Q1 statement / Q1 financial report 2026

Basic Information on the Group

1. Business Model

   Three Segments

   With the parent company, EDAG Engineering Group AG, Arbon (Switzerland), the EDAG Group is one of the largest independent engineering service providers. The entire group of companies will hereinafter be referred to as EDAG Group or EDAG.

   Within the framework of its continuous development program, EDAG Group is accelerating the diversification of its portfolio. By taking this step, the company aims to consolidate its market position and meet both the changing needs of customers and the dynamic requirements of a range of different industries. The EDAG Group

   is focusing its international attention on selected fields of industry in addition to the international mobility industry. This includes an increasing number of customers from the defense sector and, as before, from the energy, semiconductor, chemical, and medical product industries. Due to the growth potential and special requirements in the defense sector, we are currently building up additional resources dedicated to this area. This also includes training, especially for employees who already have significant skills and experience in the existing specialist areas, particularly in the automotive industry.

   As before, the EDAG Group's business is organized into the following segments: Vehicle Engineering, Electrics/Electronics and Production Solutions. We follow the sector-independent principle of production-optimized solutions, ensuring that development results are always tailored to production requirements.

   Presentation of the Vehicle Engineering Segment

   The Vehicle Engineering segment (VE) consists of services along the vehicle development process as well as responsibility for modules, derivatives and complete vehicles, from the initial idea through to the finished prototype. The segment is divided into the following divisions:

   The Body Engineering division offers a wide range of vehicle development services. These include package & ergonomics, body assembly, surface design and interior and exterior development. A further focus is on the development of door, cover and gate systems. In addition, the range of services includes the design and development of glazing and the optical design of vehicle lighting systems including headlamps, rear lamps and small lamps. Innovative technologies and the integration and

   implementation of lightweight construction concepts play a crucial role in the division

   Dimensional management which, by calculating tolerances and using simulation, helps to ensure the reproducibility and geometrical quality of the products, is increasingly gaining importance.

   Interface management in the handling of complex module developments is also taking on an increasingly significant role. Systematic process management and close coordination between divisions help to optimize development times and improve product quality.

   We regard sustainability and CO2 reduction as our guiding principles.

   As an engineering service provider, we already have a major impact on the future carbon footprint of products in the early phases of their design and development. Our team of specialists develops sustainable solutions which take the entire product life cycle into account.

   These include:

   • Lifecycle assessments (LCA) to assess environmental impact

   • Advice on what materials to select, in particular with regard to sustainable and recyclable materials

   • Development of alternative drivetrain technologies and lightweight design solutions

   • Strategies for decarbonization in production and supply chains

   • Developing and marketing our own software to enable us to provide reliable information on the future CO2 footprint in the early stages of a project

   The services offered by the Vehicle Integration division range from engineering and simulation to component, system and complete vehicle validation for automobiles, commercial vehicles and motorcycles. We cover the entire spectrum of energy system and powertrain development through to integration with the corresponding energy storage systems (e.g. battery and hydrogen), and also develop intelligent, CO2-saving chassis solutions. Computer-aided engineering (CAE) is used in the functional design of components and systems through to the complete vehicle. To ensure readiness for series production, functionality and durability are validated in our test laboratories.

   In the new vehicle dynamics simulation center, it is now possible to test prototypes on an entirely virtual basis, so saving resources. Furthermore, our EMC center, which went into operation in 2024, has enabled us to further expand our comprehensive testing capacities. The electromagnetic compatibility (EMC) of components, complete vehicles and products across the various branches of industry is tested and adapted in this center.

   Our Models & Vehicle Solutions division offers an extensive range of services, from styling to the physical validation of vehicles. We manufacture test vehicles, sub-assemblies, vehicle bodies and special, individual vehicle conversions. We are also one of the leading developers in the series production of high-quality hydrogen storage systems. Progress and the planning of large-scale MEGC (multiple element

   gas container) storage systems go hand in hand with the increasing demands for safe hydrogen storage solutions. We are continuing the development of our patented filling method to guarantee increased efficiency and safety.

   Complete vehicle development and the development of interdisciplinary module packages are managed by the Project Management division with the involvement of our international subsidiaries. In this division, we provide support in areas ranging from the definition of the product strategy and concept development to series development and production. Project Management networks and directs all the development departments - internal and external - involved, in this way ensuring continuous design status progress throughout the development.

   Just as the conclusion of a business transaction does not mean the end of the customer relationship, start of production (SOP) does not mark the end of the product development process. The After Sales division plays a vital role during both the market launch of a product and its life cycle on the market. If after sales requirements are integrated into the product development process at an early

   stage, overall costs can be reduced and customer satisfaction increased. Our After Sales Quality Management team optimizes development and production processes, ensures that suppliers are qualified, and guarantees the quality of our products. The Technical Editing team draws up legally required documents and literature for all target groups, while our After Sales Digilab maximizes the efficiency of our systems and provides customer-specific solutions.

   Presentation of the Electrics/Electronics Segment

   The service portfolio in the Electrics/Electronics segment (E/E) is divided into four divisions which provide comprehensive solutions for all relevant development tasks and the current challenges in electronics development. Systematic innovation management, the use of new agile development processes and rapid customer-oriented development are the basis for a sustainable, high quality cooperation in projects with customers.

   Technical Sales in the E/E segment is responsible for the further development of this portfolio. To this end, market trends are identified at an early stage and incorporated into the service portfolio in accordance with customer requirements.

   With a constantly evolving organization of excellence in the four areas of competence, the structure of the delivery organization of the E/E segment covers all engineering services necessary for a complete system solution. Projects are handled in cooperations across various segments and sites, in global delivery models.

   The Systems Engineering division develops electrical and electronic systems and functions, through to entire E/E architectures. In this context, the division develops innovative domain or service-oriented E/E architectures on the basis of a fully integrated tool-based E/E architecture development process. Starting with the initial feature list, topology and the vehicle electrical system, through to integration in

   the corresponding vehicle, EDAG provides support and development services for all development phases through to series production. Both the overall systems and their components, sensors, actuators and controls, are taken into account during the development of electronic systems in all relevant functional groups of the E/E

   architecture. The core competency centers on the management of the development process throughout the entire development, following either an OEM or EDAG process model. Whereas there is a tendency to perform more specifying activities at the beginning, the focus shifts towards controlling system integration and system

   validation as the project progresses, concluding with support during the approval phase of the market-ready systems.

   The Integration & Validation division combines functional E/E validation skills. The key aspects here are the creation of test strategies and test specifications for testing electronic vehicle functions, and carrying out the corresponding tests. These

   are carried out in virtual test environments, in the laboratory, at a test site, or on the road, in a variety of ways ranging from manual to highly automated. This division also handles the conception and provision of the required testing technology and infrastructure, which involves developing and setting up optimized test facilities in accordance with the relevant test requirements. All E/E aspects relating to prototype and test vehicle construction are also covered by this division.

   E/E Software & Digitalization develops hardware and software components. EDAG provides support throughout the entire development cycle from the concept phase to series production, and assumes responsibility for all development activities. Development in line with the ASPICE standard in highly automated tool chains and agile development teams is one of the daily challenges faced in the endeavor to ensure efficient processing with high-quality engineering in the projects. Information technology is another focus of Software & Digitalization. Innovative services are developed here, on behalf of customers. Key aspects are the connection of vehicles to the mobility backend, user interfaces and the development of specialized tools for mobility development. The E/E service portfolio also includes agile development processes and distinctive technological expertise in classic software development

   in the frontend and backend and in special applications in the field of AI and data science.

   In its cross-company interdisciplinary function, competence in the field of Safety & Security is taking on an increasingly significant role. One of the division's key points of focus is functional safety in line with the ISO 26262 standard. In society's endeavors to minimize risks (Vision Zero), comprehensive security concepts that

   also cover the infrastructure and monitoring elements, vehicle guidance systems for instance, are being developed. Through legal requirements for the type approval

   of vehicles (UNECE R 155) and standards such as ISO/SAE 21434, cybersecurity continues to become increasingly important. Here, too, EDAG offers a wide, constantly expanding service portfolio.

   Process & Product Data Management (in short: PPDM) provides a key addition to the EDAG service portfolio. Applying its in-depth customer-specific process and systems knowledge, PPDM deals with the project-spanning, cross-divisional management of all process operations, in this way delivering systematic and transparent results which enable the individual milestones in the product

   development process to be achieved. PPDM services range from classic OEM tasks such as bills of materials and release management, project back office management, version and configuration management, test vehicles and vehicle management, through to homologation, localization and certification management. The fields

   of consulting & strategy, environmental management and life cycle management round off this wide-ranging field of activity and provide our clients with ideas for a consistent and more efficient design of their operational methods and processes.

   Presentation of the Production Solutions Segment

   In the EDAG Group, the "Production Solutions" (PS) segment is the key driver for industrial solutions related to smart factories, digital production systems, and connected industrial value creation. PS positions itself as a comprehensive,

   international engineering partner that integrates products, processes, production, and people into a unified approach, and thus actively shapes its clients' industrial transformation.

   With locations around the world, including in Germany, the United States, India, Hungary, and Austria, Production Solutions supports customers across a wide range of industries, combining global engineering expertise with local market knowledge and implementation expertise.

   The service portfolio of Production Solutions is centered around the strategic portfolio elements Smart Factory, Smart People, Smart Ecosystem, and the Industrial Metaverse. These elements intersect and, together, form the foundation for end-to-end, digital, and sustainable production solutions-from strategic planning to stable operations.

   Smart Factory refers to the comprehensive planning, development, and implementation of modern production systems. The goal is to design factories to be cost-effective, scalable, and future-proof, and to use digital tools to validate investment decisions digitally at an early stage. The systems integrate production, logistics, building, and IT infrastructure and optimize them throughout the entire

   factory lifecycle. In the field of automation, Production Solutions is actively driving the use of AI Robotics and Physical AI. Intelligent, software-based automation solutions pave the way for adaptive production systems, autonomous robotics, and a new level of human-machine interaction, thus contributing greatly to the flexibility and future-proofing of industrial value creation.

   With Smart People, Production Solutions consistently places people at the heart of the digital factory. Digital solutions for information, collaboration, training, and empowerment ensure that employees - from management to the shop floor - are effectively integrated into networked production systems.

   The Smart Ecosystem element of the portfolio focuses on the development of digital business models and connected IT architectures for physical products and production systems. A key component of this is IT/OT convergence across the automation pyramid, taking into account regulatory and normative requirements for cybersecurity. Production Solutions develops secure, integrated system landscapes that reliably connect industrial processes, data flows, and automation systems.

   In addition, Production Solutions supports its customers with AI Factory concepts and related consulting services to help them systematically integrate artificial intelligence into development, production, and operations - from maturity assessment and use case prioritization to sustainable implementation.

   The Industrial Metaverse serves as the technological bridge across all portfolio elements. It connects the real and virtual worlds into an integrated industrial work environment that brings together digital twins of products, production processes, and buildings, and allows for virtual validation of decisions.

   The Production Solutions service portfolio is divided into three divisions: Planning Smart Factory, Engineering Smart Factory, and Feynsinn, together forming an integrated service package for sustainable production solutions.

   The Planning Smart Factory division is responsible for the comprehensive, future-oriented planning of production systems and factories, always starting with the development of a smart factory strategy that is economically, technologically, and environmentally sound, based on the customer's business objectives. The services range from the analysis of existing production and logistics structures, through

   feasibility studies, master and layout planning, to the definition of investment and implementation strategies for greenfield and brownfield projects. This involves

   an integrated assessment of production processes, logistics, buildings, building services (BS), IT, and automation structures. Planning Smart Factory takes on the role of general planner, general contractor, or general manager within Production Solutions. The division is responsible for the overall planning and management of complex factory projects, including the coordination of all specialized trades and cross processes throughout all phases of the project. A cornerstone of this approach is the digital twin of the Smart Factory, which is used to virtually validate production

   and logistics concepts, verify key performance indicators, and evaluate variants at an early stage. Simulations, virtual factory models, and VR and AR applications provide a transparent basis for investors, operators, and management to make informed decisions. Planning Smart Factory thus creates the conditions for secure investments, scalable factory concepts, and a shorter time-to-market.

   The Engineering Smart Factory division translates planned production concepts into technical designs and is responsible for their implementation through to the delivery of turnkey production solutions. The focus is on developing customized, productive, and sustainable production systems - tailored to the product, process, and regional requirements. The range of services includes mechanical, electrical, and mechatronic engineering of production facilities and special-purpose machines, the selection and integration of automation and robotics solutions, and virtual and real commissioning. By consistently utilizing virtual commissioning, simulation, and digital validation, risks can be mitigated early on, ramp-up times can be shortened, and investments can be optimally coordinated in terms of timing. In addition, Engineering Smart Factory assists with the ramp-up of complex production systems, coordinates suppliers, and - depending on the project - assumes the role of general contractor or general manager. The goal is to ensure maximum productivity in series production and to design production systems that are flexible, scalable, and future-proof.

   Feynsinn is a trade name belonging to the EDAG Group. The brand assists companies in digitizing their product and production development processes. Feynsinn acts as a consultant on equal footing, offering hands-on implementation expertise. It focuses on process analysis and simplification, system automation, and the integration of disciplines to break down silos. With its network of (process) consultants and experts in digital twins, system architectures, and data (formats) of all types (CAX from product and production development), Feynsinn increases the

   ‌efficiency of value-adding processes from development through sales and marketing in the automotive and manufacturing industries. Feynsinn's metys platform addresses applications focused on visualization and experience in industrial settings. These include XR solutions (VR/AR/MR), virtual training and collaboration solutions, digital worker assistance systems, and applications to support decision-making reliability, training, and communication. The solution consistently places people at the heart of the process - as connected decision-makers, planners, and employees. This allows Feynsinn to lay the foundation for the Industrial Metaverse: a homogeneous data and IT infrastructure that integrates product, process, and production data, enables new digital business models, and supports the sustainable further development of the smart factory.

2. Targets and Strategies

   Since its foundation in 1969, the EDAG Group has been continually developing. With an interdisciplinary team of some 8,000 employees, the EDAG Group, in its global network spanning approximately 30 international subsidiaries, realizes projects in the fields of mobility, defense, industry and public.

   Working across all industries, the EDAG Group develops products and production facilities that take all manufacturing-relevant processes into full account and integrate them into a holistic network. With its own 360-degree development approach, the EDAG Group covers the entire spectrum of modern mobility, combining innovative technologies and future-oriented concepts. Innovative strategies, data integration, and a digital infrastructure form the foundation for development solutions - ranging from highly automated industrial environments and defense applications to sustainable concepts for public sector clients.

   Corporate Purpose

   The focus of our activities is always on people and their need for progress. From this, our corporate purpose "YOUR GLOBAL ENGINEERING & TECHNOLOGY EXPERTS" is also derived.

   
   
   

   This emphasizes our motivation to reinvent ourselves every day and so be in a position to provide our customers, partners and society as a whole with technological solutions that will pave the way for change. The aim is to build on what has already been tried and tested, while at the same time promoting agility, new ideas and further developments. For our employees, "reinvent yourself" creates a balance between stability and change.

   Company Vision and Mission

   Our corporate purpose is the basis from which the vision for the EDAG Group is derived: "Joining forces to shape the future of mobility and industry. Efficiently. Safely. Sustainably."

   This gives us a clear picture of the future and the mission of our company.

   • Talent academy,

   • competence center,

   • agile future and market-shaping company,

   • game changer & visionary,

   • sustainable (socially, economically, ecologically) engineering service provider.

‌Financial Report

1. Macroeconomic and Industry-Specific Conditions

   According to the International Monetary Fund's (IMF) latest outlook on

   April 14, 2026, global economic growth is expected to be 3.1 percent for 2026, which is slightly lower compared with 3.4 percent in the previous year.

   According to the VDA [Association of the German Automotive Industry] (as of April 2026), the first quarter of the 2026 financial year saw an increase in sales of

   new vehicles in Germany. At 0.7 million units, this figure was 5.2 percent higher than in the previous year.

   According to the VDA, 3.5 million new passenger cars were registered in the European automotive market (EU, EFTA, and the UK) through March 2026. This represents a 4.1 percent increase compared to the same period last year. The development of the five largest individual markets varied widely: whereas the numbers of new vehicles registered in France (-2.1 percent) were down in the first quarter of the financial year, higher numbers of new registrations were recorded in German (+5.2 percent), the United Kingdom (+5.9 percent), Spain (+7.6 percent) and Italy (+9.2 percent) compared to the same period in the previous year.

   In Germany, an increase of 33.3 percent in new registrations of electric passenger cars (BEV and PHEV) was recorded in the first quarter of 2026. New BEV (Battery Electric Vehicle) registrations increased by 41.2 percent in, while PHEV (plug-in hybrid electric vehicle) registrations increased by 19.2 percent compared to the same period in the previous year.

   As a result of the increase in the number of electric car registrations (BEV and PHEV), with sales of 235,744 vehicles (previous year: 176.898), the proportion of electric cars in relation to the total number of cars sold rose to 33.7 percent in the first quarter of 2026 (same period in the previous year: 26.6 percent). Likewise, the number of hybrid passenger cars rose to 206,566 (29.5 percent) in the reporting period, compared to 192,187 (28.9 percent) in the first quarter of 2025. In contrast, registrations of gasoline-powered passenger cars declined both in terms of absolute sales figures to 159,058 vehicles (same period in the previous year: 189,741)

   and in terms of market share to 22.7 percent (same period in the previous year:

   ‌28.6 percent). At 96,311 vehicles, the absolute sales figures for diesel-powered passenger cars have likewise fallen compared to the previous year's figure of 102,843 vehicles. The proportion of all diesel-powered cars sold in the reporting period was 13.8 percent (same period in the previous year: 15.5 percent).

   In the USA, the volume on the light vehicle market (passenger cars and light-duty) in the first quarter of the reporting year 2026 decreased by 5.3 percent to

   3.7 million vehicles compared to the same period in the previous year. In China, the electromobility sector is growing less dynamically than before - partly due to the elimination of the full exemption from passenger car purchase tax for NEVs (New Energy Vehicles) and the expiry of regional subsidy programs. Consequently, only 4.2 million new vehicles in this category were sold by the end of March 2026, a reduction of 17.3 percent compared to the same period in the previous year.

   With 1.0 million vehicles, Japan also saw a 5.4 percent decline in new registrations compared to the same period in the previous year. An increase in market volume was also observed in India with 1.3 million (+13.2 percent) and Brazil with 0.6 million vehicles (+15.5 percent) in the reporting period.

   In the latest publication of the ZVEI Economic Barometer dated April 10, 2026, the German Electrical and Digital Manufacturers' Association (ZVEI e. V.) recorded an increase of 2.3 percent in incoming orders in the German electrical and digital industry in the first two months of the 2026 reporting year. Orders from Germany increased by 2.8 percent, the increase among foreign customers amounts to

   1.8 percent.

2. Financial Performance, Cash Flows and Financial Position of the EDAG Group in accordance with IFRS

   Financial Performance Development of the EDAG Group

   As of March 31, 2026, orders on hand increased to €366,1 million, compared to

   €336.2 million as of December 31, 2025. Neither potential call-offs relating to general agreements nor call-offs relating to production orders are included in the orders on hand. In the quarter just ended, the EDAG Group generated incoming

   orders amounting to €195.3 million, which, compared to the same period in the previous year (€229.7 million), represents a decrease of €34.5 million (-15.0 percent).

   At €171.8 million, revenue in the first quarter was approx. €20.7 million or

   10.8 percent below the previous year's level (Q1 2025: €192.6 million). The decline in revenue compared to the same period in the previous year is primarily a result of the overall still tense market situation, and is reflected in all three segments.

   Other income, amounting to €4.2 million, remained at the previous year's level.

   At €17.0 million, materials and services expenses decreased compared to the level of the previous year (Q1 2025: €18.5 million). The materials and services expenses ratio stood at 9.9 percent, which is a slight increase compared to the same period in the previous year (Q1 2025: 9.6 percent). At 3.2 percent, the materials expenses

   ratio is below the previous year's level (Q1 2025: 3.5 percent). On the other hand, at

   6.7 percent, the ratio of service expenses in relation to the revenues was above the level of the same period in the previous year (Q1 2025: 6.1 percent).

   In the quarter just ended, the company's workforce, including apprentices, numbered 8,041 employees on average, which was below the previous year's level (Q1 2025: 8,993 employees). Compared to the same period in the previous year, the EDAG Group's personnel expenses decreased by 11.7 percent to €125.0 million in the reporting period (Q1 2025: €141.5 million), primarily as a result of the declining headcount.

   Depreciation, amortization and impairments totaled €9.5 million (Q1 2025:

   €10.2 million).

   At €1.9 million (Q1 2025: €1.6 million), both EBIT and adjusted EBIT were above the level of the previous year. This resulted in an EBIT margin and an adjusted EBIT margin of 1.1 percent (Q1 2025: 0.9 percent and 0.8 percent, respectively).

   The financial result for the first quarter of 2026 was -€3.3 million, (Q1 2025:

   -€3.1 million).

   During the reporting period, the EDAG Group recorded a slightly lower loss

   (Q1 2026: -€0.9 million) than in the same period of the previous year (Q1 2025:

   -€0.9 million).

   Development of the Vehicle Engineering Segment

   Incoming orders in the first quarter of 2026 amounted to €128.6 million, which was below the level of the same period in the previous year (Q1 2025: €132.0 million). At €102.6 million, revenues were also below the previous year's level (Q1 2025:

   €108.6 million). All in all, an EBIT of €2.5 million was reported for the Vehicle Engineering segment in the quarter just ended (Q1 2025: €0.8 million). The adjusted EBIT margin amounted to 2.4 percent, which was well below the level of the same period in the previous year (Q1 2025: 0.7 percent).

   Development of the Electrics/Electronics Segment

   Incoming orders in the first quarter decreased by €20.7 million to €48.6 million compared to the same period in the previous year (Q1 2025: €69.3 million).

   Revenue totaled €49.8 million, which was also below the previous year's level of

   €58.0 million. The adjusted EBIT stood at €0.9 million (Q1 2025: €0.6 million). The adjusted EBIT margin amounted to 1.9 percent (Q1 2025: 1.0 percent), which was well above the level of the same period in the previous year.

   Development of the Production Solutions Segment

   In the Production Solutions segment, incoming orders in the first quarter amounted to €22.4 million, which was well below the level of the previous year (Q1 2025:

   €37.2 million). At €22.5 million, revenue in the first quarter just ended was well below the previous year's level (Q1 2025: €30.3 million), as was the adjusted EBIT margin, which stood at -6.9 percent (Q1 2025: 0.8 percent). Overall, the adjusted EBIT for the Production Solutions segment stood at -€1.6 million in the first quarter just ended (Q1 2025: €0.3 million).

   Cash Flows and Financial Position

   The EDAG Group's statement of financial position total decreased by €19.2 million to €568.0 million, and was therefore below the level of December 31, 2025 (€587.2 million). At €337.2 million, non-current assets were slightly below the previous year's level (12/31/2025: €340.7 million). In the current assets, there was a notable increase of €34.7 million in the contract assets. By way of contrast, the accounts receivable decreased significantly by €46.1 million. These changes reflect

   the typical development for EDAG in the first three months of a financial year, in line with the company's business activities. Cash and cash-equivalents decreased by

   €42.9 million to €39.0 million.

   On the equity, liabilities and provisions side, there was an increase in equity from €88.6 million to €88.9 million. The equity ratio on the reporting date was

   15.7 percent, which was above the level of the previous year (12/31/2025: 15.1 percent).

   Non-current liabilities and provisions decreased to €211.2 million (12/31/2025:

   €215.4 million). Current liabilities and provisions decreased by €15.3 million to

   €267.9 million, (12/31/2025: €283.3 million).

   In the first quarter of 2026 just ended, the operating cash flow was €9.3 million (Q1 2025: €18.5 million). The decrease can be attributed mainly to income tax refunds received in the previous year.

   At €2.6 million, gross investments in the reporting period were slightly higher than in the previous year (Q1 2025: €2.3 million). At 1.5 percent, the ratio of gross investments in relation to revenues was also slightly above the level of the previous year (Q1 2025: 1.2 percent).

   On the reporting date, unused lines of credit in the amount of €106.4 million exist in the EDAG Group (12/31/2025: €103.6 million). The Executive Management regards the overall economic situation of EDAG Group AG as challenging. The company was able to meet its payment obligations at all times throughout the reporting period.

3. ‌HR Management and Development

   The success of the EDAG Group depends to a significant extent on committed and well qualified employees. Behind the company's comprehensive service portfolio are people with widely differing occupations and qualifications. In addition, the EDAG Group is also characterized by the special commitment and attitude of its employees. Throughout its long-standing history, EDAG has always ensured that both young and experienced employees are offered interesting and challenging activities and projects, and are provided with the prospect of and the necessary space for personal responsibility and decision-making. And this is the primary focus of both our human resources management and development. For a more detailed representation of HR management and development, please see the Group Management Report in the Annual Report for 2025.

   On March 31, 2026, the EDAG Group employed a workforce of 7,947 people (12/31/2025: 8,303 people). Personnel expenses in the reporting period amounted to

   €125.0 million (Q1 2025: €141.5 million).

‌Forecast, Risk and Reward Report

1. Risk and Reward Report

   The following changes to the risks and rewards described in the Group Management Report in the Annual Report for 2025 have occurred:

   Operative risks in the first quarter of 2026 are in risk category A (2025: B), with an unchanged medium probability of occurrence. These adjustments are due to the still tense market situation.

   On the date of publication of the Consolidated Interim Report, the Group Executive Management still does not believe that any of the risks reported and assessed

   in the Group Management Report in the Annual Report for 2025 will jeopardize the existence of the company. The effects of geopolitical and macroeconomic uncertainties and the threat of protectionist trade restrictions do, however, pose a risk to EDAG.

   In our opinion, our strategic orientation and financial direction, our position on the market and the measures we have taken all provide a sound basis for the successful handling of the existing risks and the challenges they present. For a more detailed representation of the Risk and Reward Report, please see the Group Management Report in the Annual Report for 2025.

2. Forecast

   According to the latest IMF estimate announced on April 14, 2026, economic performance in Germany is expected to grow in the 2026 reporting year

   (+0.8 percent); 1.2 percent growth is forecast for 2027. The IMF expects a growth rate of 1.1 percent in 2026 and of 1.2 percent in 2027 for the eurozone. Growth of the US economy is expected to reach 2.3 percent in 2026, while a growth rate of 2.1 percent is anticipated in 2027. According to the latest estimate, China, with forecasts for a 4.4 percent increase in economic performance in 2026 and 4.0 in 2027, will continue to be a growth engine for the global economy. This expected growth in China will still be surpassed by India, for which an increase in economic performance of 6.5 percent is forecast for both 2026 and 2027.

   In the major international automobile markets, the business environment of the automotive industry in 2026 will continue to be challenging. Geopolitical and macroeconomic uncertainties, the threat of protectionist trade restrictions and persistently high energy and consumer prices are adversely impacting future development.

   In its forecast of April 30, 2026, the VDA therefore anticipates just a slight increase in the number of registrations in the passenger car/light vehicle markets in Europe (2 percent) and a decrease in the USA (4 percent) in 2026. At 1 percent, the growth

   rate forecast by the VDA for the Chinese market in 2026 is below the level of growth in the previous year 2025 (4 percent). The declining momentum is partly due to the fact that, following relatively strong growth, another historically high market volume was reached in the years 2024 and 2025 already. In its annual press conference on February 10, 2026, the VDA forecast that there would be a total of 81.2 million new vehicle registrations (cars and light commercial vehicles) in the current financial year.

   Besides the sales figures, however, technological and digital trends are having an enormous influence not just on our own business model, but also on those of the OEMs. In particular, a large number of automotive startup companies can see an opportunity to reshape the mobility of the future. The current emission standards and far-reaching sustainability regulations are making the further development

   of classic powertrain types essential, and promoting the integration of alternative powertrains. The BEV/PHEV technologies are also becoming increasingly important. In addition, however, e-fuels and the hydrogen-based fuel cell are providing high-tech engineering service providers with diverse opportunities. Additional challenges for

   all market participants are being created by the future-oriented fields of software, sensors, autonomous and connected driving, and the development of artificial intelligence. The development of new digital business fields and mobility services necessitates additional development and capacity requirements, which could lead to new growth opportunities for the engineering service market. The continuing

   consolidation of the engineering service providers and changed responsibility models in the drafting of work contracts will also bring about lasting changes within the sector.

   As a global-level partner to our customers, EDAG wants to operate successfully and achieve profitable growth rates again. EDAG is one of the top engineering service providers in the automotive sector, and well positioned to handle the market changes

   towards increasingly large and complex projects with more and more engineering responsibility. Targeted investments and a clear focus on our performance and technology spectrum have strengthened our international market position for fully integrated vehicle development and large module packages. By creating a synergy between the flexible and mobile application of our expertise, the utilization of our internal, Global Delivery resources, and an international project management team, we strive, at a global level, to meet our customers' expectations.

   1 Version: May 21, 2025 according to VDA

   The market for engineering services remains highly dynamic. With a growing focus on CO2 reduction, the development of alternative drive concepts is being massively accelerated. Trend topics such as highly automated driving and data-based business models call for completely new vehicle architectures, and are increasingly leading to a separation of hardware and software in development. The large number of powertrain variants will make flexible and networked smart factories indispensable. All these developments are driving the demand for development services, and will,

   in the medium to long term, lead to considerable opportunities. The VDA anticipates an investment volume of €320 billion in research and development in the automotive industry in the period until 20291; to this must be added capital investments in the amount of approx. €220 billion on the conversion of existing and the construction

   of new plants. We expect the defense sector, in particular, to demonstrate a high willingness to invest and attractive medium- to long-term growth prospects by 2026.

   We do not at present see any risk to the continued existence of the company in the geopolitical conflicts, the persistently high level of energy and staffing costs and the general slowdown in purchasing, but do see a risk that its development might be impaired. The ongoing dynamic situation in connection with geopolitical conflicts, and to some extent with the protectionist economic policies being implemented in the global environment, harbors uncertainties the development of which cannot

   be foreseen. It is difficult to reliably predict the possible consequences for supply chains and the availability of pre-products and raw materials in the industries relevant to us. With the exceptional uncertainties arising as a result, companies across all sectors find themselves facing considerable challenges when it comes to forecasting economic development and deriving a reliable and dependable quantitative outlook. On the reporting date, the Group has unused lines of credit with credit institutions in the amount of €106.4 million currently.

   ‌Delays in the awarding of contracts, project cancellations, heterogeneous capacity utilization in different areas and locations, and continuing price pressure still pose substantial risks for engineering service providers.

   For the 2026 financial year, EDAG is forecasting a development of revenues in the range of approx. +/-5 percent and an adjusted EBIT margin which, according to current estimates, will be in a positive range of up to approx. 3 percent. It is assumed that the investment rate is likely to remain in the region of approx. 2 to 3 percent.

   However, the estimates outlined here are still largely dependent on the uncertainties described above.

   The following table provides a summary of the outlook for 2026:

   in € million		2025	Forecast 2026
   Group
   Sales revenues		714.0	Changes of around +/- 5 percent
   Adjusted EBIT margin		-1.8%	Positive level of up to approx. 3 percent
   Investment rate		1.8%	Approx. 2 to 3 percent

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