2025 KHD-AG Half-Year Financial Report

Half-Year Financial Report

2024

Summary of the First Half Year 2025

• Order intake unsatisfactory due to ongoing predatory competition in international markets

• Good gross profit margin results in positive operating result (EBIT)

• Solid equity and liquidity position

Key Figures at a Glance

* Including intercompany loan of € 10 million (previous year: € 10 million) w ith entitlement to call for early repayment by giving 30 days' notice

** Balance of current assets (less cash and cash equivalents and bank deposits as w ell as current loans granted) and current liabilities (less current borrow ings)

Please note that differences can result from the use of rounded amounts and percentages.

FUNDAMENTAL GROUP PRINCIPLES

KHD Humboldt Wedag International AG (hereinafter also referred to as "KHD" or the "Group") made no fundamental changes to its business model, strategy, or management system (see combined management report of December 31, 2024, p. 14 et seq.) during the first half-year 2025 The continuing focus of KHD in 2025 is the implementation of the following five topics:

• Benefiting from the "green transition";

• Go China/India and improving the Group's presence in selected markets;

• EPC (engineering, procurement, construction) with strategic partners;

• Expansion of the service portfolio and digitalization;

• Improvement of competitiveness on the cost side and excellence in execution.

  The five areas of activity are closely integrated with each other and, if executed successfully, they ensure the future viability of the KHD Group. Close cooperation with AVIC Beijing is the case in particular with the Go China initiative and the implementation of our EPC concept. The implementation of our strategy is not a short-term task and its success will only become apparent through relevant order intake.

  Management, monitoring and reporting within the Group continue to be based on the financial indicators listed below. With respect to the basic determination and calculation of these financial performance indicators, reference is made to the combined management report of December 31, 2024, p. 19 et seq.

  The significant performance indicators of the Group are:

• Order intake and order backlog;

• Group revenue;

• Adjusted Group earnings before taxes and net finance income (adjusted EBIT) as well as the ratio to revenue (adjusted EBIT margin);

• Operating cash flow.

For Group management purposes, KHD adjusts EBIT as necessary with regard to special effects. EBIT was not adjusted during the reporting period nor in the corresponding period during the previous year.

ECONOMIC REPORT

Market Environment

According to the outlook of the International Monetary Fund (IMF World Economic Outlook April 20251), global growth for 2024 was stable at 3.3%, but lower than the historical average (2000-19). The tariff measures announced by the United States and the countermeasures of their trading partners resulted in a negative shock with regard to global growth. It is expected that the extremely high level of uncertainty will have a significantly negative impact on global economic activity. According to the reference forecast (as of April 4, 2025), global growth of 2.8% is expected for 2025 and 3.0% for 2026. Growth of 1.4% is predicted for industrial countries in 2025, while in emerging and developing countries, growth of 3.7% is predicted.

An analysis by CW Research ("Global Cement Volume Forecast Report 1H2025"2) expects that cement consumption in 2025 will decrease in comparison with 2024 by 2.0% to a total of 3.69 billion tons, due mainly to lower consumption in China. Cement demand in China will probably experience a reduction of more than 6%. If China is not taken into consideration, growth of 1.8% is forecast for 2025. CW Research expects that between 2024 and 2029, global cement demand will grow by an average of just 1.0% per year. If China is not taken into account, however, an average annual growth in cement consumption of 3.1% is forecast.

As in previous years, the expectations for 2025 are characterized by extensive differences among the regions. For North America, a reduction in demand of 4.2% is expected for 2025 along with a 6.1% reduction for China. In contrast, growth in demand is expected for Latin America (1.4%), for the Middle East (2.3%), and for Africa (2.9%), while demand in Asia (without China) is even expected to grow by 3.4%.

Even if the investment trend and the financial options available to our customers for investment projects are still not entirely satisfactory, the major factors for a future increase in cement consumption remain unchanged. The increase in population, the need for additional living space, infrastructure projects, increasing industrialization and last, but not least, the greater purchasing power of consumers in emerging and developing countries will contribute to an increase in cement consumption in the medium term.

Overall, the demand for our traditional portfolio of equipment is unsatisfactory - with the exception of India. The net zero strategies (CCUS, oxyfuel, clay calcination, 100% use of alternative fuels) of the cement manufacturers will reduce the need for conventional limestone clinker by 50% or more in comparison with demand in previous periods. Moreover, some traditional KHD markets (e.g. Russia) are not accessible due to sanctions and supply restrictions. Overall, in many markets only limited demand for new kiln lines remains (China has considerable excess capacity). Accordingly, the price pressure from Chinese competitors for new construction projects has increased, and almost

1 Accessed on July 21, 2025 at https://www.imf.org/en/Publications/WEO/Issues/2025/04/22/world-economic-outlook-april-2025

2CW Research: Global Cement Volume Forecast Report (GCVFR), 1H2025 update, Ridgefield: CW Group LLC

everywhere in the world, with the exception of India and the USA, projects designated as EPC are, for the most part, awarded based on the criterion of lowest price. For this reason, our new products and concepts for reducing CO2 emissions, with which we provide our customers with a significant contribution toward decarbonization, are especially important for the medium and long term development of KHD. In addition, the KHD Group can take advantage of good business opportunities in increasing cement plant efficiency and reducing energy consumption, in the use of alternative fuels and the greater attention paid to environmental issues, and in the area of niche products.

Overall Assessment of the Economic Situation

The business development of the Group in the first half-year 2025 exceeded the forecast published in March with regard to the operating result (EBIT) and Group earnings before taxes (EBT).

However, order intake for the first half-year 2025 of € 49.3 million was significantly below the level of the corresponding period of the previous year (€ 99.0 million). As explained in the Report on Events after the Reporting Period, contracts that were already effective before June 30, 2025 for a total of about € 144 million were recorded as order intake in July 2025. Revenue totaling € 82.7 million was 9.3% lower than the figure for the first six months of the 2024 financial year (€ 91.2 million). The cost of sales amounted to € 62.9 million (corresponding period of the previous year: € 76.1 million). As a result, the adjusted gross profit increased from € 15.1 million in the corresponding period of the previous year to € 19.8 million in the reporting period. The gross profit margin of 23.9% achieved significant improvement over the figure for the first half-year 2024 (16.6%). Following a negative figure for EBIT in the amount of € -1.3 million in the first six months of the previous year, the current figure is positive (€ 1.7 million). The first six months of the current financial year resulted in positive earnings before tax (EBT) in the amount of € 5.1 million, following € 1.3 million in the corresponding period of the previous year. Even though the development in order intake and revenue in the first half-year 2025 was not entirely satisfactory, our updated planning for the 2025 financial year now shows a positive EBIT in in the low single-digit million euro range.

Due in particular to very high advance payments received in addition to good working capital management, cash flow from operating activities in the first six months totaled € 18.1 million, following € 0.3 million in the corresponding period of the previous year.

Business Development

Order intake for the first half-year 2025 was € 49.3 million (corresponding period of the previous year:

€ 99.0 million). Customers continue to be reticent with regard to investments for new construction and expansion of cement plants with traditional technologies. Customers' decisions to make investments in innovative solutions (e.g. oxyfuel, clay calcination) often depend on state funding.

Order intake in the Capex business unit for the first half-year 2025 of € 24.7 million was significantly less than the figure for the first half-year 2024 (€ 73.3 million). Order intake in the Plant Services segment of € 24.6 million in the reporting period was also less than the figure of the corresponding period of the previous year (€ 25.7 million). The spare parts and services business contributed 50.0% to the overall order intake (corresponding period of the previous year: 26.0%).

With a volume of € 128.7 million, the order backlog as of June 30, 2025 was below the figure of December 31, 2024 in the amount of € 176.4 million. Effects due to exchange rate fluctuations, which are reported as an adjustment to order backlog, totaled € -14.2 million (corresponding period of the previous year: € 4.8 million).

Group Earning Situation

Revenue in the amount of € 82.7 million was about € 8.5 million lower than the figure for the corresponding period of the previous year of € 91.2 million. Including revenue that was 9.3% lower than in the previous year and cost of sales that was 17.3% lower, the adjusted gross profit for the first half-year 2025 was € 19.8 million higher than the level of the previous year (€ 15.1 million). The gross profit margin improved considerably from 16.6% to 23.9%.

The sales expenses of € 6.3 million exceeded the level of the first six months of the previous year by

6.8 % (€ 5.9 million) and indicate the expansion of our activities in selected markets. The administrative expenses of € 8.3 million were also slightly higher than the level of the corresponding period of the previous year of € 8.1 million. At € 4.6 million, the other expenses were considerably higher than the level of the previous year (€ 3.5 million). This is due to increased expenses for research and development (€ 3.8 million, corresponding period of the previous year: € 2.5 million). In addition, the other expenses include expenses due to exchange rate fluctuations in the amount of

€ 0.8 million (corresponding period of the previous year: € 0.6 million).

Earnings before tax and net finance income (EBIT) showed positive development and reached € 1.7 million in contrast with the negative figure of € -1.3 million in the corresponding period of the previous year. The EBIT margin in the reporting period amounted to 2.0% (corresponding period of the previous year: -1.4%).

KHD achieved net finance income in the amount of € 3.4 million, following € 2.5 million in the corresponding period of the previous year. Finance income in the amount of € 3.7 million (corresponding period of the previous year: € 3.0 million) includes interest income of € 1.5 million (corresponding period of the previous year: € 1.5 million) from two loans granted to AVIC International Kairong Limited ("AVIC Kairong"). Each of these loans, which together total € 60.0 million, incur interest at 5.0% p.a. Finance expenses in the amount of € 0.3 million (corresponding period of the previous year: € 0.5 million) primarily include interest expenses in connection with pension benefit obligations in the amount of € 0.2 million (corresponding period of the previous year:

€ 0.4 million).

The first half-year 2025 concluded with a result for the period in the amount of € 3.0 million. Negative Group earnings in the amount of € -1.4 million were generated in the corresponding period of the previous year. Diluted and basic earnings per share amounted to € 0.06 (corresponding period of the previous year: € -0.03).

Segment Earnings Situation

Revenue in the Capex segment in the first half-year 2025 reached € 57.5 million, which was considerably lower than the amount for the previous year (€ 69.0 million). In the Plant Services segment, in comparison with the corresponding period of the previous year, revenue of € 25.2 million exceeded the previous year's figure of € 22.1 million. The Plant Services segment contributed 30.5% to the total revenue; during the same period of the previous year, it contributed 24.3%.

The adjusted gross profit in the Capex segment improved to € 11.8 million from € 7.9 million in the corresponding period of the previous year, despite considerably lower revenue in comparison with the previous year. Accordingly, the gross profit margin in this segment improved to 20.6%, following 11.5% in the previous year. In the Plant Services segment, due to higher revenue, the adjusted gross profit of € 7.9 million improved in comparison with the previous year (€ 7.2 million). The gross profit margin of 31.6% was slightly less than the figure for the corresponding period of the previous year (32.5%).

In the first six months of the reporting year, the Capex segment achieved improved EBIT in comparison with the previous year of € -3.5 million, following a figure of € -5.7 million in the corresponding period of the previous year, but the figure remained negative in line with our expectations. EBIT in the Plant Services segment increased in accordance with our forecast in the first half-year 2025 to a figure of € 5.2 million, following a figure of € 4.4 million in the corresponding period in 2024.

Financial Position and Net Assets Liquidity

The total cash and cash equivalents increased considerably in the first half-year 2025 by

€ 19.2 million, from € 59.9 million as of December 31, 2024 to € 79.1 million as of June 30, 2025. As of the reporting date, € 11.2 million (as of December 31, 2024: € 20.6 million) in term deposits with original terms of more than three months are reported as other financial assets.

Cash flow from investment activities of € 9.3 million was considerably higher than the previous year's figure (€ -2.9 million) and includes in particular, in addition to interest payments received for the loans extended to AVIC Kairong (€ 1.5 million), repayments in the amount of € 9.5 million for term deposits with original terms of more than three months. Cash flow from financing activities totaled

€ -1.2 million in the reporting period, following a figure of € -0.9 million in the corresponding period of the previous year.

Taking exchange rate fluctuations in the amount of € -6.9 million (corresponding period of the previous year: € 0.8 million) into consideration, cash and cash equivalents as of June 30, 2025 amounted to € 79.1 million (as of December 31, 2024: € 59.9 million).

Total Assets

The balance sheet total for KHD of € 240.1 million as of June 30, 2025 was below the level as of the end of 2024 (€ 255.1 million). The non-current assets of the Group totaled € 74.0 million as of June 30, 2025 (as of December 31, 2024: € 75.4 million) and primarily included one of the loans extended to AVIC Kairong for € 50.0 million, property, plant and equipment of € 13.5 million (as of December 31, 2024: € 14.6 million), rights of use in accordance with IFRS 16 of € 5.4 million (as of December 31, 2024: € 6.0 million), and goodwill of € 2.1 million (as of December 31, 2024: € 2.1 million).

Current assets totaled € 166.1 million as of June 30, 2025 (as of December 31, 2024: € 179.6 million). Within the current assets, one of the two loans extended to AVIC Kairong totals € 10.0 million, unchanged since December 31, 2024. The inventories decreased from € 12.3 million to € 11.9 million and the contract assets were reduced considerably from € 15.6 million at the end of 2024 to

€ 2.4 million. Likewise, trade and other receivables decreased significantly by € 11.1 million, from

€ 51.8 million as of December 31, 2024 to € 40.7 million as of June 30, 2025. Other financial assets decreased primarily due to the repayment of term deposits with original terms of more than three months from € 32.3 million to € 22.5 million. In contrast, cash and cash equivalents increased from

€ 59.9 million at the end of 2024 to € 79.1 million as of June 30, 2025.

Financing

On the liabilities side, non-current liabilities decreased slightly in comparison with December 31, 2024 from € 26.3 million to € 24.4 million. This is primarily due to lower provisions.

Current liabilities totaling € 112.8 million at the end of the first half-year 2025 were considerably lower than the figure as of December 31, 2024 (€ 121.2 million). The reduction is primarily due to lower provisions of € 26.8 million (as of December 31, 2024: € 32.3 million) and trade payables and other liabilities of € 55.3 million (as of December 31, 2024: € 61.9 million). In contrast, the contract liabilities and advance payments received increased from € 25.5 million as of December 31, 2024 to

€ 29.2 million as of June 30, 2025.

The net working capital - the difference between current assets (less cash and cash equivalents as well as current financial investments and current loans granted) and current liabilities (less current borrowings) - improved considerably in comparison with the figure as of December 31, 2024 (€ -32.1 million) to € -46.9 million.

Equity totaled € 102.9 million, which was below the level of the figure as of December 31, 2024 (€ 107.5 million). The decrease, despite the positive result for the period, is due to currency translation differences recognized in equity of € -20.1 million (as of December 31, 2024:

€ -12.5 million). This was due in particular to the significantly weaker exchange rate of the Indian rupee against the euro. The positive Group earnings in the first half-year 2025 in the amount of

€ 3.0 million is included in equity under retained earnings. The very good equity ratio increased slightly from 42.2% as of December 31, 2024 to 42.9%.

Non-Financial Performance Indicators

Non-financial performance indicators include mainly employee development, customer satisfaction, the impact of our products on the environment, product quality and individual employee-related performance indicators.

Target achievement in relation to non-financial performance indicators is measured with the help of various instruments, such as annual employee appraisal, or the measuring of emissions values and energy consumption of individual products. Value-oriented management in the KHD Group means that, for example, customer satisfaction and the minimization of our products' impact on the environment are more important than short-term profit maximization.

The expenses for research and development in the KHD Group were € 3.8 million in the first half-year 2025, following a figure in the previous year of € 2.5 million. The increase underscores the importance of continuing target-oriented research and development of KHD technology for cement plants. Crucial topics include the continuing development of environmentally conscious products and solution concepts, with a particular emphasis on energy efficiency and emissions reduction, as well as using alternative fuels in cement plants. A particularly important goal is to further minimize the CO2 footprint associated with cement production. In addition, the continuing improvement of individual plant components, especially increasing the efficiency of cement plants, is an ongoing topic of research and development.

The KHD Group had 974 employees (excluding trainees) at the end of June 2025 (end of 2024: 944). The targeted increase in personnel primarily affected the Group company in India.

Report on Events after the Reporting Period

Contracts that were already effective before June 30, 2025 for a total of about € 144 million were recorded as order intake in July 2025. There were no other substantial developments or events of particular significance after the balance sheet date of June 30, 2025.

RISK AND OPPORTUNITIES REPORT

KHD's approach to risk management ensures that changes in the risk position are promptly identified. To the extent required, provisions are set up for specific risks. The risks identified do not pose a threat to the KHD Group as a going concern, either individually or in combination. As of the date of this half-year financial report, there has been no significant change in the assessment of risks and opportunities in comparison with the balance sheet date in 2024. For a detailed description of the risks and opportunities, please refer to the relevant section in the Group's combined management report as of December 31, 2024 (page 41 et seq. of the Group Annual Report).

OUTLOOK

In its analysis ("Global Cement Volume Forecast Report 1H2025"), CW Research expects that global cement consumption will grow on average by 1.0% annually in the period from 2024 to 2029. Without taking China into consideration, annual growth of 3.1 % is forecast for the years from 2024 to 2029.

As already published in the ad hoc disclosure of August 8, KHD adjusted the forecast submitted in the 2024 annual report for the 2025 financial year with regard to revenue along with EBIT and EBIT margin.

Order intake for the 2025 financial year is still expected to be more than 30% higher than the level of the 2024 financial year (€ 175 million). As a result of the quite considerable exchange loss of the Indian rupee in relation to the euro, revenue in the 2025 financial year will likely be up to 20% less than the figure for the 2024 financial year. For several projects, significant reductions in the total estimated costs were achieved after a successful performance test or even during project execution. Moreover, some of the provisions accounted for covering certain risks were partially reversed through profit and loss. The gross profit margin improved due to good project execution. KHD expects a clearly positive EBIT for the current year. For operating cash flow in the 2025 financial year, unchanged from the outlook in March 2025, KHD continues to expect a negative figure in the single-digit million euro range.

According to our planning, KHD's financial and net assets position in the 2025 financial year will remain stable and will not change significantly in comparison with the 2024 financial year. The continuing, satisfying liquidity position combined with the high equity ratio provides KHD with the flexibility required to cope successfully with difficult market phases. KHD thus has the prerequisites to successfully implement its strategy, continuously develop its service and product portfolio and exploit opportunities for internal and external growth.

Opportunities and Risks Relating to the Outlook for the Second Half-Year 2025

While the risk management system is, in principle, oriented toward the medium and long term, during the planning process special consideration is given to the opportunities and risks that can have an effect within the forecast period. Due to the special characteristics of long-term plant engineering, risks and opportunities can also lead to significant deviations from planned figures in the short-term outlook.

There are risks, but also significant opportunities with regard to the predicted figures for order intake, particularly in the Capex segment. The awarding of individual projects to KHD can significantly affect the order intake in the second half of the 2025 financial year. Despite close collaboration with customers during the tendering phase, customer investment decisions and the awarding of individual projects to the KHD Group can only be forecast with substantial uncertainty, which can lead to either higher or lower order intake.

The revenue and earnings forecast is mainly based on order backlog in the Capex segment and on the planning of business in the Plant Services segment, which is significantly less cyclical. The risks and opportunities relating to the planned revenue and earnings figures remain significant in the second half of the 2025 financial year as delays or accelerations in project execution, postponement of awarding projects included in the planned order intake, and unexpected changes in the results of specific projects can affect these figures.

Cologne, Germany, August 14, 2025 The Management Board

(s) Jianlong Shen (s) Jürgen Luckas (s) Dr. Matthias Jochem (Chairman)

(s) Matthias Mersmann

GROUP INCOME STATEMENT for

KHD Humboldt Wedag International AG, Cologne, for the Period from January 1 to June 30, 2025

Net result attributable to shareholders (in € thousand)

3,015 (1,391)

Weighted average number of shares outstanding 49,703,573 49,703,573 Basic (undiluted) and diluted earnings per share (in €) 0.06 (0.03)

GROUP STATEMENT OF COMPREHENSIVE INCOME for

KHD Humboldt Wedag International AG, Cologne, for the Period from January 1 to June 30, 2025

As in the previous year, no income taxes on currency translation differences were applicable. There are also, as in the previous year, no deferred tax assets or liabilities related to actuarial gains and losses.

GROUP BALANCE SHEET for

KHD Humboldt Wedag International AG, Cologne, as of June 30, 2025

GROUP STATEMENT OF CASH FLOWS for

KHD Humboldt Wedag International AG, Cologne, for the Period from January 1 to June 30, 2025

GROUP STATEMENT OF CHANGES IN EQUITY for KHD Humboldt Wedag International AG, Cologne, for the Period from January 1 to June 30, 2025

18

Notes to the Interim Group Financial Statements for

KHD Humboldt Wedag International AG, Cologne, as of June 30, 2025

1. Group Structure and Affiliated Companies

   KHD Humboldt Wedag International AG ("KHD" or "Group") is one of the world's leading providers of equipment and services for cement manufacturers. In its capacity as the ultimate holding company of the Group, KHD AG continues to hold, as a significant investment, 100% of the shares in KHD Humboldt Wedag GmbH ("KHD GmbH"), Cologne, Germany. The core business areas of the nine Group companies of KHD AG are industrial plant engineering and providing related services. Their strategic and operational focus is planning and supplying equipment for plants for the cement industry and providing an extensive range of services.

2. Reporting Principles

   The interim financial statements of KHD are prepared using uniform accounting principles. The interim financial statements of KHD and of the subsidiaries that are included in the interim Group financial statements were prepared in accordance with International Financial Reporting Standards (IFRS) and the related interpretations of the International Accounting Standards Board (IASB), as applicable pursuant to regulation No. 1606/2002 of the European Parliament and Council concerning the application of international accounting standards in the EU for interim financial reporting. In accordance with IAS 34, this interim report does not contain all of the information and notes to the financial statements that the IFRS requires for consolidated financial statements at the end of a financial year.

   These consolidated financial statements and the Group management report for the first half-year 2025 were neither audited pursuant to Section 317 of the German Commercial Code (HGB) nor were they subjected to an auditor's review.

   The accounting and measurement methods applied in these interim financial statements are consistent with those applied as of December 31, 2024, unless changes are described. The methods are described in detail in KHD's Group Annual Report on the IFRS consolidated financial statements as of December 31, 2024 on page 62 et seq.

   These interim consolidated financial statements give a true and fair view of the net assets, financial position, and result of operations during the reporting period.

   The preparation of interim financial statements requires that estimates are used and assumptions made that impact the assets, liabilities, provisions, deferred tax assets and liabilities as well as income and expenses. Over time, the estimates and assumptions can change and significantly affect the net assets, financial position, and result of operations of KHD. Although the estimates and assumptions are made carefully and conscientiously, it cannot be ruled out that the actual amounts might deviate from the estimates used in the interim financial statements.

   The assumptions and estimates apply for the most part to the Group-wide determination of economic useful life, the assumptions for the impairment test of goodwill, the measurement of provisions and the usability of tax loss carryforwards as well as the estimation of project costs and the percentage of completion in case of customer contracts with revenue recognition over time.

   The KHD Group operates in the area of plant engineering and construction. Contracts in plant engineering and construction are frequently customer contracts with revenue recognition over time. In these cases, KHD determines the result and revenue according to the stage of completion based on the proportion of contract costs already incurred for the project to the estimated total contract costs, i.e. an input method is applied. As a result, the revenue recognition over time for customer contracts corresponds to the recognition of profit according to the stage of completion. An expected loss from customer contracts with revenue recognition over time is immediately recorded in full as an expense. When revenue is recognized over time, the estimate of the stage of completion is particularly important. Significant estimates include, in particular, the total estimated project costs, total contract revenues, contract risks and other relevant figures. When revenue is recognized over time, changes in estimates can lead to an increase or decrease in revenue.

   These interim consolidated financial statements have been prepared in euro. All amounts, including figures used for comparison, are stated in thousands of euro (€ thousand). All amounts have been rounded in accordance with standard commercial practice.

3. Applying New or Revised International Financial Reporting Standards

   In the reporting period, the Group applied all International Accounting Standards Board (IASB) standards and International Financial Reporting Interpretations Committee (IFRIC) interpretations required to be applied, providing that the standards and interpretations have already been endorsed by the European Union (EU).

   Published Standards for which Application is not yet required

   In the current reporting period, the IASB has published a variety of standards, interpretations and changes to standards and interpretations, the application of which is not yet mandatory and, in part, still require endorsement into EU law.

   • Amendments to IFRS 7: Amendments related to the classification and measurement of financial instruments, published in May 2024, initial application in the 2026 financial year.

   • Amendment to IFRS 9: Amendments related to the classification and measurement of financial instruments, published in May 2024, initial application in the 2026 financial year.

   • IFRS 18: Presentation and disclosures in financial statements, published in April 2024, initial application in the 2027 financial year.

   • IFRS 19: Subsidiaries without public accountability: Disclosures, published in May 2024, initial application in the 2027 financial year.

   The KHD Group will apply these standards when they take effect. The Group does not expect these amendments or the costs of introducing these standards to result in any significant impact on the Group's net assets, financial position, and result of operations.

   The new standard IFRS 18 replaces IAS 1 and must be applied for the first time for financial years beginning on or after January 1, 2027. KHD is not planning to apply the standard earlier. In particular, IFRS 18 requires additional subtotals in the income statement as well as reconciliations with the performance measures determined by company management. The initial application of IFRS 18 will also impact KHD, although the specific extent of the effects has not currently been analyzed.

4. Consolidation

   Subsidiaries are the companies in which investments are held and in which KHD AG has power over the investee, has an exposure to variable returns from its involvement with the investee, and has the ability to use its power over the investee to affect the amount of KHD's returns. At KHD AG this is regularly the case when KHD AG holds, directly or indirectly, more than 50% of the voting rights or controls the business activities in another manner. These companies are, as a general rule, consolidated. Subsidiaries are consolidated from the date when actual control is transferred to KHD AG and are deconsolidated from the date when control no longer exists.

   All intercompany transactions, balances, and unrealized profits or losses on intra-group transactions are eliminated. The accounting and measurement principles applicable to subsidiaries pursuant to statutory law are adjusted in order to ensure consistency with the accounting and valuation principles of KHD. Non-controlling interests are presented and commented on separately.

   Besides KHD AG, the Group includes:

   Name of company

   Capital and voting rights in %

   Capital and voting rights in %

   Subscribed capital

   Subscribed capital

   Registered office		Main Buisness		June 30, 2025		Dec. 31, 2024		Currency		June 30, 2025		Dec. 31, 2024
   Cologne, Germany		Holding function		100.00		100.00	D	€		15,339,300		15,339,300
   Cologne, Germany		Plant engineering		100.00		100.00	I	€		7,000,000		7,000,000
   Dessau-Roßlau, Germany		Plant engineering		100.00		100.00	I	€		2,000,000		2,000,000
   Road Town, British Virgin Islands		Holding function		100.00		100.00	I	USD		1,000		1,000
   Cologne, Germany		Asset management		91.26		91.26	I	€		3,600,000		3,600,000
   Peachtree Corners, USA		Plant engineering		100.00		100.00	I	USD		1,000		1,000
   New Delhi, India		Plant engineering		100.00		100.00	I	INR		19,200,000		19,200,000
   Beijing, China		Plant engineering		100.00		100.00	D	USD		2,100,000		2,100,000
   São José dos		Sales		100.00		100.00	I	BRL		801,847		801,847

   KHD Humboldt Wedag GmbH Humboldt Wedag GmbH

   ZAB Zementanlagenbau GmbH Dessau

   Blake International Ltd.

   KHD Humboldt Wedag Vermögensverwaltungs-AG

   Humboldt Wedag Inc.

   Humboldt Wedag India Private Ltd. *

   KHD Humboldt Wedag Machinery Equipment (Beijing) Co. Ltd

   Humboldt Wedag Do Brasil Servicos Technicos Ltda

   Campos, Brazil

   D = directly owned * Subscribed capital of HW India as of March 31, 2025 and March 31, 2024, respectively I = indirectly owned

   22

5. Segment Reporting

   For KHD, reporting is done in two separate segments. The Capex segment (project business) is differentiated from the Plant Services segment (after sales business). Segment reporting is oriented towards internal Group management controlling and internal financial reporting, i.e. it is based on the management approach. The business activities of the two reportable segments include the following services:

   • Capex (project business)

     In the Capex segment, the KHD Group reports all revenues and expenses resulting from supplying equipment for cement plants and providing services directly linked to the equipment supply. This encompasses process technology, design, engineering, project management and the supply of technology and equipment. In individual cases, KHD also provides construction and erection services. In addition, supervision of the erection and commissioning of cement plants are allocated to this segment. General and administrative expenses, sales expenses and other expenses (in particular research and development costs) are allocated to this segment accordingly.

   • Plant Services

     The Plant Services segment comprises all revenues and expenses resulting from supplying spare parts and providing services to existing cement plants. Services include optimizing cement plants, maintenance services, carrying out plant audits, creating optimization concepts and feasibility studies, and training plant personnel. General and administrative expenses, sales expenses and other expenses are allocated to the segment accordingly.

     Management and controlling of the KHD Group is based in particular on key figures for the balance sheet and income statement. However, for the operating segments, key figures are determined only for the income statement and for order intake, but not for the balance sheet. In its function as the chief operating decision maker, the Management Board assesses the profitability of the segments based on the adjusted operating result (adjusted earnings before taxes and net finance income -adjusted EBIT).

     The following table provides an overview of the business for the 2025 and 2024 financial half-years.

     	Capex		Plant Services		Total Group		Capex		Plant Services		Total Group
     	Jan. 1 -		Jan. 1 -		Jan. 1 -		Jan. 1 -		Jan. 1 -		Jan. 1 -
     	June 30,		June 30,		June 30,		June 30,		June 30,		June 30,
     in € thousand	2025		2025		2025		2024		2024		2024
     Order intake	24,655		24,612		49,267		73,324		25,693		99,017
     Revenue	57,498		25,198		82,696		69,046		22,110		91,156
     Cost of sales	(45,684)		(17,227)		(62,911)		(61,137)		(14,919)		(76,056)
     Gross profit	11,814		7,971		19,785		7,909		7,191		15,100
     Other operating income	1,117		-		1,117		1,069		-		1,069
     Sales expenses	(5,211)		(1,090)		(6,301)		(4,713)		(1,226)		(5,939)
     General and administrative expenses	(6,629)		(1,665)		(8,294)		(6,478)		(1,611)		(8,089)
     Other expenses	(4,634)		-		(4,634)		(3,479)		-		(3,479)
     At equity result	-		-		-		25		25		50
     Earnings before interest and taxes
     (EBIT)	(3,543)		5,216		1,673		(5,667)		4,379		(1,288)
     Net finance income					3,392						2,544
     Profit before tax					5,065						1,256
     Income tax expense					(2,040)						(2,642)
     Group net profit/ loss for the period					3,025						(1,386)
     for information:
     depreciation and amortization	-				(1,638)		-				(1,587)

     The recognition and measurement principles used for the reportable segments are in line with the IFRS accounting standards described above that are used for the Group financial statements. Revenue and segment-related expenses are directly allocated to the respective segment. Expenses and income which cannot be allocated directly to the segments (e.g. general and administrative expenses) are allocated to the segments using appropriate allocation keys.

     The following project data was allocated to the different geographical areas according to the place of performance or delivery of the products and services.

     Revenue Non-current assets

     in € thousand	Jan.1 - June 30, 2025		Jan.1 - June 30, 2024		June 30, 2025		Dec. 31, 2024
     India	56,625		62,515		12,361		13,581
     Rest of Asia	5,793		6,767		-		-
     North America	3,902		8,189		284		414
     Middle East	3,634		2,344		-		-
     Africa	3,306		1,556		-		-
     Germany	2,487		1,392		9,860		9,680
     Rest of Europe	2,406		5,715		-		-
     Australia	2,282		1,249		-		-
     China	1,974		916		10		26
     South America	287		301		-		-
     Russia	-		212		-		-
     	82,696		91,156		22,515		23,701

     Order Intake Order Backlog

     in € thousand	Jan.1 - June 30, 2025		Jan.1 - June 30, 2024		June 30, 2025		Dec. 31, 2024
     India	27,218		83,214		72,615		113,947
     Australia	7,055		3,010		6,419		1,646
     North America	4,037		4,448		3,801		4,165
     Africa	3,783		1,022		14,987		14,775
     Rest of Europe	2,525		2,226		7,478		7,359
     Middle East	1,801		2,387		6,112		7,945
     Rest of Asia	1,591		1,320		14,151		19,713
     Germany	574		1,269		418		2,332
     South America	431		47		275		131
     China	252		74		2,451		4,358
     	49,267		99,017		128,707		176,371

6. Contract Assets and Contract Liabilities, Advance Payments Made and Advance Payments Received

   Claims or obligations from customer contracts with revenue recognition over time are reported under the item contract assets or contract liabilities and advance payments received.

   Contract assets represent conditional claims to a payment from the customer for satisfying contractual performance obligations. Receivables are recorded only after the claim to receipt of the payment becomes unconditional. This is usually the case if contractually agreed upon milestones for settlement are reached. When these milestones are reached, the contract assets are reclassified under receivables in the amount of the respective progress billings.

   Contract liabilities arise when customer payments based on the agreed upon milestones exceed the performance obligations that have already been satisfied. Revenue from contract liabilities is only recognized when KHD has rendered the contractual performance obligation.

   Costs incurred plus a proportionate profit depending on the stage of completion less progress billings are taken into consideration in the measurement of the contracts with revenue recognition over time.

   The development of the contract balances from customer contracts is shown as follows:

   in € thousand	June 30, 2025		Dec. 31, 2024
   Balance of contract assets and contract liabilities
   Contract assets	2,378		15,571
   Contract liabilities	(22,460)		(22,162)
   	(20,082)		(6,591)
   Contract liabilities	(22,460)		(22,162)
   Advance payments received	(6,720)		(3,324)
   Contract liabilities and advance payments received	(29,180)		(25,486)
   Advance payments made	8,388		7,423

   Of the revenue in the amount of € 82,696 thousand generated in the reporting period (corresponding period of the previous year: € 91,156 thousand), € 58,732 thousand is attributable to customer contracts with revenue recognition over time based on the stage of completion (corresponding period of the previous year: € 71,594 thousand).

   Impairment losses on contract assets for expected credit-related losses according to IFRS 9 are of minor significance.

7. Cash and Cash Equivalents

   Cash and cash equivalents comprise the following:
   in € thousand	June 30, 2025		Dec. 31, 2024
   Bank balances and cash on hand	24,799		31,939
   Short-term bank deposits	54,262		27,938
   	79,061		59,877

8. Other Expenses

   Jan.1 -		Jan.1 -
   in € thousand	June 30, 2025		June 30, 2024
   Research and development	3,776		2,492
   Exchange rate losses	858		635
   Miscellaneous expenses	-		352
   	4,634		3,479

9. Income Tax Expenses

   The income tax expense incurred in the first half-year 2025 is composed as follows:

   in € thousand	Jan. 1- June 30, 2025		Jan. 1- June 30, 2024
   Current tax expense	(1,992)		(2,585)
   Deferred tax expense	(48)		(57)
   Tax expense for the year	(2,040)		(2,642)

   The taxes for the interim financial statements are calculated using the estimated effective tax rate of the respective KHD Group company.

10. Transactions with Related Parties

As defined by IAS 24, in addition to the subsidiaries of KHD, the related companies also include those companies that have a controlling or joint management interest in KHD or exercise substantial influence as well as those other related companies of AVIC Group that are affiliated with these. As business transactions between KHD and its consolidated subsidiaries were eliminated in the consolidation process, the following presents only the transactions with respect to direct and indirect parent companies of KHD and the other related companies or persons that were not eliminated. The transactions with affiliated companies are primarily business transactions with companies of the AVIC Group and the members of the Management Board and Supervisory Board. Transactions with indirect parent companies relate to AVIC INNO and AVIC Beijing. Transactions with other affiliated companies took place with AVIC Kairong.

Relationships to Indirect Parent Companies

There has been a cooperation agreement with AVIC Beijing since 2010, reinforced since February 2011 by the capital interest in KHD amounting to 20% that is held by Max Glory Industries Limited (Max Glory), an AVIC Beijing group company. As a consequence of a public takeover offer, AVIC Beijing further increased its indirect share in KHD in the 2014 financial year. As of June 30, 2025, AVIC Beijing indirectly holds the majority of KHD shares, unchanged at 89.02%.

Relations with Affiliated Companies

KHD AG concluded a consulting contract in the 2019 financial year with 4-stream consulting GmbH, Roetgen, a company that is considered a related party in relation to the Management Board member Dr. Matthias Jochem. According to the contractual agreement, € 149 thousand was recorded by KHD AG as expenses for consulting services provided in the period from January 1 through June 30, 2025 (corresponding period of the previous year: € 178 thousand). As of June 30, 2025, the liabilities due to 4-stream consulting GmbH total € 21 thousand (as of December 31, 2024: € 21 thousand).

Since December 31, 2024 the shares the Russian company KHD OOO have been reported under other non-current financial assets as KHD does no longer have significant influence over this company. As of June 30, 2024, KHD OOO was considered an affiliated company.

Other Transactions with Affiliated Companies of the AVIC Group

As of December 30, 2025, KHD reported two loan receivables, one for € 10,000 thousand (previous year: € 10,000 thousand) and one for € 50,000 thousand (previous year: € 50,000 thousand) from AVIC Kairong as the borrower. The interest on the two loans remains unchanged from the previous year and amounts to 5% p.a.

KHD has the right to demand full or partial repayment of the first loan (€ 10,000 thousand) at any time before the due date with a 30 days' notice. Both loans are secured by a corporate guarantee of a holding company of the AVIC Group.

The following business transactions with affiliated companies of the AVIC Group took place during the first half-year 2025:

The income with indirect parent companies primarily relates to income from project business. Interest income from the loans extended to AVIC Kairong in the amount of € 1,508 thousand (corresponding period of the previous year: € 1,517 thousand) is reported under income with other affiliated companies.

Expenses

in € thousand

Jan. 1-

June 30, 2025

Jan. 1-

June 30, 2024

Associates - 92

- 92

Current Assets

in € thousand June 30, 2025 Dec. 31, 2024

Indirect parent company 2,666 2,087

2,666 2,087

As of June 30, 2025, current assets due from indirect parent companies amounted to

€ 2,666 thousand (as of December 31, 2024: € 2,087 thousand). These are exclusively the result of receivables in the context of project business.

In addition, as of the balance sheet date, loans to affiliated companies in the amount of

€ 50,000 thousand were reported under other non-current financial assets and loans to affiliated companies in the amount of € 10,000 thousand were reported under other financial assets.

Liabilities

Contract liabilities in the amount of € 812 thousand from affiliated companies were reported under liabilities from project contracts (as of December 31, 2024: € 812 thousand). Liabilities and provisions due from indirect parent companies in the amount of € 3,337 thousand were reported (as of December 31, 2024: € 1,682 thousand).

in € thousand June 30, 2025 Dec. 31, 2024

Indirect parent company 4,149 2,494

4,149 2,494