Business
Kitron : Annual Report 2025
Kitron : Annual Report
About this update from Kitron Asa
Connectivity Electrification Industry Medical Devices Defence/Aerospace Norway Denmark USA Germany Lithuania Poland JILLB°' D ' ic China Malaysia India Content Kitron in brief 4 Letter from our CEO 10 Board of Directors' report 12 Sustainability statement 18 Signatures 79 Consolidated financial statements 80 Notes to the consolidated financial statements 86 Financial statements Kitron ASA 126 Notes to the financial statements Kitron ASA 130 Auditor's reports 148 Responsibility statement 156 Definition of Alternative Performance Measures 157 Corporate governance 158 Shareholder information 165 Board and management 168 Articles of association 173 Addresses 174 Kitron in brief Kitron is an international Electronics Manufacturing Services (EMS) provider with operations in Norway, Sweden, Denmark, Lithuania, Germany, Poland, the Czech Republic, India, China, Malaysia and the United States. We have more than 3 000 full time employees. Nordics & North America Norway Sweden Denmark US Central and Eastern Europe Lithuania Poland Czech Republic Germany Asia Pacific China India Malaysia Vision and values Our vision is to provide solutions that deliver success for our customers. Our ambition is to contribute to developing our customers into leading companies within their respective markets. Commitment We are committed to customers, suppliers, shareholders, colleagues, sustainability and the environment. Innovation We foster creativity, striving for even better processes, services, and solutions, benefiting both our customers and employees. Engagement Individuals and teams are provided equal opportunities for growth, development, and realization of their potential. What we do We provide electronics manufacturing services. These include automated assembly of printed circuit boards as well as higher-level system integration. We also provide various related services, ranging from development and design, through industrialization, sourcing and logistics, to manufacturing, redesigning and upgrading products to extend their lifespan. We have more than 3 000 full-time employees, among them more than 300 engineers. Our facilities cover more than 110 000 square metres of manufacturing area and contain more than 35 SMT lines. Development Industrialisation Sourcing and Procurement Manufacturing Logistics and Distribution Redesign, Repair and Maintenance PRODUCT DEPLOYMENT Who we serve We have strong, long-term relationships with large multinational customers. They are often market leaders in their industries. Our partnerships generally date back a decade or more. Sales are strongly characterized by repeat business, continuously renewed by new product generations. These are market sectors with specialized requirements and certifications. They also provide a diversified customer portfolio that enables us to balance shifts in demand in individual market sectors. We are most competitive within complex manufacturing processes that require niche expertise. We focus our sales and marketing activities on five key sectors: Defence/Aerospace Defence has traditionally been primarily communication, encryption, and surveillance systems. Over recent years, the rapidly evolving market for unmanned systems has seen strong growth. Aerospace is mainly navigation and communication equipment for civil and military avionics. The Defence/Aerospace sector is, in general, characterised by project deliveries. However, the underlying trend is clearly one of growing defence spending within markets that are relevant to Kitron. . Connectivity Kitron's Connectivity sector is focused on connected devices. Many of these devices are sensors, continuously feeding data into increasingly advanced software, utilizing artificial intelligence to make predictions and improve efficiency and safety. Examples are multiplying, in everything from industrial control systems to medical devices monitoring vital functions and modern cars, containing many sensors communicating with the Internet. Another part of the connectivity market sector is communication, which supplies the backbone for sensors and IOT. Typical products here are wireless communication, optical transmission and networking products. Characteristics of our market segments Long-term, repeat business Customers often market leaders Often high-complexity products Regionalized supply chains and manufacturing Electrification Kitron's Electrification sector is focused on the megatrend that sees the world increasingly moving to renewable energy and electrification. Examples are battery management, power grid transmission, power and electric drive management, charging and fuel cell technology. Kitron is involved with electrification from the power grid to end-user products, from control systems for offshore wind power to battery management systems and charging stations. Industry Within the Industry sector, Kitron operates and delivers a complete range of services within industrial applications like automation, environmental, material warehousing and security. The Industry sector consists of three main product areas: control systems, electronic control units and automation. Medical devices The medical device sector consists of the product areas diagnostics, life support, surgical, hospital and home care. Kitron is especially strong in ultrasound and cardiology systems, respiratory medical devices and Lab/IVD (In-Vitro Diagnostics). Our strategy Accelerate organic growth We will continue to increase our market shares in our Nordic home markets by leveraging our key competences and competitive edge. Focus on gaining market share in Northern Europe is a priority. Asia and the US are large markets where we see attractive opportunities. In addition to targeting new customers, we see substantial opportunities in deepening our relationships with existing customers, many of which are large, complex multinationals with different divisions with potential for Kitron. We are also increasing service sales, contributing both to increased revenues and margin expansion. Continuous operational improvement We leverage growth to reduce the relative cost base. Utilizing common global functions and efficiency programs is also crucial to lowering operating expenses versus sales and staying competitive. Innovative use of advanced manufacturing technology will increasingly determine our competitiveness. Growth through targeted acquisitions Over the years, Kitron has carried out several acquisitions. All our operations are integrated and rebranded under the "One Kitron" umbrella. We intend to pursue further M&A activities to grow and will explore M&A value creation to grow the customer base, realize synergies and expand margins. Long-term growth New site Kitron Technologies Inc. USA Forerunner started Oslo Stock Exchange Entered Lithuania Entered Germany, USA New facility Arendal - Entered Poland Entered Malaysia 1962 1980 1997 1999 2001 2007 2010 2014 2016 2017 2019 2022 2023 2025 1980's EMS Entered Sweden Entered China Expanded New facility Acquired BB Acquired Delta model Lithuania Jönköping Electronics Nordic Financial performance Our target is an organic growth of 10 per cent over a business cycle, with M&A adding potential upside. We aim for an EBIT margin above 9 per cent. Over the past 10 years, the Kitron share is up about 2000%. In addition, shareholders have, over the same period, received more than the initial share price in dividends. We maintain a strong balance sheet to position us for further growth. Revenue EUR million 738 218 EBIT margin Percentage 8.7% 5.3% 2015 2025 2015 2025 ANNUAL REPORT 2025 9 Message from our CEO From momentum to position 2025 marked a year in which Kitron converted momentum into a more clearly defined and resilient market position. Following several years of portfolio shaping, operational investments, and disciplined execution, the results are now evident in how customers engage with us, how markets perceive us, and how our business mix continues to evolve. Profitable growth supported by structural demand Revenue growth during the year was driven primarily by areas of clear structural demand rather than short-term macroeconomic fluctuations. Defence, aerospace, and security remained the most significant contributors, supported by long-term programs, accelerated technology deployment, and an increased focus on regional security of supply and sovereign capabilities. Beyond defence, we continue to see sustained demand in grid expansion and energy storage. The build-out of data centers, new energy generation capacity, and resilient power infrastructure is driving demand, while advanced sensor and connectivity solutions benefit from long-term digitalization. This divergence reinforces the importance of our strategic exposure to structurally supported markets. Market sectors - focus over breadth Kitron today is more focused than a few years ago. The Defence & Aerospace market sector now forms the core of our growth and profitability, while Industry, Connectivity, Electrification, and Medical devices continue to play important but more cyclical roles. Our strategy is guided by clear priorities: focusing on segments where reliability, traceability, and manufacturing discipline are critical, and favoring structurally growing markets over consumer-driven volatility. Regional development - a flexible industrial platform The year further confirmed the strength of Kitron's multi-regional manufacturing model. The Nordics and the U.S. continued to grow. Central Europe played an important role in balancing cost, while Malaysia matured into a credible platform for diversification beyond China. Customers increasingly view Kitron not as a collection of factories, but as an integrated industrial platform capable of rapid reconfiguration across regions. Customer relationships - deeper and more resilient Customer relationships in 2025 became deeper rather than broader. Earlier engagement in the product lifecycle has resulted in a customer portfolio characterized by larger program sizes, longer visibility, and higher switching costs-creating mutual commitment and resilience across market cycles. Peter Nilsson President & CEO Kitron Group New defence tech - speed, scale and discipline A defining success factor during the year has been Kitron's position within what can be described as new defence tech. This segment is characterized by rapid technology cycles, urgent deployment requirements, and the need to scale manufacturing faster than traditionally associated with defence programs. Kitron has demonstrated a strong ability to industrialize new designs quickly, scale production across multiple sites, and maintain full traceability and quality under time pressure. This capability has increased market recognition and created new opportunities. A stronger Kitron going forward By the end of 2025, Kitron stands as a more focused, trusted, and resilient company. We have sharpened our market position, strengthened customer collaboration, and developed a manufacturing footprint designed for flexibility and scale. Our priorities remain unchanged: disciplined growth and uncompromising execution. The foundation is firmly in place, and we enter the coming years from a position of strength. Board of Directors' report Revenue in EUR million Operating profit in EUR million 900 800 700 600 500 400 300 200 100 0 775.2 80 70 70.7 738.3 64.5 641.0 647.2 60 50 40 30 20 10 45.2 48.0 365.7 23.8 2021 2022 2023 2024 2025 0 2021 2022 2023 2024 2025 Kitron's revenue for the year was EUR 738.3 million (EUR 647.2 million), which represented a 14.1 per cent increase compared with 2024. EBIT for the group was EUR 64.5 million (EUR 48.0 million). Net profit for the year amounted to EUR 43.8 million (EUR 28.0 million), corresponding to EUR 0.22 per share (EUR 0.14). According to Kitron's dividend policy, 20-60% of net profit should be paid to shareholders as dividends. Taking the company's current financial position and investment plans into consideration, the Board of Directors will propose to the Annual General Meeting a dividend of NOK 0.70 per share for the financial year 2025, compared to NOK 0.35 last year. In the Annual Report 2024, Kitron indicated an expected revenue range of EUR 600-700 million and an operating profit (EBIT) of EUR 42-63 million. Both figures exceeded the indicated ranges, reflecting accelerating demand, particularly in the Defence/Aerospace market sector. The business Kitron's business model is to provide manufacturing and assembly services for products containing electronics. The business model covers the entire value chain from development, industrialisation, purchasing, logistics and maintenance/repair to redesign. For customers, having Kitron as their professional manufacturing partner means increased flexibility, reduced costs and improved quality. The industry requires a focus on manufacturing efficiency and cost reduction. Hence, many OEMs choose to focus on their own core competences and partner with specialized EMS (Electronics Manufacturing Services) providers such as Kitron. When selecting an EMS partner, geographical proximity and access to competitive manufacturing play a crucial role in the customer's choice of supplier. With its global presence, Kitron is well-placed in this market. In 2025, the company had operations in Norway, Sweden, Denmark, Lithuania, Germany, Poland, the Czech Republic, India, China, Malaysia and the United States. All employees have been certified in accordance with international quality standards for the applicable manufacturing. Revenue per market sector 2025, EUR million 250 200 150 100 234.4 50 0 Defence / Aerospace 173.0 162.2 117.7 51.1 Connectivity Electrification Industry Medical devices Markets Kitron's services are most competitive within complex manufacturing processes that require niche expertise. Kitron focuses its sales and marketing activities within five key sectors: Connectivity, Electrification, Industry, Medical devices and Defence/Aerospace. The order backlog ended at EUR 709.3 million, an increase of 50 per cent compared to last year. The increase is largely driven by accelerating demand in the Defence/Aerospace market. Kitron recognizes firm orders and four-month customer forecasts in the order backlog, while frame agreements and similar are not included (beyond the four-month forecast). Defence/Aerospace Revenue in the Defence/Aerospace sector increased by 72 per cent and ended at EUR 234.4 million in 2025. The sector accounted for 32 per cent of the group's total revenues. Defence has traditionally been primarily communication, encryption, and surveillance systems. Over recent years, the rapidly evolving market for unmanned systems has seen strong growth. Aerospace is mainly navigation and communication equipment for civil and military avionics. The Defence/Aerospace sector is, in general, characterised by project deliveries. However, the underlying trend is clearly one of growing defence spending within markets that are relevant to Kitron. Connectivity Revenue in the Connectivity sector decreased by 3 per cent and ended at EUR 117.7 million in 2025. The sector accounted for 16 per cent of the group's total revenues. Kitron's Connectivity sector is focused on connected devices. Many of these devices are sensors, continuously feeding data into increasingly advanced software, utilizing artificial intelligence to make predictions and improve efficiency and safety. Examples are multiplying, in everything from industrial control systems to medical devices monitoring vital functions and modern cars, containing many sensors communicating with the Internet. Another part of the connectivity market sector is communication, which supplies the backbone for sensors and IOT. Typical products here are wireless communication, optical transmission and networking products. Electrification Revenue in the Electrification sector decreased by 3 per cent and ended at EUR 173.0 million in 2025. The sector accounted for 23 per cent of the group's total revenues. Kitron's Electrification sector is focused on the megatrend that sees the world increasingly moving to renewable energy and electrification. Examples are battery management, power grid transmission, power and electric drive management, charging and fuel cell technology. Kitron is involved with electrification from the power grid to end-user products, from control systems for offshore wind power to battery management systems and charging stations. Industry Revenue in the Industry sector increased by 8 per cent and ended at EUR 162.2 million in 2025. The sector accounted for 22 per cent of the group's total revenues. Within the Industry sector, Kitron operates and delivers a complete range of services within industrial applications like automation, environmental, material warehousing and security. The Industry sector consists of three main product areas: control systems, electronic control units and automation. Medical devices Revenue in the Medical sector decreased by 14 per cent and ended at EUR 51.1 million in 2025. The sector accounted for 7 per cent of the group's total revenues. The medical device sector consists of the product areas diagnostics, life support, surgical, hospital and home care. Kitron is especially strong in ultrasound and cardiology systems, respiratory medical devices and Lab/IVD (In-Vitro Diagnostics). Important events in 2025 Acquisition of DeltaNordic In November, Kitron ASA, through its subsidiary Kitron Holding AB, entered into an agreement to acquire DeltaNordic AB, a Swedish provider of advanced electronics and electrical systems with a strong foothold in the defence market. DeltaNordic serves blue-chip customers in defence, mining, and infrastructure. Revenues are projected at approximately SEK 815 million (approximately EUR 74 million) in 2026. Currently, about half of its revenue comes from defence customers - a share that continues to grow. The company operates two production facilities in Sweden and one in Nanjing, China. The acquisition was completed in January 2026. Share Issue On 25 November 2025, the company allocated 17,000,000 new shares in a private placement at a subscription price of NOK 57.25 per share, raising approximately NOK 973.25 million in gross proceeds (EUR 80.0 million in net proceeds). Part of the net proceeds from the private placement was used to finance the cash consideration that was paid in the acquisition of DeltaNordic AB after the end of 2025. Financial statements The Board of Directors believes that the annual financial statements provide a true and fair view of the net assets, financial position and result of Kitron ASA and the Kitron Group for the year. The group's consolidated financial statements are presented in compliance with IFRS® Accounting Standards as adopted by the EU. Profit and loss Operating revenue for 2025 amounted to EUR 738.3 million (EUR 647.2 million), representing a 14.1 per cent increase compared with 2024. The growth reflects accelerating demand, particularly in the Defence/Aerospace market sector. The number of full-time equivalents (FTE) increased from 2411 at the end of 2024 to 3090 at the end of 2025. Consequently, the group's payroll expenses increased to EUR 127.2 million in 2025 from EUR 115.5 million in 2024. Payroll expenses as a percentage of revenue decreased to 17.2 per cent (17.8 per cent in 2024). Kitron performs development, industrialization and manufacturing services for its customers and may perform research services related to such projects. Kitron's development activities on the company's own account are limited and are primarily aimed at planning and implementing productivity improvements, building competency and enhancing quality. Such costs are expensed when incurred. Net financial costs amounted to EUR 9.4 million. The corresponding figure for 2024 was a net cost of EUR 8.2 million. Kitron's pre-tax profit for 2025 amounted to EUR 55.1 million (EUR 39.9 million). For the US operation, deferred tax assets of EUR 3.5 million related to tax losses and other temporary differences were not capitalized by the end of December. The group's net profit for the year amounted to EUR 43.8 million (EUR 28.0 million). This corresponds to earnings per share of EUR 0.22 (EUR 0.14). Diluted earnings per share were also EUR 0.22 (EUR 0.14). The Board of Directors will, on this basis, propose to the Annual General Meeting an ordinary dividend of NOK 0.70 per share for the 2025 financial year. Last year, the ordinary dividend was NOK 0.35. Cash flow In 2025, Kitron's cash flow from operating activities was EUR 93.6 million (EUR 43.7 million). Customers have made significant cash deposits in the second half of 2025. This has led to a temporary increase in operating cash flow, cash and cash equivalents, and accounts payable. Net cash flow from investing activities in 2025 ended at negative EUR 12.4 million (negative EUR 8.6 million). The change is mainly related to increased purchases of tangible fixed assets. Net cash flow from financing activities was positive EUR 17.6 million (negative EUR 27.2 million). The increase is driven by the proceeds from issuing new shares. This is partially offset by the settlement of factoring debt. Kitron enters into financial leasing agreements when applicable. The leasing obligation is recognised as debt. In general, Kitron expects to generate sufficient cash to finance the operation in the foreseeable future. Balance sheet and liquidity Total assets on 31 December 2025 amounted to EUR 741.3 million (EUR 556.0 million). Equity amounted to EUR 313.9 million (EUR 198.9 million), and the equity ratio was 42.3 per cent (35.8 per cent). Inventories ended at EUR 155.1 million at the end of the year (EUR 141.4 million). Contract assets ended at EUR 98.9 million (EUR 77.6 million). Controlling inventory is a major focus area for the company's ongoing improvement program. Accounts receivable ended at EUR 150.1 million (EUR 124.1 million). Overdue receivables are low, and credit losses were negligible during 2025. Accounts payable ended at EUR 268.7 million (EUR 155.1 million). On 31 December 2025, the group's interest-bearing debt was EUR 114.2 million (EUR 162.2), influenced by the previously referenced share issue. The debt consists mainly of longterm bank debt, short-term bank debt, and leasing. Cash and cash equivalents amounted to EUR 145.8 million at the balance sheet date (EUR 48.7 million) influenced by the previously referenced share issue. EUR 0.12 million was restricted deposits (EUR 0.09 million). Risk factors and risk management Kitron is exposed to financial risks and has consequently implemented procedures for risk management that are designed to reduce possible negative effects. The group is exposed to fluctuations in currency exchange rates. However, revenues and costs in foreign currencies are in general largely balanced, and exchange rate risk over time is consequently limited. The group is normally allowed to adjust sales prices with customers when currencies fluctuate outside agreed-upon ranges. Other hedge agreements are usually not in use. The credit risk for the majority of the company's customers is insured. The company is therefore only exposed to credit risk on customers where the credit risk is uninsured. Kitron has only incurred immaterial bad debt costs. Kitron's debt is a combination of long-term debt and short-term debt. The group has overdraft facilities that cover expected liquidity fluctuations during the year. The Board considers the group's liquidity to be sufficient. The group's interest-bearing debt attracts interest cost at the market-based rate. Kitron has no financial instruments related to interest rates. The group does not hold any significant interest-bearing assets. Kitron has established Directors' and Officers' insurance for personal liability of its Board members, CEO and other management members. Kitron considers the financial climate risk to be very limited, based on the group's low climate impact and the climate-related external negative impact being evaluated as low. Conversely, the electrification trend drives substantial growth for Kitron. Social responsibility Kitron has implemented Ethical guidelines that reflect Kitron's core values and corporate social responsibility. Kitron has implemented an ethical committee whose task is to review and suggest updates to the ethical guidelines, decide and/or advise on ethical dilemmas, conduct risk analysis, implement relevant actions and make periodical reviews. Kitron's Sustainability statement for 2025 is presented in a separate section of the Board of Directors' report. The statement is prepared in accordance with the Oslo Stock Exchange Guidelines for Sustainability Reporting and the Euronext Guidelines for issuers on ESG reporting. The statement has been reviewed and approved by the Board. The statement on due diligence according to the Norwegian Transparency Act is available on https://www.kitron.com . Health, safety, security and environment (HSSE) At the end of 2025, the group employed a total of 3090 full-time equivalents. For further employee numbers, see the Sustainability statement section. There were no serious work-related accidents in 2025. Sick leave was 4.1 per cent (4.8 per cent in 2024). The Board considers the working environment good and conducts an annual employee survey to further improve it. Kitron does not pollute the external environment to any material extent. Several of the group's manufacturing units are certified in accordance with the NS ISO 14000 series of environmental management standards. Personnel and organisation Kitron considers the competence of employees to be the ultimate competitive advantage. Securing the required and relevant competence now and for the future is a fundamental priority, and a Kitron competence roadmap has been outlined. Individual career and competence development is part of the current performance management process. The digital learning platform Kitron Academy was launched in 2018 and Asia 534 CEE 1 406 Figure 1: Full time employees 2025, Geographical description Nordics and US 1 150 has been further developed and supplemented with learning and development activities in the following years. The platform offers the possibility to report on training activities at individual and group levels. In 2025, 80 689 hours were registered as spent on training, compared to 103 630 in 2024. Equal opportunities Kitron's basic view is that people with different backgrounds, irrespective of ethnicity, gender, religion, sexual orientation or age, should have the same opportunities for work and career development at Kitron. The company's manufacturing factories have traditionally employed a higher proportion of women. Women represented 52 per cent of the Kitron workforce in 2025. Out of 174 managers (managers having direct reports) 34 per cent are female and 66 per cent are male. Kitron takes its social responsibility seriously. In addition to ensuring that work is carried out safely, this involves respecting the freedom of association and not accepting any form of forced labour, child labour or work-related discrimination. The average pay for men and women varies due to differences in job categories and years of service, not because of gender. Women's pay level compared to men's per location can be found in the Sustainability statement section. No gender-based differences exist with regard to working hour regulations or the design of workplaces. Indirect functions include management employees, staff and other support functions. The employees in the subsidiary management teams are predominantly male. The corporate management team has 6 male members and 1 female member. The composition of the Board complies with the requirements of the Norwegian Public Limited Companies Act regarding gender balance. The report on compensation based on the requirements of the Norwegian Equality and Anti-Discrimination Act is available in the Sustainability statement section. Corporate governance The Kitron Board has adopted corporate governance policies to safeguard the interests of the company's owners, employees and other stakeholders. These principles and associated rules and practices are intended to increase predictability and transparency, and thus reduce uncertainties associated with the business. The due diligence report under the Norwegian Transparency Act will be available on the Kitron website before 30 June 2026. Kitron endeavours to have in place procedures that comply with the Norwegian code for corporate governance. The Board's review of corporate governance is presented in the annual report. Salaries and other remuneration to senior executives The Board of Directors has a separate Remuneration Committee, which addresses all significant matters related to wages and other remuneration for senior executives before the formal discussion and decision by the Board of Directors. In line with the Norwegian Companies Act, the Board of Directors has also prepared a report on remuneration to senior executives that is available on the company's website. Net profit (loss) of the parent company The Parent Company Kitron ASA recorded a profit of NOK 222.2 million for 2025 (NOK 406.1 million). The Board of Directors proposes the following allocations for Kitron ASA: Dividend NOK 153.1 million Transferred to other equity NOK 69.1 million Total allocations NOK 222.2 million There have been no events to date in 2026 that significantly affect the result for 2025 or valuation of the company's assets and liabilities at the balance sheet date. The Board confirms that the conditions for the going concern assumption have been satisfied and that the financial statements for 2025 have been prepared on the basis of this assumption. Outlook For 2026, Kitron expects revenues between EUR 900 and 1050 million. Operating profit (EBIT) is expected to be between EUR 84 and 108 million. The Board emphasizes that every assessment of future conditions necessarily involves an element of uncertainty. Sustainability statement Disclosure requirement index IRO-2 ESRS Standard Category Disclosure Requirement Page number in report ESRS 2 Basis for preparation BP-1 20 BP-2 (Reported alongside the disclosures to which they refer) Governance GOV-1 20 GOV-2 23 GOV-3 23 GOV-4 23 GOV-5 24 Strategy SBM-1 24 SBM-2 27 SBM-3 29 IRO management IRO-1 31 IRO-2 35 ESRS E1 Governance GOV-3 23 Strategy E1-1 38 ESRS2 SBM-3 38 IRO management ESRS2 IRO-1 32 E1-2 40 E1-3 40 Metrics and targets E1-4 40 E1-5 41 E1-6 41 E1-7 Not material E1-8 Not material E1-9 N/A (Phase-in) ESRS E5 IRO management ESRS2 IRO-1 33 ESRS2 SBM-3 44 E5-1 44 E5-2 44 Metrics and targets E5-3 44 E5-4 45 E5-5 46 E5-6 N/A (Phase-in) ESRS Standard Category Disclosure Requirement Page number in report ESRS S1 Strategy ESRS2 SBM-2 49 ESRS2 SBM-3 51 IRO management S1-1 52 S1-2 54 S1-3 54 S1-4 55 Metrics and targets S1-5 55 S1-6 56 S1-7 N/A (Phase-in) S1-8 57 S1-9 58 S1-10 58 S1-11 N/A (Phase-in) S1-12 N/A (Phase-in) S1-13 N/A (Phase-in) S1-14 59 S1-15 N/A (Phase-in) S1-16 59 S1-17 60 ESRS S2 Strategy ESRS2 SBM-2 28 ESRS2 SBM-3 61 IRO management S2-1 62 S2-2 64 S2-3 64 S2-4 65 Metrics and targets S2-5 66 ESRS G1 Governance ESRS2 GOV-1 67 IRO management ESRS2 IRO-1 33 G1-1 67 G1-2 69 Metrics and targets G1-3 70 G1-4 70 ESRS 2 General disclosures Basis for preparation of sustainability statement BP-1 The statement has been prepared in accordance with the EU's sustainability directive (CSRD) and the associated European standards for sustainability reporting (ESRS). The sustainability statement has been prepared on a consolidated basis. The scope of consolidation is the same as for the financial statements, and no undertakings are exempted from individual or consolidated sustainability reporting. The sustainability statement covers Kitron's upstream and downstream value chain, as well as our own operations. For an overview and description of our value chain, please refer to chapter 2.10. Accordingly, Kitron's double materiality analysis has taken into account the entire value chain. Kitron's GHG emissions inventory includes scope 3 emissions. Regarding policies for managing sustainability matters in Kitron's value chain, the sustainability statement covers both the Ethical Code of Conduct and the Supplier Code of Conduct. The option to omit specific information corresponding to intellectual property, know-how, results of innovation or the disclosure of impending developments or matters in the course of negotiation is not invoked. Governance of sustainability matters GOV-1 The Board Kitron's Board of Directors has the overall responsibility for safeguarding the interests of all shareholders and other stakeholders, and supervising the management of Kitron's operations and overarching business conduct. The Board's responsibilities include overseeing the implementation and effectiveness of relevant policies, such as the Anti-Corruption Policy and the Ethical Code of Conduct. The Board reviews and approves the policies, as well as the annual corruption risk assessment conducted by the Corporate Management Team (CMT) and addresses any matters related to business conduct that are brought to their attention. Kitron has 8 non-executive board members, three of whom are employee-elected members representing the workers (see Table 2 2 below). 100% of the shareholder elected members are independent. The Group Board of Directors bears the ultimate responsibility for Kitron's sustainability, and the annual report, including Kitron's sustainability statement, is discussed and approved by the Board. The Audit & Risk committee is responsible for overseeing the group's internal controls, risk management and reporting processes. The Board's mandate was amended in 2024 to include sustainability reporting. Material risks impacts, the implementation of due diligence, as well as performance are reviewed (half-yearly) by the Board. The Board's responsibility related to overseeing the IROs was formalized in 2025 in a Guideline for Double Materiality Assessment, which summarizes the DMA process at Kitron, including the roles and responsibilities involved. Corporate Executive Management (CMT) Kitron's Corporate Executive Management has 7 members (for composition and identity, see Table 2 2 below). CMT bears the responsibility for the group's strategy, development and day-to-day work. This means CMT is responsible for compliance with legislation and regulations and our Ethical Code of Conduct, for the oversight of impacts, risks and opportunities, as well as for setting targets and the implementation of appropriate and effective initiatives to ensure that we reach our goals. The CFO is responsible for the group's sustainability reporting, for monitoring performance and for overseeing risk management processes in line with Kitron's risk management procedures. Material IROs are included in the groups' ordinary risk management and discussed at least half-yearly at CMT meetings. The CMT also regularly monitors performance towards group targets, including our GHG emissions reductions target. This is done by reviewing the quarterly reports from the sites (see below). To date, there are no specific controls and procedures applied for the management of IROs. Responsibilities regarding impacts, risks and opportunities are not directly reflected in policies and procedures but covered indirectly by the Kitron Risk Management Policy and the Anti-Corruption Policy which both define the CMT as the highest level responsible. In 2025, Kitron adopted additional policies and procedures (e.g. Kitron's Environmental Policy and General Procedure for Engaging with Workers) as a measure to strengthen Kitron management of IROs. Furthermore, the CMT is responsible for conducting an annual integrity risk assessment to identify and prioritize internal and external corruption risks faced by the business. The CMT ensures that all activities within their respective areas are carried out in accordance with the Ethical Code of Conduct and the Anti-Corruption Policy and is responsible for communicating these policies and providing guidance on their interpretation and application. Additionally, the CMT conducts integrity due diligence on trading partners in the onboarding process and with a risk-based approach, periodically assesses anti-corruption policies and procedures to maintain the organisation's commitment to ethical business practices. The sites The business areas are responsible for follow-up and compliance with policy, strategy, targets and governance documents related to sustainability. The day-to-day work with corporate responsibility and environmental management is usually handled by the sites with support from the CMT. Each site makes its own risk review, which is thereafter consolidated on the group level. Progress towards targets, including sustainability targets, is reported quarterly to the group CFO through the Group quality and sustainability function. Ethics Committee The Ethics Committee, acting on behalf of the CMT, holds several key responsibilities to ensure the organization's commitment to ethical business practices and anti-corruption measures. The Ethics Committee meets as needed, but at least three times a year, and consists of members of Kitron's CMT. The Chief Finance Officer is the Chairman of the Ethics Committee. The Chairman of the Ethics Committee reports annually to the CEO who in turn reports to the Board of Kitron ASA, among others on the implementation and effectiveness of the organisation's anti-corruption activities. The Chairman of the Ethics Committee also has a direct reporting line to the Audit Committee of the Board. Kitron's Ethics Committee's mandate is to review and suggest updates of guidelines, decide and/ or advise in ethical dilemmas and anti-corruption issues, conduct risk analysis, implement relevant actions and make periodical reviews. This includes advising on the Ethical Code of Conduct and other relevant anti-corruption laws, regulations, policies and procedures. The Ethics Committee also performs regular ethical audits, primarily related to anti-corruption, and monitors the development of anti-corruption legislation and other regulatory requirements in countries where Kitron operates or plans to establish activities. This ensures that the organisation remains compliant with evolving legal standards. This includes advising the Ethical Code of Conduct and other relevant anti-corruption laws, regulations, policies, and procedures Identity of Management and Board members and information on diversity and competences Table 2 1: Identity of management and Board members Board of Directors Corporate Executive Management Tuomo Lähdesmäki, Chairman Maalfrid Brath, Deputy Chairman Petra Grandinson Michael L. Thomsen Gyrid Skalleberg Ingerø Ingjerd Livollen, employee elected Board member Geir Runge Vedøy, employee elected Board member Håkon Ljøstaf, employee elected Board member Peter Nilsson, CEO Cathrin Nylander, CFO (Finance, HR, IT) Hasse Faxe, CCO Stian Haugen, CTO (Digitalization & Technology) Hans Petter Thomassen VP Nordics and NA Mindaugas Sestokas VP CEE Zygimantas Dirse, VP Asia The Board has diverse educational and professional background, where most of the members are educated within the fields of engineering, accounting and business, or electronics. 50% of Board members are female, and all members are over the age of 50 years. 86% of the CMT members are male. 43% of CMT members are between the age of 40 and 50 and 57% are more than 50 years old. Table 2 2: Gender diversity of Board and Corporate management team Male Female Total Male (%) Female (%) Non-Executive Board 4 4 8 50.0% 50.0% Shareholder elected 2 3 5 40.0% 60.0% Employee elected 2 1 3 67.0% 33.0% Corporate management team 6 1 7 85.8% 14.2% Skills and competence of Board and Management Kitron mapped in 2024 the competencies of the CMT and Board regarding the sectors, products/ services and geographic locations where Kitron operates, as well as Kitron's material IROs. Results are shown in figures and tables below. Overall, the CMT and Board's competencies are good and adequate. In addition to their own competences, and access to Kitron's in-house sustainability experts, they have access to external expertise on sustainability matters through various industry- and sustainability related organizations as well as Kitron's external sustainability advisors. In 2025, a competence development session, facilitated by external experts, was conducted, addressing climate-related matters and workers in the value chain as a topic. Table 2 3: Findings from competence mapping - Sustainability topics Level of competency (Average response) Sustainability topics Kitron's Board Kitron's corporate management Greenhouse gas emissions / climate change 2.5 3.9 Renewable energy 2.5 3.9 Climate adaptation (climate risk) 2.5 3.9 Resource inflows (Scarcity of critical materials, environmental footprint of components) 3.0 3.9 Resource outflows (including recyclability, reuse, waste) 3.0 3.9 Own workforce, working conditions (health and safety, adequate wages) 3.6 4.0 Own workforce, equal treatment and opportunities for all (training and skills development) 3.8 4.0 Workers in the value chain, working conditions (adequate wages) 3.4 2.9 Workers in the value chain, working conditions (collective bargaining, freedom of association) Workers in the value chain, other work-related rights (human rights abuse such as e.g. forced labour) 3.4 2.9 3.0 2.4 Corruption and bribery, corporate culture 3.3 4.0 Scale: 1 - No experience 2 - Limited experience 3 - Familiar with 4 - Practiced experience How Kitron has addressed impacts, risks and opportunities during the reporting period GOV-2 Considerations regarding material IROs are an inherent part of strategic reviews and decision-making. For example, investment decisions regarding production facilities take into account GHG emissions reductions and physical climate risk on a regular basis, and risk management regarding 3TG (conflict minerals) is integrated into Kitron's regular practices for managing supply chain risk The CMT oversees the risk management process formally once a year but assesses and manages risks all year in the weekly CMT meetings. So far, no material trade-offs among material IROs have been identified. Details regarding our risk management procedures are described in more detail in chapter 2.8 below. Integration of sustainability-related performance in incentive schemes GOV-3 Kitron's incentive schemes are annually updated and reviewed by the HR and Remuneration Committee and approved by the Board. In accordance with the Remuneration Guidelines, the Senior Executives had an annual variable pay scheme with a maximum potential of 85% percent of the base salary. The scheme has stepped targets representing 0-100% of bonus achievement for EBIT, ROOC R3, Growth and ESG separately. The bonus payments are then calculated based on the actual performance on these targets. The Corporate management Short Term Incentive (STI) has 10 % connected to sustainability, which is linked to the share of renewable energy in the total energy consumption of Kitron's facilities. The KPI is the % share of renewable energy of total energy scope 2 consumption at the sites. This target has been identified as a key GHG reduction measure, primarily addressing scope 2 emissions, as well as Scope 3 emissions related to leased facilities. The Board does not have performance-related remuneration, and there are no additional incentives directly tied to other climate-related considerations. Disclosure of mapping of information provided in the sustainability statement about due diligence process GOV-4 Table 2 4: Statement of due diligence process. Core elements of due diligence Paragraphs in the sustainability statement (disclosures in line with the following disclosure requirements) a) Embedding due diligence in governance, strategy and business model ESRS2 GOV-1, ESRS2 GOV-2, ESRS2 GOV-5, ESRS2 SBM-1 b) Engaging with affected stakeholders in all key steps of the due diligence ESRS2 SBM-2, ESRS SBM-2 S1, ESRS SBM-2 c) Identifying and assessing adverse impacts ESRS2 SBM-3, GOV-1 d) Taking actions to address those adverse impacts ESRS2 E1-3 e) Tracking the effectiveness of these efforts and communicating ESRS2 GOV-1, ESRS2 GOV-2 Risk management and internal controls over sustainability reporting GOV-5 The sustainability reporting process, as well as the steps of the due diligence process described above, is overseen by the group CFO. Therefore, the output of relevant processes such as the stakeholder dialogue, annual risk review and data gathering to track performance, e.g. regarding energy use and GHG emissions are monitored throughout the year on a regular basis. Risk assessments regarding the availability of information and data for the sustainability reporting process are conducted annually by the CFO in cooperation with the group's quality and sustainability function and HR function. Risks are prioritized on a qualitative basis in discussions, and mitigating actions are initiated and reviewed by the CMT if needed. Kitron's main risks related to the accuracy of sustainability reporting are identified to be connected to the availability of granular data regarding Kitron's upstream and downstream value chain, i.e. supplier data on scope 3 emissions and potential sustainability-related impacts and risks arising from activities further upstream in Kitron's value chain without a direct business relationship with Kitron. Furthermore, Kitron has identified the risk for resource in- and outflow data being inaccurate due to estimation uncertainty. These findings have been discussed with the CMT throughout FY25. In FY25, sustainability reporting has become a further streamlined and integrated part of Kitron's financial reporting processes. The amendment of the Audit committee's mandate to include sustainability reporting, approved by the Board at the meeting 12 February 2025, is an important step in this regard. Key elements of our business SBM-1 Kitron is an Electronics Manufacturing Services (EMS) company. Kitron provides various services within the manufacturing, assembling, and testing of electronic products for the professional market. Core areas are electronics, testing, assembly and system testing, system integration, repairs and upgrades. The company's total revenue for 2025 is 738.3 MEUR, and at the end of the period, Kitron had 2830 employees (see also Table 2 5 below). Kitron sorts the customers into five market sectors: Connectivity, Electrification, Industry, Medical devices and Defence & Aerospace. The customers are international, predominantly Northern European, and also include China, and North America. In regard to products and services banned in certain markets, Kitron complies with international trade and export control laws within the jurisdictions in which we operate. Table 2 5: Total number of employees (head count) by geographical area Geographical area Headcount (end of period) Nordics 1 030 Central & Eastern Europe 1 113 North America 147 Asia 540 Total 2 830 Overview of our value chain Kitron sources components, Printed Circuit Boards (PCBs), mechanical drawing parts and other production inputs from Manufacturers of electrical components, PCBs and mechanics. Kitron's business is to produce the electronics modules and complete systems for the customer which owns the IP (intellectual property) of the products. The products are transported to the customers who distribute them to the end users. Since we manufacture a variety of products within various segments, there are many different types of end-users, ranging from medical or military personnel, operators of industry machinery and equipment, to consumers using household equipment and cars. Upstream Own Downstream 'Processing: Refining and processing these raw materials to obtain pure elements. Extraction: Mining essential raw materials like silica, copper, gold, tantalum, and rare earth elements. Mining and processing companies 'Printed Circuit Boards (PCBs):Substrate and copper is mainly used to create PCBs. Distributors 'Mechanical components Capacitors and Resistors: Other materials like tantalum and ceramics are used to manufacture capacitors and resistors. Semiconductors: Silicon is processed into wafers and used to create microchips and integrated circuits. Manufacturers of electrical components, PCBs and mechanics Manufacturing Services Development and industrialisation Electronics Manufacturing Services Manufacturing Services Development and industrialisation Customer End user Customer decoupling (customer design) Mineral mines exist in vastly different geographical areas: Congo and 16 surrounding countries (conflict minerals), China , Australia, Chile, Indonesia etc. Kitron is currently only able to track and rule out conflict minerals. Electronic components (wafers, semiconductors, capacitors, etc.) are being produced in Taiwan, South Korea, China, the United States, Japan, Germany, and there are numerous facilities in each country. Normally, a component with certain aspects can be sourced from several suppliers as long as they are approved by the customers. Electronic components distributors are located in all regions globally. Kitron has around 300 customers. The customer designs and owns the IP of the product. Kitron's liability after the product has left Kitron is related to workmanship. Our main promise to any customer is that we want to be their long-term, sustainable partner. While the products and services we deliver are required to meet the highest quality requirements, we are fully committed to sustainable development, and we expect the same from our supply partners. Kitron's goal is to minimize negative environmental and social impacts from its supply chain. At Kitron, we use the highest standards in the selection of supply partners. Inputs are gathered by purchasing components (see above) from our suppliers, and thorough requirements our suppliers must meet, and regular quality checks, our inputs are developed and secured. We expect our suppliers to adhere to all applicable laws and regulations, to the highest ethical standards defined in the Kitron Code of Conduct, as well as to the separate Suppliers Code of Conduct, which applies to all suppliers. Delivering high-quality products is key to Kitron's competitive advantage and of high importance to our customers, employees and owners. Kitron affects quality directly through our purchasing, supplier selection, and quality management processes, as well as indirectly through our business relationships. Kitron production inputs can be divided into three parts: electronic components, mechanical drawing parts and PCB (Printed Circuit Boards). Electronic components In regard to electronic components, Kitron primarily deals with distributors and manufacturers. Kitron purchases components from close to 1601 manufacturers through approximately 1243 supply partners. Kitron has established a Preferred Partner Program. In 2025, 50 per cent of all electronic components (by value) were procured from 9 Preferred Partners. Mechanical drawing parts This sub commodity includes a wide variety of parts, from metal casting to machine parts, injection molded plastic, sheet metal and aluminum die casting. Due to the bulk and weight of this type of parts, Kitron tends to purchase these components close to the point of use, and we continue to build mechanical parts supply chains around our factories in different regions. In 2025, 14 per cent of all Mechanical drawing parts (by value) were procured from 5 Preferred Partners. Printed Circuit Boards (PCBs) Kitron buys most of the PCBs from China (up to 70 per cent of the world's PCBs are produced in China), either directly from manufacturers or through distributors, as with electronic components. In 2025, 64 per cent of the PCBs were procured from 4 Preferred Partners. In the case of PCBs, these Preferred Partners include both distributors and manufacturers. The outputs of our production are complex and high-reliability products for high-value sectors such as electronic components and devices for use within e.g. communications, sensors, batteries, transmission, power management and supplies, robotics, medical diagnostics, life support and surgery. Delivering high-quality production services provides benefits to our customers and is key to being our customers' partner of choice, now and in the future, providing benefits for our investors and shareholders. Regarding the revenue of Kitron's business segments, the Corporate management (Chief Operating Decision Maker) has evaluated that the group operates in only one segment; Electronics Manufacturing Services (EMS). There is therefore no separate segment reporting in Kitron. However, revenue is presented in five business sectors, Connectivity, Electrification, Industry, Medical Devices and Defence and Aerospace. Elements of our strategy that relate to or impact sustainability matters Kitron has operations in industries and countries that are particularly susceptible to the risk of corruption. Kitron also does business in countries known for having problems associated with human rights and child labour (China, Malaysia). One of Kitron's most important groups of products, PCBAs contain metals such as gold and tin, with the risk of being mined in an area of armed conflict and traded illicitly. We are aware that this presents challenges regarding our sustainability, and that it can subject us to substantial financial risk. Metals such as gold and tin (potential conflict minerals) are part of the prefabricates we purchase, and hence sourced further upstream in Kitron's value chain. Kitron continuously monitors the share of conflict-free minerals, but to date, Kitron does not have information on the geographic locations of other mining activities. To deal with our sustainability and minimize our financial risk, we work systematically on Ethics and Anti-corruption. We carry out an annual ethics and corruption awareness training, and our long-term (2030) target is zero incidents of corruption. This sustainability matter linked to PCBAs is relevant for all markets and geographies we operate in (Connectivity, Electrification, Industry, Medical devices and Defence & Aerospace). Another important aspect for Kitron's business relationships with customers, also posing financial risk to our company, are GHG emissions from production processes, relevant across all geographies where Kitron operates and all customer categories. Progress in reducing GHG emissions is important for our customers with ambitious decarbonization agendas across all markets Kitron operates in. For this reason, Kitron has taken action to mitigate emissions (please see chapter E1-3 on climate-related actions). The company maintains sufficient internal resources to support ongoing initiatives and does not foresee constraints related to access to finance or capital for the planned actions. An important aspect of Kitron's strategic approach is to maintain flexibility regarding geographical presence and types of products we can produce for our customers. This is a way of actively managing risks that also relate to sustainability matters, e.g. physical climate risk (in case facilities should be damaged by extreme weather events), or resilience regarding the loss of revenue due to changes in the demand of certain types of products (e.g. applications used by the oil and gas sector facing transition risk). The oil & gas sector is a subsector of Kitron's industry market sector, and Kitron delivers electronics for subsea oil extraction. The revenue share is around 1.5%. Kitron is not active in the fossil fuel (coal, oil and gas) sector, i.e. Kitron does not derive revenues from exploration, mining, extraction, production, processing, storage, refining or distribution, including transportation, storage and trade, of fossil fuels. No revenue stream comes directly from coal or oil and gas. Key stakeholders and how their views and interests are taken into account SBM-2 Stakeholder views are incorporated into relevant processes, including strategic discussions, actions, and decision-making. Members of the Corporate Management Team (CMT) participate in stakeholder dialogues, and the CMT is informed of significant findings, including those related to sustainability impacts. The Board is also kept informed as part of the regular dialogue during CMT and Board meetings. These findings are discussed at CMT and Board meetings, and, if necessary, decisions are made to take appropriate steps to mitigate impacts and risks or pursue opportunities. This approach ensures an understanding of how strategic choices and the business model may contribute to creating, exacerbating, or mitigating significant material impacts on key stakeholders, enabling adaptation of the strategic approach and business model when necessary. Transitioning to the use of green energy and implementing adequate supplier risk management schemes are examples of past adaptations to align business practices with stakeholder interests and views. Currently, no further changes are planned or deemed necessary. For the purpose of the double materiality analyses, business activities across the entire value chain were considered in relation to sustainability matters to identify relevant stakeholders. Insights from ongoing stakeholder dialogues, supplemented with publicly available information and external expert opinions, were utilised to ensure that stakeholder views and interests are sufficiently covered in the double materiality assessment. Details on stakeholder engagement are provided in Table 2.6. Table 2 6: Key stakeholders and their importance to Kitron Stakeholders Importance to Kitron Purpose Details on stakeholder engagement Investors and banks The purpose of the stakeholder engagement with investors and banks is to inform about strategies and operations and align them with the stakeholder. Access to capital is necessary, and it is important that our investors and financers regards Kitron as a safe investment with financial solidity and profitability that will lead to stable shareholder returns. Kitron engages with main investors and banks 3-4 times a year. Engagement with banks is handled by the CFO and the Group Financial manager. Customers Fulfill contractual details and follow-up, planning of future cooperation. The customers require from Kitron that we manufacture their products at a competitive price and that way we support their ambitions for quality and sustainability. Kitron engages with customers, some as often as every week, but formal meetings more normally on a quarterly basis. Customer engagement is handled by COO, BDMs and local KAMs. Consumers and end-users Kitron does not engage with consumers and end-users directly since we manufacture products on demand and as a service for our customers, who distribute them to consumers and end-users. Suppliers Fulfill contractual details and follow-up, planning of future cooperation. Effective cooperation with suppliers is essential for Kitron to achieve competitive pricing and ensure the timely availability of production inputs. High demands are placed on suppliers to comply with the UN Global Compact's 10 principles for human rights, labour rights, the precautionary principle for environmental protection, and anti-corruption measures. All suppliers are required to sign the Supplier Code of Conduct, committing to adhere to these requirements. Supplier engagement is handled by the COO, Group Sourcing director, group and local sourcing organisations. Workers in the value chain Ensure compliance with ethical standards and protect the rights of workers in the value chain Workers within the value chain are a key group of stakeholders in regard to responsible business practices. At present, Kitron has not engaged directly with these workers, but addresses human and labor rights through engagement with our suppliers (see above and disclosures regarding S2, ESRS 2 SBM-2) Stakeholders Importance to Kitron Purpose Details on stakeholder engagement Employees Ensure that that the interests, views, and rights of employees, including respect for their human rights, and including the views of the worker's representatives, are known to Kitron and can be used to inform strategic discussions, actions and decision making. To achieve our ambitions, we depend on attracting, retaining and developing motivated, engaged and skilled employees. To be an attractive employer we need to create an environment that continuously develops our employees and their competencies. Kitron engages formally once a year in our employee survey. Dependent on local law and labor organizations, meetings with these organizations are conducted more frequently. Employee engagement is very much formalized in the Nordics. Outside of the Nordics it could be topics centered. For more detail see above and disclosures regarding S1, ESRS 2 SBM-2 Society and affected communities The society set ramifications that we operate under, through regulations, laws and directives. Kitron is not regarded as a cornerstone company where we operate, and based on the present in-house information on our own operations and value chain no significant IROs regarding affected communities have been identified. Kitron does not have regular engagement with society or affected communities. Nature Nature is a "silent stakeholder" that cannot directly represent its interests. We are still completely dependent on nature for us to be able to live good lives. That's why nature is an important stakeholder that is taken into account in Kitron's double materiality assessment, environmental management systems at our sites, and actions such as reducing climate emissions. As described above, understanding stakeholder interests and views is essential for Kitron in informing strategic discussions, actions, and decision-making, and these insights are continuously utilised to shape the business model to ensure future resilience. Interest and views of own workforce - SBM-2 S1 Kitron's workforce is a key stakeholder, crucial for delivering services and shaping the strategy and business model. Recognizing impacts on health, safety, and wages, Kitron upholds high standards across all sites to attract and retain skilled employees. Engagement occurs through representation on the Kitron ASA Board, the European Workers Council, and annual surveys via the Eletive platform. In the Nordics, engagement adheres to legal regulations, while other regions use focus groups to address work-related matters. These activities integrate workforce interests and views into strategic decisions, aligning business goals with employee needs. Managing directors at each site review engagement outcomes, communicating with worker representatives and taking necessary actions. The Board and Corporate Management Team receive updates on workforce perspectives, particularly regarding sustainability impacts, through Board meetings and employee surveys. Interest and views of workers in the value chain -SBM-2 S2 Workers in the value chain are a key stakeholder group for Kitron. Their rights are integrated into the business model through the Supplier Code of Conduct, which mandates that suppliers respect and uphold worker rights. Components may be sourced from regions with human rights concerns, but the Supplier Code of Conduct aims to protect these workers. This approach influences Kitron's strategy and business model. If human rights breaches are identified, Kitron informs customers and requests alternative components, potentially ending relationships with non-compliant suppliers. Responsibility for supplier choice and worker impact is shared with customers. Kitron seeks to align business practices with ethical standards and protect the rights of value chain workers. Material impacts, risks and opportunities and their interaction with strategy and business model SBM-3 Table 2 7 provides an overview of Kitron's material impacts, risks and opportunities identified in our double materiality assessment. Kitron considers its business model to be resilient in regard to the IROs identified. Risk management practices have proven to be effective and are described further below. Based on our resilience analysis in connection with climate risk (please refer to disclosures in line with E1 below), we consider the measures taken to reduce risks to be adequate. The same applies to the other risks identified, and we regard our policies and practices for managing them as sufficient. The (potential) effects of our material IROs and how they are managed are described in detail in the chapters on environmental, social and governance topics. Kitron announced its acquisition of DeltaNordic AB in late 2025, with the transaction closing in early 2026. The acquired business is very similar to Kitron's existing operations, and as such, no new significant IROs are expected to arise from this acquisition. The potential impact on Kitron's IRO landscape will continue to be assessed in future reporting periods. Table 2 7: Overview of Kitron's material impacts, risks and opportunities Topical standard ESRS Impact, risk, and opportunity (IRO) Type of IRO +/- A/P TF Where in value chain ESRS E1 Climate change Impact on the environment through GHG emissions in scope 1,2 and 3. I - A Own operations, upstream, downstream Risk of losing customers due to evolving market expectations and customer requirements. R Medium Downstream Opportunity to acquire new customers by demonstrating a commitment to sustainable operations and aligning with market expectations. O Medium Downstream Use of electricity in production impact the environment through GHG emissions in scope 1 and 2. I - A Own operations Extreme weather events, may cause short-term supply chain disruptions, particularly in sourcing critical components. R Long Upstream Kitron sites could potentially be affected by flood, forest fires or similar weather events. R Short Own operations ESRS E5 Circular economy Substantial resource outflows (products sold to our clients) I - P Medium Downstream Substantial resource outflows (waste) I - P Medium Own operations The input material, selected by Kitron's clients, in products and production processes can have adverse impacts on other sustainability topics. I - P Medium Upstream Poor handling of waste can lead to fines and loss of reputation. R Medium Own operations Scarcity in minerals and other input materials. R Medium Upstream ESRS S1 Own workforce Kitron working conditions could potentially harm the employees in the work place. I - P Short Own operations Kitron's workforce may face challenges related to fair wages and working conditions. I - P Short Own operations Failure to offer adequate wages that reflect market standards and employee expectations, leading to challenges in maintaining critical competence. R Medium Own operations Employee unrest if remuneration levels, worker's rights, health and safety, work life balance are unsatisfactory, or if discrimination occurs. R Short Own operations Failure to prioritize employee engagement, training, and skills development, may lead to risk of losing critical talent and competence. R Medium Own operations Risk of sourcing materials from conflict-affected or high-risk areas, where mining and production may contribute to human rights abuses or unethical practices. I - P Medium Upstream ESRS S2 Workers in the value chain Value chain employees may face challenges related to fair wages and working conditions, particularly in regions with weaker labor standards or enforcement. I - P Short Upstream Value chain workers could be prohibited to organize. I - P Short Upstream Corruption and bribery in supply chain can contribute to economic inequality and weaken socio-economic development in the regions where Kitron operates. I - P Short Upstream ESRS G1 Business conduct Potential of being affected by unethical business conduct. R Medium Own operations Kitron could potentially be negatively impacted by corruption within own workforce. R Medium Own operations Kitron could potentially be negatively impacted by corruption within own workforce. R Medium Own operations TF = Timeframe + = Positive - = Negative A = Actual P = Potential All IROs identified are covered in the ESRS (no entity-specific IROs). There are no changes to the material impacts, risks and opportunities compared to the previous reporting period since this is the first year of reporting under the CSRD. At the end of 2025, Kitron announced the acquisition of DeltaNordic AB. The acquired business is very similar to Kitron's existing operations, and as such, no new significant IROs are expected to arise from this acquisition.