no goodwill.

Impairment losses are reversed to the new recoverable amount, except in the case of goodwill, if the reasons for impairment losses recognised in previous years no longer apply. The upper value limit for write-ups is the amortised acquisition and production costs that would have resulted if no impairment losses had been recognised in previous years. No write-ups were recognised on intangible assets or property, plant and equipment in the reporting period or in the comparative period.

6.6. ACCOUNTING FOR LEASES

At the inception of the contract, an assessment is made as to whether the contract constitutes or contains a lease. This is the case if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The definition of a lease in accordance with IFRS 16 is used to assess whether a contract contains the right to control an identified asset.

At the commencement date or when a contract containing a lease component is modified, the contractually agreed consideration is allocated on the basis of the relative stand-alone selling prices. The Group has decided to make use of the option under IFRS 16.15 to refrain from separating the non-lease components and instead recognise lease and non-lease components as a single lease component.

On the provision date, the Group recognises an asset for the right of use granted and a lease liability. The right-of-use asset is initially measured at cost, which is the present value at initial measurement, adjusted for payments made on or before the commencement date, plus any initial direct costs and the estimated costs of dismantling or removing the underlying asset or restoring the underlying asset or the site on which it is located, less any lease incentives received.

Subsequently, the right-of-use asset is amortised on a straight-line basis from the commencement date to the end of the lease term, unless ownership of the underlying asset is transferred to the Group at the end of the lease term or the cost of the right-of-use asset reflects the fact that the Group will exercise a purchase option. In this case, the right-of-use asset is amortised over the useful life of the underlying asset, which is determined in accordance with the regulations for property, plant and equipment. In addition, the right-ofuse asset is adjusted on an ongoing basis for impairment losses, if necessary, and for certain remeasurements of the lease liability.

The lease liability is initially recognised at the present value of the lease payments not yet made at the commencement date, discounted at the interest rate implicit in the lease or, if this cannot be readily determined, at the incremental borrowing rate of the Group or the countries of the subsidiaries. The Group normally uses the incremental borrowing rates as discount rates.

To determine the incremental borrowing rates, the Group obtains interest rates from various external financial sources and makes certain adjustments to take account of the lease terms.

The lease payments included in the measurement of the lease liability include

Fixed payments, including de facto fixed payments
variable lease payments that are linked to an index or (interest) rate, initially measured using the index or (interest) rate applicable on the provision date
Amounts expected to be payable under a residual value guarantee
the exercise price of a purchase option if the Group is reasonably certain to exercise it, lease payments for a renewal option if the Group is reasonably certain to exercise it, and penalties for early termination of the lease unless the Group is reasonably certain not to terminate early.

The lease liability is measured at the present value of the remaining lease payment, discounted at the lessee's incremental borrowing rate. It is remeasured if the future lease payments change due to a change in the index or (interest) rate, if the Group adjusts its estimate of the expected payments under a residual value guarantee, if the Group changes its estimate of the exercise of a purchase, extension or cancellation option or if a de facto fixed lease payment changes.

In the event of such a remeasurement of the lease liability, the carrying amount of the rightof-use asset is adjusted accordingly or recognised in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.

Short-term leases and leases based on low-value assets

The Group has decided not to recognise right-of-use assets and lease liabilities for leases for which the underlying assets are of low value and for short-term leases, including IT equipment. The Group recognises the lease payments associated with these leases as an expense on a straight-line basis over the term of the lease (see section 3.6).

6.7. CASH AND CASH EQUIVALENTS

Cash and cash equivalents consist of cash on hand, immediately available bank balances and short-term bank deposits, all of which have an original term of less than three months. Utilised overdraft facilities are reported under current financial liabilities.

6.8. FINANCIAL INSTRUMENTS

In accordance with IAS 32, a financial instrument is defined as a contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. In accordance with IFRS 9, they can include non-derivative financial instruments, such as trade receivables and payables, as well as derivative financial instruments.

Financial assets and financial liabilities are initially recognised at fair value, which generally corresponds to the transaction price. Transaction costs that are directly attributable to the acquisition or issue of the financial instrument are only recognised in the carrying amount if the corresponding financial instrument is not measured at fair value through profit or loss. In the case of trade receivables without a significant financing component, the transaction price is always recognised, which is determined in accordance with IFRS 15. Subsequent measurement depends on the classification of the financial instruments.

Regular way purchases or sales of financial assets and liabilities are generally recognised on the trade date. Financial assets and liabilities are only netted if offsetting of the amounts is legally enforceable at the present time and there is an intention to actually offset. These conditions are not met. There are also no master netting agreements or similar agreements, meaning that there is no offsetting in the STS Group balance sheet, nor can circumstances arise in which offsetting is possible.

6.8.1. Financial assets

Financial assets include in particular

Trade receivables and other receivables,
Other financial assets
Cash and cash equivalents

Financial assets with a term of more than twelve months are recognised under non-current financial assets.

The classification of financial assets depends on the underlying business model and the cash flow criterion, according to which the contractual cash flows of a financial asset may consist solely of interest and amortisation on the outstanding principal amount of the financial instrument. The cash flow criterion is always assessed at the level of the individual financial instrument. The assessment of the business model relates to the question of how financial assets are managed to generate cash flows. The management can either be aimed at holding, selling or a combination of both.

The company classifies financial assets into one of the following categories:

Financial assets measured at amortised cost (debt instruments)
Financial assets measured at fair value through other comprehensive income (debt instruments)
Financial assets measured at fair value through profit or loss
Financial assets measured at fair value through other comprehensive income without recycling (equity instruments)

Financial assets measured at amortised cost (debt instruments)

The most significant category of financial assets for the Group is the category of assets measured at amortised cost in relation to debt instruments. They are measured at amortised cost if the following two criteria are met:

The business model for managing these financial instruments is geared towards holding them in order to realise the underlying contractual cash flows and
The resulting contractual cash flows consist solely of interest and amortisation on the outstanding principal amount.

These financial assets are subsequently measured using the effective interest method and are subject to the provisions for impairment in accordance with IFRS 9.5.5ff. At the Group, trade receivables, other assets and bank balances are mainly subject to this category. For further details, please refer to section 5.2.1 "Financial instruments".

Trade receivables that are sold as part of a factoring agreement without the receivables being derecognised as part of the sale of the receivables continue to be allocated by the Group to the "hold" business model and therefore to the "amortised cost" category. As part of the business model criterion, the Group defines a sale as an actual sale that also leads to a derecognition. According to the Group's interpretation, a purely legal sale without disposal does not constitute a sale business model within the meaning of IFRS 9

Financial assets measured at fair value through other comprehensive income (debt instruments)

Debt instruments are measured at fair value through other comprehensive income if the following two criteria are met:

▪ The business model for managing these financial instruments is geared towards holding them in order to realise the underlying contractual cash flows and also towards selling them.

▪ The resulting contractual cash flows consist solely of interest and amortisation on the outstanding principal amount.

For these financial assets, interest, foreign currency valuation effects and expenses and income in connection with impairments are recognised in the income statement. The remaining changes are recognised in other comprehensive income in accordance with the requirements of IFRS 9 and reclassified to profit or loss upon disposal (recycling).

Portfolios of receivables that are generally subject to the possibility of factoring with disposal of the corresponding receivables are allocated to the "hold and sell" category and measured at fair value through other comprehensive income (FVOCI). There are currently no receivables portfolios that are recognised at fair value through other comprehensive income (FVOCI).

Financial assets measured at fair value through profit or loss

This category includes financial assets held for trading, financial instruments using the fair value option, financial assets for which measurement at fair value is mandatory and equity instruments that are not measured at fair value through other comprehensive income. A trading purpose exists if a short-term purchase or sale is intended. Derivatives that are not part of a hedging relationship are always held for trading purposes. Financial assets that do not fulfil the cash flow criterion are always measured at fair value through profit or loss, regardless of the underlying business model. The same measurement applies to financial instruments that are subject to a "sell" business model.

The fair value option for financial assets is not utilised.

Any changes in the fair value of these instruments are recognised in profit or loss.

Financial assets measured at fair value through other comprehensive income without recycling (equity instruments)

When recognising an equity instrument for the first time, the Group has the irrevocable option to measure it at fair value through other comprehensive income. The prerequisite is that it is an equity instrument in accordance with IAS 32 that is not held for trading and is not a contingent consideration within the meaning of IFRS 3. The option is exercised separately for each equity instrument.

Gains or losses from such a financial asset are not reclassified to profit or loss on disposal (no recycling). Dividends from such instruments are recognised in profit or loss. Equity instruments measured at fair value through other comprehensive income are not subject to the rules on impairment.

6.8.2. Impairment of financial assets

Financial assets, with the exception of financial assets at fair value through profit or loss, contract assets in accordance with IFRS 15, lease receivables, loan commitments and financial guarantees are subject to the impairment model within the meaning of IFRS 9.5.5. Accordingly, the Group recognises an impairment loss for these assets on the basis of expected credit losses. Expected credit losses result from the difference between the contractually agreed cash flows and the expected cash flows, measured at present value using the original effective interest rate. The expected cash flows also include proceeds from the sale of collateral and other loan collateral, which are an integral part of the respective contract.

Expected credit losses are recognised in three stages. For financial assets for which there has been no significant increase in the default risk since initial recognition, the impairment is measured in the amount of the 12-month expected credit loss (stage 1). In the event of a significant increase in the default risk, the expected credit loss is calculated for the remaining term of the asset (stage 2). The Group generally assumes that there is a significant increase in credit risk if the asset is 30 days past due. This principle can be refuted if, in individual cases, reliable and justifiable information indicates that the credit risk has not increased. If there is objective evidence of impairment, the underlying assets are allocated to level 3. Objective evidence of impairment is presumed if the asset is more than 90 days overdue, unless there is reliable and justifiable information in the individual case that a longer overdue period is more appropriate. In addition, a refusal to pay and the like are regarded as objective evidence.

The class of assets relevant to the Group for the application of the impairment model are trade receivables and contract assets. The Group applies the simplified approach in accordance with IFRS 9.5.15 for these. Accordingly, the impairment is always measured in the amount of the expected credit losses over the term. For further details on the calculation of impairments, see the section 5.2.2 "Financial risk management".

For the other assets that are within the scope of the impairment model of IFRS 9 and that are subject to the general approach, financial assets are summarised accordingly on the basis of common credit risk characteristics or individual default information is used to measure the expected losses. In each case, the calculation is based on current probabilities of default on the respective reporting date.

The Group generally assumes a default if the contractual payments are more than 90 days overdue. In individual cases, internal or external information is also used to indicate that the contractual payments cannot be made in full. Financial assets are derecognised if there is no reasonable expectation of future payment.

6.8.3. Financial liabilities

Financial liabilities constitute an obligation to return cash and cash equivalents or another financial asset. These include, in particular, trade payables, liabilities to banks and derivative financial instruments.

For the initial measurement of financial liabilities, please refer to the description of financial assets. Financial liabilities are generally measured at amortised cost using the effective interest method (financial liabilities through amortised cost, FLAC). The category of financial liabilities at fair value through profit or loss (FLtPL) includes all financial liabilities held for trading purposes. This includes derivatives that are not part of a hedging relationship and financial instruments for which the fair value option has been exercised.

Financial liabilities are classified as current unless the Group has an unconditional right to defer settlement of the liability to a date at least twelve months after the balance sheet date.

The fair value option for debt instruments in accordance with IFRS 9 is not utilised.

6.8.4. Derecognition of financial assets and liabilities

Financial assets are derecognised when the rights to payments have expired or have been transferred and the Group has transferred substantially all the risks and rewards of ownership.

Financial liabilities are derecognised when the liability has been settled, i.e. the contractual obligation has been fulfilled, cancelled or has expired.

6.8.5. Derivative financial instruments

Within the Group, derivative financial instruments are used selectively to manage risks from interest rate fluctuations. Derivative financial instruments are initially recognised as financial assets or liabilities at fair value in the category of financial assets at fair value through profit or loss or financial liabilities at fair value through profit or loss. Attributable transaction costs are recognised in profit or loss in the period in which they are incurred. With the exception of derivatives designated as hedging instruments to hedge cash flows as part of cash flow hedges, all derivatives are recognised at fair value through profit or loss. They are recognised in the consolidated balance sheet under "Other financial assets" or "Other financial liabilities". The Group does not currently recognise any hedging relationships.

6.9. INVENTORIES AND PREPAYMENTS MADE ON INVENTORIES

Inventories are valued at the lower of acquisition or production cost and net realisable value. The cost of raw materials and supplies is calculated using the moving average. Incidental acquisition costs are also taken into account. Work in progress and internally produced finished goods are recognised at production cost. In addition to material, production and special direct production costs, production costs also include appropriate portions of the overheads attributable to production as well as production-related depreciation.

Net realisable value is defined as the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale. Advance payments on inventories are capitalised at cost.

6.10. CONTRACT ASSETS AND CONTRACT LIABILITIES

Contract assets arise from the application of revenue recognition over a period of time. This is primarily the case for the Group if the products have no alternative use due to their specifications and there is an enforceable right to payment from the customer at least in the amount of reimbursement of the costs incurred for the services already rendered, including an appropriate profit margin. In these cases, the Group recognises revenue on the basis of the input-oriented cost-to-cost method (applied to customer tools) or the output method (applied to series production). As revenue is recognised before the date on which the Group has an unconditional right to receive the consideration, a contract asset is capitalised. If the Group is unable to determine the amount of the margin with sufficient certainty, revenue is recognised using the zero profit margin method. The margin is then only recognised at the end of the project.

Contract liabilities mainly result from advance payments received from customers in connection with a customer order where the products have not yet been delivered or the service has not yet been rendered.

Contract assets and contract liabilities are netted at contract level. Depending on the remaining term, they are recognised as current or non-current.

The impairment provisions of IFRS 9 are applied to contract assets.

6.11. PENSIONS AND SIMILAR OBLIGATIONS

The Group has pension obligations from defined benefit pension plans. Pension obligations are measured in accordance with IAS 19 using the projected unit credit method on the basis of actuarial reports. This takes into account not only the pensions and acquired entitlements known on the balance sheet date, but also expected future increases in pensions and salaries.

The net interest expense for the reporting period is calculated by multiplying the net obligation by the underlying discount rate.

Actuarial gains and losses from the measurement of the gross defined benefit obligation are recognised in other comprehensive income and presented separately in the statement of comprehensive income. Expenses from the compounding of interest on benefit obligations are recognised in the financial result. Service cost is recognised in personnel expenses, whereby past service cost from plan amendments is recognised immediately in profit or loss.

6.12. OTHER PROVISIONS

A provision is recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation (see IAS 37.14).

Provisions are recognised at the present value of the expected outflow of resources. Noncurrent provisions are discounted to the balance sheet date on the basis of corresponding market interest rates.

6.13. REALISATION OF INCOME AND EXPENSES

Sales are reported as revenue and recognised at the fair value of the consideration received or receivable, less returns and discounts and volume rebates granted.

6.13.1. Sale of goods

The Group recognises revenue when control of distinct goods or services is transferred to the customer. The customer must therefore have the ability to control the use and obtain substantially all of the remaining benefits. The basis for this is a contract between the Group and the customer. The parties must have agreed to the contract and the agreements contained therein, the individual obligations of the parties and the terms of payment must be identifiable, the contract must have economic substance and the Group must be likely to receive consideration for the service provided. There must therefore be enforceable rights and obligations. The transaction price generally corresponds to the revenue. If the contract contains more than one distinct performance obligation, the transaction price is allocated to the individual performance obligations on the basis of the relative stand-alone selling prices. If no individual selling prices are observable, the Group estimates these. The individual performance obligations identified are realised either over a certain period of time or at a certain point in time.

Customer tools

The Group develops and produces first-series moulds for some of its customers. In accordance with IFRS 15, this represents a separate performance obligation to the customer. The projects have an average term of 6 to 24 months. As a rule, the Group receives advance payments from customers for these performance obligations on the basis of an agreed advance payment plan over the term of the project. At the Group's discretion, these do not currently include a significant financing component to be recognised separately due to the term. If the Group has no alternative use for the customer tools due to their specifications and has an enforceable right to payment from the customer at least in the amount of a reimbursement of the costs incurred for the services already rendered, including an appropriate profit margin, revenue is recognised over a period of time. However, due to the uncertainty regarding the margin to be realised, the zero profit margin method is used. If there is no enforceable right to payment including an appropriate margin, revenue is recognised at the time of transfer of control to the customer through acceptance.

Customised products

Customer-specific products are subject to revenue recognition over time if the products have no alternative use due to their specifications and the Group has an enforceable right to payment from the customer at least in the amount of a reimbursement of the costs incurred for the services already rendered, including an appropriate profit margin. This applies to large parts of the Group's series production of customised parts. The stage of completion for revenue recognition over time is measured using the output method, which is based on the goods delivered. The production and delivery of goods from series production fulfils the condition for the application of the output method. Payments are generally due no later than 90 days after acceptance by the customer.

Other goods

Revenue from the sale of other goods is recognised when control has been transferred to the buyer. Depending on the respective customer contract and the respective order, the time of revenue recognition generally coincides with the time of delivery or acceptance. Payments are generally due no later than 90 days after acceptance by the customer.

6.14. Other income and expenses

Interest is recognised as income or expense on an accrual basis using the effective interest method. Interest income and interest expenses arise primarily from bank balances, loans and leasing and factoring agreements. Dividend income is recognised when the right to receive payment is established.

Expenses are recognised when the service is utilised or at the time they are incurred.

Research expenses are recognised in profit or loss in the period in which they are incurred. Development expenses are recognised in profit or loss at the time they are incurred, unless they are development costs that must be capitalised as an intangible asset in accordance with IAS 38 if the relevant conditions are met.

6.15. INCOME TAXES

Income tax expense represents the sum of current tax expense and deferred taxes.

Due to its affiliation with the Adler Pelzer Group, the STS Group will fall within the scope of the German Minimum Tax Act in the 2024 financial year, which implements the OECD Model Rules for Pillar 2. Adler Pelzer Holding GmbH will act as the national group parent, whereas STS Group AG is a partially owned subsidiary of Adler Pelzer Holding GmbH. G.A.I.A. Holding Srl will be recognised as the ultimate parent company of the overall Group.

Based on an overall calculation of the multinational group of companies with data for the 2024 financial year, 4 out of 5 jurisdictions can claim a CbCR safe harbour rule for the STS Group and its subsidiaries in Germany and abroad, i.e. no supplementary tax is due in these jurisdictions for 2024. No detailed Pillar 2 full calculation is currently available for countries that do not fulfil CbCR safe harbour. According to an indicative simplified calculation, no significant supplementary tax amount is assumed. Therefore, no tax expenses from the MinStG or corresponding foreign MinStG for its foreign investments are recognised in the consolidated financial statements of STS Group AG for the 2024 financial year.

6.15.1. Current taxes

The current tax expense is calculated on the basis of the taxable income for the year. Taxable income differs from the net profit for the year from the consolidated statement of comprehensive income due to expenses and income that are taxable or tax-deductible in later years or never. This also explicitly includes effects from consolidation recognised in profit or loss. The Group's liabilities for current taxes are calculated on the basis of the tax rates that apply or will soon apply from the perspective of the reporting date.

6.15.2. Deferred taxes

Deferred taxes are calculated in accordance with IAS 12 on the basis of the internationally recognised liability method. Under this method, deferred tax items are recognised for all temporary differences between the tax bases of assets and liabilities and their carrying amounts in the consolidated balance sheet as well as for tax loss carryforwards. Deferred taxes on these calculated differences are always recognised if they lead to deferred

tax liabilities. Deferred tax assets are only recognised if it is probable that the corresponding tax benefits will be realised. Deferred tax assets and liabilities are also recognised on temporary differences arising from company acquisitions, with the exception of temporary differences on goodwill, provided these are not recognised for tax purposes.

The tax rates for future years are used to calculate deferred taxes if they have already been established by law or the legislative process has essentially been completed. Changes in deferred taxes in the balance sheet generally lead to deferred tax expenses or income. If certain items that result in a change in deferred taxes are recognised directly in equity, the change in deferred taxes is also recognised directly in equity.

Deferred tax liabilities are recognised for all taxable temporary differences in connection with investments in subsidiaries, unless the company holding the investment is able to control the timing of the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future (so-called "outside basis differences" (OBD)).

6.16. GOVERNMENT GRANTS

Government grants, including non-monetary grants at fair value, are only recognised if there is reasonable assurance that the grant will be received:

a) the company will fulfil the associated conditions, and that b) the grants are awarded.

Grants are recognised as income over the periods in which the expenses for which they are intended to compensate are incurred. Grants received as compensation for expenses already incurred or for immediate financial support, irrespective of future expenses, are recognised in profit or loss in the period in which the claim arises.

Government grants amounted to EUR 0.5 million in the reporting year as at 31 December 2024 (2023: EUR 0.2 million). The grants support the companies with both personnel expenses and investments.

6.17. SIGNIFICANT ESTIMATES AND JUDGEMENTS

When applying the accounting policies in the consolidated financial statements, both judgements and estimates are required that can have a significant impact on the amounts reported in the financial statements. While judgements primarily relate to the interpretation and application of accounting standards, estimation uncertainties relate to assumptions about future developments that may affect the measurement of assets and liabilities.

6.17.1. Discretionary decisions

The preparation of the consolidated financial statements requires the Group management to make significant judgements, particularly with regard to the interpretation and application of IFRS regulations. These decisions may have a significant impact on the presentation of the Group's net assets, financial position and results of operations. Significant judgements concern, among other things

Revenue realisation

The determination of the amount and timing of revenue from contracts with customers is subject to the company's judgement in accordance with IFRS 15. The input method cost-to-cost is generally used for contracts for first-series tools that are fulfilled over a period of time, as the company believes that the costs incurred as part of the project provide a true and fair view of the performance of the service. Contracts for series products that meet the criteria for revenue recognition over time, on the other hand, are generally measured using the output method, as in these cases the units produced or delivered provide a true and fair view of the performance of the service. In the case of period-related services, performance is recognised when the service is rendered. For contracts that are fulfilled at a specific point in time, the transfer of control over the goods is taken as the basis. As a rule, the agreed Incoterms are used to assess the transfer of control.

The definition of cash-generating units for impairment tests

As part of the impairment test in accordance with IAS 36, Group management is required to define cash-generating units (CGUs). This categorisation is based on discretionary decisions as to which groups of assets jointly generate independent cash flows.

The CGUs are determined taking into account company-specific factors such as the internal management systems, the organisational structure and the economic dependence of individual assets on each other. Particularly in the case of complex Group structures with integrated business divisions, the determination of CGUs can have a significant impact on the calculation of a possible impairment requirement.

In addition, the definition of the CGUs influences the amount of the goodwill impairment test, as goodwill must be allocated to one or more CGUs. A different categorisation of CGUs can therefore lead to different impairment amounts and therefore has a direct impact on the Group's net assets, financial position and results of operations.

6.17.2. Estimation uncertainties

In addition to judgements, the preparation of the consolidated financial statements also requires a number of estimates based on assumptions about future economic developments. These estimates relate in particular to

Estimates as part of the impairment test

When reviewing the recoverable amount for cash-generating units (CGUs), the company takes into account the knowledge and expectations of future developments in the market and competitive environment of the CGUs as at the reporting date. Accordingly, the underlying planning figures and forecasts for the CGUs are subject to estimates by the company and management. These include, in particular, assumptions regarding sales development and expense structure, as well as the discount rate. The discount rate takes into account expected risks associated with the CGUs. Depending on the assumptions made by management, effects may arise for accounting purposes. However, the forecasts and the sensitivity analyses performed did not provide any indications of a potential impairment, even though forecasts are generally subject to estimation uncertainties.

Estimates by way of purchase price allocation

In the case of company acquisitions, estimates are made to determine the fair value of acquired assets and liabilities. Independent experts generally value land, buildings, technical equipment and machinery, while marketable securities are recognised at their market value. As these appraisals are based on assumptions, certain uncertainties arise.

The fair value of intangible assets is determined using suitable methods, usually by forecasting future cash flows. Depending on the type of asset and the data available, cost, market or capital value-oriented methods are used, with the latter being particularly relevant for intangible assets. One example is the relief-from-royalty method for licence valuation, in which cost savings achieved through the elimination of licence fees are discounted and recognised as a value. Estimates of useful economic life are also subject to assumptions that cause uncertainty.

Contingent liabilities also require assumptions regarding the probability of occurrence, which in turn leads to uncertainties.

Determination of the useful life of property, plant and equipment, software and licences

When estimating the useful life of assets, the company is guided by past experience. However, due to accelerated technological progress, it is possible that faster amortisation may become necessary, for example.

Expected credit losses

For a description of the estimates and assumptions on which the expected credit losses are based, please refer to section 5.2.2 Financial risk management, subsection Credit and default risk.

Recognition of deferred tax assets and deductible temporary differences

Deferred tax assets are recognised for tax loss carryforwards and deductible temporary differences if the realisation of the associated tax benefit through future taxable profits is considered probable on the basis of a management profit forecast for the Group companies. The profit forecast of management relates in particular to the amount of taxable profit and its expected time of realisation.

Provisions

Provisions differ from other liabilities in terms of uncertainties regarding the timing or amount of future expenditure required. A provision is recognised when the company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation (see IAS 37.14).

Due to different economic and legal judgements and the difficulties in determining a probability of occurrence, there are fundamental recognition and measurement uncertainties.

Actuarial assumptions must be made for the measurement of pension provisions. These assumptions depend on the individual judgements of the management.

6.17.3. Transformation process due to climate change

The automotive industry and its suppliers are experiencing high pressure to transform their business model as a result of climate change and political and social developments. The German Association of the Automotive Industry (VDA) points out that the transformation process will only succeed if the framework conditions and planning and investment security for manufacturers and users are right. Due to the agile macroeconomic situation and legal framework conditions, estimates and discretionary decisions arising from the transformation process have an impact on various accounting issues.

In particular, this affects the useful lives of property, plant and equipment with the Group's production facilities. Based on current knowledge, these will be utilised as planned and therefore no adjustments to the depreciation period are required. Estimates and judgements have also been identified for investments to reduce climate-related risks for the production facilities in France. The assessment was generally based on the risk reports on the buildings of the insurance company's production facilities, the risk exposure of the production facilities and their history and experience. Risks from temperature fluctuations, heat stress with water shortages and flooding and their impact on business interruptions, energy availability and prices were also identified. These risks are not included in the planning, as an appropriate estimate cannot currently be made and the probability of occurrence of further inevitable and necessary investments relating to the risks of temperature fluctuations, heat stress and flooding is classified as low by the management.

Page |159

6.18. EVENTS AFTER THE BALANCE SHEET DATE

There were no events after the balance sheet date.

Hagen, 27 March 2024

Alberto Buniato (CEO

INSURANCE OF THE LEGAL REPRESENTATIVES

To the best of our knowledge, and in accordance with the applicable reporting principles, the consolidated financial statements give a true and fair view of the assets, liabilities, financial position and profit or loss of the Group, and the combined management report includes a fair review of the development and performance of the business and the position of the Group, together with a description of the principal opportunities and risks associated with the expected development of the Group.

Hagen, 31 March 2025

Alberto Buniato (CEO)

REPORT OF THE INDEPENDENT AUDITOR

To STS Group AG, Hagen

REPORT ON THE AUDIT OF THE CONSOLIDATED FINANCIAL STATEMENTS AND THE GROUP MANAGEMENT REPORT

Audit Opinions

We have audited the consolidated financial statements of STS Group AG, Hagen, and its subsidiaries (the Group), which comprise the consolidated statement of financial position as at 31 December 2024 , the consolidated statement of comprehensive income, the consolidated income statement, the consolidated statement of changes in equity and the consolidated statement of cash flows for the financial year from 1 January to 31 December 2024 , and notes to the consolidated financial statements, including a summary of significant accounting policies. In addition, we have audited the group management report of STS Group AG, which is combined with the management report of the Company, for the financial year from 1 January to 31 December 2024 .

In our opinion, based on the findings of our audit, the accompanying consolidated financial statements

the accompanying consolidated financial statements comply, in all material respects, with the IFRS Accounting Standards issued by the International Accounting Standards Board (IASB) as adopted by the EU and the additional requirements of German commercial law pursuant to Section 315e (1) HGB and, in compliance with these requirements, give a true and fair view of the assets, liabilities and financial position of the Group as at 31 December 2024 and of its financial performance for the financial year from 1 January to 31 December 2024 , and
the accompanying Group management report as a whole provides a suitable view of the Group's position. In all material respects, this Group management report is consistent with the consolidated financial statements, complies with German legal requirements and appropriately presents the opportunities and risks of future development.

Pursuant to § 322 Abs. 3 Satz 1 HGB, we declare that our audit has not led to any reservations relating to the legal compliance of the consolidated financial statements and of the group management report.

Basis for the audit opinions

We conducted our audit of the consolidated financial statements and of the group management report in accordance with § 317 HGB and the EU Audit Regulation (No 537/2014, referred to subsequently as "EU Audit Regulation") and in compliance with German Generally Accepted Standards for Financial Statement Audits promulgated by the Institut der Wirtschaftsprüfer [Institute of Public Auditors in Germany] (IDW). Our responsibilities under those requirements and principles are further described in the "Auditor's Responsibilities for the Audit of the Consolidated Financial Statements and of the Group Management Report" section of our auditor's report. We are independent of the Group companies in accordance with the requirements of European law and German commercial and professional law, and we have fulfilled our other German professional responsibilities in accordance with these requirements. In addition, in accordance with Article 10 (2) (f) of the EU Audit Regulation, we declare that we have not provided non-audit services prohibited under Article 5 (1) of the EU Audit Regulation. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions on the consolidated financial statements and on the group management report.

Key audit matters in the audit of the consolidated financial statements

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the consolidated financial statements for the financial year from 1 January to 31 December 2024 . 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 our view, the following matter was the most significant in our audit:

❶ Recoverability of property, plant and equipment and intangible assets

We have structured our presentation of this key audit matter as follows

① Issue and problem definition
② Audit approach and findings
③ Reference to further information

In the following, we present the key audit matter:

❶ Impairment of property, plant and equipment and intangible assets

① Property, plant and equipment and intangible assets totalling EUR 108.5 million (46.3% of total assets and 240.8% of equity) are recognised in the company's consolidated financial statements. Property, plant and equipment and intangible assets are subjected to an impairment test by the company on an ad hoc basis in order to determine a possible need for depreciation and amortisation. The impairment test is generally carried out at the level of the cash-generating units to which the respective asset is allocated. As part of the impairment test, the carrying amount of the respective cash-generating units is compared with the corresponding recoverable amount (higher of value in use and fair value less costs to sell). The recoverable amount is generally determined on the basis of the value in use. The measurement is generally based on the present value of future cash flows of the respective cash-generating units. The present values are determined using discounted cash flow models. The Group's approved medium-term planning forms the starting point, which is extrapolated using assumptions about long-term growth rates. Expectations about

future market developments and assumptions about the development of macroeconomic factors are also taken into account. Discounting is carried out using the weighted average cost of capital of the respective cash-generating units. No need for impairment was identified as a result of the impairment test.

The result of this valuation is highly dependent on the estimates of the legal representatives with regard to the future cash inflows of the respective cash-generating units, the discount rate used, the growth rate and other assumptions and is therefore subject to considerable uncertainty. Against this background and due to the complexity of the valuation, this matter was of particular significance in the context of our audit.

② As part of our audit, among other things, we analysed the methodology used to perform the impairment test. After comparing the future cash inflows used in the calculation with the Group's approved medium-term planning, we assessed the appropriateness of the calculation, in particular by reconciling it with general and industry-specific market expectations. We discussed and verified additional adjustments to the medium-term planning for the purposes of the impairment test with the relevant departments and employees of the Company. We also assessed the appropriate consideration of the costs of Group functions. With the knowledge that even minor changes in the discount rate and growth rates used can be significant, we intensively analysed the parameters used to determine the discount rate and growth rates applied with the support of our internal valuation specialists and reproduced the calculation methods. In order to take account of the existing forecast uncertainties, we analysed the sensitivity analyses prepared by the company.

and performed our own sensitivity analyses for the cash-generating units with low excess cover (carrying amount compared to recoverable amount). In doing so, we determined that the carrying amounts of the cash-generating units are sufficiently covered by the discounted future cash inflows, taking into account the information available. The measurement parameters and assumptions applied by the executive directors are consistent overall with our expectations and are also within the ranges that we consider to be reasonable.

③ The company's disclosures on the balance sheet item "Intangible assets" are contained in section 4.1, on the balance sheet item "Property, plant and equipment" in section 4.2 and on the assessment of recoverability in section 6.5 of the notes to the consolidated financial statements.

Other information

The legal representatives are responsible for the other information.

The other information comprises

the declaration on corporate governance pursuant to Section 289f HGB and Section 315d HGB
the separate non-financial Group report to fulfil Sections 315b to 315c HGB
the annual report excluding cross-references to external information with the exception of the audited consolidated financial statements, the audited group management report and our auditor's report

Our opinions on the consolidated financial statements and on the group management report do not cover the other information, and consequently we do not express an opinion or any other form of assurance conclusion thereon.

In connection with our audit, our responsibility is to read the other information referred to above and, in doing so, consider whether the other information

is materially inconsistent with the consolidated financial statements, with the group management report information audited for content or our knowledge obtained in the audit, or
otherwise appears to be materially misstated.

Responsibilities of the legal representatives and the Supervisory Board for the consolidated financial statements and the Group management report

Management is responsible for the preparation of the consolidated financial statements that comply, in all material respects, with IFRSs as adopted by the EU and the additional requirements of German commercial law pursuant to Section 315e (1) HGB and that the consolidated financial statements, in compliance with these requirements, give a true and fair view of the assets, liabilities, financial position and financial performance of the Group. Furthermore, management is responsible for such internal control as they have determined necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud (i.e. accounting fraud or error) or error.

In preparing the consolidated financial statements, the legal representatives are responsible for assessing the Group's ability to continue as a going concern. Furthermore, they are responsible for disclosing, as applicable, matters related to going concern. In addition, they are responsible for financial reporting based on the going concern basis of accounting unless there is an intention to liquidate the Group or to cease operations, or there is no realistic alternative but to do so.

Furthermore, management is responsible for the preparation of the group management report that, as a whole, provides an appropriate view of the Group's position and is, in all material respects, consistent with the consolidated financial statements, complies with German legal requirements, and appropriately presents the opportunities and risks of future development. In

addition, management is responsible for such arrangements and measures (systems) as they have considered necessary to enable the preparation of a group management report that is in accordance with the applicable German legal requirements, and to be able to provide sufficient appropriate evidence for the assertions in the group management report.

The Supervisory Board is responsible for overseeing the Group's financial reporting process for the preparation of the consolidated financial statements and of the group management report.

Auditor's Responsibilities for the Audit of the Consolidated Financial Statements and of the Group Management Report

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 whether the group management report as a whole provides an appropriate view of the Group's position and, in all material respects, is consistent with the consolidated financial statements and the knowledge obtained in the audit, complies with the German legal requirements and appropriately presents the opportunities and risks of future development, as well as to issue an auditor's report that includes our opinions on the consolidated financial statements and on the group management report.

Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Section 317 HGB and the EU Audit Regulation and in compliance with German Generally Accepted Standards for Financial Statement Audits promulgated by the Institut der Wirtschaftsprüfer (IDW) will always detect a material misstatement. 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 and this group management report.

During the audit, we exercise professional judgement and maintain professional scepticism. In addition

Identify and assess the risks of material misstatement of the consolidated financial statements and of the group management 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 opinions. The risk of not detecting a material misstatement resulting from fraud is higher than the risk of not detecting a material misstatement 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 of the consolidated financial statements and of arrangements and measures relevant to the audit of the group management report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's internal control or on the effectiveness of these arrangements and measures.
Evaluate the appropriateness of accounting policies used by the executive directors and the reasonableness of accounting estimates and related disclosures made by the executive directors.
Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in the auditor's report to the related disclosures in the consolidated financial statements and in the group management report or, if such disclosures are inadequate, to modify our respective audit opinions. We draw our conclusions on the basis of the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Group to cease to be able to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements present the underlying transactions and events in a manner that the consolidated financial statements give a true and fair view of the assets, liabilities, financial position and financial performance of the Group in compliance with IFRSs as adopted by the EU and the additional requirements of German commercial law pursuant to Section 315e (1) HGB.
We plan and perform the audit of the consolidated financial statements to obtain sufficient appropriate audit evidence regarding the financial information of the entities or business segments within the Group to express opinions on the consolidated financial statements and on the group management report. We are responsible for the direction, supervision and review of the audit activities performed for the purpose of the audit of the consolidated financial statements. We are solely responsible for our audit opinions.
Evaluate the consistency of the group management report with the consolidated financial statements, its conformity with [German] law, and the view of the Group's position it provides.
Perform audit procedures on the prospective information presented by the legal representatives in the group management report. On the basis of sufficient appropriate audit evidence we evaluate, in particular, the significant assumptions used by management as a basis for the prospective information, and evaluate the proper derivation of the prospective information from these assumptions. We do not express a separate opinion on the forward-looking statements or on the underlying assumptions. There is a significant unavoidable risk that future events will differ materially from the forward-looking statements.

We communicate with those charged with governance 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 provide those charged with governance with a statement that we have complied with the relevant independence requirements, and communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, the actions taken or safeguards applied to address independence threats.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter.

OTHER LEGAL AND REGULATORY REQUIREMENTS

Report on the audit of the electronic reproduction of the consolidated financial statements and the group management report prepared for publication purposes in accordance with Section 317 (3a) HGB

Audit opinion

We have performed an assurance engagement in accordance with Section 317 (3a) HGB to obtain reasonable assurance about whether the reproduction of the consolidated financial statements and the group management report (hereinafter also referred to as "ESEF documents") contained in the file STS_GROUP_KA+ZLB_ESEF-2024-12-31.zip and prepared for publication purposes complies in all material respects with the requirements of Section 328 (1) HGB for the electronic reporting format ("ESEF format"). In accordance with German legal requirements, this audit only extends to the conversion of the information contained in the consolidated financial statements and the group management report into the ESEF format and therefore does not extend to the information contained in these reproductions or any other information contained in the above-mentioned file.

In our opinion, the reproduction of the consolidated financial statements and the group management report contained in the above-mentioned file and prepared for publication purposes complies in all material respects with the requirements of Section 328 (1) HGB for the electronic reporting format. Beyond this audit opinion and our audit opinions on the accompanying consolidated financial statements and on the accompanying group management report for the financial year from 1 January to 31 December 2024 contained in the "Report on the audit of the consolidated financial statements and of the group management report" above, we do not express any opinion on the information contained in these reproductions or on any other information contained in the above-mentioned file.

Basis for the audit opinion

We conducted our audit of the reproduction of the consolidated financial statements and of the group management report contained in the above-mentioned file in accordance with Section 317 (3a) HGB and the IDW Auditing Standard: Audit of the Electronic Reproduction of Financial Statements and Management Reports Prepared for Publication Purposes in Accordance with Section 317 (3a) HGB (IDW PS 410 (06.2022)) and the International Standard on Assurance Engagements 3000 (Revised). Our responsibilities under those standards are further described in the "Auditor's Responsibilities for the Audit of the ESEF Documents" section. Our audit

practice complies with the quality management system requirements of the IDW Quality Management Standard: Requirements for Quality Management in the Auditing Practice (IDW QMS 1 (09.2022)) have been applied.

Responsibility of the legal representatives and the Supervisory Board for the ESEF documents

The executive directors of the company are responsible for the preparation of the ESEF documents including the electronic reproduction of the consolidated financial statements and the group management report in accordance with Section 328 (1) sentence 4 no. 1 HGB and for the labelling of the consolidated financial statements in accordance with Section 328 (1) sentence 4 no. 2 HGB.

Furthermore, the company's management is responsible for such internal control as they have determined necessary to enable the preparation of ESEF documents that are free from material non-compliance with the requirements of Section 328 (1) HGB for the electronic reporting format, whether due to fraud or error.

The Supervisory Board is responsible for overseeing the process of preparing the ESEF documents as part of the financial reporting process.

Responsibility of the auditor of the consolidated financial statements for the audit of the ESEF documents

Our objective is to obtain reasonable assurance about whether the ESEF documents are free from material non-compliance with the requirements of Section 328 (1) HGB, whether due to fraud or error. During the audit, we exercise professional judgement and maintain professional scepticism. In addition

Identify and assess the risks of material non-compliance with the requirements of Section 328 (1) HGB, 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.
Obtain an understanding of internal control relevant to the audit of the ESEF documents 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 these controls.
Evaluate the technical validity of the ESEF documents, i.e. whether the file containing the ESEF documents complies with the requirements of the Delegated Regulation (EU) 2019/815 in the version applicable as of the reporting date regarding the technical specification for this file.
Evaluate whether the ESEF documents enable a consistent XHTML reproduction of the audited consolidated financial statements and the audited group management report.
Evaluate whether the tagging of the ESEF documents with Inline XBRL technology (iXBRL) according to Articles 4 and 6 of the Delegated Regulation (EU) 2019/815 in the version

applicable at the reporting date provides an adequate and complete machine-readable XBRL copy of the XHTML reproduction.

NOTE ON ANOTHER MATTER - USE OF THE AUDITOR'S REPORT

Our auditor's report should always be read in conjunction with the audited consolidated financial statements and the audited Group management report as well as the audited ESEF documents. The consolidated financial statements and the group management report converted into ESEF format - including the versions to be filed in the company register - are merely electronic reproductions of the audited consolidated financial statements and the audited group management report and do not replace them. In particular, the "Report on the audit of the electronic reproduction of the consolidated financial statements and the group management report prepared for publication purposes in accordance with Section 317 (3a) HGB" and our audit opinion contained therein can only be used in conjunction with the audited ESEF documents provided in electronic form.

NOTE ON THE SUPPLEMENTARY AUDIT

We issue this auditor's report on the consolidated financial statements and the group management report as well as on the reproduction of the consolidated financial statements and the group management report included in the file STS_GROUP_KA+ZLB_ESEF-2024-12-31.zip and prepared for publication purposes based on our statutory audit completed on 31 March 2025 and our supplementary audit completed on 25 April 2025, which related to the first-time submission of the ESEF documents.

AUDITOR RESPONSIBLE FOR THE AUDIT

The German Public Auditor responsible for the engagement is Christian König.

Munich, 31 March 2025 / limited to the first-time submission of the ESEF documents referred to in the note on the supplementary audit:

Munich, 25 April 2025

PricewaterhouseCoopers GmbH Auditing firm

Christian König ppa. Bernhard Obermayr Certified Public Accountant Certified public accountant

AI Terminal

STS Group AG

418_rns_2025-07-14_671fba4f-de44-4fb0-b4a6-ee889d978252.pdf

Annual report 2024

STS Group CONTENTS

AT A GLANCE

BALANCE SHEET KEY FIGURES

COMPANY PROFILE

1.REPORT OF THE SUPERVISORY BOARD

Monitoring and consulting in continuous dialogue with the Executive Board

Meetings and key topics discussed by the Supervisory Board

Report on the work of the Committee

Corporate Governance and Declaration of Conformity

Audit of the annual and consolidated financial statements for the 2024 financial

year

Dependency report

2. SUMMARISED MANAGEMENT REPORT AND GROUP MANAGEMENT REPORT

BASIS OF THE GROUP

BUSINESS ACTIVITY

GROUP STRATEGY AND MANAGEMENT

GOALS AND STRATEGY

CONTROL SYSTEM

FINANCIAL AND NON-FINANCIAL PERFORMANCE INDICATORS

EMPLOYEES

RESEARCH AND DEVELOPMENT

ECONOMIC REPORT

MACROECONOMIC AND SECTOR-SPECIFIC FRAMEWORK CONDITIONS

OVERALL ECONOMIC DEVELOPMENT

GLOBAL ECONOMY WITH MODERATE GROWTH

DECLINING GROWTH MOMENTUM IN CHINA

SLIGHT RECOVERY IN THE EUROZONE

MEXICO'S GROWTH SLOWS SIGNIFICANTLY

ROBUST US ECONOMY REMAINS THE PILLAR OF THE GLOBAL ECONOMY

ECONOMIC DEVELOPMENT IN THE SECTOR

BUSINESS PERFORMANCE

EARNINGS, FINANCIAL POSITION AND NET ASSETS OF THE GROUP

EARNINGS POSITION

EARNINGS POSITION BY SEGMENT

PLASTICS SEGMENT

SEGMENT CHINA

SEGMENT MATERIALS

FINANCIAL POSITION

PRINCIPLES AND OBJECTIVES OF FINANCIAL MANAGEMENT AND DIVIDEND POLICY

CASH FLOW

LIQUID ASSETS

NET FINANCIAL DEBT

ASSET POSITION

OVERALL STATEMENT OF THE MANAGEMENT BOARD ON THE ECONOMIC SITUATION

OPPORTUNITY AND RISK REPORT

RISK MANAGEMENT SYSTEM

Internal control and risk management system as part of the accounting process

Financial risk management

RISK REPORT

Macroeconomic risks

ECONOMIC RISKS IN THE SECTOR

FURTHER RISKS

LONG-TERM CONTRACTS

DEPENDENCE ON MAJOR CUSTOMERS

ENVIRONMENTAL PROTECTION LAWS

SUPPLY CHAIN BOTTLENECKS

NEW TECHNOLOGIES

PRODUCT LIABILITY CLAIMS

ADJUSTMENT OF THE TAX BASE

SYSTEM AND NETWORK FAULTS

FINANCIAL RISKS

OPPORTUNITIES REPORT

MACROECONOMIC OPPORTUNITIES

ECONOMIC OPPORTUNITIES IN THE SECTOR

Regulatory requirements strengthen the trend towards zero-emission vehicles

FURTHER OPPORTUNITIES

HELPING TO SHAPE TECHNOLOGY TRENDS

UNIQUE SELLING POINT

VARIABLE BATCH SIZES

BROAD MARKET POSITIONING

LARGE ORDERS

ABILITY TO ACT QUICKLY

LONG-STANDING CUSTOMER RELATIONSHIPS

NETWORK WITH THE ADLER PELZER GROUP

OVERALL STATEMENT OF THE MANAGEMENT BOARD ON OPPORTUNITIES AND RISKS

FORECAST REPORT