2024/25 Annual Report

Binzmühlestrasse 171

8050 Zürich, Switzerland

Fon: +41 44 278 7940

Mail: investorrelations@klingelnberg.com Web: https://www.klingelnberg.com

‌KLINGELNBERG GROUP

To our Shareholders

Your Company, the KLINGELNBERG Group, successfully navigated the diverse and increasingly complex global economic challenges of the 2024/25 financial year. At over EUR 309 million, sales reached the highest figure in the Company's history. An operating result of over EUR 16 million underscores KLINGELNBERG's continued solid earnings performance. It should be noted that the nominal decline in net profit is primarily attributable to a one-off effect: in the previous financial year, KLINGELNBERG received insurance payments due to damage caused by the July 2021 floods. At the same time, a collective wage agreement - which, from KLINGELNBERG's perspective, was significantly excessive - had a negative impact. Against this backdrop, and in light of the strains on the global economy due to weak growth in Europe, emerging tariff disputes, and continued price increases, the strong sales figures and the (adjusted) solid earnings show how well the Company is positioned. Meanwhile, our successes in process optimization, cost reduction, and efficiency improvements enabled us to partially offset the challenges posed by shifts in the market and in our product mix. Not least, KLINGELNBERG was able to continue its sustained positive development throughout the entire past financial year.

The global economy came under significant pressure in many key regions. KLINGELNBERG cannot completely decouple from global developments, but due to its leading position in the Electromobility, Renewable Energies, Industrial & Defense sectors, and the automotive industry, we performed comparatively well. This has recently been reflected - albeit modestly - in the Company's market valuation, though we believe that KLINGELNBERG shares still hold significant potential.

It is both gratifying and far from self-evident that KLINGELNBERG was once again able to surpass the already high sales level of the previous financial year. KLINGELNBERG benefits from its broad and globally leading market position, its cutting-edge technologies, and its strong innovative capabilities. These factors combine to provide KLINGELNBERG with stability in a difficult and uncertain market environment.

Even during periods of market stagnation, KLINGELNBERG remains successful - thanks in large part to a robust order backlog that supports capacity utilization and provides long-term operational visibility.

03

KLINGELNBERG GROUP

To our Shareholders

It still holds true: KLINGELNBERG identified and successfully implemented the most promising strategic course at an early stage - and continues to benefit disproportionately from enduring global megatrends. KLINGELNBERG is set to benefit sustainably from the continued growth of electromobility - particularly in Asia - from hybrid drive concepts in other parts of the world, and from the growth in renewable energies and the associated industrial infrastructure. Even if, in some regions, the strategic decisions around private transport (e.g., internal combustion versus electric drive systems) were to shift again, KLINGELNBERG is capable of delivering solutions for all requirements. Additionally, the Defense sector is increasingly becoming a global megatrend. KLINGELNBERG has traditionally maintained a strong presence in this area and benefits from the growing overall investment in this technologically demanding field. Clear strategic positioning, innovative products, cost efficiency, and lean management have helped position the Company as a global market leader in key categories and promising growth markets. Investment in Research & Development (R&D) is a high priority for us. We focus our R&D on giving our customers productivity advantages - taking a holistic view of machinery, services, and especially digital products.

Another milestone was the acquisition of the metrology specialist VISPIRON ROTEC GmbH, which allowed us to further expand our leadership in gear technology. This strategic acquisition enables us to meet the growing demands of the industry and offer innovative solutions.

These developments underscore our commitment to innovation and quality to meet the challenges of modern industry.

For the 2025/26 financial year, KLINGELNBERG remains cautiously optimistic despite the recent increase in global economic uncertainty, while maintainingour traditional restraint. KLINGELNBERG is well aware that the successes achieved cannot be taken for granted. The ongoing debate around the introduction of tariffs presents new challenges for the Company and its customers. That said, even such political developments present opportunities. We recognize that, as a result of the tariff discussions, some regions that have been rather passive in terms of economic policy in recent years are now generating new momentum.

Our customers - wherever they may be in the world and whatever sector they operate in - know KLINGELNBERG's strengths. Whenever solutions are needed in areas where our Company has the required expertise, KLINGELNBERG is a first choice - for obvious reasons: quality, innovative strength, and reliability. The Company will continue on this path and seize growth opportunities as they arise.

We are deeply grateful to our employees, leadership team, and members of the Executive Committee for their continued commitment and exceptional performance. Our gratitude also extends to our shareholders for their trust and loyalty to our Company.

Sincerely yours,

Dr. Jörg Wolle Philipp Kannengießer

Chairman of the Board of Directors CEO Zürich, 25 June 2025

• Net sales increased by EUR 5,6 million (+1,8%) to EUR 309,1 million

• Order intake of EUR 249,9 million (-19,7%)

• Highest net sales in the Company's history for the second time in the last three financial years

• EBIT amounted to EUR +16,2 million, a decrease of EUR 8,9 million

• Net profit of EUR 10,0 million

• Equity ratio at 51,2%, an increase of 3,7 percentage points

• Dividend of CHF 0,50 per share

Group key figures

For alternative performance measures please refer to chapter Alternative Performance Measures.

KLINGELNBERG GROUP

At a Glance

Net sales from goods and services, in EUR million Order intake, in EUR million

350,0 350,0

300,0 300,0

250,0 250,0

200,0

150,0

100,0

200,0

150,0

100,0

50,0 50,0

0,0

2020/21 2021/22 2022/23 2023/24 2024/25

0,0

2020/21 2021/22 2022/23 2023/24 2024/25

Order backlog, in EUR million Employees (FTE), full time equivalents

350,0

300,0

250,0

200,0

150,0

100,0

50,0

0,0

2020/21 2021/22 2022/23 2023/24 2024/25

1.600

1.400

1.200

1.000

800

600

400

200

0

2020/21 2021/22 2022/23 2023/24 2024/25

Personnel expense, in EUR million Other operating expense, in EUR million

120,0 50,0

100,0

40,0

80,0

60,0

40,0

20,0

30,0

20,0

10,0

0,0

2020/21 2021/22 2022/23 2023/24 2024/25

0,0

2020/21 2021/22 2022/23 2023/24 2024/25

Operating result (EBIT), in EUR million Operating result as % of net sales from goods and services

30,0

25,0

20,0

15,0

10,0

5,0

0,0

-5,0

-10,0

-15,0

-20,0

2020/21 2021/22 2022/23 2023/24 2024/25

10,0

5,0

0,0

-5,0

-10,0

-15,0

2020/21 2021/22 2022/23 2023/24 2024/25

Share price, from 01 April 2023 - 31 March 2025

25

20

15

10

5

With the acquisition of VISPIRON ROTEC GmbH in September 2024, the KLINGELNBERG Group is expanding its leading role in measurement technology and further growing its successful business. VISPIRON ROTEC is a highly specialized company based in Munich, Germany, which focuses on rotational analysis. The company develops and manufactures measurement technologies used worldwide in the automotive, wind power and turbine industries.

VISPIRON ROTEC's deep technical focus on the measurement of rotating machines and systems is particularly important. This technology enables improved efficiency and reliability of critical machine components, which is of crucial importance in many industries. The focus is on providing high-precision measurement technology for rotating systems. The systems help detect wear and faults early, increasing operational reliability. This is particularly crucial in industries such as the automotive industry or in wind power plants, where even the smallest detail can determine the efficiency and longevity of the systems. KLINGELNBERG sees great potential not only for strengthening existing markets, but also for tapping into new high-growth areas. KLINGELNBERG sees many opportunities for the Company to move forward in the coming years, especially in the areas of sustainability and increasing the efficiency of machines and systems.

The VISPIRON ROTEC Team in Munich, Germany

In the 2024/25 financial year, the KLINGELNBERG Group presented its innovative products and solutions at some of the most important international trade shows in the industry. Attendance at AMB in Stuttgart (Germany), MAKTEK in Istanbul (Turkey), JIMTOF in Tokyo (Japan) and IMTEX in Bangalore (India) enabled KLINGELNBERG to make valuable contacts and expand its network.

From 10 to 14 September 2024, AMB (International Exhibition for Metal Working) in Stuttgart, Germany, attracted the who's who of the metalworking industry. AMB has presented the highlights of international metalworking every other year since 1982. It's the marketplace and meeting point where the latest products, technologies, innovations, services, and concepts are presented in all their facets. AMB was backed by the sponsor associations VDMA Precision Tools, VDMA Software and Digitalization, and VDW German Machine Tool Builders' Association. Among the machines on display at the KLINGELNBERG exhibition booth were the HÖFLER Speed Viper Cylindrical Gear Grinding Machine, the HÖFLER R 300 Cylindrical Gear Roll Testing Machine, and the KLINGELNBERG P 40 Precision Measuring Center.

The MAKTEK Eurasia trade show in Istanbul is an international trade show specialized in metalworking machine tools. Held every two years at the Tüyap Fair Convention & Congress Center, it is considered the largest platform for the industry in the Eurasian region. For six days, it attracts exhibitors and a broad trade audience from many European and Asian countries. KLINGELNBERG was also represented from 30 September to 05 October 2024, with a small presentation area in the booth of the Turkish distributor PMS Makina Ltd.

The 32nd JIMTOF (Japan International Machine Tool Fair) was held in Tokyo from 05 to 10 November 2024. The show is organized by the Japan Machine Tool Builders' Association (JMTBA). The JMTBA is a non-profit trade association of machine tool manufacturers, founded in 1951. At JIMTOF, KLINGELNBERG presented the HÖFLER Speed Viper Cylindrical Gear Grinding Machine, the HÖFLER R 300 Cylindrical Gear Roll Testing Machine, and the KLINGELNBERG P 40 Precision Measuring Center.

From 23 to 29 January 2025, the KLINGELNBERG Group was on display at the IMTEX trade show in Bangalore. One of India's largest exhibitions for the metal-cutting industry, this seven-day

event showcased the complete spectrum of products and technologies in the field of metal cutting manufacturing. The KLINGELNBERG Group, represented by its Indian subsidiary KLINGELNBERG India Pvt. Ltd., presented its wide range of products and services, including the HÖFLER Speed Viper Cylindrical Gear Grinding Machine, the HÖFLER R 300 Cylindrical Gear Roll Testing Machine, and the KLINGELNBERG P 40 Precision Measuring Center.

In addition, the KLINGELNBERG Group organized three successful events aimed at further strengthening the Company's position:

With events for industry professionals provided free of charge for customers under the Gear Seminar brand, KLINGELNBERG offers knowledge forums covering all aspects of gear technology. During the popular live events, KLINGELNBERG experts bring customers up-to-date on current technologies, trending topics and innovations in Bevel Gear Technology, Cylindrical Gear Technology and Precision Measuring Technology. Gear Seminar Italy took place on 05 and 06 June 2024, at Lake Garda. With a strong local presence and a wide array of presentations translated into Italian, KLINGELNBERG was able to further expand its customer base locally.

ing information on innovations, challenges, and growth strategies. KLINGELNBERG provided insights into topics such as e-mobility, digital solutions in precision metrology, and high-speed gear measurement with optical metrology. The topic of noise analysis was also on the agenda, and various solutions were presented. Participants were able to attend lectures in Japanese and take advantage of networking opportunities.

On 11 and 12 February 2025, KLINGELNBERG America, Inc. held a successful open house exhibition at the Saline location, entitled "Precision, Innovation, Partnership." Participants had the opportunity to attend a series of talks on current technical topics. In addition, live demonstrations of the machines were presented on the factory floor, providing a hands-on look at the latest technologies.

The KLINGELNBERG Group is one of the world's leading companies in developing and manufacturing machines for bevel gear and cylindrical gear machining and precision measuring centers for axially symmetrical components and gearing. The Group also manufactures spiral bevel gears to customer specifications - with ultimate precision using in-house technology.

The origins of the engineering company date back to 1863. The KLINGELNBERG family remains an anchor shareholder of the Company. The path from the Company's origins to global market leadership has been shaped by continuous striving towards first-rate quality and absolute reliability, for both products and service. With numerous R&D engineers worldwide and more than 200 registered patents, the Company demonstrates its capacity for innovation each and every day.

KLINGELNBERG operates engineering and manufacturing facilities in Switzerland and Germany. The Company ensures a global presence with regional sales offices and service centers. In addition, its ISO 14001 certification and participation in the VDMA's (German Mechanical Engineering Industry Association) "Blue Competence" initiative give credence to the Company's sustainable, environmentally sound business practices.

The OERLIKON Bevel Gear Technology segment makes economical, high-precision manufacturing of bevel gears a reality for customers. All machines in the system have been designed to work together to enable pre-machining and finishing of even the most complex gears. KLINGELNBERG offers the most advanced technology and efficient machines for each and every step in the process chain.

The production process chain for bevel gears includes tool preparation, cutting, measuring, hardening, grinding or lapping and testing. The KIMoS (KLINGELNBERG Integrated Manufacturing of Spiral Bevel Gears) software package supports every step in bevel gear design and optimization. Measurement results are converted to gear corrections with the software KOMET. As part of this process, all necessary data for the gear cutting process, tool preparation and quality control of the finished bevel gears is prepared in parallel. At the same time, a convenient data handling system offers the possibility of using development and production databases to access machine tools in production and quality assurance. The software package thus provides the optimum basis for ultra-modern bevel gear production according to the Closed Loop method, ensuring transparency and documented quality throughout the entire process chain.

Stringent accuracy requirements for gear tooth measurements and increasingly complex drive components demand the best measuring technology available and a machine and software concept optimized for these applications. That is why leading manufacturers put their trust in Precision Measuring Centers from KLINGELNBERG which represent the most widely used standard in the industry, while also serving as a reference for metrology institutes.

Today, KLINGELNBERG Precision Measuring Centers (P-Series) are ideally suited to handle most measurement tasks in a wide range of sectors: Users in the automotive and commercial vehicle industries, and the aerospace and aeronautical engineering industries, rely on this technology that replaces up to six different conventional measur-

ing devices. This allows the following measurement tasks to be fully automated in a single setting:

• Gear measurement

• General coordinate measurement

• Form and position measurement

• Roughness measurement

• Contour measurement

• Optical measurement

  HÖFLER Cylindrical Gear Technology
  
  
  

  The HÖFLER Cylindrical Gear Technology segment is synonymous with efficient and flexible production of cylindrical gears. All machines have been perfectly designed to work as a system family, enabling pre-machining and finishing of even the most complex gears. Moreover, thanks to decades-long expertise and great innovative strength, we are able to maintain a leadership position not only through our high research and development standards, but also our in-house application engineering services.

  KLINGELNBERG offers the most advanced technology and efficient machines in the cylindrical gear process chain. The production steps in the process chain include process design, grinding, deburring, measuring and quality control. HÖFLER Cylindrical Gear Machines stand out not just because of their advanced hardware; the Company's own Gear Production software also makes a key contribution to the successful execution of each step.

  The software guarantees convenient machining of

  even the most complex topographies and ensures maximum efficiency in daily use. Only in this way is concentrated knowledge of state-of-the-art machining strategies and process sequences placed right in the user's hands. And with its numerous options, Gear Production plays an active role in achieving productivity gains.

  KLINGELNBERG Drive Technology

  Back in 1923, KLINGELNBERG was the first company in the world to begin made-to-order production of bevel gears using the continuous hobbing method at its site in Hückeswagen, Germany. A high level of innovation and close partnership

  
  
  

  with customers and suppliers has constituted a tried-and-tested success model ever since. In 2008, the Drive Technology segment was moved from the original plant in the center of Hückeswagen to the Winterhagen industrial zone, located approximately five kilometers away. Today, spiral bevel gears with diameters up to 3.000 millimeters are manufactured there - using state-of-the-art methods.

  KLINGELNBERG HISTORY 1863 to 1897

  FOUNDING

  • The Company is founded in Remscheid, Germany.

  • The founders of W. Ferd. Klingelnberg, Söhne (Julius and Ernst Klingelnberg).

    1922 to 1951

    GEAR TECHNOLOGY

  • Production of bevel gear machines for the Palloid method.

  • First hobbing machine built at the Hückeswagen plant, model FK 150, construction year 1923.

  • 1951 Internationalization begins. First subsidiary abroad.

    1908 to 1916

    PRODUCTION SITES

    • Production of tools and machine blades begins on the Company's own production site in Remscheid, Germany.

    • Tool production is relocated from Remscheid to Hückeswagen, Germany.

      1985 to 1996

      EXPANSION

      • First introduction of a CNC measuring device.

      • Entry into bevel gear grinding business through acquisition of Dr.-Ing.-Wie-ner-Verzahntechnik-GmbH.

      • Takeover of Oerlikon Geartec AG - Zürich, Switzerland.

      • Acquisition of ZEISS Industrial Metrology (Höfler) in Ettlingen.

      20

      
      
      1997 to 2003

      INNOVATIONS

  • Introduction of a dry cutting process for spiral bevel gears with the new generation of C machines: OERLIKON Spiral Bevel Gear Cutting Machine

    C 28.

  • Introduction of a new series of OERLIKON Bevel Gear Grinding Machines G 27/G 60 with vertical concept.

    2017 to 2021

    KLINGELNBERG 2.0

  • Premiere of HÖFLER Cylindrical Gear Grinding Machine Speed Viper for high-production generating grinding.

  • KLINGELNBERG has been listed on the SIX Swiss Exchange since 20 June 2018.

  • KLINGELNBERG receives numerous awards such as the iF Design Award, the Best of Industry and the German Innovation Award.

  • Conquering new markets through development of innovative solutions for

e-mobility and wind power.

EVOLUTION

• The Company enters its seventh generation with Jan Klingelnberg.

• Commissioning of the world's most advanced large bevel gear manufacturing facility in Hückeswagen-Winterhagen, Germany.

• Assumption of core business of Höfler Maschinen-bau GmbH in Ettlingen, Germany.

EXPANSION

• After just ten months of construction, the new assembly hall covering a total area of 8,000 square meters was officially inaugurated in Hückeswagen-Winterhagen at the end of 2022.

• Acquisition of measurement technology expert VISPIRON ROTEC GmbH.

21

At the beginning of 2025, the global economy was shaped by profoundly shifting geopolitical and economic conditions. The trade barriers introduced by the U.S. government placed a considerable strain on the global economy by disrupting global trade flows and driving up production costs. This contributed to a broad-based global slowdown, which affected international goods trade, industrial output, and the already sensitive value chains. Stimulus-generating investments increasingly stagnated in light of these multifaceted challenges. In addition to ongoing geopolitical tensions - particularly in Europe - the unpredictability of U.S. tariff policy further weighed on the macroeconomic environment and led to a significant increase in economic policy uncertainty.

In the United States, overall economic output increased significantly in the fourth quarter of 2024, albeit at a slightly slower pace of 0,6%. Despite an expansion in private consumption, gross fixed capital formation actually declined. At the same time, the economic policy measures introduced by the new U.S. administration led to heightened uncertainty among domestic businesses, resulting in a deceleration of expansion dynamics. While output growth in advanced economies moderated somewhat, emerging markets experienced an upswing - driven in particular by a rebound in previously subdued economic activity in China and India. According to official figures, overall economic output in China expanded by 5% in 2024. The economic recovery accelerated noticeably, supported by policy-driven consumption and public investment. However, the primary driver of last year's expansion in China was stronger external demand, while imports saw only modest growth.

Following stagnation in 2023, economic activity in the eurozone showed modest upward momentum in 2024. Overall economic expansion slowed from 0,4% in the third quarter to 0,2% in the fourth quarter, with significant variation across member states. Spain recorded robust growth, with GDP increasing by 0,8% in the fourth quarter. In contrast, GDP growth stagnated in both France and Italy. Germany, meanwhile, experienced a contraction of -0,2%.

As a whole, the global economy faced considerable trade-related and geopolitical risks at the beginning of 2025. While the long-term consequences of the U.S. administration's tariff policy remained difficult to quantify, the price pressures triggered by these trade measures could prompt central banks to tighten monetary policy again in an effort to anchor inflation expectations. However, negotiations between the EU and the U.S. could help de-escalate the conflict - potentially even leading to a complete elimination of bilateral tariffs.

Despite these diverse and global challenges, the KLINGELNBERG Group once again succeeded in achieving a high level of sales in the 2024/25 financial year. Compared to the previous financial year, net sales increased by EUR 5,6 million to EUR 309,1 million. The order backlog declined by EUR 59,3 million but remained at a high level of EUR 208,2 million. Approximately 51,9% of total sales were generated in the Asia-Pacific region, with a further 30,0% coming from the EMEA region.

The Bevel Gear segment generated net sales of EUR 83,2 million at the end of the 2024/25 financial year, representing a decline of EUR 5,9 million (-6,7%) compared to the previous financial year. Order intake totaled EUR 69,9 million, which was EUR 17,6 million below the level of the same prior-year period. This decline was attributable, among other factors, to the elevated level of uncertainty among automotive manufacturers regarding the ongoing technological transition.

While Asia continued to focus heavily on electromobility, a sustained trend toward hybrid vehicles emerged in the U.S., creating new momentum for the bevel gear business. Amid this period of widespread global uncertainty, the KLINGELNBERG Group once again demonstrated its strong resilience. Thanks to a broad and diversified product portfolio, the Company was able to tap into additional market potential in both traditional drive technologies and modern hybrid vehicles. At the same time, orders from the globally active commercial vehicle industry partially offset the decline in demand from the passenger car segment triggered by the shift toward electric mobility.

In parallel, the power skiving capability - developed in recent years and already implemented in the field - offered customers in the commercial vehicle sector the opportunity to use bevel gear machines for cutting both cylindrical and bevel gears. The power skiving option, which can be ret-rofitted to existing machines as part of the broader industry transformation, is also expected to generate further momentum for the bevel gear business.

In the 2024/25 financial year, the Cylindrical Gear segment achieved an increase in net sales of EUR 5,5 million, reaching a total of EUR 101,3 million. The Asian market, which had already proven to be a key driver in the first half of the financial year due to its strong focus on electromobility, remained a major growth contributor in the second half as well.

With the successfully introduced Speed Viper, KLINGELNBERG has demonstrated its ability to meet the highest precision requirements in e-mobility applications through uniquely engineered and technically advanced machines for automotive generating grinding. This was reinforced by the first manufacturing and testing cells (Speed Viper and R 300) installed successfully in the field for serial production of high-precision e-drive gears, further underscoring the KLINGELNBERG Group's strong innovation capabilities. Given the growing significance of electric drive technologies in the Asian region, this market is gaining increasing dominance in the Cylindrical Gear business. Whether in automotive gear grinding, innovative noise testing of running gears with the R 300, or large-scale machines, KLINGELNBERG offers forward-looking solutions to unlock additional market potential.

The sluggish order intake in the first half of the 2024/25 financial year continued into the second half. By financial year-end, order intake stood at EUR 79,6 million - clearly below the record level of EUR 111,0 million recorded in the prior financial year. The strong demand for the Speed Viper in Asia - where electromobility remains a major focus - helped to offset the weak level of inquiries, particularly from Europe, but was not enough to fully compensate for it. The slowdown in the large machine segment (Rapid) and the industrial sector (Viper 500) also contributed to the reduced order volume in the second half. Nevertheless, with the successful market establishment of the Speed Viper series in Asia, the outlook for stable growth remains intact. Furthermore, with the adoption of China's Five-Year Plan in 2025, additional stimulation of the wind energy sector is expected, likely resulting in increased medium-term demand for the Rapid series.

The Measuring Centers segment achieved net sales of EUR 100,7 million, an increase of EUR 2,1 million compared to the previous financial year. This result not only continued the strong performance from the first half of the 2024/25 financial year but also exceeded the high sales level of the prior financial year.

However, order intake in this segment fell short of previous financial years. Following record order volumes in recent financial years, order intake in the 2024/25 financial year amounted to EUR 76,1 million - a decline of EUR 20,7 million compared to the same prior-year period. The decrease was primarily driven by a slowdown in momentum in the e-mobility sector, especially in the

U.S. and European markets. Large bundled orders from Chinese and European automotive manufacturers were almost entirely absent. Nevertheless, the newly developed P 125 and P 152 models gained a strong foothold in the market.

Complemented by the successful market launch of the P 200, KLINGELNBERG was able to successfully place another new development on the market with additional sales of the P 300, thereby defying the current challenging global economic conditions.

To further strengthen the Measuring Centers segment, KLINGELNBERG has initiated deeper market penetration efforts in Asia, particularly within the Japanese automotive sector. Combined with the consistent development of new technological features and enhancements to established solutions, this opens up additional potential for the segment to tap into new applications and markets. Moreover, with the adoption of China's Five-Year Plan and increasing momentum in the wind energy sector, growing demand for KLINGELNBERG's high-precision Measuring Centers is anticipated.

With net sales of EUR 19,8 million at the close of the 2024/25 financial year, the Drive Technology segment recorded an increase of EUR 2,6 million compared to the same prior-year period. Order intake rose by EUR 6,3 million year over year, reaching a total of EUR 19,7 million. Additional momentum in order intake resulted from the announcement that Drive Technology will focus exclusively on contract gear manufacturing going forward.

Operational improvements in bevel gear production - particularly shorter lead times and increased machine availability - contributed to the higher net sales. In addition, pent-up demand in the consolidated and highly liquid mining market increasingly translated into orders for the segment.

In the 2024/25 financial year, KLINGELNBERG could record a series of further developments and innovations that offer additional sales and earnings potential in the future.

The increasing cost pressure on large components for wind power requires new technologies that will enable proven principles for high-volume and mass production of smaller components to be transferred over to large components. The newly developed KLINGELNBERG Precision Measuring Center P 152 closes the gap in the portfolio between the mid-sized and the large precision measuring center model series. The combination of high-precision mechanical engineering, advanced measuring software, and measuring technology ensures quality and efficiency at the highest level. The latest addition to the family is capable of measuring components with a maximum outside diameter of 1.520 mm and workpiece weights up to 8.000 kg with the usual measurement precision. Despite this heavy workpiece weight, no special foundation is required. The P 152 for mid-sized gears such as planet gears used in wind power combines dimension, form, and position measurements with gear measurement, making the operating principles used in high-volume and mass production applicable to large gears as well.

A special highlight is now also the option of using our hybrid measurement technology not only for optical pitch measurement, but also for fast and efficient topographical measurement of waviness on tooth flanks and tooth profiles. Waviness on tooth flank surfaces is often the cause of increased noise excitation in the transmission. The aim of effective quality assurance in gear production should be to detect such waviness reliably and as early as possible. The measuring of waviness is made possible by the use of optical sensors specially developed and optimized for gear measurement, which continuously record the measured values in a helical motion and thus significantly reduce the measurement time.

Quick changeover between the tactile 3D NANOSCAN stylus system and the HISPEED OPTOSCAN optical sensor continues to guarantee economical applications and supports flexible, fast, and precise data acquisition with the usual quality.

The development of electrically powered vehicles is creating new requirements for gears in transmissions. This applies to both fully electric vehicles and hybrid vehicles, which also feature purely electric driving cycles. With the masking noise of the internal combustion engine eliminated, the acoustic behavior of gears has become a new quality criterion. To address this, KLINGELNBERG has introduced the R 300 Gear Roll Testing machine, which allows the evaluation of the acoustic performance of manufactured gears. The key challenge for manufacturers lies in the fact that quality limits are not simply specified on a drawing - they must be defined collaboratively by production and vehicle acoustics experts. To support this process, the Company is continuously enhancing its software tools to systematically evaluate test results and derive meaningful tolerances.

The ratio of research and development expenses increased by 0,6 percentage points compared to the previous financial year and totaled 9,2% in the 2024/25 financial year. The increase is mainly due to higher expenditures on research and development. R&D expenditures of EUR 28,4 million underline the importance of product development for the KLINGELNBERG Group.

In the 2024/25 financial year, the KLINGELNBERG Group achieved net sales from goods and services of EUR 309,1 million - the highest in the Company's history. This figure was EUR 5,6 million above the prior-year result and EUR 0,1 million higher than the previous record net sales posted in the 2022/23 financial year.

The change in inventory of finished and unfinished goods as well as unbilled goods and services amounted to EUR -10,7 million in the financial year under review (prior financial year: EUR +2,3 million). As a result, total operating performance decreased by EUR 7,4 million to EUR 298,4 million compared to the 2023/24 financial year.

In line with the lower total operating performance, material expense decreased by EUR 13,5 million year over year, amounting to EUR 117,3 million. Due in part to the reduction in inventory, the materials ratio declined by 3,4 percentage points compared to the previous financial year, reaching 39,3% at the end of the 2024/25 financial year. Gross profit thus amounted to EUR 181,1 million, up EUR 6,1 million on the previous financial year.

Personnel expense amounted to EUR 119,8 million at the end of the 2024/25 financial year, up EUR 5,5 million on the previous financial year. Wages and salaries, including social security contributions, rose by EUR 6,4 million. This increase was primarily due to the increase in headcount (+35 FTE), resulting in part from the acquisition of VISPIRON ROTEC GmbH, as well as a 3,3% collectively agreed wage increase at KLINGELNBERG GmbH. Other personnel expenses, by contrast, declined by EUR 0,5 million - mainly due to lower costs for external personnel (also at KLINGELNBERG GmbH). In addition, expenses for employee pension plans decreased by EUR 0,4 million.

Due in part to the product mix, the personnel expense ratio increased from 37,4% in the 2023/24 financial year to 40,2%. As at 31 March 2025, the KLINGELNBERG Group employed

1.348 people (FTE), representing an increase of 35 employees compared to the previous financial year.

At the end of the 2024/25 financial year, other operating expense amounted to EUR 43,5 million, which was EUR 1,0 million below the previous financial year's level.

The other operating expense ratio stood at 14,6% at the end of the 2024/25 financial year, remaining in line with the prior financial year.

Other operating income amounted to EUR 3,3 million at the end of the 2024/25 financial year, representing a decrease of EUR 9,7 million compared to the previous financial year. This decline was primarily due to the absence of flood-related payments (EUR 9,0 million).

Roughly three years after the flood disaster of 14 July 2021 severely slowed the post-pandemic recovery, the KLINGELNBERG Group succeeded in emerging from the crisis in a strengthened position over the subsequent years. For the third consecutive financial year, the KLINGELNBERG Group also achieved a double-digit million operating result (EBIT) in the 2024/25 financial year. In the reporting year, the operating result amounted to EUR 16,2 million, a decrease of EUR 8,9 million compared to the previous financial year, which was primarily attributable to the absence of flood-related payments. The high order backlog of EUR 208,2 million provides a positive outlook for the new financial year.

The operating result as a percentage of net sales from goods and services was +5,2%, a decline of 3,1 percentage points year over year. Basic earnings per share amounted to EUR +1,13.

In the 2024/25 financial year, the KLINGELNBERG Group reported a financial result of EUR -1,2 million, which was EUR 1,3 million above the previous financial year's figure. This positive development was primarily due to a reduction in foreign currency losses.

Current assets decreased by EUR 19,5 million in the 2024/25 financial year to EUR 200,9 million as at 31 March 2025. The main drivers were inventories, which declined by EUR 10,0 million, and receivables from goods and services, which decreased by EUR 9,7 million. In contrast, non-current assets increased by EUR 3,5 million, primarily due to investments made during the reporting year. Overall, the balance sheet total of the KLINGELNBERG Group declined by EUR 16,0 million compared to 31 March 2024, amounting to EUR 280,1 million as at 31 March 2025.

Total liabilities decreased by EUR 18,7 million (-12,0%) compared to 31 March 2024, amounting to EUR 136,7 million as at 31 March 2025. This reduction was mainly attributable to a EUR 12,6 million decrease in other short-term liabilities and a EUR 1,9 million decline in long-term financial liabilities. Net debt decreased by EUR 1,7 million and stood at EUR 25,6 million at the end of the 2024/25 financial year.

Equity increased by EUR 2,6 million (+1,9%) compared to 31 March 2024, reaching EUR 143,4 million as of the balance sheet date. Net profit contributed EUR 10,0 million to equity, while the dividend payment reduced equity by EUR 4,7 million. The equity ratio rose by 3,7 percentage points compared to 31 March 2024, reaching 51,2% as at 31 March 2025. This means that the KLINGELNBERG Group further strengthened its stable financial position in the 2024/25 financial year.

In the 2024/25 financial year, KLINGELNBERG AG acquired Munich-based metrology specialist VISPIRON ROTEC GmbH. VISPIRON ROTEC GmbH is a specialist in the field of rotational analysis and, prior to the acquisition, generated sales of approximately EUR 3-4 million with around 20 employees.

KLINGELNBERG India was founded in 2011 and offers solutions for the local market, including clamping devices, tool management services, metrology services, as well as application and engineering support. KLINGELNBERG intends to further expand its operations through investments in its Indian subsidiary. The scope of the investment includes the acquisition of land, the construction of a new building, and a significant expansion of operational capacities, including in-house manufacturing of clamping devices and the further development of digital business activities.

Cash flow from operating activities decreased by EUR 4,5 million compared to the 2023/24 financial year, amounting to EUR 19,0 million. This decline was partly attributable to the reduction in net profit, which fell by EUR 7,2 million to EUR 10,0 million.

Cash flow from investing activities totaled EUR -12,5 million, which was EUR 5,2 million lower than in the previous 2023/24 financial year. This included outflows for investment in tangible fixed assets of EUR 8,5 million in the 2024/25 financial year, including a plot of land in Pune, India, and machinery investments at the sites in Hückeswagen, Germany, and Pune, India. The acquisition of VISPIRON ROTEC GmbH was also included in this item.

Cash flow from financing activities amounted to EUR -6,8 million, with the largest item being the dividend distribution of EUR 4,7 million.

Overall, there was a net change in cash of EUR -0,5 million.

In 2018, KLINGELNBERG established a holistic risk management system to identify, evaluate and manage business risk. For further information about this system, please refer to Note 5.7.7 of the Corporate Governance Report. KLINGELNBERG has to deal with a variety of financial risks as described in the following.

• Business cycle risks: The current economic environment continues to be shaped by significant risks. Geopolitical tensions, such as the war in Ukraine and other global conflicts, remain a major source of uncertainty. In addition, it is unclear how the current U.S. tariffs will impact demand in the United States.

• Currency risks: KLINGELNBERG's primary exposure to currency risks relates to the CHF, USD, and JPY, and arises in the context of business transactions from the translation of the disclosed assets and liabilities. Typically, KLINGELNBERG uses foreign exchange forwards or currency options to hedge against USD and JPY currency risks in connection with current machinery transactions affecting open and, in some cases, expected production and purchase orders.

• Interest rate risks: Short-term bank account balances are subject to market fluctuations. These balances are not hedged. KLINGELNBERG has no long-term interest-bearing assets. Most of the long-term financial liabilities bear fixed interest rates. The short-term bank debt is not hedged.

• Sales risks: An increase in the intensity of competition can lead to a decrease in sales and profitability.