Financial statement HENSOLDT AG 2025

German GAAP (HGB) Annual Financial Statements of

HENSOLDT AG

for the fiscal year ended on 31 December 2025

This English report is for convenience only. In case of discrepancies between the English and the German report, the German report shall prevail. Furthermore the English report is not provided in the European Single Electronic Format (ESEF). The legally required rendering in ESEF-format is filed in German language with the operator of the German Federal Gazette and published in the German Federal Gazette.

STATEMENT OF FINANCIAL POSITION

INCOME STATEMENT

Fiscal year

NOTES

1. Bases and Methods of the Annual Financial Statements

   As of 31 December 2025, HENSOLDT AG, Taufkirchen, (Local Court of Munich HRB 258711) (the "Company") was the parent company of the HENSOLDT Group.

   On 24 September 2020, the shares of the Company were admitted to trading on the Frankfurter Stock Exchange with admission to the sub-segment of the regulated market with the ticker symbol HAG000. Trading commenced on the following day. As part of the regular review of the DAX index family composition, HENSOLDT AG was included in the SDAX index and the TecDAX index by Deutsche Börse on 20 June 2022 and in the MDAX with effect from 20 March 2023. The main reason was that the market capitalisation based on free float had risen compared to other companies. The Federal Republic of Germany is a shareholder of HENSOLDT AG through the Kreditanstalt für Wiederaufbau (KfW) with a share of 25.1 % on 31 December 2025 as well as Leonardo S.p.A., Italy, which holds 22.8 % in HENSOLDT AG.

   The Annual Financial Statements of HENSOLDT AG were prepared in accordance with sections 242 et seq. and 264 et seq. of the German Commercial Code (HGB) and in accordance with the relevant provisions of the German Stock Corporation Act (AktG) and the articles of association. The provisions applicable to large corporations apply.

   The applicable measurement provisions set forth in the German Commercial Code were observed by taking into account the going concern principle. The valuation methods applied to the previous Annual Financial Statements were retained.

   Items in the Statement of Financial Position and the Income Statement were combined to provide a clearer presentation and are broken down accordingly in the notes.

   The Annual Financial Statements are presented in Euro (€). Unless otherwise stated, all financial figures presented herein in € are rounded to the nearest thousand € according to proven commercial principles. Due to rounding, numbers presented may not add up precisely to the totals provided and percentages may not precisely reflect the absolute figures. Absolute amounts of less than €500 and greater than zero are shown as 0 or -0, depending on the sign. On the other hand, for items that have no value, the indication of a false display is made with "-".

   The Income Statement is prepared according to the cost-of-sales method.

   Accounting and valuation methods

   The accounting and valuation methods set out below were the primary methods used for the preparation of the Annual Financial Statements.

   Intangible assets are valued at cost and are reduced by scheduled amortisation. For the purpose of scheduled amortisation of intangible assets, the company predominantly expects a useful life of 3 years. The straight-line method of amortisation is applied.

   Property, plant and equipment are valued at cost and are reduced by scheduled depreciation. The planned depreciation is based mainly on the following useful lives: 3 to 10 years for other plants and business and factory equipment, 4 to 20 years for land, rights equivalent to land and buildings, including buildings on third-party land. The straight-line method of depreciation is applied.

   Additions to low-value assets with cost of acquisition or production of up to €800 are immediately recognised as an expense in the year of acquisition or production.

   Financial assets are recognised at cost or, in the case of expected permanent impairment, at the lower fair values. That applies if objective indications, in particular events or changes in circumstances, indicate a significant or prolonged impairment. In the case of a previous write-down, a lower valuation may not be retained if the reasons for it no longer exist.

   Advance payments made are recognised at their nominal amount.

   Accounts receivable and other assets are recognised at their nominal value. Recognisable individual risks and general credit risks are accounted for through appropriate value adjustments.

   Cash and cash equivalents are disclosed at the nominal value.

   The difference between the higher settlement amount of a liability and the issue amount is included in a prepaid expenses item. Repayment is made through scheduled annual depreciation, which is distributed over the entire term of the liability.

   Provisions for pensions and similar obligations are recognised at the settlement amount and determined actuarially using the projected unit credit method.

   The following premises were used for the calculation:

   • Actuarial interest rate: 2.06 %

   • Pension trend: 2.00 %

   • Salary trend: 2.00 % - 4.00 %

   The calculated final age is essentially based on the age limits stipulated in the Rentenversicherungs-Altersgrenzen-Anpassungsgesetz [German Pension Insurance Age Limit Adjustment Act] of 2007 as well as the current biometric Richttafeln [Mortality Tables] 2018 G by Heubeck. The final funding age was set at 67 years. In addition, assumptions were made regarding the payout options granted to pension beneficiaries.

   The provision for pensions as at 31 December 2025 are discounted at a flat rate in accordance with section 253 (2) HGB using the average market interest rate of the past ten fiscal years, which results from an assumed residual term of 15 years.

   The plan assets for pensions and similar obligations measured at fair value are netted with the provisions in accordance with section 246 (2) sentence 2 HGB.

   In the Income Statement, interest expenses from the calculation of retirement benefit obligations and comparable longterm obligations and income or expenses from the fair value measurement of plan assets are netted and reported in the finance result.

   Tax provisions and other provisions take into account all contingent liabilities and are recognised as liabilities at the settlement amount required in accordance with the principles of reasonable business judgement, taking into account future price and cost increases, if applicable. Non-current provisions are discounted to the date of their expected utilisation using the average term-adequate interest rates for the past seven fiscal years published by Deutsche Bundesbank.

   Other provisions are recognised for anticipated losses arising from foreign currency forward transactions or interest rate swap transactions concluded to hedge exchange rate or interest rate fluctuations in the amount of the negative market values. The valuation was made using recognised valuation methods such as "option pricing" models and "discounted cash flow" models. The input parameters used are based on observable market data such as interest rate curves. Positive market values represent unrealised gains and are not recognised in the statement of financial position.

   Liabilities are recognised at their settlement amounts.

   Deferred taxes are calculated for temporary differences between the commercial and tax valuations of assets, liabilities and accruals. In addition, deferred tax assets are calculated on the existing corporate and trade tax loss carryforwards, insofar as a utilisation of the loss carryforwards is expected in the next 5 years. Any resulting tax burden will, in total, be recognised in the statement of financial position as deferred tax liabilities. In the case of tax relief, no use is made of the corresponding capitalisation option pursuant to section 274 (1) sentence 2 HGB and capitalisation is waived.

   Receivables and liabilities denominated in foreign currencies with a residual term of less than one year are valued at the spot foreign exchange rate prevailing on the balance sheet date. Accounts receivables in foreign currencies with a residual term of more than one year are translated at the foreign exchange rate on the accounting date or at the lower rate on the balance sheet date, foreign currency liabilities at the foreign exchange rate prevailing on the accounting date or at the higher rate on the balance sheet date. Advance payments made or received will be converted at the selling or bid rate prevailing on the accounting date.

2. Explanations for the Statement of Financial Position

   1. Intangible assets

      Intangible assets amount to €65,256 thousand as of 31 December 2025 (previous year: €32,325 thousand).

      Advance payments made for the procurement of licences as part of the implementation of the business transformation for SAP S/4HANA in the amount of €32,574 thousand (previous year: €29,214 thousand) were capitalised in the fiscal year.

      For a breakdown of the items summarised in the Statement of Financial Position and their changes, refer to the "Changes in fixed assets" section.

   2. Property, plant and equipment

      Property, plant and equipment amount to €1,194 thousand as of 31 December 2025 (previous year: €1,498 thousand).

      For a breakdown of the items summarised in the Statement of Financial Position and their changes, refer to the "Changes in fixed assets" section.

   3. Financial assets

      Financial assets mainly consist of the investment in the subsidiary HENSOLDT Holding GmbH in the amount of €2,670 million (previous year: €2,670 million).

      In addition, there are loans with respect to the indirect investment GEW Technologies (Pty) Ltd. of €11.6 million (previous year: €12.4 million).

      For a breakdown of the items summarised in the Statement of Financial Position and their changes, refer to the "Changes in fixed assets" section.

   4. Advance payments made

      Advance payments made amounting to €89 thousand (previous year: €175 thousand) are owed to third parties.

   5. Accounts receivable and other assets

      	31 Dec.	31 Dec.
      in € thousand	2025	2024
      Trade receivables	61	110
      Accounts receivable from affiliated companies	1,265,149	1,038,635
      Other assets	435	1,075
      Accounts receivable and other assets	1,265,645	1,039,820

      Accounts receivable from affiliated companies mainly relate to a loan from the company to HENSOLDT Holding GmbH in the amount of €667,941 thousand (previous year: €667,941 thousand). In addition, receivables from the profit transfer of HENSOLDT Holding GmbH amounting to €285,105 thousand (previous year: €164,613 thousand) and receivables from cash pooling amounting to €215,104 thousand (previous year: €149,951 thousand) are included. Furthermore, accounts receivable from advance VAT returns of controlled companies amount to €64,156 thousand (previous year: €9,990 thousand) and financial receivables from HENSOLDT Nexeya France S.A.S. amount to €19,325 thousand (previous year: €24,326 thousand). Receivables from internal services amount to €7,456 thousand in the reporting year (previous year: €20,799 thousand).

      Other assets mainly comprise tax receivables amounting to €194 thousand (previous year: €7 thousand) and credit balances with suppliers amounting to €74 thousand (previous year: €140 thousand). The previous year included tax receivables of €711 thousand.

      As in the previous year, all accounts receivable and other assets have a residual term of less than one year.

   6. Cash and cash equivalents

      Cash and cash equivalents relate to current cash account balances in the amount of €11 million (previous year: €11 million) as well as to short-term overnight deposits in the amount of €407 million (previous year: €302 million) and short-term deposits in the amount of €250 million (previous year: €100 million).

   7. Prepaid expenses and deferred charges

      In April 2025, as part of a comprehensive realignment of its financing structure, the Company completely replaced its existing financing arrangements - consisting of a senior facility agreement with a term loan, a term facility and a revolving credit facility - with a new syndicated loan agreement. The new agreement includes a term loan and a revolving credit facility. In addition, promissory note loans with maturities of three, five and seven years, with fixed and variable interest rates, were raised in July 2025.

      As part of the refinancing, all previously deferred costs amounting to €4,398 thousand in relation to the terminated financing agreements were reversed and new deferred items were created for the new financing instruments. The directly attributable transaction costs relating to the term loan concluded in April 2025 amounted to €2,454 thousand as of 31 December 2025. Transaction costs of €1,155 thousand were deferred for the new revolving credit facility. In connection with the promissory note loans issued in July 2025, a total of €542 thousand was accrued as of 31 December 2025. These costs will be amortised on a straight-line basis over the respective loan terms until 2032.

      In addition, the balance sheet item includes insurance premiums of €228 thousand (previous year: €282 thousand) and other deferred charges mainly for software licences of €1,443 thousand (previous year: €1,734 thousand).

   8. Equity

      As of 31 December 2025, the subscribed capital of HENSOLDT AG amounts to €115.5 million and is divided into 115,500,000 ordinary bearer shares (no-par value shares).

      	31 Dec.	31 Dec.
      in € thousand	2025	2024
      Capital reserve section 272 (2) no. 1 HGB	280,406	280,406
      Capital reserve section 272 (2) no. 4 HGB	1,409,989	1,409,989
      Capital reserve	1,690,395	1,690,395

      In accordance with the articles of association, the subscribed capital of the Company may be increased by the Management Board until the end of 26 May 2029, with the approval of the Supervisory Board, by issuing new ordinary bearer shares against cash and/or in kind contributions, once or several times, for in summary up to €23.1 million (Authorised Capital 2025).

      The share capital of the Company was conditionally increased by up to €23.1 million by resolution of the Annual General Meeting of 27 May 2025 through the issuance of up to 23,100,000 new no-par value bearer shares against contributions in cash or in kind (Conditional Capital 2025). The Conditional Capital increase will only be implemented to the extent that, based on convertible or warrant bonds, profit participation certificates, or profit-sharing bonds (or combinations of these instruments), each with conversion or option rights or conversion or option obligations, issued by HENSOLDT AG or by group companies of HENSOLDT AG within the meaning of Section 18 of the German Stock Corporation Act (AktG) by the end of 26 May 2029, pursuant to the authorization resolved by the Annual General Meeting on 27 May 2025, conversion or option rights are exercised, or holders of bonds obligated to convert or exercise options fulfill their obligation to convert or exercise options, or the entity exercises its right, upon maturity of the bonds, to grant the holders of the respective partial bonds shares of the entity in whole or in partly instead of payment of the cash amount due, and to the extent that no other forms of settlement are used. As of 31 December 2025, the Company had not utilised its 2025 conditional capital. Accordingly, the Conditional Capital 2025 amounted to €23.1 million as of 31 December 2025.

      The equity does not include any amounts restricted from distribution in accordance with Section 253 (6) sentence 2 HGB (previous year: €223 thousand).

      In fiscal year 2025, no withdrawal from the capital reserve was made during the preparation of the financial statements in accordance with Section 272 (2) No. 4 HGB. In the previous year, €35 million was withdrawn and included in the balance sheet profit.

      Net income for the fiscal year 2025 amounted to €163,156 thousand (previous year: net income €21,844 thousand). Taking into account the profit carry-forward of €10,093 thousand reduced by the dividend distribution of €57,750 thousand, this results in a balance sheet profit of €173,249 thousand (previous year: €67,843 thousand).

   9. Provisions for pensions and similar obligations

      Provisions for pensions and similar obligations amount to €16,641 thousand (previous year: €19,426 thousand) and are disclosed at their settlement amount and determined actuarially according to the projected unit credit method.

      The assets transferred in trust to Allianz Treuhand GmbH, Frankfurt am Main, within the framework of a Contractual Trust Arrangement (CTA), and thus representing dedicated assets for the fulfilment of pension obligations, are plan assets within the meaning of section 246 (2) sentence 2 HGB and are therefore offset against the corresponding pension obligations at their fair value.

      Information on netting in accordance with section 246 (2) sentence 2 HGB:

      Fiscal year

      in € thousand	2025	2024
      Expected settlement amount for pensions and similar obligations	19,580	22,255
      Acquisition cost of plan assets	2,670	2,627
      Fair value of plan assets	2,938	2,829
      Offset of expenses	-	0
      Offset of income	330	463

      The interest expenses of the obligations, the current income from the plan assets and the income or expenses from changes in the fair value of the plan assets are presented offset in the finance result under interest and similar income or expenses.

      The difference in accordance with section 253 (6) sentence 3 HGB amounts to €269 thousand (previous year: €223 thousand) and is restricted from distribution.

   10. Other provisions

       Other provisions relate to personnel-related provisions in the amount of €26,052 thousand (previous year: €22,227 thousand) and miscellaneous other provisions of €11,588 thousand (previous year: €14,697 thousand).

       Provisions relating to staff include variable remuneration components of €3,839 thousand (previous year: €2,504 thousand) and non-current variable remuneration components (Long-Term Incentive Bonus) of €19,792 thousand (previous year: €18,302 thousand).

       The personnel-related provisions also include provisions for anniversary allowances. This provision amounts to €316 thousand on the balance sheet date (previous year: €288 thousand). An interest rate of 1.94% (previous year: 1.63 %) was used for their actuarial valuation as at the reporting date of 31 December 2025.

       Furthermore, there are obligations to employees from the Company's lifetime work account model, in the amount of the remuneration components contributed by employees; these amount to €577 thousand (previous year: €460 thousand). For this purpose, the underlying securities-based plan assets were calculated using financial mathematics and the corresponding amount of the obligation was derived from this. As at the balance sheet date, these securities are reported as trust assets at fair value (€577 thousand; previous year: €460 thousand) at cost of acquisition of €557 thousand. The difference amount according to Section 253 (6) sentence 3 HGB is €20 thousand (previous year: €0 thousand) and is blocked from distribution. Trust assets and the obligation are presented on a net basis.

       Personnel-related provisions also include the obligations arising from the replenishment and severance payments of part-time retirement obligations of €87 thousand (previous year: €147 thousand). The obligations arising from the payment arrears of part-time retirement obligations amounting to €103 thousand (previous year: €308 thousand) have been offset against earmarked plan assets which serve to secure this obligation. The fair value of the plan assets amount to €621 thousand (previous year: €593 thousand) at cost of acquisition of €583 thousand. The difference amount according to Section 253 (6) sentence 3 HGB is €38 thousand (previous year: €20 thousand) and is blocked from distribution. The difference on the asset side of €518 thousand (previous year: €285 thousand) is shown as a separate balance sheet item under assets. The offset interest expenses amount to €0 thousand, while the income from the fair value adjustment is €28 thousand (previous year: €25 thousand). An interest rate of 1.88 % was used for the actuarial valuation as at the reporting date of 31 December 2025.

       Other provisions include provisions for anticipated losses arising from the valuation of interest rate swaps as at the reporting date in the amount of €8,522 thousand (previous year: €11,750 thousand), provisions for the remuneration of the Supervisory Board and the Annual General Meeting amounting to €1,566 thousand (previous year: €1,572 thousand) and provisions for auditing and consulting fees of €1,500 thousand (previous year: €1,375 thousand).

   11. Liabilities

       The liabilities as well as their maturities as of 31 December are as follows.

       31 Dec.

       in € thousand	< 1 year	1 to 5 years	> 5 years	2025
       Liabilities to banks	12,834	1,065,000	85,000	1,162,834
       Trade liabilities	20,970	-	-	20,970
       Liabilities to affiliated companies	1,379,821	-	-	1,379,821
       Other liabilities	73,679	-	-	73,679
       Liabilities	1,487,304	1,065,000	85,000	2,637,304

       31 Dec.

       in € thousand	< 1 year	1 to 5 years	> 5 years	2024
       Liabilities to banks	13,907	1,070,000	-	1,083,907
       Trade liabilities	23,441	-	-	23,441
       Liabilities to affiliated companies	1,123,378	-	-	1,123,378
       Other liabilities	8,162	-	-	8,162
       Liabilities	1,168,888	1,070,000	-	2,238,888

       In April 2025, as part of a comprehensive refinancing, the Company restructured its liabilities to banks.

       The existing term loan of €620 million (nominal amount), the term facility of €450 million (nominal amount) concluded in relation to the acquisition of ESG GmbH in December 2023 and the revolving credit facility of €370 million that was not utilised rising various credit facilities. This includes a term loan with a nominal value of €850 million and a new revolving credit facility in the amount of €400 million, which was not utilised of as of 31 December 2025. In July 2025, promissory note loans totalling €300 million (nominal value) were issued. This included €65 million with a term of three years at partly fixed and partly variable interest rates, a further €150 million with a term of five years at partly fixed and partly variable interest rates, and €85 million with a term of seven years at a fixed interest rate.

       The newly concluded credit facility and the promissory note loans resulted in interest liabilities amounting to €11,486 thousand (previous year: €11,439 thousand) as of 31 December 2025. Furthermore, a liability from payment services agreements concluded with a bank in the amount of €1,348 thousand (previous year: €2,468 thousand) was also included. Under this agreement, the bank undertakes to settle payment obligations arising from goods and services on time, thus enabling HENSOLDT to benefit from extended payment terms with the original suppliers.

       Liabilities to affiliated companies of €1,379,821 thousand (previous year: €1,123,378 thousand) are liabilities from the cash pooling of €1,372,703 thousand (previous year: €1,114,934 thousand) and trade payables of €7,118 thousand (previous year: €8,444 thousand).

       Other liabilities mainly include liabilities from taxes (VAT and wage tax) in the amount of €71,377 thousand (previous year: €7,597 thousand).

   12. Financial instruments

       The Company had interest rate swap transactions at 31 December 2025 with a total volume of €620 million and with a term running until 14 April 2027. The nominal interest expense of the 3-month EURIBOR will be exchanged for this period for an interest rate of 2.99%. The negative fair values of interest rate swap transactions represent unrealised losses and are recognised in other provisions in accordance with the imparity principle.

       The market values were determined on the basis of the market information available on the balance sheet date, in particular interest rates, and constitute the values at which a third party would assume the rights and obligations arising from the financial instruments.

   13. Contingent liabilities

       The obligations entered into from contingent liabilities amount to €626,943 thousand (previous year: €520,786 thousand), were concluded for affiliated companies and relate mainly to advance payment and contract performance guarantees towards third parties. Furthermore, letters of comfort exist with affiliated companies in the amount of €67,000 thousand. These contingent liabilities were not recognised as liabilities, as the underlying obligations are likely to be fulfilled due to the creditworthiness of the debtors and therefore no utilisation is expected.

   14. Other financial obligations

       Payment obligations for tangible and intangible assets totalling €766 thousand (previous year: €831 thousand) exist for long-term rental and leasing agreements. A total of €271 thousand (previous year: €207 thousand) of these obligations are due within one year.

3. Explanations for the Income Statement

   1. Revenue

      The Company provides administrative, advisory and other services to subsidiaries and affiliated companies.

   2. General administrative expenses

      The general administrative expenses include the expenses for the further strategic development of the HENSOLDT Group as well as central administrative expenses of HENSOLDT AG which are not passed on to the operating companies of the HENSOLDT Group. In the previous year, the expense for the employee share programme, which was not passed on to the participating companies of HENSOLDT Group, was included in an amount of €90 thousand.

   3. Other operating income

      Other operating income of €8,010 thousand (previous year: €20,391 thousand) primarily includes income from the reversal of the provision for anticipated losses from the valuation of interest rate swap transactions at balance sheet date of €3,228 thousand (previous year: realised income from ongoing interest rate swap transactions of €5,531 thousand), income from transfer of costs recorded in other operating expenses to affiliated companies of €4,024 thousand (previous year: €6,938 thousand) as well as non-recurring income from the reversal of other provisions of €524 thousand (previous year: €254 thousand). The previous year included income of €7,650 thousand from the transfer of costs for the employee share programme to the participating companies of the HENSOLDT Group.

   4. Other operating expenses

      Other operating expenses of €6,928 thousand (previous year: €18,305 thousand) mainly comprise realised losses from ongoing interest rate swap transactions of €2,757 thousand in fiscal year 2025 (previous year: expenses of €2,213 thousand from the addition of provisions for anticipated losses from the valuation of interest rate swap transactions at the balance sheet date), costs passed on to affiliated companies of €4,024 thousand (previous year: €6,938 thousand) and realised foreign exchange losses of €54 thousand (previous year: €20 thousand). The previous year figures included expenses of €7,650 thousand for the employee share programme, which were passed on to the participating companies of the HENSOLDT Group as well as expenses of €268 thousand for the capital increase.

   5. Financial result

      Fiscal year

      in € thousand	2025	2024
      Income from other securities and loans classified as financial assets1	1,521	1,293
      Other interest and similar income1	17,589	20,585
      Interest and similar expenses	-75,203	-85,895
      Other financial result	-22,318	-19,795
      Financial result	-79,165	-102,413

      1 Adjustment of the prior year's figure within the financial result

      The income from other securities and loans classified as financial assets solely includes interest income from affiliated companies from the loan to GEW Technologies (Pty) Ltd.

      Other interest and similar income includes mainly interest income from affiliated companies from cash pooling amounting to €7,726 thousand (previous year: €7,680 thousand) and from loans amounting to €3,436 thousand (previous year:

      €1,845 thousand) as well as interest income on short-term deposits of €6,097 thousand (previous year: €7,526 thousand). In 2024 income from pension obligations amounts to €328 thousand (previous year: €463 thousand).

      Interest and similar expenses include interest expenses of €46,955 thousand on the newly concluded term loan and promissory note loans as part of the restructured financial liabilities. In the previous year, interest expenses for the Term Loan and Term Facility repaid in April 2025 amounted to €55,793 thousand. In addition, interest expenses to affiliated companies from cash pooling amounting to €28,154 thousand (previous year: €30,098 thousand) are included.

      The other financial result mainly includes write-offs on financial receivables from affiliated companies amounting to

      €22,000 thousand (previous year: €19,800 thousand.

   6. Income taxes

      Income tax expenses of €11,572 thousand (previous year: €9,227 thousand) is a current tax expense amounting to

      €10,420 thousand (previous year: €9,933 thousand) as well as a current tax expense, relating to the previous year, of

      €1,152 thousand (previous year: €706 thousand).

   7. Other taxes

      Other taxes amount to €106 thousand (previous year: €50 thousand) and relate mainly to non-deductible VAT in the amount of €94 thousand (previous year: €39 thousand).

   8. Cost of materials

      Fiscal year

      in € thousand	2025	2024
      Cost of raw materials, consumables and supplies and goods purchased	1,141	499
      Cost of materials	1,141	499

   9. ‌Personnel expenses / staff

      Fiscal year

      in € thousand	2025	2024
      Wages and salaries	38,920	30,334
      Social security contributions and expenses for pensions and similar obligations thereof pensions €-628 thousand (PY: €1,546 thousand)	1,385	3,369
      Personnel expenses	40,305	33,704

      The following overview shows the average number of employees during the fiscal year, broken down by group:

      Fiscal year

      Average	2025	2024
      Employees	137	123
      Apprentices / Trainees	7	8
      Total	144	131

4. Other disclosures

   1. Composition and mandates of the Management Board and the Supervisory Board Members of the Management Board and mandates of the members:

      • Dörre, Oliver (Munich), Chairman of the Management Board, Chief Executive Officer of HENSOLDT AG

      • Ladurner, Christian (Vaterstetten), Chief Financial Officer of HENSOLDT AG

      • Dr. Immisch, Lars (Munich), Chief Human Resources Officer of HENSOLDT AG (until 31 December 2025)

        Members of the Supervisory Board and mandates of the members

        The following persons are members of the Supervisory Board:

        Name	Born	Member since	Appointed until	Profession
        Reiner Winkler (Chair)	1961	2022	2030	Independent Consultant
        				Chair of the Works Council of HENSOLDT Sensors

        Armin Maier-Junker1 (Vice Chair)	1962	2017	2026
        Dr. Jürgen Bestle1	1966	2021	2026
        Jürgen Bühl1	1969	2017	2026
        Marco R. Fuchs	1962	2023	2030
        Achim Gruber1	1963	2021	2026
        Ingrid Jägering	1966	2017	2030
        Marion Koch1	1978	2020	2026
        Giuseppe Panizzardi	1963	2023	2030
        Raffaella Luglini	1971	2024	2030
        Julia Wahl1	1987	2019	2026
        Hiltrud Werner	1966	2022	2030
        1 Representative of the employees

        GmbH, Ulm; Chair of the General Works Council of HENSOLDT Sensors GmbH and Chair of the Group Works Council of HENSOLDT AG

        CTO of HENSOLDT AG

        Division Manager on the Executive Board of IG Metall

        Chair of the Management Board of OHB SE

        Chair of the Works Council of HENSOLDT Optronics GmbH, Oberkochen

        Member of the Management Board and CFO of Stihl AG

        Member of the Works Council of HENSOLDT Sensors GmbH, Immenstaad; Head of the "Airborne & Space Radars" business unit of HENSOLDT Sensors GmbH

        Senior Vice President M&A and Equity Investments of Leonardo S.p.A.

        Chief Sustainability Officer of Leonardo S.p.A.

        Press Officer at IG Metall Baden-Württemberg Management Consultant

        The following members of the Supervisory Board of the Company who have mandates in other Supervisory Boards or comparable domestic and foreign control bodies are shown in the following table (Mandates within the HENSOLDT Group are marked with an asterisk (*):

        Name Position

        Dr. Jürgen Bestle • Member of the Supervisory Board of HENSOLDT Sensors GmbH*

        Jürgen Bühl

        • Member of the Supervisory Board of HENSOLDT Sensors GmbH*

        • Member of the Supervisory Board of Airbus Defence & Space GmbH

        • Chair of the Supvervisory Board of ZARM Technik AG

        • Chair of the Supvervisory Board of MT Aerospace AG

        • Member of the Supvervisory Board of OHB System AG

        • Member of the Supvervisory Board of Rocket Factory Augsburg AG

          Marco R. Fuchs

          • Chair of the Board of Directors of OHB Italia S.p.A

          • Chair of the Board of Directors of OHB Sweden AB

          • Chair of the Board of Directors of Antwerp Space N.V.

          • Chair of the Board of Directors of LuxSpace Sàrl

          • Chair of the Supervisory Board of ORBCOMM Deutschland Satellitenkommunikation AG

          • Board member of Skyloom Global Corp.

            Achim Gruber • Member of the Supervisory Board of HENSOLDT Optronics GmbH*

            • Chair of the Advisory Board of Wegmann Unternehmens-Holding GmbH & Co. KG

              Ingrid Jägering

          • Member of the Board of Directors of KNDS N.V.

          • Member of the Supervisory Board of ZF Friedrichshafen AG (since March 2025)

          • Member of the Supervisory Board of SAF-Holland SE (until May 2025)

            Giuseppe Panizzardi • Member of the Board of Leonardo International S.p.A. (since May 2025)

            Julia Wahl

            • Member of the Supervisory Board of HENSOLDT Sensors GmbH*

            • Member of the Supervisory Board of Aesculap AG

              Hiltrud Werner

            • Chair of the Supervisory Board of Mitteldeutsche Flughafen AG

            • Member of the Supervisory Board of Everllence SE

          Members not mentioned have no corresponding mandates in other companies.

   2. Remuneration of the Management Board and the Supervisory Board Remuneration of the members of the Management Board

      The total remuneration of the members of the Management Board in the fiscal year amounted to €5,559 thousand (previous year: €6,978 thousand). This figure includes the fair value at the grant date for share-based compensation of

      €2,464 thousand (previous year: €2,776 thousand) for the awarding of 33,565 (previous year: 80,452) virtual shares. For the performance targets linked to these awards, we refer to the remuneration report of HENSOLDT AG published on the website of HENSOLDT at https://investors.hensoldt.net in the "Corporate Governance" section.

      Former members of the Management Board, including those who left at the end of the year, received total remuneration of €2,721 thousand (previous year: €2,258 thousand).

      HENSOLDT AG has made pension provisions of €5,219 thousand for pension commitments to former members of the Management Board and their surviving dependents (previous year: €6,643 thousand).

      Remuneration of Supervisory Board members

      The remuneration of the members of the Supervisory Board comprised basic remuneration and additional remuneration for committee activities totalling €980 thousand in the fiscal year (previous year: €973 thousand) of which €0 thousand (previous year: €27 thousand) relate to the Supervisory Board members who resigned from the board in fiscal year 2025.

      Information on the remuneration of individual Management Board and Supervisory Board members is presented in the remuneration report of HENSOLDT AG published on the website of HENSOLDT at https://investors.hensoldt.net.

   3. Declaration of conformity with the German Corporate Governance Code

      The Management Board and the Supervisory Board of HENSOLDT AG issued the declaration prescribed in accordance with section 161 AktG on 18 / 26 November 2025. It is available on the website of HENSOLDT at https:// investors.hensoldt.net in the "Corporate Governance" section.

   4. Information on shareholdings

      In fiscal year 2025 the liquidation of EuroAvionics Schweiz AG and the merger of ESG InterOp Solutions GmbH with ESG Elektroniksystem- und Logistik-GmbH were completed.

      Company	Registered office	Share of capital		Equity in € thousand	Profit/ Loss in € thousand
      Direct shareholdings
      HENSOLDT Holding GmbH 5, 7, 13	Taufkirchen / Germany	<100,0 %1		1,465,637	0
      Indirect shareholdings
      HENSOLDT Holding Germany GmbH 5, 8, 13	Taufkirchen / Germany	<100,0 %1		1,066,014	-
      HENSOLDT Sensors GmbH 5, 9, 13	Taufkirchen / Germany	<100,0 %1		233,128	-
      HENSOLDT Optronics GmbH 5, 9, 13	Oberkochen / Germany	<100,0 %1		660	-
      GEW Integrated Systems (Pty) Ltd. 14	Brummeria / South Africa	100.0	%	n/a	n/a
      GEW Technologies (Pty) Ltd. 5	Brummeria / South Africa	93.3	%	16,444	-2,612
      HENSOLDT South Africa (Pty) Ltd. 5	Irene / South Africa	70.0	%	40,700	-5,753
      HENSOLDT Australia Pty Ltd 3	Fyshwick / Australia	100.0	%	2,090	39
      HENSOLDT Cyber GmbH i.L.3,15	Taufkirchen / Germany	100.0	%	1,765	357
      HENSOLDT Avionics Holding GmbH 5, 9	Pforzheim / Germany	100.0	%	38,852	0
      HENSOLDT Avionics GmbH 5, 10	Pforzheim / Germany	100.0	%	38,029	0
      EuroAvionics UK Ltd. 5	London / United Kingdom	100.0	%	1,697	144
      HENSOLDT Avionics US HoldCo. Inc. 5	Dover / USA	100.0	%	4,168	-207
      HENSOLDT Avionics USA LLC 5	Sarasota / USA	100.0	%	2,836	64
      HENSOLDT UK Limited 5	Enfield / United Kingdom	100.0	%	52,347	61
      KH Finance No. 2 Limited 5	Enfield / United Kingdom	100.0	%	13,638	-2,288
      KH Finance Limited 5	Enfield / United Kingdom	100.0	%	-67,441	-234
      Kelvin Hughes Limited 5	Enfield / United Kingdom	100.0	%	87,251	169

      HENSOLDT Netherlands B.V. (formerly Kelvin Hughes (Nederland) B.V.) 5	Rotterdam / The Netherlands	100.0	%	1,903	-462
      A/S Kelvin Hughes 5	Ballerup / Denmark	100.0	%	-1,260	-380
      HENSOLDT Singapore Pte. Ltd. 5	Singapore / Singapore	100.0	%	2,677	141
      HENSOLDT Holding France S.A.S. 5	Paris / France	100.0	%	-34,515	-4,899
      HENSOLDT France S.A.S. 5	Plaisir / France	100.0	%	22,776	2,945
      Kite Holding France S.A.S. 3	Paris / France	100.0	%	-51	-2
      HENSOLDT Nexeya France S.A.S. 5	Toulouse / France	100.0	%	14,557	-35,067
      HENSOLDT Space Consulting S.A.S. 5	Toulouse / France	100.0	%	299	160
      HENSOLDT Mechatronic Solutions S.A.S. 5	Toulouse / France	85.0	%	1,901	-1
      Nexeya Canada Inc. 2	Markham / Canada	100.0	%	5,328	306
      HENSOLDT Analytics GmbH 5	Vienna / Austria	100.0	%	-17,220	-3,443

      ESG Elektroniksystem- und Logistik-GmbH 5, 11	Munich / Germany	100.0	%	40,502	1,145
      ESG Consulting GmbH 5	Fürstenfeldbruck / Germany	100.0	%	1,893	423
      ESG Aerosystems Inc. 5	Starke / USA	100.0	%	1,083	-804
      Cyoss GmbH 3, 12	Munich / Germany	100.0	%	26,385	0
      ESG Facility Management GmbH 5, 12	Fürstenfeldbruck / Germany	100.0	%	7,025	0
      HENSOLDT Theon NightVision GmbH 3	Wetzlar / Germany	50.1	%	2,199	1,241
      Atlas Advanced Optoelectronics & Security L.L.C. 5 (formerly Atlas Optronics LLC)	Abu Dhabi / UAE	49.0	%	79	183
      EURO-ART Advanced Radar Technology GmbH 4	Munich / Germany	25.0	%	196	-4
      EURO-ART International EWIV 5	Munich / Germany	50.0	%	7,475	62
      EUROMIDS S.A.S. 5	Paris / France	25.0	%	6,139	1,809
      LnZ Optronics Co. Ltd. 5	Seoul / South Korea	50.0	%	1,425	202
      PMTL-Peinture Composite S.A.S. 2	L'Isle-Jourdain / France	49.8	%	146	26
      J.A.M.E.S. GmbH i.L. 5, 15	Taufkirchen / Germany	50.0	%	1,438	-2,066
      Société Commune Algérienne de Fabrication de Systèmes Electroniques SPA 5	Sidi Bel Abbès / Algeria	49.0	%	35,233	980
      Deutsche Elektronik Gesellschaft für Algerien mbH 5	Ulm / Deutschland	66.7	%	10,067	-138
      Antycip Iberia SL 3	Barcelona / Spain	100.0	%	29	0
      HENSOLDT do Brasil Segurança e Defesa Electrónica e Optica Ltda 5	São Paulo/ Brazil	100.0	%	26	149
      HENSOLDT Private Ltd. 6	Bangalore / India	100.0	%	1,010	128
      MaHyTec S.A.S. 5	Dole / France	100.0	%	-4,175	-2,019
      Nexeya USA Inc. 2	Beaufort / USA	100.0	%	1	0
      HENSOLDT Nexeya Belgium SRL 3	Mouscron / Belgium	100.0	%	225	195
      Kelvin Hughes LLC 5	Bethesda / USA	100.0	%	971	3,445
      HENSOLDT Middle East Limited Company 1	Riyadh / KSA	100.0	%	149	-96
      HENSOLDT Switzerland GmbH 5	Bern / Switzerland	100.0	%	105	83
      21strategies GmbH 3	Hallbergmoos / Germany	15.5	%	1,603	-498
      KBN CADTRAN EDV System GmbH 5	Bremen / Germany	100.0	%	542	-21
      KBN Konstruktionsbüro GmbH 5	Bremen / Germany	100.0	%	813	-70
      PTL Luftfahrt GmbH i.L. 5,15	Kiel / Germany	100.0	%	0	-302
      Quantum-Systems GmbH 3	Gilching / Germany	1.6	%	61,767	1,323

      n/a: No information available

      1 Equity as of 31/12/2022 and annual result of 2022

      2 Equity as of 30/06/2023 and annual result of 2022/2023

      3 Equity as of 31/12/2023 and annual result of 2023

      4 Equity as of 30/09/2024 and annual result of 2023/2024

      5 Equity as of 31/12/2024 and annual result of 2024

      6 Equity as of 31/03/2025 and annual result of 2024/2025

      7 Profit and loss transfer agreement with HENSOLDT AG

      8 Profit and loss transfer agreement with HENSOLDT Holding GmbH

      9 Profit and loss transfer agreement with HENSOLDT Holding Germany GmbH

      10 Profit and loss transfer agreement with HENSOLDT Avionics Holding GmbH

      11 Loss transfer agreement by HENSOLDT Holding Germany GmbH

      12 Profit and loss transfer agreement with ESG Elektroniksystem- und Logistik GmbH

      13 Participation by the Federal Republic of Germany with one share with a nominal value of € 1

      14 No separate financial statements are published for the company as it is fully consolidated into GEW Technologies (Pty) Ltd., Brummeria / South Africa

      15 in liquidation

   5. Auditor's fees

      The fees for the audit services provided by KPMG AG were related to the audit of the Consolidated Financial Statements of the Group and the Annual Financial Statements together with the Combined Management Report, the Management Report of HENSOLDT AG and the Remuneration Report as well as the review of the interim report for the half year and the audit of Financial Statements of its subsidiaries.

      Other assurance services relate mainly to the audit of the Sustainability Report, that contains the Group's non-financial report.

      The information on the auditor's fees is included in the Consolidated Financial Statements of HENSOLDT AG. Disclosure at this point is waived due to the exempting group clause set forth in section 285 No. 17 HGB.

   6. Disclosures in accordance with section 160 (1) no. 8 AktG

      BlackRock, Inc., Wilmington, Delaware, United States of America, notified us on 22 January 2026, that its voting rights in HENSOLDT AG exceeded the reporting threshold of 3% on 19 January 2026 and amounted to 4.88% on that date (corresponding to 5,632,174 out of a total of 115,500,000 voting rights).

      JPMorgan Chase & Co., Wilmington, Delaware, United States of America, notified us on 12 September 2025, that its voting rights in HENSOLDT AG exceeded the reporting threshold of 3% on 10 September 2025, and amounted to 3.13% on that date (corresponding to 3,613,486 out of a total of 115,500,000 voting rights).

      SMALLCAP World Fund, Inc., Lutherville Timonium, United States of America, notified us on 17 March 2025, that its voting rights in HENSOLDT AG exceeded the reporting threshold of 3% on 14 March 2025, and amounted to 3.09% on that date (corresponding to 3,569,998 out of a total of 115,500,000 voting rights).

      Leonardo SpA, Rome, Italy, notified us on 13 December 2023, that its voting rights in HENSOLDT AG fell below the notification threshold of 25% on 8 December 2023, and amounted to 22.82% on that day (corresponding to 26,355,000 out of a total of 115,500,000 voting rights).

      The Federal Republic of Germany, Berlin, Germany, notified us on 27 May 2021, that its voting rights in HENSOLDT AG exceeded the notification threshold of 25% on 26 May 2021, and amounted to 25.10% on that date (corresponding to 26,355,001 out of a total of 105,000,000 voting rights).

      For details, please refer to the publication on our homepage at https://investors.hensoldt.net.

   7. Parent company

      HENSOLDT AG, Taufkirchen, is the ultimate German parent company and prepares, pursuant to section 290 HGB, Consolidated Financial Statements pursuant to section 315e (1) HGB according to the IFRS as approved in the European Union for the biggest and smallest group of companies. HENSOLDT AG, including its main subsidiaries, is included in the Consolidated Financial Statements of HENSOLDT AG.

      The Annual Financial Statements and the Consolidated Financial Statements of HENSOLDT AG, including the Combined Management Report of the Group, are published in the German Company Register and are filed with the Commercial Register of Munich under HRB 258711 in German language.

   8. Tax relations

      HENSOLDT AG acts as a parent company as part of a consolidated tax group for corporate tax and trade tax with HENSOLDT Holding GmbH as a controlled company. Furthermore, the indirect subsidiaries HENSOLDT Holding Germany GmbH, HENSOLDT Sensors GmbH, HENSOLDT Optronics GmbH, HENSOLDT Avionics Holding GmbH and HENSOLDT Avionics GmbH belong to the same income tax group.

      HENSOLDT AG acts as tax group parent within the VAT group.

   9. Events after the reporting date

      In November 2025, HENSOLDT announced that Dr. Lars Immisch, member of the Management Board and CHRO, would be leaving the company at his own request at the turn of the year 2025/2026. By resolution of the Supervisory Board, Inka Tews was appointed to the Management Board for a term of three years with effect from 1 May 2026. Until Inka Tews takes up the position of CHRO, the Management Board, together with the HR management team, will ensure continuity and stability in all personnel-related matters.

      The terms of office of the six current employee representatives on the Supervisory Board of HENSOLDT AG will end at the close of the Annual General Meeting on 22 May 2026. The following were elected via the elections held on 9 to 13 March 2026 as employee representatives to the Supervisory Board of HENSOLDT AG with effect from the end of the Annual General Meeting on 22 May 2026: Dr. Jürgen Bestle, Jürgen Bühl, Wolfgang Hirschle, Marc Hoffmann, Julia Wahl, Steffi Zehrer.

      Furthermore, there were no events of particular significance that occurred after the end of the fiscal year and were not taken into account in the income statement or in the statement of financial position.

   10. Proposal for the distribution of profits

   The Management Board and the Supervisory Board propose the distribution of a dividend of €0.55 (previous year:

   €0.50) per share to holders entitled to dividends. This corresponds to an expected total payment of around €63.5 million (previous year: €57.8 million). The remaining balance sheet profit of €109.7 million is to be carried forward to the next fiscal year. The payment of the proposed dividend as well as the profit carry-forward are subject to the approval of the Annual General Meeting.

   Taufkirchen, 17 March 2026

   HENSOLDT AG

   Management Board

   Oliver Dörre Christian Ladurner

5. Annex

depreciation

Acquisition and production cost Accumulated amortisation and

Carrying amounts

Combined Management Report of

HENSOLDT AG

for the year ended on 31 December 2025

The contents of websites referred to in the Combined Management Report are not part of the Combined Management Report and have not been audited; these serve only to provide further information.

Content

1. Governance responsibility 104

   1. Business conduct (G1) 104

   2. HENSOLDT-specific disclosures due to material impacts, risks and opportunities 109

2. Appendix for the Sustainability Report 111

1. Takeover-relevant information and explanatory report 120

   1. Composition of share capital 120

   2. Restrictions on voting rights or transfer of shares 120

   3. Shareholdings exceeding 10% of the voting rights 121

   4. Shares with special rights of control 121

   5. Type of voting rights control if employees have an interest in the capital and do not exercise their control rights directly . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

   6. Legal requirements and provisions of the articles of association concerning the appointment and dismissal of members of the Management Board and amendments to the articles of association . . . . . . . .

      121

      122

   7. Authority of the Management Board to issue or repurchase shares 122

      1. Conditional capital 122

      2. Authorised capital 124

      3. Share buyback 125

   8. Significant agreements of the Company that are subject to a change of control due to a takeover bid 127

   9. Compensation agreements concluded by the Company with members of the Management Board or employees in the event of a takeover bid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

      127

2. Corporate governance statement 128

   1. Fundamentals 128

   2. Declaration of Conformity pursuant to section 161 AktG 128

   3. Remuneration of Management Board and Supervisory Board 129

   4. Disclosures on corporate governance practices 129

      1. Principles 129

      2. Suggestions of the Code 130

      3. The HENSOLDT Code of Conduct - the "Standards of Business Conduct" 130

      4. Compliance 130

      5. Risk and control management 130

      6. Sustainability 130

      7. Shareholders and general meeting 131

      8. Management Board and Supervisory Board shareholdings 131

      9. Corporate communication and transparency 131

   5. Working methods of Management Board and Supervisory Board 131

      1. Management Board of HENSOLDT AG 132

      2. Supervisory Board of HENSOLDT AG 133

      3. Committees of the Supervisory Board 137

      4. Disclosures on the representation of women on the Management Board and Supervisory Board and at the top management levels of HENSOLDT AG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

         139

3. HENSOLDT AG 141

   1. Results of operations of HENSOLDT AG 141

   2. Net assets and financial position of HENSOLDT AG 142

   3. Opportunities and risks 143

   4. Forecast 143

1. ‌Group fundamentals

   1. ‌Business model

      The HENSOLDT Group (hereinafter also "HENSOLDT" or "the Group") is a specialised provider of complete electronic sensor solutions for defence and security applications. HENSOLDT develops and manufactures innovative and customised solutions in the fields of radars, electromagnetic warfare, avionics and optronics. At 31 December 2025, its portfolio comprised a wide range of products and solutions. HENSOLDT is driving the development of defence electronics and optronics and is continually striving to expand and improve the current offering through its own developments based on innovative approaches to data fusion, artificial intelligence (AI) and cyber security, as well as through industrial collaborations and acquisitions designed to increase its competitiveness and expand into new markets.

      As a platform- and manufacturer-agnostic system integrator in the defence and security sector, HENSOLDT supplies products for a variety of platforms (such as fighter aircraft, unmanned aerial vehicles, helicopters, naval vessels and submarines, armoured vehicles and satellites) from various manufacturers.

      HENSOLDT sells its products and solutions to German and foreign governments as well as to supranational organisations such as NATO and their armed forces and security forces. This occurs both directly and indirectly, for example via commercial customers or as part of consortia or joint ventures. Such forms of industrial cooperation are entered into with other companies, for example with the Euroradar consortium, which is developing the nose radar for the Eurofighter jet. In indirect sales, HENSOLDT's products are usually installed as components of integrated products or platforms as part of procurement projects for armed and security forces of governments and supranational organisations as end customers. These procurement projects are subject to a strict regulatory environment at both national and international levels in the form of parliamentary or administrative approvals as well as trade regulations and export controls.

      In fiscal year 2025, HENSOLDT generated around two thirds of its revenue in its home market of Germany. About a quarter of revenue in 2025 was generated with other end customers in the EU and NATO (excluding Germany) as well as in NATO-equivalent countries (in particular Australia and Switzerland), for which HENSOLDT depends on standardised and reliable export control procedures. A detailed list of revenue by region is included in Note 9.3.

      HENSOLDT provides a wide range of solutions, products and services across the market. Consequently, the vertical range of manufacture varies between the different solutions, at the different locations and, for example, depending on the degree of series maturity. This encompasses the production of circuit boards and individual components, their integration and final acceptance through to installation at customer sites. Suppliers, who are divided into optical, electronic and mechanical suppliers depending on their specialisation, play an important role here.

   2. ‌Organisation and group structure

      1. ‌Legal structure

         HENSOLDT Group consists of HENSOLDT AG (the "Company") with its official office in Taufkirchen, Germany, (registered office: Willy-Messerschmitt-Str. 3, 82024 Taufkirchen, Germany, under entry no. HRB 258711, Munich Local Court) and its subsidiaries.

         The Consolidated Financial Statements include the Financial Statements of HENSOLDT AG and the Financial Statements of all material subsidiaries that are directly and indirectly controlled by HENSOLDT AG. In fiscal year 2025, the liquidated company EuroAvionics Schweiz AG was deconsolidated and the subsidiary ESG InterOp Solutions GmbH, previously not consolidated for reasons of materiality, was merged with the fully consolidated ESG Elektroniksystem-und Logistik-GmbH. As a result, 35 entities, including the parent company (previous year: 36) were fully consolidated, while 1 (previous year: 1) company was included in the Consolidated Financial Statements using the equity method.

         The reporting for HENSOLDT AG is included in the Combined Management Report in the section "VIII HENSOLDT AG".

      2. ‌Locations and employees

         HENSOLDT's headquarters are in Taufkirchen near Munich, an important German centre of defence innovation. The Group's German business activities are thus based in particular in Ulm, Oberkochen, Pforzheim and in Fürstenfeldbruck. Other locations in Germany include Wetzlar, Immenstaad, Kiel, Bremen and Donauwörth. As per 31 December 2025, of the 9,362 HENSOLDT employees (previous year: 8,986), among them 874 trainees, interns etc. (previous year: 856), approx. 7,700 (previous year: approx. 7,200) were employed in Germany. HENSOLDT's larger locations outside Germany are mainly based in France, South Africa and the UK.

      3. ‌Operating segments1

         HENSOLDT Group is, as described below, divided into the two operating segments Sensors and Optronics, both of which are subject to reporting requirements.

         At the start of fiscal year 2025, a new operating structure for the divisions was implemented in order to provide optimum support for the strategic objectives of HENSOLDT. The most important change was the bundling of the system and solutions competencies of the former ESG Division and the former Spectrum Dominance & Airborne Solutions Division under the new Multi-Domain Solutions (MDS) Division.

         Sensors operating segment

         The Sensors segment provides system solutions with a focus on technical sensor technology from the four divisions Radar & Electromagnetic Warfare (REW), Optronics, Multi Domain Solutions (MDS) and Services & Training.

         The products from the divisions REW and Optronics as well as the multi-faceted, comprehensive system solutions from the MDS Division complement each other in the value chain, generating synergies between the divisions such as through shared development and production. The Services & Training division is mainly positioned further down the value chain as an aftersales unit and is largely dependent on the primary business of the other divisions.

         Radar & Electromagnetic Warfare (REW)

         The Radar & Electromagnetic Warfare division of HENSOLDT develops and manufactures mobile and stationary radar and IFF systems (Identification Friend or Foe) for both military and civilian use. The division's product portfolio includes medium- and long-range air defence radars, ground surveillance systems, drone defence systems, airport surveillance systems, friend-or-foe identification systems, and systems for establishing secure data connections for air, sea and land platforms. These systems are used on various platforms. For example, the TRML-4D radar is used in the IRIS-T SLM air defence system. As a supplier to the Eurofighter programme, HENSOLDT is responsible for developing the Eurofighter Common Radar System (ECRS) Mk1 radar and further developing the Praetorian self-protection system.

         The electronic warfare field focuses on the use of modern technologies to control the electromagnetic spectrum in order to neutralise enemy radar, communication and command systems using sophisticated jamming and deception techniques.

         Optronics (OPT)

         The Optronics division within the Sensors segment encompasses electronic self-protection systems that integrate missile, laser and radar warning sensors with countermeasures for air, sea and land platforms, for example in various helicopter models and on the PUMA infantry fighting vehicle.

         Multi Domain Solutions (MDS)

         The Multi-Domain Solutions (MDS) division brings together a diverse and comprehensive portfolio of solutions for the security and defence sector. MDS develops and implements tailor-made complete solutions and system solutions, including security-related systems, software and IT. As a technology and innovation partner and approved aviation company for aircraft and aircraft systems for the German Armed Forces, the division provides support for secure

         1 The disclosures in this section also provide additional information to the disclosures ESRS SBM-1 - Strategy and business model required by the ESRS in the sustainability report.

         digitalisation and networking in all military and civil areas of application. MDS is responsible for the development, implementation, support and operation of individual platforms and complex end-to-end systems for both manned and unmanned applications. As a supplier of sensor technologies, HENSOLDT is strengthening its position in major programmes such as P-8A Poseidon and STH (heavy transport helicopter) and is responsible for key service and logistics projects.

         The division also offers electronic systems for the detection and evaluation of radar and radio signals, as well as jamming systems that protect convoys or vehicles from improvised explosive devices, among other things. Alongside applications in the electromagnetic spectrum for land, sea and air operations, a range of defensive cyber solutions rounds off the product portfolio.

         The division also includes military and civil avionics systems, for example situational awareness systems, mission computers and flight data recorders. These systems are used in the PEGASUS airborne signal intelligence system, for which HENSOLDT acts as consortium leader, in combat aircraft such as the Eurofighter, and in various transport aircraft and helicopters.

         Services & Training

         Ensuring operational readiness is of central importance in the defence sector. The Services & Training division mainly provides customer support and service activities, as well as professional maintenance over the entire lifecycle of the platforms and systems developed in the other divisions of the Sensors segment in order to guarantee their reliability and availability.

         HENSOLDT offers a comprehensive, continually expanding training portfolio that includes in-person, in-house, blended learning, online as well as virtual-reality and extended-reality formats for the practical teaching of skills and capabilities.

         Optronics operating segment

         The Optronics segment offers system solutions with a focus on optronics from the three divisions Optronics (OPT), Radar & Electromagnetic Warfare (REW) and Services & Training. The focus is on the products of the Optronics division supplemented by Radar & Electromagnetic Warfare (REW) in the value chain. Services & Training is downstream from the other divisions and essentially includes the aftersales area.

         Optronics (OPT)

         The Optronics division includes optronics, optical instruments, and precision instruments for military, security-related and civilian applications in the areas of ground-based systems, maritime and border surveillance, airborne optronics and space technology. In terms of ground systems, the division offers reconnaissance, surveillance and target acquisition systems for military platforms (e.g. armoured vehicles), hand-held optics such as telescopic sights, visors, laser rangefinders, night vision devices and thermal imaging cameras, which support both snipers and infantry soldiers in observation and targeting. For maritime and border surveillance, optronic mast systems and periscopes for submarines as well as electro-optical/infrared surveillance systems for maritime and terrestrial infrastructures are supplied. The airborne optronics and space unit develops optics for space missions as well as electro-optical reconnaissance systems and self-protection solutions for various platforms to provide protection against complex threats. In addition, the division plays a role in the civil sector by supplying precision optics for lithographic systems in semiconductor manufacturing to aid microchip production.

         Radar & Electromagnetic Warfare (REW)

         The REW division within the Optronics segment offers solutions in the areas of defence and security as well as air traffic management. The defence and security portfolio particularly includes radar for ship and land applications, cryptographic devices and tactical point-to-point communication systems. The air traffic management portfolio includes the delivery, installation and maintenance of air traffic control radar, weather radar, navigation, voice communications and runway lighting systems for military and civil airports.

         Services & Training

         In the Services & Training division, service solutions for the products of the Optronics segment are developed, implemented and delivered. This ensures that the availability of products and systems is maintained for decades to ensure optimal functionality, performance and usability for customers.

   3. ‌Performance measurement system Most significant financial performance indicators

      HENSOLDT uses certain key performance indicators (KPIs) to measure performance, identify trends and make strategic decisions. In order to ensure a comparability of these indicators over multiple year periods and within the sector, adjusted performance indicators are also used. The most significant financial performance indicators are revenue and order intake, the book-to-bill ratio and the adjusted EBITDA.

      Revenue reflects the total value of the operating activities and is thus a key figure for the company's success. For revenue, HENSOLDT differentiates between revenue from core business and revenue from pass-through business. The latter essentially results from key projects in which HENSOLDT is the consortium leader, as costs for certain components purchased from the respective consortium partners are passed on to the customer without any significant margin.

      Order intake shows the future revenue potential from orders where a contract becomes effective and enforceable. The book-to-bill ratio is defined as the ratio of order intake to revenue in the relevant fiscal year.

      Adjusted EBITDA is defined as EBIT adjusted for depreciation, amortisation (including effects on earnings from purchase price allocations) and impairment, as well as certain special items relating to transaction costs, OneSAPnow-related special items as well as other special items.

      Other financial performance indicators

      In addition, HENSOLDT uses its order backlog as another key performance indicator, with adjusted EBIT and adjusted free cash flow as two alternative further non-GAAP performance indicators. These are intended to provide a better understanding of the financial situation of HENSOLDT Group by excluding items that are not classified as part of ongoing operations.

      The order backlog is defined as the value of the order book as of the respective reporting date by recording customer orders starting with the opening backlog, taking into account revenue and adjustments for the respective reporting period, and ending with the ending backlog.

      Adjusted EBIT corresponds to earnings before financial result and income taxes (EBIT), adjusted for certain special items relating to transaction costs, effects on earnings from purchase price allocations, OneSAPnow-related special items as well as other special items.

      Adjusted free cash flow is defined as free cash flow adjusted for special items and M&A activities. The free cash flow is defined as the sum of the cash flows from operating and investing activities as reported in the Consolidated Statement of Cash Flows.

      A reconciliation of the non-GAAP performance indicators "adjusted EBITDA" and "adjusted EBIT" to the key figures included in the Consolidated Financial Statements before adjustment is included in Note 9.2.

      Fiscal year

      in € million	2025	2024	Delta
      Most significant financial performance indicators
      Revenue	2,455	2,240	9.6%
      Order intake	4,710	2,904	62.2%
      Book-to-bill-ratio1	1.9x	1.3x	0.6x
      Adjusted EBITDA1	452	405	11.7%
      Other financial performance indicators
      Order backlog	8,833	6,644	32.9%
      Adjusted EBIT1	327	295	10.7%
      Adjusted free cash flow1	347	249	39.3%

      1 Non-GAAP performance indicators

      Non-financial performance indicators

      In addition to the financial performance indicators presented above, non-financial performance indicators of a strategic nature are also used for the Group, which are included as part of the remuneration of the management and other executives of the Group as part of the long-term incentive compensation. Currently, these are the ESG2 goals "Diversity", "Environmental", "Climate Impact" and "Social" as well as the successful implementation of special multi-year projects. These do not represent significant key performance indicators, as they are not consistently controlled. A detailed analysis of the non-financial topics and performance indicators can be found in section "V Sustainability Report".

      Special items

      Adjusting key performance indicators for special items is intended to create transparency regarding the nature, origin and classification of the adjusted items, as well as to ensure the comparability of key performance indicators across time and across companies. Special items include only those expenses and revenues that are not attributable to ongoing operating activities, do not recur regularly, and whose nature or amount impair the meaningfulness of the periodic key performance indicators.

      Special items include particularly transaction costs relating to mergers or acquisitions, effects on earnings from purchase price allocations (PPA), expenses relating to the OneSAPnow (SAP S/4HANA) business transformation, and other special items.

      Other special items include other exceptional and non-regularly recurring effects. These can include, for example, restructuring measures, significant legal disputes, or extraordinary impairments.

      In contrast, items that result from ordinary business activities, that occur regularly or that are an integral part of operational performance are not classified as special items, even if their amount fluctuates or varies from period to period.

   4. ‌Research and development

      Research and development (R&D) in the HENSOLDT Group comprises both product-specific developments, further development of products and general research and development activities that concentrate on basic research and product innovation.

      Expenditures incurred as part of the research and development activities amounted to €142 million in fiscal year 2025 (previous year: €109 million). Of which €42 million (previous year: €32 million) were recognised as an expense and €100 million (previous year: €77 million) were capitalised as development costs in fiscal year 2025. The main focus of capitalised development costs in the Sensors segment was on naval and ground radar programmes, self protection as well as Identification Friend or Foe solutions, whereas in the Optronics segment the additions mainly related to land, air

      2 Environmental, Social and Governance

      and maritime programmes. This reflects a capitalisation ratio of 70.2% (previous year: 70.8%) based on total R&D expenses. Amortisation of capitalised development costs amounted to €48 million in the fiscal year (previous year: €41 million) and are included in this amount in the cost of sales.

      The research and development ratio, calculated as the proportion of expenses incurred through the company's own R&D activities in relation to consolidated revenue, was 5.8% higher than the previous year's level of 4.9%.

      Costs incurred for research and development as part of orders are allocated to the cost of sales.

2. ‌Economic report

   1. ‌Economic conditions

      1. ‌General economic conditions

         Despite considerable uncertainties and trade conflicts, global economic development remained robust in 2025. The International Monetary Fund (IMF) forecast global growth of 3.3% for 2025, unchanged from its previous year's estimate. This figure remains slightly below the long-term average. According to the IMF, economic activity is being driven by moderate growth in advanced economies, while emerging markets continue to show mixed developments. According to the IMF, heavy investment in artificial intelligence, primarily in North America and Asia, coupled with accompanying infrastructure spending, significantly mitigated and overcame the economic impact of US tariffs in 2025. One positive development worth highlighting is the rapid adaptation of global supply chains to changes in trade policy. On the other hand, challenges remain in the form of domestic and geopolitical tensions, restrictive monetary policy, fluctuating energy prices, and ongoing uncertainties in international trade. Global inflation continued its downward trend and was forecast to reach 4.1% in 2025, albeit with regional differences.

         The economic recovery in the eurozone was weaker than in other advanced economies. The IMF anticipates growth of 1.0% for 2025. The weak industrial economy - particularly in the manufacturing sector, still suffering from high energy prices as a result of Russia's war against Ukraine - and increased geopolitical uncertainty had a negative impact on growth. At the same time, the decline in inflation to around 2.0% gave a slight boost to real income growth, with private consumption having a stabilizing effect.

         The German economy remained sluggish in 2025. According to the ifo Institute and the German Council of Economic Experts, gross domestic product largely stagnated and was expected to be 0.2% for 2025. A number of factors contributed to the overall economic downturn in Germany. These included protectionist and volatile US trade policy, the appreciation of the euro, and structural challenges such as demographic change, cautious investment behaviour, high energy prices, and declining international competitiveness. Despite a moderate rise in unemployment, the labour market remained stable, with job losses mainly in the manufacturing sector.

      2. ‌Conditions in the defence and security sector

         Increasing geopolitical tensions continue to shape the international security situation. The war between Russia and Ukraine, the recent military escalation between Iran, Israel and the US, with resulting repercussions for numerous states in the region, as well as further conflicts in the Middle East, are shifting security policy priorities and increasing the global demand for defence and deterrence capabilities. The current developments also highlight the risk of further regional destabilisation of the Middle East with potential repercussions for global security and energy architectures. At the same time, the strategic rivalry between the US and China is exacerbating tensions between the geopolitical superpowers. The increasing pressure being applied by the US on European countries to invest more in their defence capabilities became abundantly clear in the dispute over Greenland. Furthermore, hybrid forms of attack, such as cyberattacks, disinformation campaigns, and assaults on critical infrastructure, are putting pressure on countries to strengthen their security capacities.

         This has brought about a historic turning point in the transatlantic region. According to NATO data, all member states are expected to reach the 2% target by 2025. The alliance's defence budgets are continuing to rise significantly, reflecting the need for structural modernisation and faster delivery of capabilities. The roadmap agreed at the NATO summit in The Hague, which sets out plans to increase defence spending to 5% of GDP by 2035 - with 3.5% allocated to core defence and up to 1.5% to infrastructure, resilience and innovation - remains the key strategic framework.

         Germany is systematically implementing these priorities. Following defence expenditure of over €86 billion in 2025, the defence budget will increase to €108.2 billion in the approved federal budget for 2026. Of this, €82.7 billion will be allocated to the core defence budget and €25.5 billion to the special fund for the Bundeswehr. In addition, commitment appropriations of around €324 billion will provide long-term financial planning certainty for procurement projects.

         Budget decisions are reflected directly in specific procurement activities: since mid-2025, numerous 25-million-euro projects have been approved; in total, more than 150 projects are to be debated in parliament by the end of 2026 -many of them featuring substantial HENSOLDT involvement and for all military dimensions and branches of the armed forces.

         Support for Ukraine remains another key focus. Germany remains one of Europe's leading support providers, having allocated military aid worth around €40 billion since the war began. For 2026, military aid has been increased by a further €3 billion - in particular for artillery systems, drones, armoured vehicles and air-defence components. These commitments not only reinforce Ukraine's defence capabilities, they also stabilise European security industry foundations.

         At the same time, the European Union is stepping up its industrial policy measures. As of 2025, the SAFE (Security Action for Europe) programme has a funding framework of up to €150 billion, while the ReArm Europe / Readiness 2030 strategy aims to mobilise up to €800 billion in defence investment by the end of the decade. Both initiatives promote interoperability, accelerate procurement processes and strengthen Europe's technological independence.

         The release of the new US National Security Strategy in December 2025 also marks a fundamental shift in the strategic framework for European security architecture. The US emphasises a stronger focus on its own national priorities and explicitly states that its military resources must be increasingly concentrated in the Indo-Pacific region. This new emphasis effectively marks a gradual decoupling by the US from Europe's security concerns and underpins the expectation that European countries will assume greater responsibility for their own defence capabilities. For Europe, this means that it needs to further expand its sovereign military and industrial capacities, reduce dependencies, and focus more on developing capabilities within the European security sphere.

         Meanwhile, the nature of military capabilities is changing fundamentally. Software-defined systems, multi-domain operations, artificial intelligence and data fusion are becoming key factors in modern defence. National and European procurement strategies seek to rapidly integrate these capabilities into their armed forces - supported by the German Planning and Procurement Acceleration Act (BwPBBG), set to come into force in early 2026. This opens up additional opportunities for HENSOLDT: the BwPBBG will accelerate national procurement decisions and strengthen security-related industrial value creation in Germany and Europe.

         With the security policy decisions made in recent months and the resulting procurement decisions, an environment is emerging that requires modern capabilities to be available quickly and in a scalable manner. HENSOLDT is excellently positioned for this, as a platform-independent provider of high-integrated sensor and data technologies and as a technological pioneer in the field of software-defined defence. The increasing demand for networked, digitally controlled weapon systems opens up additional growth opportunities for HENSOLDT in Germany and Europe.

   2. ‌Business development and key events Business development and key events in the reporting period

      Germany's security policy environment continues to be marked by numerous crises and conflicts around the world, and these are becoming increasingly complex and volatile. Russia's war against Ukraine, conflicts in the Middle East - which recently escalated into an armed conflict (Middle East war) involving the United States of America (US) and the State of Israel jointly against the Islamic Republic of Iran (Iran) - and the strategic confrontation between the US and China are shifting security policy priorities and increasing the global demand for defence and deterrence capabilities. The growing tensions between the US and Europe also raise issues that not only affect bilateral relationships but also the entire international order. This poses great challenges for Germany, Europe and the North Atlantic alliance. It is clear that both national and European actors are determined to strengthen defence capabilities and respond to current security policy challenges. The ongoing investment in the security and defence industry will not only provide assurance of operational readiness, but also open up significant business opportunities for HENSOLDT in the European market.

      Overall, HENSOLDT's operating business in fiscal year 2025 continued its positive development, and significant order intake was achieved through further procurements made by the German government. With an order volume of €4,710 million, the high order intake of the previous year's period of €2,904 million was exceeded by 62.2%. The growth was achieved in both segments, although the Optronics segment's performance was particularly positive, recording an increase in order intake of 114.3% - mainly through large orders for the Luchs 2 "next-generation reconnaissance vehicle". This development reaffirms HENSOLDT's successful positioning in its core markets and the high level of demand for the solutions it offers. Revenue, containing lower pass-through business revenue compared to the previous year period, increased to €2,455 million (previous year: €2,240 million) in fiscal year 2025. This represents an increase compared to the previous year of 9.6% or €215 million. This increase is primarily attributable to the significant growth in core business, which developed particularly well in the Optronics segment, but also in the Sensors segment of the MDS

      division, driven inter alia by the business activities of the ESG Group. The significant increase in adjusted EBITDA of 11.7% (€452 million; previous year: €405 million) was mainly driven by the positive development in the Optronics segment and resulted in an adjusted EBITDA margin of 18.4% (previous year: 18.1%). The increase in adjusted EBITDA for the Group was mainly a result of higher sales volumes in the core business. The book-to-bill ratio was 1.9x in fiscal year 2025, an increase of 0.6x compared to the previous year period, driven primarily by significant order intake in the fourth quarter of 2025.

      In April 2025, HENSOLDT successfully completed the realignment of its financing structure, and through a comprehensive refinancing programme took a decisive step towards further financial independence and flexibility. Under this refinancing, HENSOLDT has replaced the previous financing arrangement with an unsecured, flexible corporate financing structure. The previous term loan and term facility totalling €1,070 million and the €370 million revolving credit facility were replaced by a new syndicated loan agreement. The new syndicated loan includes a €850 million term loan, a €150 million bridging loan and a new revolving credit facility of €400 million. A guarantee line of €400 million was also agreed with the banking syndicate. The new financing arrangement made improvements in all aspects of the financial conditions. The optimised capital structure leads to a more stable interest burden in the long term, while creating additional corporate leeway for more rapid strategic decision-making independent of external capital providers.

      HENSOLDT entered into a strategic cooperation with Munich-based defence tech startup Quantum Systems GmbH in April 2025. This partnership is linked to HENSOLDT having acquired 1.6% of the shares in Quantum Systems GmbH and sets the foundation for closer collaboration in the area of software-defined defence (SDD). The partnership combines HENSOLDT's extensive expertise in sensor data fusion, sensor resource management and data management, and in distributed systems with Quantum Systems' cutting-edge unmanned aerial systems (UAS) and software skills. Together, the companies aim to accelerate the development and deployment of interoperable, multi-domain defence capabilities.

      HENSOLDT AG held its Annual General Meeting on 27 May 2025. It was decided to pay a dividend of €0.50 per share (total of €57.8 million) to the shareholders of HENSOLDT AG for the fiscal year 2024.

      In July 2025, a promissory note loan in the amount of €300 million was issued as part of the comprehensive refinancing programme initiated in April 2025. The loan consists of €65 million with a three-year term at fixed and variable interest rates, a further €150 million with a five-year term at fixed and variable interest rates and €85 million with a seven-year term at fixed interest rates. The promissory note loan replaced the bridge loan of €150 million.

      In November 2025, HENSOLDT announced that Dr Lars Immisch, Member of the Management Board (CHRO) and HR Director, would be leaving the company at his own request at the close of 2025/beginning of 2026. Following a resolution by the Supervisory Board, Inka Tews was appointed as a Member of the Management Board for a term of three years, effective from 1 May 2026. Until Inka Tews takes over the position of CHRO, the Management Board, working together with the HR management team, will ensure continuity and stability in all personnel-related matters.

      Events after the reporting date

      In March 2026, HENSOLDT AG entered into an agreement to acquire 100% of the outstanding shares of Beusker's Apparaten Fabriek B.V. ("BAF"). BAF is the 100% shareholder of B.V. Nederlandse Instrumenten Compagnie "Nedinsco" ("Nedinsco"). Nedinsco is active in the defence and semiconductor industry and focuses on the development and production of optomechatronic systems, including periscopes, driver vision systems and subsystems for optronic sensor units. The Management Board and Supervisory Board of HENSOLDT AG have unanimously approved the full acquisition of BAF. The acquisition will be entirely financed from existing funds. Subject to regulatory approvals and other conditions, the acquisition, including the obtainment of control and the payment of the purchase price for the shares in BAF is expected to be completed around mid-2026 and by 31 October 2026 at the latest.

   3. ‌Net assets, financial position and results of operations

      1. ‌Results of operations

         Order intake, revenue, book-to-bill ratio and order backlog

         Order intake Revenue Book-to-bill Order backlog

         Dec.

         Fiscal year Fiscal year Fiscal year 31

         31

         Dec.

         in € million	2025	2024	% Delta	2025	2024	% Delta	2025	2024	% Delta	2025	2024	% Delta
         Sensors	3,143	2,209	42.3%	2,058	1,908	7.9%	1.5x	1.2x	0.4x	6,505	5,463 19.1%
         Optronics	1,585	740	114.3%	419	348	20.4%	3.8x	2.1x	1.7x	2,366	1,225 93.0%
         Elimination/ Transversal/Others	-18	-45		-21	-15					-38	-44
         HENSOLDT	4,710	2,904	62.2%	2,455	2,240	9.6%	1.9x	1.3x	0.6x	8,833	6,644 32.9%

         The figures for 2024 include the activities of the acquired ESG Group starting from the second quarter of 2024 in the Sensors segment.

         Order intake

         In fiscal year 2025, HENSOLDT Group achieved a significant increase in order intake, rising across the whole Group by 62.2% to €4,710 million (previous year: €2,904 million). Both segments contributed to this increase, although the major share of the growth was attributable to the Optronics segment with a rise of 114.3%.

         The Sensors segment recorded an order intake of €3,143 million in the reporting year, an increase of 42.3% over the previous year. This positive development resulted primarily from contract extensions for Eurofighter Mk1 radars and additional orders for TRML-4D and Spexer radars to support Ukraine in the REW Division. Additional order intake under the key project PEGASUS (airborne electronic signals intelligence system) and order intake under the P-8 Poseidon programme in the MDS division also contributed significantly to this result. The previous year period included, in particular, orders for the short-range air defence system (LVS NNbS) as well as orders for TRML-4D radars to support Ukraine and as part of the European Sky Shield Initiative (ESSI) for Latvia and Slovenia.

         With a year-on-year increase of 114.3% to €1,585 million (previous year: €740 million), order intake in the Optronics segment rose significantly in fiscal year 2025. This development was largely driven by major orders for the Luchs 2 new-generation reconnaissance vehicle, on which HENSOLDT provides the sensor technology and the Ceretron mission system, and for the Leopard 2 battle tank within the Ground Based Systems (GBS) product line. Significant order intake was also achieved in the Naval & Border Surveillance product line. The previous year included orders relating to Final Focus Metrology (FFM), orders for the laser rangefinder for the M1 Abrams battle tank and an order for the LVS NNbS project.

         Revenue

         The Group's revenue amounted to €2,455 million in fiscal year 2025 (previous year: €2,240 million), representing an increase of 9.6% year on year. This increase is primarily due to the significant upturn in core business, which developed particularly positively in the Optronics segment and in the MDS Division of the Sensors segment.

         In the Sensors segment, revenue amounted to €2,058 million in fiscal year 2025, representing an increase of 7.9% or

         €150 million over the previous year. The main driver of this positive development was further growth in the core business, particularly in the MDS division and also revenue from business activities of the ESG Group. In line with expectations, pass-through revenue decreased due to the ongoing implementation of the PEGASUS and Eurofighter radar key projects.

         In the Optronics segment, revenue amounted to €419 million in fiscal year 2025. This represents a year-on-year increase of 20.4% or €71 million, which was mainly generated in the Ground-Based Systems product lines of the German unit.

         Book-to-bill ratio3

         The book-to-bill ratio developed positively, increasing by 0.6x to 1.9x in fiscal year 2025.

         In the Sensors segment, a book-to-bill ratio of 1.5x was achieved. The increase by 0.4x compared to the previous year's period was mainly due to the high order intake.

         The book-to-bill ratio in the Optronics segment of 3.8x was significantly higher than the significant book-to-bill ratio of

         2.1x recorded in the previous year. The increase mainly resulted from significant order intake for Luchs 2 and Leopard 2 in the fourth quarter of fiscal year 2025 recorded in the German unit's Ground-Based Systems product line.

         Order backlog

         Order backlog at Group level increased by 32.9% to a total of €8,833 million (previous year: €6,644 million) due to the significant book-to-bill ratio of 3.8x in the Optronics segment.

         In the Sensors segment, the order backlog of €6,505 million was significantly higher than the previous year's figure of

         €5,463 million. The increase compared to 31 December 2024 was mainly driven by the high level of order intake in the REW division.

         The significant increase in the order backlog of the Optronics segment, by 93.0% to €2,366 million compared to 31 December 2024, resulted primarily from the significant order intake in the fourth quarter 2025.

         Income

         Profit Profit margin1

         Fiscal year Fiscal year

         in € million	2025	2024	% Delta	2025	2024
         Adjusted EBITDA Sensors	394	381	3.5%	19.2%	20.0%
         Adjusted EBITDA Optronics	58	24	140.4%	13.8%	6.9%
         Adjusted EBITDA	452	405	11.7%	18.4%	18.1%
         Depreciation, amortisation and impairments of non-current assets	-181	-163	-11.2%
         Special items2	-50	-57	12.7%
         Earnings before financial result and income taxes (EBIT)	221	185	19.6%	9.0%	8.3%
         Financial result	-94	-68	-38.8%
         Income taxes	-41	-12	>-200 %
         Group profit / loss	86	106	-18.3%	3.5%	4.7%
         Earnings per share (in €; basic/diluted)	0.77	0.93	-17.8%

         1 The profit margins are calculated in relation to the corresponding revenue.

         2 See the definition of special items in chapter "I.3 Performance measurement system".

         Adjusted EBITDA

         HENSOLDT achieved an adjusted EBITDA of €452 million in fiscal year 2025 (previous year: €405 million). The significant improvement in adjusted EBITDA by 11.7% year-on-year was mainly driven by the positive development in the Optronics segment and led to an adjusted EBITDA margin of 18.4% (previous year: 18.1%). This improvement in underlying adjusted EBITDA across the Group mainly resulted from increased volume of revenue in core business.

         The increase in adjusted EBITDA in the Sensors segment, up 3.5% compared to the previous year, resulted from a higher volume of revenue, which, compared to the previous year period, contained higher revenue in the higher-margin core business and a lower share of revenue from pass-through business in the key projects. This positive development was achieved despite temporary productivity losses in the first half of the year, which occurred in the course of

         3 The book-to-bill ratio is defined as the ratio of order intake to revenue in the relevant fiscal year.

         commissioning the new logistics centre. Positive effects on adjusted EBITDA also resulted from the contribution of the ESG Group in the MDS division, which compensated for the negative project-mix in the REW division.

         In the Optronics segment, adjusted EBITDA improved significantly compared to the previous year, in particular in the German unit. This increase was primarily attributable to volume effects resulting from increased production and to lower operating and other expenses. This development was partly offset by project-mix effects and expenses relating to the new Oberkochen site.

         Earnings before financial result and income taxes (EBIT)

         In addition to the effects on adjusted EBITDA described above, EBIT includes the following effects of depreciation and amortisation as well as special items.

         Depreciation and amortisation increased mainly due to the first-time recognition of rights-of-use for property leases for the new location in the Optronics segment and capitalised development costs.

         The decrease in special items4 resulted mainly from lower expenses incurred for consultation services and transaction costs relating to the acquisition and integration of the ESG Group and due to lower expenses for the newly commissioned logistics centre in fiscal year 2024 and the accompanying implementation of an IT inventory management system. This was offset by higher OneSAPnow-related expenses in connection with the business transformation for SAP S/4HANA and expenses for occupying the new site in Oberkochen.

         Group profit / loss

         The Group profit / loss is calculated as shown above from the adjusted EBITDA, depreciation and amortisation, special items, the financial result and income taxes.

         The increase in the negative financial result was primarily attributable to higher interest expenses from the recognition of lease agreements and from expenses from foreign currency effects. In addition, interest income from cash investments was lower compared to the previous year period. The refinancing led to additional expenses incurred for the repayment of the replaced loans. These were offset by lower interest expenses for the new term loan and the promissory note loans compared to the previous loans.

         This was an increase in income taxes of €29 million in fiscal year 2025, rising to €41 million (previous year: €12 million). Income taxes include current tax expenses of €24 million (previous year: €13 million) and deferred tax expense of €17 million (previous year deferred tax income: €1 million).

         The higher current income tax expense is due to tax loss carryforwards of the German companies that were utilised in the previous year. The changes in deferred taxes relate primarily to the reduction in deferred tax assets due to the utilisation of loss carryforwards and the future reduction in the corporation tax rate.

         Earnings per share

         Earnings per share decreased from €0.93 to €0.77 compared to the previous year, mainly due to higher income taxes and higher financial expenses.

         The Management Board intends to propose to the Supervisory Board the distribution of a dividend of €0.55 per share (previous year: € 0.50 per share) to shareholders entitled to such dividends. This corresponds to an expected total payment of around €63.5 million (previous year: €57.8 million). The payment of the proposed dividend is subject to the approval of the Annual General Meeting.

         4 See the definition of special items in chapter "I.3 Performance measurement system".

      2. ‌Net assets5

         	31 Dec.	31 Dec.
         in € million	2025	2024 % Delta
         Non-current assets	2,562	2,289 11.9%
         therein: Right-of-use assets	413	249 65.9%
         Current assets	2,865	2,407 19.0%
         therein: Inventories	878	719 22.1%
         therein: Cash and cash equivalents	933	733 27.3%
         Total assets	5,427	4,696 15.6%

         As of 31 December 2025, the Group's assets increased by €731 million or 15.6% to €5,427 million. The increase is due in particular to higher cash and cash equivalents of €200 million, a €164 million increase in right-of-use assets and a

         €159 million increase in inventories.

         Non-current assets amounted to €2,562 million as of 31 December 2025, up €273 million or 11.9% from the previous year's figure of €2,289 million. This increase was largely due to the first-time recognition of right-of-use assets for property leases for the new site in the Optronics segment. The new site in Oberkochen is designed to enable the company's planned growth and maximum flexibility for current and future production models in manufacturing, as well as efficient and effective work in all areas.

         Current assets increased by €458 million or 19.0% over the previous year's value from €2,407 million to €2,865 million as of 31 December 2025. This increase is primarily attributable to higher cash and cash equivalents (+€200 million) and a €159 million increase in inventories. Cash and cash equivalents increased in particular due to cash inflows from the

         €300 million promissory note loan issued in July 2025 and a positive free cash flow of €217 million. This was offset by the repayment of existing loans as part of the refinancing completed in April 2025, which resulted in a net cash outflow of

         €220 million, and the dividend payment to HENSOLDT AG shareholders for the 2024 financial year in the amount of €58 million. The increase in inventories is mainly due to higher stocks of raw materials, consumables and supplies as well as work in progress intended to secure production capacity and enable an expansion of production to accommodate the increased order volume.

      3. ‌Financial position

HENSOLDT's financial management is focused on guaranteeing financial stability, flexibility and especially liquidity of the Group at all times. This includes management of the financing structure of HENSOLDT Group, the cash and liquidity management and the monitoring and controlling of market price risks such as exchange rate and interest rate risks. The financing structure of HENSOLDT Group enables it to maintain financial scope in order to take advantages of business and investment opportunities.

The Group has entered into external financing arrangement with credit agreements and a revolving credit facility ("Revolving Credit Facility" or "RCF") and a promissory note loan. In 2025, the Group realigned its financing structure.

The previous term loan and term facility totaling €1,070 million and the revolving credit line of €370 million were replaced in April 2025 by a new syndicated loan agreement ("Facilities Agreement") comprising various credit facilities through net settlement. The newly negotiated syndicated loan agreement includes a term loan with a volume of €850 million. In addition, a new revolving credit facility in the amount of €400 million was set up.

In July 2025, promissory note loans totaling €300 million were issued. This included €65 million with a term of three years at partly fixed and partly variable interest rates, a further €150 million with a term of five years at partly fixed and partly variable interest rates, and €85 million with a term of seven years at a fixed interest rate.

5 Only changes in balance sheet items exceeding €50 million and with a percentage deviation of more than 10% are explained.

The availability and terms of the long-term syndicated loan agreement concluded in April 2025 depend on compliance with financial covenants, which have undergone only minor adjustments compared with the previous financing. The financial covenant relates to the ratio of net debt to adjusted earnings before interest, taxes, depreciation, and amortization ("consolidated EBITDA") as defined in the syndicated loan agreement. The terms of the financing continued to be complied with in fiscal year 2025. In the event of a breach of the terms, the financing partners are entitled to terminate the relevant syndicated loan. At present, there are no indications that the covenant cannot be fully complied with in the foreseeable future.

As of 31 December 2025, equity and liabilities increased by €731 million or 15.6% to €5,427 million compared to €4,696 million as of 31 December 2024. This rise was primarily due to an increase in current liabilities.

Equity increased in fiscal year 2025 by €116 million to €1,002 million. This resulted particularly from the Group profit of

€89 million attributable to the shareholders of HENSOLDT AG. In addition, other reserves increased by €91 million, mainly due to actuarial adjustments to provisions for pension benefits and the increase in plan assets. By contrast, the dividend payment of €58 million had a negative impact on retained earnings. A reclassification of €35 million from capital reserves to retained earnings was also made.

Non-current liabilities amounted to €2,091 million as of 31 December 2025, up €164 million from the previous year's figure of €1,927 million. The increase was primarily due to the €160 million rise in lease liabilities in connection with the new property leases for the new site in Oberkochen. The realignment of the financing structure in April 2025 also contributed to the increase: As part of this measure, the previous term loan and term facility totalling €1,070 million were replaced by a new term loan with a nominal value of €850 million. In addition, a promissory note loan of €300 million was issued in July 2025. By contrast, reduced non-current provisions (€-130 million), in particular due to lower provisions for pension obligations as a result of higher interest rates and higher plan assets, had a contrasting effect on the movement in non-current liabilities.

Current liabilities increased to €2,334 million as at 31 December 2025, up €451 million on the previous year's figure of

€1,883 million. The increase was mainly due to higher contractual liabilities, which rose by €370 million. This development is primarily the result of prepayments received, inter alia related to TRML-4D radars. Furthermore, trade payables rose by €44 million, due to the higher business volume at the end of the fiscal year. The €68 million increase in other current liabilities was mainly due to higher VAT liabilities arising from the increased sales volume in the fourth quarter.

6 Only changes in balance sheet items exceeding €50 million and with a percentage deviation of more than 10% are explained.

Fiscal Year

1 Defined as sum of "Proceeds from sale of intangible assets and property, plant and equipment", "Payments for investments in non-consolidated affiliates, joint ventures, associates, other investments and other non-current financial assets", "Proceeds from disposals of non-consolidated affiliates, joint ventures, associates, other investments and other non-current financial assets", "Acquisition of subsidiaries net of cash acquired" as well as "Other cash flows from investing activities" as reported in the Consolidated Statement of Cash Flows. In addition, a compensation obligation paid in connection with the acquisition of the ESG Group was recognised in operating cash flow in the fiscal year 2024.

2 See the definition of "other special items" in chapter "I.3 Performance measurement system".

The cash flows from operating activities were once again at a very high level of €450 million and above the previous year's value (€311 million). In addition to the continuing positive operating performance, changes in working capital had a particular impact. This primarily reflects cash inflows from advance payments received in connection with TRML-4D radars and Eurofighter Mk1 radars, for example. This was offset by cash outflows for investments in inventories to handle the planned business volume in the following quarters, among other things.

The significantly lower cash flow from investing activities compared to the previous year (€-233 million; previous year:

€-745 million) includes, in particular, cash outflows for investments in development projects, for the business transformation to SAP S/4HANA, for property, plant, and equipment, and for the acquisition of shares in Quantum Systems GmbH. In the previous year period, cash flow from investing activities was substantially influenced by the purchase price payment for acquiring 100% of the shares in the ESG Group.

As a result, free cash flow in the current fiscal year 2025 significantly increased by €651 million, reaching €217 million (previous year: €-434 million).

At €347 million, adjusted free cash flow was once again at a very high level and exceeded the figure of the successful previous year by €98 million.

The increased cash outflow for OneSAPnow-related special items reflects the increased investments resulting from the progress of the business transformation within the framework of SAP S/4HANA. Significantly lower cash outflows for M&A activities7 in fiscal year 2025 amounting to €29 million (previous year: €574 million) include, in particular, cash outflows for the acquisition of shares in Quantum Systems GmbH. Other special items mainly include cash outflows incurred in connection with the gradual occupation of the new site in Oberkochen. In addition, cash outflows for consulting services incurred in connection with the acquisition and integration of the ESG Group as well as payments for the new logistics centre commissioned in fiscal year 2024 and the associated implementation of an IT merchandise management system are included.

7 Defined as sum of "Proceeds from sale of intangible assets and property, plant and equipment", "Payments for investments in non-consolidated affiliates, joint ventures, associates, other investments and other non-current financial assets", "Proceeds from disposals of non-consolidated affiliates, joint ventures, associates, other investments and other non-current financial assets", "Acquisition of subsidiaries net of cash acquired" as well as "Other cash flows from investing activities" as reported in the Consolidated Statement of Cash Flows. In addition, a compensation obligation paid in connection with the acquisition of the ESG Group was recognised in operating cash flow in the fiscal year 2024.