KRONES

In the Corporate Governance Statement, the Executive Board and Supervisory Board report on the company's corporate governance. The responsibilities of the Krones Group Executive Board and Supervisory Board are governed by rules of procedure. The Executive Board consists of five executive members, 20% of whom are women, while the Supervisory Board consists of 16 non-executive members, 37.5% of whom are women. An overview of the composition and competencies of the Supervisory Board is disclosed in the profile of skills and expertise. As a result of regular reporting by Corporate Sustainability, all members of our Executive Board have knowledge of sustainability issues.

Percentage of independent board members in the administrative, management and supervisory bodies:

• Total percentage on the shareholders side who are independent: 62.5%
• Percentage on the shareholders side who are independent of the Executive Board and the company: 87.5%
• Percentage on the shareholders side who are independent of controlling shareholders: 75%

Clear roles and responsibilities are defined for the monitoring of IRO management. The Executive Board sets the targets and monitors sustainability performance, whereas responsibility for carrying out the materiality assessment and IRO management is delegated to Corporate Sustainability. Sustainability priorities are an integral part of Executive Board decision-making. The Executive Board is provided with quarterly updates on progress towards the sustainability targets. The Supervisory Board monitors implementation of the sustainable corporate strategy and compliance with regulatory requirements.

The members of the Executive Board each have the sustainability expertise and experience necessary for their areas of responsibility. All members of the Supervisory Board have the necessary skills to fulfil their advisory and supervisory role for sustainability topics and the impact of these topics on the strategy and business model. The Executive Board and Supervisory Board are able to assess industry-specific and entity-specific IROs on the basis of their many years of industry experience, subject-matter expertise and understanding of Krones' specific challenges and circumstances.

As a result of regular reporting by Corporate Sustainability, all members of our Executive Board have knowledge of sustainability issues. The Executive Board is provided with quarterly updates on progress towards the sustainability targets. Sustainability priorities are an integral part of Executive Board decision-making. The Executive Board sets the targets and monitors sustainability performance. The Supervisory Board monitors implementation of the sustainable corporate strategy and compliance with regulatory requirements.

The Executive Board holds coordination meetings on sustainability topics at six-weekly intervals so as to bring the management of our sustainability targets into the top tier of company leadership. Progress in target achievement is monitored and assessed on a quarterly basis as part of reporting to the Executive Board. In this reporting, the twelve sustainability key performance indicators are tracked and strategic decision papers formulated regarding the company's sustainable development. The reporting includes detailed information on how the targets are monitored, an assessment of whether progress is in line with the targets as originally planned and an analysis of trends or significant changes in performance.

The Supervisory Board is also informed of the findings via the Executive Board's regular reporting. The management and supervisory bodies are briefed on stakeholder interests in reports and meetings to ensure that those interests inform strategic decisions.

Sustainability matters are included in the policies that govern Executive Board remuneration. From the 2024 financial year onwards, ESG targets account for 20% of the target amount of the long-term incentives (LTIs), and further ESG targets are to be added in turn. In addition to Scope 1 and Scope 2 greenhouse gas (GHG) emissions, the LTI has also been based since the 2023 financial year on the percentage of women in management (Krones AG and Krones Group). Emissions are weighted at 70%, the percentage of women in management in the Krones Group is weighted at 20% and the percentage of women in management within Krones AG is weighted at 10%.

Statement on due diligence - The risk of providing inaccurate, incomplete or misleading information in the non-financial statement was identified as a material risk. Policies, work instructions and manuals are established in order to identify and reduce risks in the area of sustainability reporting. In this connection, we have developed control mechanisms to ensure the accuracy and completeness of our sustainability reporting and thus the provision of precise, complete and clear information. Our sustainability reporting processes and controls are continually reviewed to ensure they meet changing needs and are adjusted as necessary to improve their effectiveness.

Our fundamental codes – the Code of Conduct and the Supplier Code of Conduct – are derived from the company's corporate vision. These documents apply without exception to all workers and service providers along the value chain. Their purpose is to ensure compliance with laws, standards and policies throughout the company in order to foster a working environment characterised by integrity, respect and fair and responsible conduct. At the same time, the policy documents serve to embed a strong compliance culture within the company, reinforce our values and encourage employees throughout the value chain to report wrongdoing. In the interests of all stakeholders, violations of our codes are systematically investigated and dealt with.

Sustainability-related risks are regularly tracked, assessed and prioritised in our group-wide risk management system. The assessment of existing risks is updated and newly identified risks are added in a half-yearly risk inventory. Risks can be reported informally at any time by submitting an ad-hoc report.

The risk of providing inaccurate, incomplete or misleading information in the non-financial statement was identified as a material risk. Policies, work instructions and manuals are established in order to identify and reduce risks in the area of sustainability reporting. In this connection, we have developed control mechanisms to ensure the accuracy and completeness of our sustainability reporting and thus the provision of precise, complete and clear information. Our sustainability reporting processes and controls are continually reviewed to ensure they meet changing needs and are adjusted as necessary to improve their effectiveness.

Group-wide Sustainability Accounting Guidelines provide the uniform basis for the definition, calculation and presentation of sustainability information. The sustainability-related quantitative metrics to be determined are collected by the operating departments and are generally based on process data systems, measurements, readings, calculations and procurement data. Financial information is taken from the financial reporting that is prepared in parallel. Any adjustments and changes to sustainability data – whether in terms of definition, calculation or presentation – are clearly identified and communicated.

We have established control mechanisms as part of our data collection process. The process of quantitative data collection, verification and consolidation in the Krones Group is implemented in centralised software. To ensure the comparability and accuracy of the reported data, all metrics are converted into a standardised reference unit directly in the software. Uniform conversion factors are applied to enable consistent and efficient data processing.

The Krones Group is a globally leading provider of packaging and filling technologies for the food and beverage industry. Our business model is based on the development, manufacture and sale of machines and entire lines for process, filling and packaging technology. Krones products include bottle washers, fillers, labellers, inspection devices, complete packaging lines, recycling systems, and process technology and intralogistics solutions. Our services encompass consulting, planning, installation, maintenance and training. We serve a wide variety of customers, from small breweries to large multinational beverage producers.

In sales, we work closely with our customers to offer tailored solutions that meet their specific requirements. Our own operating processes begin with research and development. This is where we create innovative solutions that enable our customers to produce more efficiently and sustainably and that digitalise the related processes. Manufacturing takes place in state-of-the-art production facilities intended to ensure high quality and precision for our products. Subsequent to installation, we offer comprehensive after-sales services to ensure system longevity and performance.

Our upstream value chain includes sourcing high-quality materials and components from trusted suppliers and working with logistics partners to ensure problem-free transportation and timely delivery. Outcomes of our business activities include not only our sales of machines and lines, but also positive impacts on our customers' production processes such as increased efficiency, reduced resource consumption and improved product quality. Trust-based working relationships with our business partners, risk management and auditing and security measures help to ensure that we can gather, develop and secure the inputs from our business model and supply chain as resiliently as possible.

Value Chain

Upstream value creation:

• Who? Suppliers: Indirect Suppliers (Raw material sourcing and production), Direct Suppliers (Manufacturers, infrastructure providers, trading companies, service providers, worker agencies, logistics)
• Where? Germany (57.4%), United States (8.2%), China (5.5%), Italy (5.5%), Switzerland (3.0%), Poland (1.6%), Hungary (1.6%), Czech Republic (1.4%), Austria (1.4%), Netherlands (1.3%), other countries (<1.0%)
• What? Raw materials (stainless steel, steel, aluminium, plastic), Production materials (Components & parts), Infrastructure (energy, water), Services (temporary workers), Logistics/distribution

Own operations:

• Who? Temporary workers, Krones blue collar, Krones administration, Krones service techs, Ext. service techs
• Where? Production sites: Germany, Hungary, Austria, Switzerland, Italy, China, India, USA, Brazil; LCS centers: South Africa, Nigeria, Kenya, Thailand, Russia, Belgium, Mexico, UK, UAE
• What? Production & assembly for Bottling and packaging equipment, Process technology, Digitalization Services, Intralogistics, Recycling solutions

Downstream value creation:

• Who? Customers (B2B): Beverage industry and non-beverage sector (food, dairy, chemicals, pharmaceuticals, diagnostics, medical equipment, healthcare and cosmetics) + plastics recyclers
• Where? Europe (33.3%), Central Asia (2.2%), Middle East/Africa (11.0%), Asia-Pacific (12.3%), China (7.7%), North- and Central America (23.1%), South America/Mexico (10.4%)
• What? Planning, consulting, collaboration; Lifecycle Services; Logistics, distribution; Construction, installation, commissioning, testing, acceptance; Service, maintenance, spare parts, reparation, overhaul; Operating supplies; Customer's finished end beverage or liquid food product; Usage of machinery; Recycled materials; Recycling & end of life

The interests of our stakeholders range from product quality and innovation to working conditions, environmental protection, economic performance and social responsibility. Ongoing communication with our stakeholders is an integral part both of our sustainability initiatives and of our project and process design to ensure that we are aligned with our stakeholders' interests and views. The insights we gain from this dialogue are incorporated into our due diligence processes and into the double materiality assessment. The management and supervisory bodies are briefed on stakeholder interests in reports and meetings to ensure that those interests inform strategic decisions.

Stakeholder Engagement

The various negative and positive impacts, risks and opportunities already directly and indirectly influence our business model, our value chain and our strategic decisions. Investment in implementing sustainability-related actions and optimising our value creation processes is a key part of our corporate strategy to manage the wide variety of effects influencing our business. Our sustainable business strategy is therefore a dynamic and continuous process that evolves with changing circumstances, with the aim of developing innovative and sustainable solutions that not only meet our customers' needs, but also have a positive impact on the environment and promote social values. At the same time, we have implemented a systematic approach for monitoring, analysing and thus tracking the impacts of our business activities on people and the environment. The time horizons over which we expect our business activities to have a significant impact on the environment and society are very varied, reflecting the complexity of our global operations.

Resilience of strategy and business model in relation to material impacts, risks and opportunities

In line with our corporate vision of »Solutions beyond tomorrow«, the Krones Group's strategy and business model are geared to sustainability and efficiency. Krones proactively incorporates sustainability risks such as climate change, the need for responsible use of packaging materials and feeding the world's population into its strategic planning and thus into investment, development and sales decisions. The vision of making sustainable products widely available drives innovation and reinforces Krones' market position, enabling it to seize opportunities and increase its resilience in a changing market environment. Viewed over the medium term, Krones benefits from a stable international beverage and liquid food market and from customers who show constant willingness to invest. We have the strategic flexibility to repurpose, modernise or decommission assets as needed to maintain our competitiveness and sustainability. Furthermore, we invest in the professional development of our employees to ensure that our team has the skills needed for any adjustments in our product and service portfolio. These measures contribute to Krones' ability to operate successfully in a changing market environment.

The material topics listed below and the associated impacts, risks and opportunities are included in the monitoring of the corporate strategy, in decision-making processes and in risk management. The current materiality assessment for Krones was carried out from April to June 2024. The findings, which were reviewed in December to ensure that they are still current, comprise the basis for Krones' sustainability reporting for the 2024 financial year.

For the combined non-financial statement for the 2024 financial year, a double materiality assessment for the Krones Group was carried out for the first time in accordance with the requirements of the ESRS. Under the double materiality principle, information must be provided on an ESRS topic if the assessment identifies a material impact on people or the environment or a financial impact on Krones. The materiality assessment incorporated a range of methodologies and assumptions, including stakeholder analysis, stakeholder engagement, value chain analysis and engagement, and the application of specific assessment criteria and thresholds. Following the initial double materiality assessment carried out in collaboration with internal departments and taking into account the expectations of external stakeholders, the Executive Board evaluated the identified IROs and approved them in an Executive Board resolution.

Scope

The materiality assessment identified and assessed the impacts of our business activities on people and the environment and the risks and opportunities for our business. This process takes into account the impacts connected with Krones through its own business activities and business relationships. Our assessment included actual and potential positive and negative impacts in relation to sustainability topics. The financial impact assessment took account of sustainability-related risks and opportunities that could have a negative or positive impact on our business. Our process is designed to identify specific activities, business relationships, geographies or other factors that give rise to heightened risk of negative impacts.

Stakeholder engagement

We carried out the double materiality assessment with the involvement of internal experts from various business units and corporate functions at Krones. In place of direct consultation or evaluation of material topics by external stakeholders, internal subject-matter experts with in-depth specialist knowledge examined the potential and actual impacts from the perspective of affected stakeholders. These experts are in regular contact with external stakeholders and therefore have a good insight into their interests and views.

Methodology

To determine the materiality of a sustainability matter for reporting purposes, Krones assesses the related IROs. The first step is to identify and name these IROs. Impact materiality is thus assessed 'inside-out' by looking at the (actual or potential) positive or negative impacts of Krones' business activities on people and the environment along the value chain. Next, each sustainability topic is assessed for its financial impact on Krones in order to determine whether it has financial materiality (»outside-in«).

The company's impact on people and the environment can be actual or potential, negative or positive, it can arise directly through Krones or indirectly along the value chain and it can have a short, medium or long-term effect. An impact's materiality is determined by its severity, which is based on an assessment of its scale, scope and (in the case of negative impacts) remediability and (for potential impacts) its likelihood of occurrence. Risks and opportunities are (potential) financial impacts of a sustainability matter on Krones in that it has an influence on the company's cash flows, development, performance, position, cost of capital or access to finance. This is not constrained to matters under Krones' control. Dependencies on natural, human and social resources can be sources of financial risks or opportunities. The materiality of risks and opportunities is assessed based on the magnitude of the financial effects and their likelihood of occurrence. Based on a predefined materiality threshold, which is based on the EFRAG recommendation, matters are considered material if they are associated with either a significant positive or negative impact or significant financial risks or opportunities.

Assessment Criteria

Process

The materiality assessment process began with the compilation of a longlist of potentially material topics, reflecting both the ESRS criteria and entity-specific characteristics. An integral part of this process was the identification of relevant stakeholders and the analysis of their interactions and expectations. On the basis of this longlist, the positive and negative impacts, risks and opportunities along the Krones Group's value chain were analysed in detail. These IROs were assessed by recognised subject-matter experts within the company and then reviewed and validated by the Sustainability Steering Board. By applying predefined thresholds, we were able to precisely identify the material sustainability topics of greatest significance to our corporate strategy. Based on scores for the respective IROs, a given topic is identified as material and both qualitative and quantitative data is collected in accordance with the ESRS requirements. We have established control mechanisms as part of our data collection process. These are covered in the "Risk management and internal controls" section.

As the outcome of the materiality assessment, six out of ten topics are material for Krones. The sustainability-related impacts, risks and opportunities associated with the material topics are presented in detail in the topic-specific sections.

Material topics

• E1 Climate change adaptation / Climate change mitigation / Energy
• E3 Water
• E5 Resource inflows / Resource outflows
• S1 Working conditions / Equal treatment and equal opportunities for all / other work-related rights
• S2 Working conditions / Equal treatment and equal opportunities for all / other work-related rights
• G1 Corporate Culture / Digital Responsibility

Non-material topics

No locations or business activities have been identified where environmental pollution, biodiversity and the ecosystem, affected communities or consumers and end-users is a material topic. Nor did the subject-matter experts identify any material IROs for these matters in our upstream and downstream value chain.

Pollution

The assessment of the environmental impacts of our business activities covered pollution (air, water, soil, living organisms and food resources), substances of concern and microplastics. The assessment of these topics and the related stakeholder groups showed the topic of pollution to be non-material for Krones.

Biodiversity and the ecosystem

As most of our sites are in long-established commercial and industrial zones, our existing activities have been assessed to have little impact on biodiversity. When developing new sites for use, preliminary assessments are carried out in consultation with the authorities. We also use recognised screening tools that enable us to analyse, assess and respond to biodiversity risks. A biodiversity scenario analysis considers physical, regulatory and reputation risks. No material risks have been identified for our sites as a result of this analysis, which was conducted in part in dialogue with local communities.

Affected communities

As part of the materiality assessment, Krones examined the impact of its business activities on local communities. The matters considered included potential noise emissions from operating processes, the volume of traffic caused by our activities, and the related air and light pollution. Potential health effects on local residents were also taken into consideration. Krones is committed to continuous interaction with stakeholders to ensure that their interests and concerns are taken into account. However, no material negative or positive impacts, risks or opportunities related directly to our business processes were identified in the assessment.

Consumers and end-users

Our business-to-business customers use Krones machinery and services to manufacture their products, which are then consumed by private end-consumers. The quality and functionality of Krones machines can influence the quality of the end products. For this reason, the double materiality assessment considered matters potentially related to the personal safety of consumers and end-users. However, the assessment did not identify consumer safety as a material topic. Krones aims to ensure that its machines and lines meet the highest quality standards in order to guarantee the safety of end-consumers. Due to the small likelihood of occurrence, the topic is therefore considered non-material.

Climate Transition Plan

Presentation of group-wide targets and strategic actions to achieve our climate targets as part of our overall business strategy:

• Positive contribution to climate change mitigation
• Transition to a low-emission circular economy
• Significant reduction in GHG emissions
• Transparent reporting on progress through annual update

Scope: Entire value chain
Responsibility: Corporate Sustainability, Executive Board
Third-party standards and initiatives: Paris Climate Agreement, Greenhouse Gas Protocol, Science Based Targets initiative
Communication: Corporate website; internal communication channels such as: SharePoint, Intranet, Executive Board

*We recognise the importance of assessing potential locked-in GHG emissions. However, a qualitative assessment in relation to our assets and products is not yet available. Under the provisions on the EU Paris-aligned benchmarks in Delegated Regulation (EU) 2020/1818, Krones is not excluded from the EU Paris-aligned benchmarks.

The Krones Group's sustainability targets were officially adopted by the Executive Board in the 2020 financial year. In 2024, they were subjected to a review in which twelve environmental, social and governance (ESG) key performance indicators were selected to manage sustainability along the value chain through to 2030. The targets are geared to the energy and media-efficient operation of our products and technologies and contribute to the transition to a circular economy.

Krones sustainability targets 2030 and Net-Zero until 2040

Upstream chain

• -30% Reducing Scope 3 emissions in upstream processes
• 100% Suppliers managed with regard to human rights

Own operations

• -80% Reducing Scope 1+2 emissions at our plants
• -10% Reducing water and hazardous waste in our operations
• 20% Women in leadership
• -30% Reducing occupational accidents in relation to hours worked
• 100% Legal entities evaluated with compliance risk analyses
• 85% Implementing ISO 27001 for relevant entities

Downstream chain

• -30% Reducing Scope 3 emissions for the sold products
• -25% Reducing energy footprint of sold products
• -20% Reducing water footprint of sold products
• 30% of Krones lines' plastics output recycled with Krones technology (equivalent)

Until 2040

• NET-ZERO Emissions along the entire value chain

The Krones Group is committed to achieving net-zero GHG emissions along the entire value chain (Scope 1, Scope 2 and Scope 3) by 2040, corresponding to a 90% absolute reduction across all emissions. In accordance with the SBTi standard, the remaining 10% must be neutralised using technologies such as carbon removal and carbon capture.

As part of our sustainable corporate strategy, the following group-wide policy applies to environmental topics:

Climate and Environment Policy

General objectives: Definition of group-wide minimum standards for environmental protection; Embedding of climate and environmental protection in business processes and projects

Main subject matter:

• Climate change: Reduction of GHG emissions and energy consumption; Promotion of energy efficiency; Focus on own production and use of renewable energy; Climate change adaptation actions
• Water and marine resources: Standards for water management, water resources and water treatment; Standards for water consumption and withdrawal; Proper wastewater management; Avoidance of surface sealing
• Resource use and circular economy: Promotion of the circular economy; Mindful use of resources; Waste management

Reference to third-party standards or initiatives: United Nations Sustainable Development Goals (SDGs), UNGC principles, European Green Deal, ISO 14001/ISO 50001

Scope: Binding on all Krones Group employees worldwide; Applies along the entire value chain

Organisational unit accountable for implementation: Corporate Sustainability; Adoption by the Executive Board

Process for monitoring: Internal review in regular audits; External audits and ISO certifications by independent third parties

Consideration given to the interests of stakeholders: Dialogue-based engagement in policy development

Availability of the policy to stakeholders: Available to all employees; Access via internal policy management system

IROs that the policy relates to: Climate change adaptation, Climate change mitigation, Energy matters, Water, Resource inflows, Resource outflows

In the event of an environmental violation, all workers along the entire value chain and external stakeholders of the Krones Group have various means to be heard. Besides direct contact with the company, the main point of contact is the Krones Integrity reporting system. This enables environmental violations to be clearly identified as such from the outset.

Actions and resources

Climate adaptation actions focused on buildings

Based on the results of the physical climate transition risk assessment, Krones has taken action to adapt to climate change. These include the air conditioning of office space to cope with rising temperatures and the construction of a new building in India with improved ventilation. In addition, new buildings worldwide are constructed in accordance with LEED Gold or a comparable local standard.

Scope 1 actions

Use of heat pumps, solar thermal energy and local heat networks for renewable heat energy

At the Neutraubling site, Krones is investing in energy-efficient heating systems such as heat pumps in order to reduce the energy consumption of and direct emissions from heating systems. This is expected to reduce annual GHG emissions by around 7,000 tonnes of CO2e. A consulting project is to be launched in 2025 with the aim of evaluating and optimising on-site heat energy infrastructure.

Electrification of the vehicle fleet

Electrification of the worldwide vehicle fleet serves to reduce the direct emissions from the use of company vehicles. This changeover is not expected to result in any significant cost changes. The global electrification of the fleet that is already underway will be accelerated from 2025 under a group-wide car policy.

Scope 2 actions

Procurement of renewable energy

We buy 100% green power with guarantees of origin for the Krones AG production sites in Germany. This is a significant lever for reducing our Scope 2 GHG emissions. At our major international sites, too, we are transitioning to buying only green power. The short-term switch to green power is a key step enabling us to significantly reduce our Scope 2 emissions.

Expanding photovoltaic capacity for own electricity generation

Sustainable energy supplies and the expansion of our own renewable power and heat generation capacities – combined with intelligent energy management – are at the heart of our efforts to reduce energy-related GHG emissions. Installing photovoltaic systems to provide self-generated electricity increases independence from externally sourced electricity and reduces Scope 2 emissions. We have made generating our own electricity from renewable sources a priority in our company climate strategy and have related projects in progress worldwide. At our most energy-intensive sites, photovoltaic projects are in progress or have already been completed.

ISO 50001 and awareness-raising

Energy management at the German production sites of Krones AG is ISO 50001 certified. As part of the existing audit and certification processes under ISO 50001, we conduct regular employee training on energy and environment topics. Another way we raise awareness among our workforce is through regular internal reporting on the progress of our climate strategy via the various internal communication platforms.

Scope 3 actions

Upstream value chain

Material intensity optimisation through ecodesign

By developing machinery that uses less material, Krones helps reduce the emissions related to the machinery's manufacture. The enviro sustainability programme plays an active role in the product development process, purposefully integrating ecological design aspects from the Eco-Design framework. To ensure that development work is guided by the principles of environmental sustainability, ongoing development projects are evaluated on the basis of a checklist and managed by way of milestones that incorporate enviro requirements into the product development process.

Emission reduction programme with suppliers

By collaborating with suppliers to reduce the carbon footprint of purchased products, Krones is helping to reduce emissions in the upstream supply chain. To present one face to the supplier, the Procurement category team serves as the supplier's primary point of contact. In order to obtain a clear picture of emissions in our supply chain, we analyse and quantify our suppliers' emissions. To improve our understanding in this regard, we require our suppliers to provide primary emission data in the form of cradle-to-gate product carbon footprints. This not only improves comparability, but also increases transparency on our environmental impact. Moreover, we expect selected suppliers that have a significant impact on our upstream Scope 3 emissions to set ambitious climate targets. These are required to be validated as science-based targets by the SBTi.

Downstream value chain

Sustainability programme for products – enviro

By optimising the energy efficiency of existing machines, Krones is reducing energy consumption and the associated emissions. For many years now, our enviro sustainability programme for machines and lines has been a key component of our product sustainability. It was developed in collaboration with TÜV SÜD and focuses on the energy and media consumption as well as the eco-friendliness of Krones machines, lines and solutions. The associated processes are established within the enviro management system. Underlying it all is the enviro manual, which defines the principles of the management system, presents the assessment criteria and thus acts as a company-wide guide for energy and media-efficient product design and optimisation. Krones carries out Life Cycle Assessments (LCA) for its machines to determine their carbon footprint, primarily quantifying GHG emissions on the basis of ISO 14067:2018. To demonstrate the benefits of our technologies, we use a special tool to calculate the GHG savings. Based on the results, we can show that machinery in the enviro product portfolio achieves significant GHG savings in use compared to standard models.

Development of sustainable product solutions

Developing and selling products that are more energy-efficient than previous products and technologies helps reduce emissions at end-customers. The sustainability of a product starts in the design and development stages. Strategic portfolio planning and the continued development of new and existing Krones products and solutions is handled by Research and Development and the respective product lines. Environmental compatibility, with a special focus on GHG emissions, is one of the key value drivers under which development projects are initiated and prioritised.

Promotion of electrification in thermal processes

Where possible, Krones promotes the conversion of thermal processes to renewable heat energy systems such as the use of heat pumps. Electrifying thermal processes in our machinery has the potential to reduce GHG emissions by up to 1.9 million tonnes per year when using green electricity.

Other

Krones has not currently implemented any nature-based solutions as part of its climate change mitigation activities. In accordance with the SBTi, we intend to reduce a portion of our GHG emissions by using carbon dioxide removal technologies from 2035 at the earliest. We are also developing a proposal for implementation of an internal carbon pricing system as a decision aid and to incentivise climate action and targets.

Targets

As part of our climate strategy, our climate targets are set out in our Climate and Environment policy and address the climate change-related impacts, risks and opportunities along our value chain. In setting our climate targets, we used the Science-Based Targets Initiative (SBTi) and Greenhouse Gas Protocol (GHG Protocol) methodologies to ensure that our targets are science-based and consistent with the ambitious goals under the Paris Agreement, and in particular the goal of limiting global warming to 1.5 degrees Celsius. Our targets are based on consistent emission factors from recognised databases provided by the UK Department for Environment, Food & Rural Affairs (DEFRA), the International Energy Agency (IEA) and others. We also base our targets on the robust findings of the latest reports of the Intergovernmental Panel on Climate Change (IPCC) to ensure that our strategies are in line with the latest science and global efforts to mitigate climate change.

Our emission reduction targets relate to greenhouse gases quantified in tonnes of CO2 equivalent (t CO2e). This unit of measurement allows us to put the different greenhouse gases generated by our activities on a common footing, providing a consistent and comparable basis for our targets and for measuring our progress. Our Scope 2 target uses the market-based approach, with Scope 2 emissions reported in accordance with the GHG Protocol to avoid double counting.

In connection with its sustainability targets, Krones has involved the SBTi as an external stakeholder in order to validate the set targets. The SBTi has confirmed that our targets are consistent with the science on limiting climate change. Both our short-term targets and long-term targets, including the net zero target, have been validated by the SBTi.

The Scope 3 GHG emission reduction targets for the short-term time horizon were adjusted in the 2024 financial year. This adjustment reflects increased ambition to demonstrate our responsibility and reinforce our commitment to a more sustainable value chain on the 1.5 degrees Celsius reduction pathway. We regularly review our emission reduction targets to take account of new scientific findings and developments in the policy framework.

The entity-specific energy footprint KPI measures the electrical and thermal energy consumption of the filling and packaging technology portfolio products sold per 1,000 filled and packaged containers in production operations. The KPI relates to Krones AG. Krones AG is responsible for the main consumption and therefore uses this metric as a steering element. It is weighted by order intake in euros for complete and partial lines in each line cluster. The aim of the KPI is to track our performance in terms of the energy and media efficiency of the line clusters we sell, as well as research and development activities relating to our machinery. It enables us to tell whether the machines and lines we sell are becoming more energy-efficient and reducing overall energy consumption. Based on consumption data forecasts from the ERP system on all Krones AG lines sold during the year, we calculate the average energy consumption per 1,000 bottles and containers for each line cluster and then the total energy index across all line clusters weighted by order intake.

We have not set a specific target for the material topic of climate change adaptation and do not currently plan to do so. However, this is continually reviewed based on current developments and needs. The topic of climate change adaptation is part of our Climate and Environment policy, in which we specify related standards. Compliance with the policy is monitored by defined processes that include the monitoring of actions and audits. We are thus taking action, based on the results of the climate transition risk assessment in 2023, to adapt to the negative impacts of climate change.

Energy consumption and mix

KRONES reported energy consumption disaggregated by source for 2024. The company falls under Sector C Manufacturing (Manufacture of machinery and equipment not elsewhere classified), categorised as a high climate impact sector.

Energy consumption by source (2024)

*Note: No use is made of direct nuclear energy sources. The share of nuclear energy in the national electricity grids is included in the figures under "fossil energy".

Energy production (2024)

Energy intensity (2024)

Methodology note: Total energy consumption covers the KRONES Group. Energy intensity is calculated as total energy consumption divided by net revenue from high climate impact sector activities (all KRONES revenue falls under this categorisation).

Gross Scopes 1, 2, 3 and Total GHG emissions

Scope 1 GHG emissions

Krones does not have any data on biogenic emissions from its own operations.

Sub-breakdown: Not disclosed. The report does not provide disaggregation of Scope 1 by stationary combustion, mobile combustion, process emissions, or fugitive emissions.

Scope 2 GHG emissions

Methodology note: For gross Scope 2 emissions, information on GHG emissions other than carbon dioxide (CH₄, N₂O, HFC, PFC, SF₆, NF₃) is not available for location-based emission factors or has been excluded from the market-based data. When purchasing energy, the company uses official certificates of origin: guarantees of origin in the EU, renewable energy certificates (RECs) in the US, and green electricity certificates (GECs) in China.

Contractual instruments (2024):

• Share of contractual instruments in total Scope 2 GHG emissions: 66.3%
• Percentage of bundled energy generation instruments: 5.0%
• Percentage of unbundled energy attribute claims: 61.3%

Total Scope 1 and Scope 2 GHG emissions

Progress (market-based): –51.7% reduction from base year 2019 to 2024.

Scope 3 GHG emissions

Total upstream Scope 3: 1,342,896 t CO₂e (2024); base year 2019: 1,143,312 t CO₂e (progress: +17.5%)

Total downstream Scope 3 (sold products): 8,462,243 t CO₂e (2024); base year 2019: 10,337,228 t CO₂e (progress: –18.1%)

Categories excluded: 3.8 Upstream leased assets, 3.9 Downstream transportation and distribution, 3.10 Processing of sold products, 3.13 Downstream leased assets, 3.14 Franchises, and 3.15 Investments. Per SBTi, these are either not relevant to Krones or do not generate significant emissions. Category 3.9 excluded due to lack of data availability; data collection will be established for the coming reporting year.

Calculation methodology:

• Categories 3.1, 3.2: Hybrid (primary supplier data where available, activity-based or spend-based otherwise)
• Category 3.3: As for Scopes 1 and 2
• Category 3.4: Spend-based
• Category 3.5: Spend-based
• Category 3.6: Hybrid
• Category 3.7: Average data-based
• Category 3.11: Hybrid (primary consumption data for products sold)
• Category 3.12: Based on products sold

Primary data share: 83.2% of Scope 3 GHG calculated using primary data (2024).

Total GHG emissions

Progress (market-based): –14.8% reduction from base year 2019 to 2024.

Net-zero target: By 2040, achieve at least –90% absolute reduction across all emissions (Scopes 1, 2, and 3). In accordance with the SBTi standard, the remaining 10% must be neutralised using technologies such as carbon removal and carbon capture.

GHG intensity per net revenue

Energy consumption and mix (2024)

Energy production (2024):

• Non-renewable energy production: 23,109 MWh
• Renewable energy production: 5,846 MWh

Energy intensity per net revenue

Note on high climate impact sector: Following an analysis of climate-intensive sectors, the Krones Group falls under Sector C Manufacturing, category Manufacture of machinery and equipment not elsewhere classified. The Krones Group's revenue is therefore categorised as being associated with a high climate impact sector.

Methodology notes

Base year adjustments: The acquisition of Netstal Maschinen AG in 2024 resulted in structural changes. Scope 1, 2, and 3 emissions, including the base year, were recalculated to reflect the acquisition. Additionally, a correction was made to Scope 1 emissions for both the base year and the previous year, as quantities of heat energy sold in previous years were erroneously excluded from Scope 1 accounting.

Emission factors: Data collection tool uses integrated emission factors from external sources provided by DEFRA and the IEA, updated annually.

GHG Protocol alignment: Targets validated by the Science Based Targets initiative (SBTi) and based on GHG Protocol. Scope 2 target uses the market-based approach.

Scope 3 calculation basis: Category 3.11 calculation basis was adjusted from order intake data to revenue data in 2024 for more accurate period-based allocation. This does not affect comparability of GHG emissions as the definition of the value chain is unchanged.

LCA verification: Methodology for calculating consumption data in the enviro management system is reviewed by TÜV SÜD. Upstream Scope 3 calculation methodology has been externally validated by a university.

Krones is not yet able to fully quantify the financial effects of material ESG-related risks and opportunities in monetary terms as required by the ESRS. We capture the expected financial impact and incorporate it into our strategic considerations by using qualitative assessment logic. However, we work continuously to improve our risk assessment processes and plan to carry out a comprehensive financial impact assessment in the coming year or at the latest by the end of the phase-in period. We are also not yet able to provide quantitative information on the financial impacts of our current and future action plans and the actions within them. This applies both to the main activities and plans that we intend to implement and to their financial significance relative to the figures in our financial reports.

Transition risks

In the assessment of climate transition risks, medium-term risks were identified using Representative Concentration Pathway (RCP) 8.5. The assessment of transition risks focuses on two matters: The availability of renewable energy (technology), and regulatory developments with regard to single-use plastics (current regulation). In order to ensure secure supplies of green energy and reduce our dependence on external energy sources, we are systematically investing in our own generating capacity for green electricity and green heat energy. As well as addressing the potentially limited availability of green energy, this investment also offers the potential for long-term cost savings. The regulation of single-use plastics also plays a key role in our business model, as a significant proportion of our revenue is based on solutions for filling and packaging beverages in PET bottles. While a global blanket ban on single-use plastics is not currently likely, regional initiatives such as the EU directives on increasing the recycled content of plastic packaging could have an impact on our business. However, we see these developments not only as a challenge, but also as an opportunity: Our advanced recycling technologies are designed to keep plastics in a closed loop. In this way, we are actively contributing to the circular economy and are leading the way in a changing market environment.

Krones has not identified any assets or business activities in the climate transition risk assessment that are incompatible with or need significant efforts to be compatible with a transition to a climate-neutral economy.

Physical risks

As part of our physical climate risk management, we have established a structured process to identify and assess climate-related hazards and risks. The identification of climate-related hazards is based on the classification of climate hazards in Commission Delegated Regulation (EU) 2021/2139. Among other hazards, this includes extreme weather events, long-term climate changes and other relevant environmental changes caused by climate change. We compare the current climate with the expected future climate scenarios using the four RCP scenarios published by the Intergovernmental Panel on Climate Change (IPCC): RCP 2.6, RCP 4.5, RCP 6.0 and RCP 8.5 (in each case for the 20-year period from approximately 2020 to 2040). These scenarios were chosen because they cover a wide range of potential future developments and include both the 1.5 degrees Celsius target scenario and scenarios with more climate change. The scenarios are taken from the IPCC's Sixth Assessment Report and represent the recognised state of scientific knowledge. They range from a scenario with strict climate change mitigation policies (RCP 2.6), which aims to limit global warming to below two degrees Celsius, to a scenario with no additional climate mitigation policies (RCP 8.5), which would lead to much greater warming. Using this wide range of scenarios enables us to adequately cover the risks and uncertainties potentially facing our company. The scenarios are based on a large number of assumptions and parameters, including different emission pathways, technological developments and policy measures. These assumptions and limitations are necessary in order to understand the complexity of climate change and its potential impact on our business.

We identify high-risk locations and work closely with local experts to validate and assess the related risks. Where necessary, adaptation strategies are developed to strengthen the resilience of our sites. The current climate data is compared with the forecasts in order to identify changes and trends. If today's climate figures are forecast to be exceeded with a likelihood of more than 95%, we classify a location as very high risk and mark it with a red flag. We have identified five high-risk locations: Tampa (USA), Secunderabad (India), São Paulo (Brazil), Taicang (China) and Shanghai (China). After validating the identified risks with the site experts, no significant medium-term physical risks were identified, as regulatory measures or internal adaptation measures are already being implemented. These risk mitigation measures are regularly reviewed to ensure that they are up to date and effective for the long term.

As part of our sustainable corporate strategy, the following group-wide policy applies to environmental topics:

Climate and Environment Policy

General objectives: Definition of group-wide minimum standards for environmental protection; Embedding of climate and environmental protection in business processes and projects

Main subject matter:

• Water and marine resources: Standards for water management, water resources and water treatment; Standards for water consumption and withdrawal; Proper wastewater management; Avoidance of surface sealing

Reference to third-party standards or initiatives: United Nations Sustainable Development Goals (SDGs), UNGC principles, European Green Deal, ISO 14001/ISO 50001

Scope: Binding on all Krones Group employees worldwide; Applies along the entire value chain

Organisational unit accountable for implementation: Corporate Sustainability; Adoption by the Executive Board

Process for monitoring: Internal review in regular audits; External audits and ISO certifications by independent third parties

Consideration given to the interests of stakeholders: Dialogue-based engagement in policy development

Availability of the policy to stakeholders: Available to all employees; Access via internal policy management system

IROs that the policy relates to: Water

In the event of an environmental violation, all workers along the entire value chain and external stakeholders of the Krones Group have various means to be heard. Besides direct contact with the company, the main point of contact is the Krones Integrity reporting system. This enables environmental violations to be clearly identified as such from the outset.

Water consumption

Total water consumption

Water intensity

Measurement methodology

The share of water consumption obtained from direct measurement, sampling and extrapolation or best estimates is as follows:

• 93.3% from direct measurement
• 5.4% from extrapolation
• 1.3% from best estimates

The main category of water consumption varies from site to site and mainly relates to employee needs, production and the commissioning of machinery.

Water stress areas

Four sites, of which two are production sites, were located in areas at high water risk in 2024. No Krones site has been affected by a shortage of water, either in terms of quantity or quality, or has caused significant problems in this regard.

Water discharge

Wastewater from production is discharged in accordance with the regulations applicable at all production plants. Where the local infrastructure allows, it is discharged to public wastewater treatment plants. Stormwater is primarily directed into the natural subsoil to help replenish groundwater and offset the negative effects of soil sealing.

Product water footprint

The entity-specific water footprint indicator comprises the water consumption of the filling and packaging technology portfolio in productive operation and relates to Krones AG, weighted by order intake for each line type.

Anticipated financial effects from material water and marine resources-related impacts, risks and opportunities

KRONES references this disclosure requirement in its ESRS index table, pointing to:

• Section: »Financial effects and investments« (Page 85)
• Reference list Page 128 (NFS - Non-Financial Statement)

No detailed quantitative financial effects, phase-in exemption statement, or methodology for calculating anticipated financial effects from water and marine resources-related impacts, risks and opportunities are provided in the extracted excerpts.

As part of our sustainable corporate strategy, the following group-wide policy applies to environmental topics:

Climate and Environment Policy

General objectives: Definition of group-wide minimum standards for environmental protection; Embedding of climate and environmental protection in business processes and projects

Main subject matter:

• Resource use and circular economy: Promotion of the circular economy; Mindful use of resources; Waste management

Reference to third-party standards or initiatives: United Nations Sustainable Development Goals (SDGs), UNGC principles, European Green Deal, ISO 14001/ISO 50001

Scope: Binding on all Krones Group employees worldwide; Applies along the entire value chain

Organisational unit accountable for implementation: Corporate Sustainability; Adoption by the Executive Board

Process for monitoring: Internal review in regular audits; External audits and ISO certifications by independent third parties

Consideration given to the interests of stakeholders: Dialogue-based engagement in policy development

Availability of the policy to stakeholders: Available to all employees; Access via internal policy management system

IROs that the policy relates to: Resource inflows, Resource outflows

In the event of an environmental violation, all workers along the entire value chain and external stakeholders of the Krones Group have various means to be heard. Besides direct contact with the company, the main point of contact is the Krones Integrity reporting system. This enables environmental violations to be clearly identified as such from the outset.

Actions and resources related to circular economy

The document references actions and resources related to resource use and circular economy in the cross-reference table:

• Cross-reference: E5-2 Actions and resources in relation to resource use and circular economy is addressed in the section "Actions and resources" on page 123, with a reference to page 85.

However, the actual content of these actions is not provided in the excerpts. The excerpts contain only the index/cross-reference table showing where E5-2 disclosures can be found in the full report, but do not include the substantive disclosure content itself from pages 85 or 123.

Targets related to circular economy

The company states that resource use and circular economy targets are set out in its Climate and Environment policy and address impacts, risks and opportunities along the value chain. These targets relate to the prevention and recycling stages of the waste hierarchy.

Entity-specific recycling KPI

The company discloses an entity-specific recycling KPI relating to Krones AG and Krones Recycling GmbH. This KPI expresses the total weight of plastic recycled by recycling systems as a percentage of the total weight of plastic processed by stretch blow moulders.

• Target metric: Percentage of plastic recycled by recycling systems relative to plastic processed by stretch blow moulders
• Scope: Krones AG and Krones Recycling GmbH (own operations and downstream value chain)
• Target value: Not quantified in the excerpts
• Target year: Not disclosed
• Baseline year: 2024 (full data collected for the first time; progress will be tracked from 2024)
• Baseline value: Not disclosed
• Progress to date: Not disclosed (monitoring begins from 2024)

The company states it also has a target related to reducing hazardous waste to minimize environmental and health risks and ensure compliance with environmental regulations.

Resource inflows

The company states it has not set a specific target for the material topic of resource inflows and does not currently plan to do so, though this is continually reviewed. Resource inflows are addressed through the Climate and Environment policy with defined standards and monitoring processes.

Note: The excerpts reference page 83 for "sustainability targets" and page 84 for E5-3 disclosure, but the detailed quantified targets are not included in the provided excerpts.

E5-4 Resource Inflows

Krones manufactures and supplies custom-tailored machines and systems for process, filling and packaging technology – including process technology systems, filling and packaging systems and recycling technologies. The resource inflows that Krones needs for this purpose can be categorised into four main material classes: stainless steel, steel, non-ferrous metals and plastics.

The resource inflows are identified in software analysis in Procurement. For companies where no total weight was reported for the invoice amounts, the total weight was extrapolated using a factor. Biological materials are included in addition by analysing all procurement groups in which such materials are expected. With regard sustainable procurement, reference is made to the Krones Supplier Handbook and its requirements. As documentation on sustainable procurement was not available for all materials used and for the corresponding suppliers in the current reporting period, the data includes only bio-based materials and suppliers with a sustainability certification scheme (PEFC, FSC, Blue Angel, etc.). Krones applies the cascading principle by recycling and reusing biobased materials to maximise resource efficiency. This includes using materials in various stages before disposal or energy recovery.

Methodology for recycled content

The main subsidiaries of relevance for identifying the range of reused components and products are ecomac Gebrauchtmaschinen GmbH, Ampco Pumps GmbH and Netstal Maschinen AG. Part of their business model is the reconditioning of Krones machinery and/or components. The proportion of recycled materials used at Krones is estimated for the four most relevant material classes: stainless steel, steel, non-ferrous metals and plastics. As specific data is not available from suppliers at the present time, the percentage recycling content is taken from published statistics – such as from the German Federal Environment Agency, Fraunhofer Institute or PlasticsEurope – and applied to Krones materials. Cross-sectoral average recycling content figures are thus used. This approach is judged to be appropriate given Krones' worldwide material sourcing.

As a result of targeted efforts over the past few years, an increasing proportion not only of bio-based, but also of polymer-based packaging materials is now being recycled and reused. Double counting is avoided by not including reused materials in recycled content.

Resource outflows

Krones has set a target for the percentage of Krones lines' plastics output recycled with Krones technology (equivalent). The 2030 target is 30%, with a base year of 2022 at 7.6%.

Product durability and lifetime: The company focuses on enhancing product longevity and reliability. Under the material topic of resource use and circular economy, Krones emphasizes designing products for extended lifespans, facilitating repair and refurbishment, and supporting modularity to enable upgrades and component replacement. The company states that "our products are designed for long service lives and can be repaired, refurbished and upgraded as needed."

Recyclability and circular design: Krones has developed its Prefero preform system, which can handle up to 100% recycled PET. The company closed the PET loop through acquisition of Netstal, providing all technologies needed for bottle-to-bottle recycling. Krones recycling technology enables closed-loop PET solutions, maintaining PET in an environmentally friendly and sustainable cycle.

Repairability and service: Krones provides comprehensive lifecycle services (LCS) through approximately 3,000 service technicians globally across over 70 countries. The company offers Modular Service Agreements (MSAs) with over 1,000 MSAs in place, supporting plant operators in improving production efficiency. Global spare parts availability is ensured through LCS centres, enabling quick delivery to operators worldwide.

Design for circularity: The line of the future, to be presented at drinktec 2025, incorporates innovations focused on sustainability, digitalisation and efficiency. Product development follows the principle of "Solutions beyond tomorrow" with emphasis on resource efficiency and circular economy principles.

Waste

Krones has set a target to reduce hazardous waste in operations by 10% by 2030, with a base year of 2020. As of 2024, hazardous waste has increased by 31.2% relative to the 2020 baseline.

Waste management approach: The Climate and Environment policy defines group-wide minimum standards for environmental protection, including standards for waste management. The policy covers the entire value chain and is binding on all Krones Group employees worldwide. Implementation responsibility lies with Corporate Sustainability, with adoption by the Executive Board.

The policy emphasizes:

• Promotion of the circular economy
• Mindful use of resources
• Proper waste management

Waste management follows established standards under ISO 14001 certification. Regular internal reviews and external audits by independent third parties ensure compliance. The company applies the waste hierarchy principle in managing waste streams.

Scope and reporting: The company reports on waste generated in operations (Scope 3 category 3.5) using spend-based methodology for emissions calculation. For 2024, this category generated 842 t CO2e compared to 646 t CO2e in the base year 2019.

Note: Detailed quantitative waste data tables (total waste generated, hazardous vs non-hazardous split, waste diverted from disposal vs directed to disposal) are not disclosed in the available excerpts for the 2024 reporting period.

Our fundamental codes – the Code of Conduct and the Supplier Code of Conduct – are derived from the company's corporate vision. These documents apply without exception to all workers and service providers along the value chain. Their purpose is to ensure compliance with laws, standards and policies throughout the company in order to foster a working environment characterised by integrity, respect and fair and responsible conduct.

Code of conduct

Subject matter and objectives: General standards under our corporate vision of »Solutions beyond tomorrow« as part of our sustainable corporate strategy

Environmental, Social and Governance aspects:

• Environmental protection and climate change mitigation
• Respect for human rights including human trafficking, prohibition of forced labour and child labour, anti-discrimination, diversity and inclusion
• Anti-corruption, Fraud prevention, Conflicts of interest, Competition, Confidentiality, Privacy, Dangers of digital media

Scope: Own workforce, suppliers and customers; No specific groups – entire workforce

Responsibility: Corporate Governance, Executive Board

Third-party standards and initiatives:

• Sustainable Development Goals (SDGs)
• United Nations Global Compact (UNGC) principles
• Organisation for Economic Cooperation and Development (OECD) Guidelines for Multinational Enterprises
• International Labour Organization (ILO) core labour standards
• Ethical Trading Initiative (ETI) Base Code
• German Supply Chain Due Diligence Act (LkSG)

Communication: Corporate website; internal communication channels such as: SharePoint, Intranet, Executive Board

Human Rights Statement

Subject matter and objectives: Human rights strategy – Why human rights due diligence and Krones belong together

Topics:

• Governance and players
• Due diligence obligations
• Risk management
• Preventive measures
• Reporting system
• Reporting and effectiveness control

Scope: Own workforce, suppliers and customers; No specific groups – entire workforce

Responsibility: Corporate Sustainability, Executive Board

Third-party standards and initiatives:

• Sustainable Development Goals
• UNGC principles
• OECD guidelines for Multinational Enterprises
• ILO core labour standards
• ETI Base Code
• German Supply Chain Due Diligence Act (LkSG)
• Guiding Principles on Business and Human Rights
• International Bill of Human Rights
• UK Modern Slavery Act

Communication: Corporate website; internal communication channels such as: SharePoint, Intranet, Executive Board

Taking action on material impacts on own workforce

KRONES discloses several actions and initiatives to address material impacts on its own workforce, though resources are described primarily qualitatively rather than with quantified financial allocations.

Employee development and promotion

Performance reviews and training programmes

• Scope: Own operations
• Description: Annual performance reviews conducted with employees. Needs-oriented staff development and training programmes prioritized across employee's entire career.
• Implementation: Training portal accessible to majority of employees group-wide serves as main point of contact for continuing education programmes. State-of-the-art learning programmes with range of learning providers being rolled out across the group.
• Target groups: Training programmes for young professionals; professional development programmes for lifelong learning and new career prospects within the group.
• Resources: Human resources; system costs (non-financial)

Working conditions

"New work" approaches and workplace redesign

• Scope: Own operations
• Description: Workplaces being redesigned and improved, including shared desking and conversion of office buildings to state-of-the-art working environments. Mobile working retained to provide flexibility and promote work-life balance.
• Implementation: Adapted to local conditions as needed globally

Anti-discrimination and equal treatment

Gender-neutral potential identification and promotion programme

• Scope: Own operations (Krones AG and group-wide)
• Time horizon: Extended in 2024 from previous women-focused programme
• Description: Activities extended from identifying high potential among women employees to gender-neutral potential identification and promotion programme to further promote equal opportunities.
• Resources: Diversity Board plays important part in development and implementation
• Supporting measures: Executive Board-level communication and education campaigns to raise awareness and promote non-discriminatory working environment; grading system assessing positions rather than people to guarantee objectivity and equal treatment in pay

Diversity and inclusion initiatives

• Scope: Own operations, group-wide
• Description: Targeted programmes, worldwide talent pools, international thematic communities and measures for balanced age structures connecting employees of diverse age groups, gender identities, nationalities and career fields.
• Specific support: Four disability officers at Krones AG (similar points of contact at other sites) to enable employees with disabilities to integrate into working life according to individual capabilities.
• Policy link: Commitment to Diversity Charter (signed 2010)

Training and awareness campaigns

Human rights and labour topics training

• Scope: Own operations
• Time horizon: Annual basic instruction; ongoing e-learning
• Description: "Human rights at Krones" training programme dealing exclusively with human rights due diligence topics. Must be completed by employees in regular contact with third parties. Annual basic instruction at Krones AG includes occupational safety aspects. Training provided as needed for specific risk groups at other locations.
• Target groups: Own employees, temporary employees, service providers and contractors (receive appropriate safety instructions)
• Resources: Human resources; system costs (non-financial)

Investigation process

Defined investigation process for discrimination incidents

• Scope: Own operations
• Description: When discrimination incidents reported or identified, defined investigation process followed for plausibility and validation to decide and take appropriate action.
• Resources: Human resources; financial resources for outside support (non-financial)

Communication and dialogue

Multiple communication channels

• Scope: Own operations (Krones AG and group-wide)
• Description: Information accessible through intranet, corporate website, employee magazine. Regular video messages, works meetings, monthly management meetings. Employee reviews for dialogue between permanent employees and supervisors. "Executive Board members in dialogue" initiative for personal interchange.
• Effectiveness: Feedback from employee reviews, corporate vision survey, topic-specific surveys demonstrates activities and measures to be effective and appropriate.

Overall resource allocation summary (from actions table, page 146):

• Due diligence audits (suppliers, customers, third-party payers, commercial agents and other business partners): Human resources; database costs
• Spot checks (own operations): Human resources
• Training programmes (own operations): Human resources; system costs
• Investigation process: Human resources; financial resources for outside support

Characteristics of the undertaking's employees

Total headcount and FTE

Krones employed 20,379 employees (headcount) as of 31 December 2024. The company also reported operating with more than 20,000 employees worldwide during the 2024 financial year.

Prior year comparison:

• 2023: Not explicitly stated in headcount format in excerpts
• Average number of employees in 2024 financial year used for turnover calculation: 18,938 (implied from turnover rate calculation)

Headcount by gender

Headcount by region

Headcount by contract type and gender

Headcount by contract type and region

Headcount by employment type (full-time/part-time)

Not explicitly disclosed in tabular format. The company defines full-time employees as those with contractually agreed standard weekly working hours, and part-time employees as those with working hours less than planned working hours. Full-time equivalents (FTE) are calculated by converting part-time working hours as a percentage of full-time hours, but specific FTE totals are not provided.

Non-employees

Employee turnover

Note: Turnover includes employees leaving voluntarily or due to dismissal, retirement, or death in service, based on average number of employees in the 2024 financial year.

New hires

Not disclosed.

Methodology notes

• Headcount: Actual number of employees, irrespective of working hours
• Permanent employees: Individuals employed and paid directly by Krones (full-time, part-time, apprentices, trainees)
• Excluded from headcount: Work-study students, interns, employees of contractors
• Data source: Group-wide data management systems, updated daily, reported as of 31 December 2024
• Regional classification: Based on operational locations
• Gender data: Based on system records; 46 employees not reported reflects data entry limitations

Characteristics of non-employees in the undertaking's own workforce

Definitions

Non-employees: Temporary employees and self-employed people

Temporary employees are individuals who are employed under contract with a third party and assigned to work for Krones on a temporary basis. Self-employed people are people who have entered into a contract with Krones to supply labour.

Methodology

The data for these metrics is collected and updated daily in our group-wide data management systems. The metrics are all reported by headcount as of 31 December 2024.

Non-employee workers

The number of employees at the end of the reporting period provides information for that point in time, without capturing fluctuations during the reporting period.

Training and awareness

Temporary employees, service providers and contractors receive appropriate safety instructions.

Collective bargaining coverage and social dialogue

Collective bargaining coverage

Krones AG has adopted the collective agreement of the Bavarian metal and electrical industry on the basis of a recognition agreement, which contains a large number of stipulations with regard to working conditions and terms and conditions of employment. The number of employees covered by collective agreements is based on the employment contracts in force and relates to employees in Germany. Beyond this, Krones has not entered into any other collective agreement, which is why no employees outside of the EEA have coverage.

Social dialogue

Krones employees are also actively represented in social dialogue. This takes place in Germany through the works councils, although not at European level. Krones has no agreements on representation by a European works council. The metric is calculated as the ratio of Krones AG employees to the total number of Krones Group employees.

Metrics

*European Economic Area

Methodology note: For countries with > 50 employees representing > 10% total employees.

Employee representation structure

All employees within Krones AG are represented by local site-specific works councils that, together, make up the Central Works Council. Outside of Germany, employees of the international sites establish representation of their interests individually in formal and legal terms. Within the global Krones network, representatives of the Group Works Council maintain contact with the managing directors, plant managers and local unions of the major international manufacturing sites. International business aspects are addressed by the Supervisory Board. Works Council members represent employee interests on the Supervisory Board.

Diversity metrics

Gender distribution in management

The gender distribution measures the percentages of women and men in management levels based on chief positions in the company. Chief positions at Krones are defined as the management level, are linked to the organisational chart, and indicate responsibility for an organisational unit. The metric is calculated by determining the percentage of female managers in relation to the total number of managers.

Age band distribution

The age distribution of employees analyses the age structure of the workforce. It is presented in age groups in order to provide a comprehensive picture of the demographic structure. Employees are divided into age groups (such as under 30, 30 to 50, and over 50) and the percentage is calculated for each age group.

Target for women in management positions

The target of 20% women in management positions was adjusted in the review of the sustainability targets in 2024 and extended from being a target for Krones AG to a target for the entire Krones Group.

Methodological note: One potential limitation relates to legal restrictions on the collection of age and gender-related data.

Training metrics

Persons with disabilities

The disclosure is based on the number of employees who provided data. All companies are included that are legally permitted to collect this data and have also returned the data. The percentage of employees with disabilities is calculated for all companies included and therefore covers 80% of Krones worldwide.

Adequate wages

Benchmark used

Krones assesses adequate wages by comparing the minimum wage paid in the company against the average hourly wage (before deductions) in the country concerned. The company states:

"A company can be assumed to pay an adequate wage if the minimum wage paid in the company exceeds the average hourly wage, before deductions, in the country concerned."

This methodology does not apply a living wage benchmark. Instead, it relies on country-level average wages as the comparator.

Coverage and scope

The assessment is global in scope. Krones states:

"The figures can therefore be assumed to apply globally."

The percentage is based on data returned by individual companies. For companies that did not provide data, a qualitative assessment was conducted based on number of employees and home country. The qualitative assessment found no impact on the overall analysis.

Results

0.2% of employees were paid below the applicable benchmarks for adequate wages in 2024.

Countries affected: Romania, United Arab Emirates.

Policy framework

The Human Rights and Social Topics policy lays down minimum standards with regard to pay. Average salaries are determined by HR managers in the various companies.

The basis for internal comparison is the target remuneration for permanent full-time employees as of 31 December 2024, comprising:

• Base salary
• Fixed allowances
• Variable remuneration

The precise composition depends on the remuneration policy in each company.

Methodology details

• Assessment basis: Comparison of company minimum wage vs. country average hourly wage (before deductions)
• Data collection: Data returned by individual companies
• Gap treatment: Qualitative assessment for non-reporting entities based on headcount and country
• Frequency: Annual assessment (as of 31 December 2024)

Targets and commitments

No forward-looking targets or commitments disclosed.

Social protection

The vast majority of employees in the Krones Group are covered by social protection in the form of state provision or company benefits. These employees have protection against loss of income due to unemployment, illness, work-related accidents, disability, parental leave or retirement. Protection against loss of income in retirement is provided, for example, through both public pension schemes and company pension plans.

In order to ensure the social protection of employees, a carefully review is carried out of the national legal situation and internal company policies. Compliance with country and entity-specific standards is verified by each HR manager. For this purpose, the social protection provision is assessed and reviewed to determine whether it meets the requirements.

Countries with partial social protection

Coverage: The vast majority of employees are covered through both state provision and company benefits for loss of income due to unemployment, illness, work-related accidents, disability, parental leave, and retirement.

Retirement protection: Provided through both public pension schemes and company pension plans.

Total workforce: 20,379 employees

Persons with disabilities

The percentage of employees with disabilities is a key metric for assessing inclusion and support for people with disabilities in the company. This data is collected and analysed on the basis of legal requirements, which results in limitations as disclosing such information is not universally mandatory or permitted.

The disclosure is based on the number of employees who provided data. All companies are included that are legally permitted to collect this data and have also returned the data. The percentage of employees with disabilities is calculated for all companies included. It therefore covers 80% of Krones worldwide.

Training and skills development metrics

Average training hours per employee

The average number of training hours per employee measures the average time that employees invest in training. It is calculated as the total number of training hours divided by the number of employees.

Performance reviews

Performance reviews are conducted with employees on an annual basis. Employee reviews serve as an opportunity for dialogue between permanent employees of Krones AG and their direct supervisor, providing space to discuss goals and expectations and for structured feedback.

Note: The statement indicates that performance reviews are conducted annually with employees, but no quantitative coverage metrics (percentage of employees receiving reviews, breakdowns by gender or category) are disclosed.

Health and safety metrics

Coverage by health and safety management system

69.9% of the own workforce was covered by ISO 45001 certification as of the reporting period.

Work-related fatalities, injuries and ill health

*Reportable according to KPI matrix. Reportable work-related accidents exclude commuting accidents.

Scope and methodology

The metrics are collected using a data collection tool. Where there are technical or practical obstacles, extrapolations are also used. The number and rate of reportable work-related accidents does not include commuting accidents and excludes non-employees (contractors). Data is taken directly from the system with no estimates made.

Strategic target

Krones aims to reduce the number of work-related accidents per million hours worked within the Krones Group by 30% by 2030 compared with the 2020 baseline (8.9 accidents per million hours in 2020). As of 2024, the company has achieved a 37.2% reduction with 5.6 accidents per million hours worked.

Compensation metrics (ESRS S1-16)

Pay gap

The gender pay gap, expressed as a percentage of the average income of male employees, is 6.4% for 2024.

Basis for assessment: The assessment is based on target remuneration for employees of Krones AG as of 31 December 2024. This comprises a base salary, fixed allowances and variable remuneration components, which are based on the remuneration policy in each company. The gross hourly pay level of female employees is compared with that of male employees.

Remuneration ratio

The ratio of the annual total compensation for the highest-paid individual to the median annual total compensation for all employees (excluding the highest-paid individual) is 25.6% for 2024.

Methodology

The remuneration metrics are disclosed for Krones AG (the parent company). The basis for assessment is the target remuneration for employees of Krones AG as of 31 December 2024, comprising base salary, fixed allowances and variable remuneration components based on the company's remuneration policy.

For the gender pay gap, the gross hourly pay level of female employees is compared with that of male employees.

Incidents, complaints and severe human rights impacts

In line with our commitment to transparency and integrity, we confirm that there were no incidents or serious human rights violations involving forced labour, human trafficking or child labour during the reporting period that would require the disclosure of monetary amounts. Similarly, there were no violations involving work-related discrimination or harassment that resulted in fines, penalties or compensation. Accordingly, no cross-reference is provided to our financial statements.

Investigation process: In the event that incidents of discrimination are reported or identified, a defined investigation process is followed for plausibility and validation in order to decide and take appropriate action.

Our fundamental codes – the Code of Conduct and the Supplier Code of Conduct – are derived from the company's corporate vision. These documents apply without exception to all workers and service providers along the value chain. Their purpose is to ensure compliance with laws, standards and policies throughout the company in order to foster a working environment characterised by integrity, respect and fair and responsible conduct.

Supplier Code of Conduct

Subject matter and objectives: General standards under our corporate vision of »Solutions beyond tomorrow« as part of our sustainable corporate strategy – expectations regarding the ethical, social and environmental responsibility of business partners

Environmental, Social and Governance aspects:

• Environmental protection and climate change mitigation
• Respect for human rights including human trafficking, prohibition of forced labour and child labour, anti-discrimination, diversity and inclusion
• Anti-corruption, Fraud prevention, Conflicts of interest, Competition, Confidentiality, Privacy

Scope: Suppliers

Responsibility: Corporate Governance, Executive Board

Third-party standards and initiatives:

• Guiding Principles on Business and Human Rights
• International Bill of Human Rights
• UK Modern Slavery Act

Communication: Corporate website; internal communication channels such as: SharePoint, Intranet, Executive Board

supplemented by the Supplier Handbook, including ESG requirements

Human Rights Statement

Subject matter and objectives: Human rights strategy – Why human rights due diligence and Krones belong together

Topics:

• Governance and players
• Due diligence obligations
• Risk management
• Preventive measures
• Reporting system
• Reporting and effectiveness control

Scope: Own workforce, suppliers and customers; No specific groups – entire workforce

Responsibility: Corporate Sustainability, Executive Board

Third-party standards and initiatives:

• Sustainable Development Goals
• UNGC principles
• OECD guidelines for Multinational Enterprises
• ILO core labour standards
• ETI Base Code
• German Supply Chain Due Diligence Act (LkSG)
• Guiding Principles on Business and Human Rights
• International Bill of Human Rights
• UK Modern Slavery Act

Communication: Corporate website; internal communication channels such as: SharePoint, Intranet, Executive Board

Our fundamental codes – the Code of Conduct and the Supplier Code of Conduct – are derived from the company's corporate vision. These documents apply without exception to all workers and service providers along the value chain. Their purpose is to ensure compliance with laws, standards and policies throughout the company in order to foster a working environment characterised by integrity, respect and fair and responsible conduct. At the same time, the policy documents serve to embed a strong compliance culture within the company, reinforce our values and encourage employees throughout the value chain to report wrongdoing. In the interests of all stakeholders, violations of our codes are systematically investigated and dealt with. All value chain workers and external stakeholders of the Krones Group have various means to be heard in the event of a violation. Besides direct contact with the company, the main point of contact is the Krones Integrity reporting system.

Code of conduct

Subject matter and objectives: General standards under our corporate vision of »Solutions beyond tomorrow« as part of our sustainable corporate strategy

Environmental, Social and Governance aspects:

• Environmental protection and climate change mitigation
• Respect for human rights including human trafficking, prohibition of forced labour and child labour, anti-discrimination, diversity and inclusion
• Anti-corruption, Fraud prevention, Conflicts of interest, Competition, Confidentiality, Privacy, Dangers of digital media

Scope: Own workforce, suppliers and customers; No specific groups – entire workforce

Responsibility: Corporate Governance, Executive Board

Third-party standards and initiatives:

• Sustainable Development Goals (SDGs)
• United Nations Global Compact (UNGC) principles
• Organisation for Economic Cooperation and Development (OECD) Guidelines for Multinational Enterprises
• International Labour Organization (ILO) core labour standards
• Ethical Trading Initiative (ETI) Base Code
• German Supply Chain Due Diligence Act (LkSG)

Communication: Corporate website; internal communication channels such as: SharePoint, Intranet, Executive Board

Supplier Code of Conduct

Subject matter and objectives: General standards under our corporate vision of »Solutions beyond tomorrow« as part of our sustainable corporate strategy – expectations regarding the ethical, social and environmental responsibility of business partners

Environmental, Social and Governance aspects:

• Environmental protection and climate change mitigation
• Respect for human rights including human trafficking, prohibition of forced labour and child labour, anti-discrimination, diversity and inclusion
• Anti-corruption, Fraud prevention, Conflicts of interest, Competition, Confidentiality, Privacy

Scope: Suppliers

Responsibility: Corporate Governance, Executive Board

Third-party standards and initiatives:

• Guiding Principles on Business and Human Rights
• International Bill of Human Rights
• UK Modern Slavery Act

Communication: Corporate website; internal communication channels such as: SharePoint, Intranet, Executive Board

supplemented by the Supplier Handbook, including ESG requirements

Our upstream value chain includes sourcing high-quality materials and components from trusted suppliers and working with logistics partners to ensure problem-free transportation and timely delivery. Trust-based working relationships with our business partners, risk management and auditing and security measures help to ensure that we can gather, develop and secure the inputs from our business model and supply chain as resiliently as possible.

Stakeholder Interaction with Suppliers

Suppliers: Regular interaction; discussions and collaboration on ESG topics within the supply chain

Examples: Supplier meetings, Business partner due diligence, Audit formats, Sustainability Assessments, Supplier days

Purpose: Compliance with the Supplier Code of Conduct and protection of human rights; decarbonisation of our supply chain

Incidents of corruption or bribery

Confirmed incidents

Krones reported zero confirmed incidents of corruption or bribery during the reporting period.

Convictions and fines

The company disclosed:

Investigation procedures and speak-up mechanisms

Krones operates the Krones Integrity reporting system, a whistleblower portal accessible 24/7 through the corporate website. The system allows employees and external stakeholders to report violations anonymously or with contact information (where local laws permit). Reports can cover corruption, conflicts of interest, fraud, embezzlement, theft, money laundering, and other compliance matters.

The Head of Corporate Governance serves as the investigator, appointed by the Supervisory Board with a direct reporting line to ensure independence. When a report is submitted:

• Receipt is confirmed and information checked for plausibility
• The Compliance Team conducts an independent, objective investigation
• Utmost discretion, confidentiality, and anonymity are ensured
• Feedback is provided to the whistleblower within three months
• Appropriate follow-up action is taken in accordance with Whistleblower Directive legislation

The system is operated by an independent third-party provider to ensure access control, data protection, content encryption, and secure connections. All employees receive compliance training that includes information on the whistleblower system and designated contact persons.

Payment practices

Process and systems

The payment terms for suppliers are predefined and stored in the internal enterprise resource planning (ERP) system. As soon as an invoice is received, the payment terms are automatically retrieved and the ERP system monitors the process, including the specified payment deadlines. To avoid late payment, the system records receipt of the invoice and forwards it through a workflow to the worklist of the responsible employee. Posting runs are generally performed weekly to ensure timely processing and payment. A tool additionally supports the management of invoices in the worklist. The tool checks what invoices are in the system and whether the supplier is blocked. It automatically notifies the responsible employee of any discrepancies so that action can be taken. Payments are initiated automatically according to the required payment date.

Average payment time

The average number of days taken to pay an invoice worldwide is currently 70.5 days.

Standard contractual payment terms

The minimum payment term should be 30 days net, or a maximum of 14 days if a fast-payment discount applies.

The average payment period for the standard payment terms (applicable to 64% of the total procurement volume) in days and percentages breaks down as follows:

• 29% < 30 days
• 61% >= 30 days / < 75 days
• 10% > 75 days

Legal proceedings for late payment

There are four legal proceedings outstanding for late payment in the 2024 financial year. These variously relate to alleged late payment and substandard/non-performance.

Supplier finance programme

Krones makes use of a supplier finance programme. As of 31 December 2024, trade payables include supplier finance liabilities in the amount of €145,919 thousand (previous year: €141,360 thousand).

The payment terms for liabilities under the supplier finance program were between 45 and 180 days. The payment terms for liabilities to suppliers not participating in the supplier finance program were between one and 180 days.

Trade payables

As of 31 December 2024, trade payables amounted to €802,194 thousand (previous year: €723,164 thousand), all with a residual term of up to 1 year.