MTU Aero Engines

Reference: page 110-111.

The Executive Board is responsible for managing and monitoring MTU's impacts, risks and opportunities; the CEO holds the additional role of Chief Sustainability Officer (CSO) and, supported by the Corporate Sustainability (CS) Board, defines the company's sustainability positioning and strategy. The CFO is responsible for corporate reporting, including the sustainability statement.

The Supervisory Board is responsible under statute for monitoring corporate reporting, including the sustainability statement, and its Audit Committee reviews the sustainability statement and monitors the accounting process.

At the end of the reporting period the Executive Board comprised two female and two male members (average female ratio 67% in 2025, up from 33% in 2024); the Supervisory Board comprised four female and eight male members (average female ratio 57% in 2025, down from 71% in 2024), and the Supervisory Board considers all its members independent. Both boards received training on CSRD and ESRS requirements. The CS Board, drawn from the first management level below the Executive Board, drives operational sustainability implementation and reports to the CSO and, regularly, to the full Executive Board, the Supervisory Board and its Audit Committee.

Reference: page 112.

Overarching sustainability goals are set by the Executive Board and the CSO; the CS Board provides mechanisms for measuring outcomes through an interdisciplinary team of topic and site coordinators, meets at least every two months, and reports quarterly to the Executive Board and/or CSO and the Supervisory Board on material impacts, risks and opportunities, the implementation of due diligence, and the effectiveness of policies, actions and targets.

Results of the double materiality assessment, the content of the sustainability statement, and progress on actions and targets are standing items on the annual meeting agendas of the Audit Committee and the Supervisory Board, and monitoring of the sustainability statement is embedded in the Audit Committee's annual agenda.

Sustainability is described as "a central component of MTU's strategy and business model," reflected in strategic priorities such as the Claire technology agenda. In the reporting period, all material impacts, risks and opportunities identified in the double materiality assessment were addressed by the CS Board and discussed with the Executive Board, the Supervisory Board and its Audit Committee.

Reference: page 113.

Executive Board compensation links sustainability performance to both short- and long-term incentives. "The share of the ESG targets in the variable compensation is 20% for both the STI and the LTI, regardless of a possible strategic multiplier" (ESRS 2 GOV-3-29d). On 1 January 2025 MTU extended a comparable compensation structure to senior management.

Short-term incentive (STI): 50% EBIT (adjusted), 30% free cash flow (adjusted), 20% ESG targets, capped at 0-200%, with a strategic multiplier of 0.8-1.2 (cap 240% of target).

Performance Share Plan (PSP/LTI): four-year performance period weighted 40% relative TSR, 40% adjusted EPS, 20% ESG targets, capped at 0-200% (250% including share price and dividends).

The Supervisory Board selects up to three ESG performance criteria each year from a list including environmental management, employer attractiveness, compliance, employees & diversity, and responsible procurement. The Supervisory Board's compensation carries no share-based or sustainability-linked component.

Reference: page 113.

MTU maps the core elements of its sustainability due diligence process to the corresponding disclosures and page numbers of the sustainability statement, stating that "the outcome of core elements of MTU's sustainability due diligence process already informs its assessment of impacts, risks, and opportunities and will continue to do so in the future."

The mapping covers: embedding due diligence in governance, strategy and business model (GOV-2, GOV-3, SBM-3; pages 112, 120, 150, 172, 194); engaging with affected stakeholders (GOV-2, SBM-2, IRO-1, MDR-P; pages 112, 116, 124, and topical MDR-P references); identifying and assessing negative impacts (IRO-1; page 124); taking action to address negative impacts (topical MDR-A; pages 204, 212); and tracking and communicating effectiveness (topical MDR-M and MDR-T; pages 225 and the topical target sections).

Reference: page 114.

Sustainability risks are managed within MTU's Group-wide risk management system (RMS), based on international frameworks such as COSO and national auditing standards (IDW). Sustainability-related risks and opportunities are identified and assessed quarterly by the CS Board; material sustainability risks are reported to the Risk Board and folded into regular risk reporting to the Executive Board, Supervisory Board and Audit Committee.

Internal controls over sustainability reporting (ICSR) currently cover selected metrics, in particular those underlying Executive Board compensation. A data management software collects and calculates reported metrics; local data collectors validate information on-site, deviations from the prior year trigger automatic review, and consolidated data is validated again at Group level. Data collection, metric definition and calculation processes are reviewed annually by the responsible departments, and all data inputs require documented evidence.

Reference: pages 114-116.

MTU's portfolio covers commercial and military aircraft engines and aero-derivative industrial gas turbines across two segments: the OEM business (new commercial and all military engines) and the MRO business (commercial maintenance, repair and overhaul).

Employees by region (2025 vs 2024): Germany 9,672 (9,241); Europe excl. Germany 1,925 (1,733); Americas 1,042 (954); Asia-Pacific 31 (25).

The Sustainability Program 2025+, launched in 2021, spans six action areas (governance, product, procurement, production, maintenance, employees and society); in the reporting year MTU launched a project to extend this strategy to 2030. Climate targets are aligned with the European Green Deal and the Paris Agreement's 1.5°C goal.

Value chain: upstream raw materials and intermediate products (mines/smelters, engine-part suppliers); own operations covering manufacturing and maintenance; downstream processing by engine OEMs and cell manufacturers, the airline use phase, and end of life. Direct suppliers are concentrated in the EU and U.S.

Reference: pages 116-120.

MTU groups stakeholders into affected stakeholders (e.g. workers in the upstream value chain, nature as a "silent stakeholder") and users of the sustainability statement (investors, analysts, policymakers, media), noting many stakeholders sit in both categories (employees, suppliers, business partners).

A stakeholder table sets out engagement channels and interests for own workforce (surveys, dialogue events), business partners and customers (visits, audits), suppliers (supplier portal, quality audits), workers in the upstream value chain (IAEG Sustainability Assessment Program findings), capital market participants (AGM, roadshows), associations, policymakers, science/research, media and regional stakeholders.

Stakeholder input feeds primarily into the double materiality assessment (see IRO-1); the Executive Board, CS Board and Supervisory Board are involved and informed of stakeholder feedback. Topic-specific engagement descriptions cover S1 own workforce, S2 workers in the value chain, and the entity-specific topics of product quality/flight safety and foreign trade.

Reference: pages 120-123.

Material environmental matters: negative impacts from GHG emissions in MTU's own operations, direct and lower-tier suppliers, investments, and the product use phase; in 2025 the materiality assessment added a new negative impact from limited alternative sourcing for production materials and a negative impact from depletion of nonrenewable resources. A long-term risk exists that failing to meet climate targets could damage ESG ratings and customer perception, and a new transition risk covers reduced flight demand from rising GHG costs. MRO activities generate a positive impact on the circular economy.

Material social matters: both positive (job security, work-life balance, health & safety, training) and negative (injury risk, individual discrimination cases) impacts on own workforce, plus a new HR-planning risk; workforce impacts in the upstream value chain.

Governance: anti-corruption practices and a "speak-up" culture generate positive impacts.

With the exception of product quality/flight safety and foreign trade (both entity-specific), all material IROs are covered by ESRS DRs. MTU states it "does not anticipate any current financial effects" from the identified risks, and that its 2025 resilience analysis (see E1 SBM-3) found strategic orientation already factors in most identified climate risks and opportunities.

Reference: pages 124-129.

MTU's double materiality assessment runs a four-phase process (business-context understanding; IRO identification per ESRS 1 AR16 plus SASB sector guidance; assessment on a four-point severity/likelihood scale; threshold-setting), owned by Corporate Sustainability Management and Reporting, reviewed annually. In 2025 MTU folded its former standalone zero-tolerance criterion (corruption, human-rights breaches in own workforce, export-control violations, product quality/flight safety) into the unified assessment rather than applying it separately.

Climate (E1): the physical risk analysis was updated in 2025 using IPCC SSP5-8.5 ("worst case," 3.3-5.7°C by 2100) across current (2011-2030) and future (2031-2050) horizons and all 28 ESRS-specified hazards; transition risk used the NGFS Net Zero 2050 (2024 vintage) scenario plus internally developed sector scenarios, both extending to 2039.

E2/E3/E4: each used TNFD's LEAP approach (E3 also drawing on the WRI Aqueduct Water Risk Atlas, E4 on the WWF Biodiversity Risk Filter); the E4 analysis concluded MTU "has no material impacts on threatened species." A new TNFD project was launched in 2025 to improve upstream value-chain transparency.

Climate-specific risk identification and scenario analysis is also presented under E1-2 (2025/2026 ESRS numbering).

Reference: pages 129-130, 214-215.

Following the 2025 double materiality assessment, MTU's "List of material ESRS topics" identifies ESRS E1 (climate change), ESRS E5 (circular economy - resource outflows), ESRS S1 (own workforce), ESRS S2 (workers in the value chain) and ESRS G1 (business conduct - corporate culture; corruption and bribery) as material, alongside the entity-specific topics of product quality/flight safety and foreign trade. This is a narrower list than FY2024, when E2, E3, E4, S3 and S4 were also treated as material.

An annex ("Disclosure requirements in ESRS covered by the undertaking's sustainability statement," pages 214-215) lists the specific material DRs with their page references. MTU states that, following ESRS 1 materiality-of-information criteria, "no metric is omitted within this sustainability statement due to materiality of information considerations." A separate annex table (pages 216-218) lists the specific datapoints where MTU has applied ESRS 1 phase-in exemptions.

Reference: page 143; pages 144-149.

MTU's transition plan follows the levers Reduce, Shift, Remove and Enable through three programs: ecoRoadmap (Scope 1&2 at production/maintenance sites), the Claire technology agenda (Scope 3.11, sustainable propulsion concepts) and ecoTransition, launched in 2025 (Scope 3.1 and 3.15 data transparency).

The prior target of -60% Scope 1 and market-based Scope 2 by 2030 vs. 2019 (already at -42.2% by 2024) was replaced in 2025 with -63% by 2035 and -90% by 2050, rebased to 2024, to incorporate the newly consolidated Fort Worth site; unavoidable remaining emissions are to be offset through permanent CO2 removal.

In 2025 MTU commissioned a deep geothermal plant at Munich covering up to 80% of site heating once fully expanded. Financial resources for transition-plan actions totaled €158 million in 2025 (2024: €167 million), with taxonomy-aligned CapEx of €46 million under economic activity 3.21 (Manufacturing of aircraft). "The roadmaps and actions were approved by MTU's Executive Board." MTU is not excluded from EU Paris-aligned benchmarks.

Reference: pages 125-127 (ESRS 2 IRO-1). This disclosure requirement did not exist under the 2023 ESRS the report was prepared against; content is back-filled from IRO-1, where MTU discloses climate scenario analysis in detail.

Physical risk: MTU updated and extended its physical climate risk analysis in 2025 across the Group and relevant business-partner/downstream locations, using IPCC SSP5-8.5 - "the IPCC emissions scenario with high GHG emissions in the 21st century" projecting global warming of 3.3-5.7°C by 2100 - explicitly chosen as a "worst-case scenario." All 28 chronic and acute hazards specified by ESRS E1 were assessed for current (2011-2030) and future (2031-2050) horizons using site-specific geospatial climate projections and a five-class risk scale.

Transition risk: assessed against the NGFS Net Zero 2050 scenario (2024 version), which limits warming to 1.5°C, plus internally developed sector-specific transition scenarios built since 2023 incorporating macroeconomic and price variables, both extending to 2039. Key drivers modeled include rising GHG/fuel prices, SAF mandates, flight restrictions and stakeholder ESG expectations. No supplier-location-specific scenario modeling was performed for the upstream value chain.

Climate-specific risk identification is also presented under ESRS 2 IRO-1.

Reference: pages 150-151 (E1 SBM-3), cross-referring to page 120 (SBM-3). This disclosure requirement did not exist under the 2023 ESRS the report was prepared against; content is back-filled from the E1 section of ESRS 2 SBM-3, where MTU discloses a resilience analysis performed in the reporting year.

"In the reporting year, MTU conducted a resilience analysis for its own business operations and the downstream value chain in order to further assess climate-related physical risks and climate-related transition risks." Because the physical and transition risk analyses found no material physical risks and no material upstream transition risks, the resilience analysis concentrates on transition risks to own operations and the downstream value chain, covering a 15-year horizon aligned to GHG targets set for 2030, 2035, 2040 and 2050.

The analysis identified failure to meet climate targets as the principal material transition risk, alongside demand-side risk from rising CO2 costs. MTU concludes it "is convinced that it can adapt its business model to climate change," citing access to funding, asset modernization, portfolio adaptation and workforce retraining as flexibility levers. Uncertainties stem from assumptions about transition events beyond the current political agenda, reviewed and updated annually.

Reference: pages 151-153.

Three central policies govern climate action. The MTU climate protection manual sets the overarching Scope 1&2 concept, targeting a 63% reduction by 2035 from the 2024 base year, covering fully consolidated production/maintenance sites (97.3% of Scope 1 and location-based Scope 2 emissions); the climate and environmental protection division and, at management level, the Executive Board and CSO are responsible. Procedural instructions for evaluation of environmental aspects in product design embed low-consumption, low-emission and recyclability criteria into engineering gate reviews. The Climate Transition Plan guidelines set out MTU's initial climate position, reduction pathway, accounting, target-setting, risk assessment and financing approach, monitored by the Climate Transition Board with regular progress reports to the CS Board and Executive Board, and referencing the GHG Protocol and Paris Agreement. None of the three policies is publicly available outside MTU's internal document management system.

Reference: pages 154-157.

Actions are organized under the same three programs as the transition plan. ecoRoadmap (Reduce/Shift/Remove/Enable): commissioned the Munich deep geothermal plant, raised renewable natural-gas blending (e.g. biogas in Canada) to 17.9% (2024: 8.2%), introduced heat pumps, and saved 1,643 tCO2e in 2025 (2024: 914 tCO2e), with a further 15,924 tCO2e reduction expected by 2030. Claire technology agenda: GTF Gen2 development (targeting up to 10-15% further CO2 reduction), Flying Fuel Cell™ stack production started with an Airbus MoU signed, and a KlimaRAT contrail-research consortium with DLR; Scope 3.11 CO2/ASK fell 2.1% versus 2024 and 13.5% versus the 2019 base year. ecoTransition (launched 2025): built an environmental material database and ran first lifecycle-assessment pilots.

2025 CapEx and OpEx on sustainability-goal actions totaled €68 million and €90 million respectively (2024: €83m/€84m).

Reference: pages 157-160.

Scope 1 and market-based Scope 2: -63% by 2035 and -90% by 2050, both rebased to a 2024 baseline of 54,322 tCO2e (Scope 1: 40,175; Scope 2: 14,147), covering 97.3% of the relevant emissions; determined via SBTi's cross-sector absolute-reduction pathway, though "the target has not been externally validated and was set without the direct involvement of stakeholders." 2025 achievement: -3.4% versus the 2024 base year.

Scope 3.11 (use of sold products): -45% per ASK by 2040 versus a 2019 baseline, based on ICAO's LTAG F2 fuel scenario; 2.1% reduction in 2025, 13.5% cumulative since 2019. An SBTi validation attempt was unsuccessful under current Version 5 criteria due to methodological limitations for aviation; MTU will reassess once the updated SBTi Net-Zero Standard (Version 2) is published.

No absolute Scope 3.1/3.15 target is set; instead MTU aims to raise weight-/supplier-specific data coverage in Scope 3.1 to 70% and investment-specific data in Scope 3.15 to 50% by 2028.

Reference: pages 161-162.

Fuel consumption from natural gas was 112,563 MWh (2024: 114,128) and from crude oil/petroleum products 70,094 MWh (2024: 67,209); no coal is consumed. Nuclear-sourced consumption (via purchased electricity) fell to 899 MWh (0.2%) from 2,462 MWh (0.7%). MTU produced 96,853 MWh of self-generated energy, of which 7,243 MWh was renewable (2024: 520 MWh). Energy intensity fell to 44.0 MWh per €m net revenue from 50.7 in 2024. The 2025 estimation method for sites without primary data was changed to differentiate by site type, and 2024 figures were restated accordingly.

Reference: pages 162-166.

Significant Scope 3 categories are 3.1 (purchased goods and services), 3.2 (capital goods), 3.4 (upstream transport), 3.11 (use of sold products) and 3.15 (investments), identified per the GHG Protocol Scope 3 Standard; categories 3.3, 3.5-3.10, 3.12-3.14 are excluded as immaterial. The 3.11 "use of sold products" category (3,686,274 tCO2e, +10.0%) is the largest single driver, reflecting higher unit sales and the addition of the leasing business. GHG intensity per €m net revenue improved to 788.2 tCO2e (market-based), from 826.4 in 2024, despite the absolute increase. Non-CO2 contrail effects are not currently quantified pending standardized methodology (the EU/EUROCONTROL NEATS tool launched in 2025 is being monitored).

Reference: page 166.

MTU purchases carbon credits to offset emissions outside its own value chain, independent of its Scope 1/2 targets. In 2025 it canceled 6,000 tCO2e of credits (2024: 13,185 t), of which 66.7% came from removal projects (biogenic sinks, TÜV-certified) and 33.3% from mitigation projects; 66.7% of credits originated within the EU, and none qualified as corresponding adjustments. For 2026, MTU has contracted to cancel a further 4,000 tCO2e.

"MTU has not developed any projects for GHG removal and mitigation within its own value chain. For this reason, there are no metrics to report on this topic." As part of the Group-wide Climate Transition Plan, MTU intends to shift from temporary external offsetting toward long-term in-value-chain removal solutions to stay on a 1.5°C path in Scope 1 and 2 through 2050.

Reference: page 166.

"MTU does currently not apply internal carbon pricing schemes and therefore has no metrics to report for this topic."

No further elaboration is given in the sustainability statement; MTU's decarbonization decision-making instead runs through the quantified ecoRoadmap, Claire technology agenda and ecoTransition levers described under E1-1 and E1-3, and through Executive Board and senior-management incentive metrics ("CO2 abatement through sustainable actions" and "Remaining CO2 emissions") described under GOV-3.

Reference: page 167.

MTU's materiality assessment identified a material positive impact in the resource-outflows subtopic: "MTU's long-standing expertise in the maintenance, repair, and overhaul (MRO) of engines and the resulting high quality of customer-specific or on-demand MRO services have a positive impact on resource use." Only non-repairable parts are replaced during MRO, extending engine service life.

The governing policy is the same procedural instructions for evaluation of environmental aspects in product design described under E1-2, which "support the development and design of products with a long service life and useful life as well as the development of resource-efficient repair processes," and also cover recycled/recyclable material use in product design. For target, monitoring, scope, responsible level and availability details, MTU cross-references the E1-2 policy table rather than repeating them.

Reference: pages 168-169.

Engine components use high-temperature super alloys requiring strict purity verification, making circular-economy strategies strategically important. The Fort Worth site is being expanded into a full disassembly/assembly/testing MRO facility, and 3D.aero GmbH (sensor technology and automation) was fully integrated at end-2024 to support more efficient maintenance.

Under MTUPlus Intelligent Solutions, "smart repairs" (PERFORMPlus) prioritize on-wing or on-site repair using Engine Trend Monitoring data, while "smart reuse" (ValuePlus) disassembles decommissioned engines to recondition and reinstall used parts, and sells reconditioned spares. Planned actions to 2030 include a metrics system for circular-economy evaluation (with DLR's Institute of Maintenance, Repair and Overhaul), expanded inspection/repair capability (including a borescope solution), parts-level wear prediction, and systematic screening of retiring fleets for spare-parts recovery, plus digital-twin development by 2035.

Reference: page 170.

"MTU has not set itself an ESRS-compliant target in this regard." Instead, circular-economy considerations are embedded as qualitative criteria in product design for key products (high-pressure compressors, low-pressure turbines, turbine center frames) - covering material recyclability, use of REACH-compliant materials, and resource-efficient manufacturing/maintenance processes.

MTU notes the procedural instructions and related actions have positive effects on resource use "not currently recorded due to the wide range of topics," with benefits including reduced disassembly/inspection time, resource conservation through used-parts reuse and repair, faster repair-procedure development, and more efficient identification of reusable components. MTU states it aims to establish suitable metrics for evaluating these actions going forward.

Reference: pages 170-171.

MTU's key products (high-pressure compressors, low-pressure turbines, turbine center frames) are designed for durability, reparability, reuse and recyclability across the aircraft's service life.

Durability: average MTU product durability was 24.3 years versus an industry average of 22.9 years, a 106.1% durability ratio (2024: 106.6%), calculated from the Cirium database on aircraft retirement age; the methodology switched in 2025 from forecast-based to actual retirement-age data, which MTU says corrects an earlier understated (95.2%) result.

Reparability: engines are disassembled into modules for component-level repair without full teardown, guided by Engine Trend Monitoring; non-repairable or end-of-life parts are used to produce spares.

Recyclability: product recyclable content reached 98.3% (2024: 98.2%) and packaging recyclability 97.5% (2024: 95.8%, restated on harmonized methodology), based on metal alloys assumed 100% recyclable and other materials assessed via literature research.

Reference: pages 173-179.

MTU's core workforce policy is its Policy Statement on the Protection of Human Rights, publicly available, committing to the UN Global Compact, UN Universal Declaration of Human Rights, ILO Core Labor Standards, UN Guiding Principles on Business and Human Rights and SDGs 5/8, covering child labor, forced labor, freedom of association, fair remuneration, nondiscrimination and occupational safety. It is supported by: the Code of Conduct, the manual for human rights risk management (LkSG), the management manual (quality/H&S/environment IMS, ISO 45001-certified at seven sites), the agreement on H&S responsibility, documentation and reporting of accidents, the corporate works agreement on training and development, the agreement on disease prevention and inclusion of severely disabled individuals, and the agreement on collaborative behavior in the workplace (anti-bullying/harassment). MTU is a signatory to Germany's Diversity Charter. Reporting on human rights concerns runs through the confidential iTrust whistleblower system.

Reference: page 180.

Germany has works councils, a Group Works Council and executive representative committees; Poland and Canada have workers' representatives; employee interests are also represented on the co-determined Supervisory Board (equal seats). Dialogue with workers' representatives at Group level occurs at regular monthly meetings, and engagement effectiveness is assessed through regular employee surveys.

For particularly vulnerable groups (persons with disabilities, migrants, LGBTQ+ employees), MTU engages elected representatives for severely disabled persons, dedicated inclusion officers, and supports self-organized employee resource groups (ERGs) including the Network of Engine Women (patron: CFO Katja Garcia Vila since mid-2025) and the AeroPride queer network (established 2023, backed by COO Dr. Silke Maurer).

Reference: pages 180-181.

MTU operates a grievance mechanism giving its workforce confidential and secure channels to report concerns, including direct contact with the compliance officer or the multilingual, anonymous web-based iTrust whistleblower system, available to employees, non-employees and third parties. Country-specific channels also exist, e.g. at MTU Maintenance Canada employees may escalate discrimination complaints to the British Columbia Human Rights Tribunal.

The compliance officer confirms receipt and coordinates follow-up; in confirmed violations the human rights officer is informed and involves Group and site human rights coordinators. Effectiveness of the grievance mechanism is reviewed annually and on an ad hoc basis where risk conditions change materially, and MTU states it "does not tolerate any form of retaliation" against users of these channels.

Reference: pages 181-186.

Five action areas address material S1 impacts and risks: health and safety (occupational safety management system, ISO 45001 certification at seven sites, mandatory annual safety training, the ongoing "Safety Culture@MTU" project through June 2027); diversity and inclusion (gender-diversity actions tied to the Women's Career Index, top-10 ranking in FKI 2025; Inclusion Roadmap 2025 for persons with disabilities, though MTU "has not reached the planned quota of severely disabled employees" in Germany); grievance mechanisms and human rights (iTrust, risk management, training - no new actions added in 2025, existing activity continued); work-life balance (flexible hours, mobile working, sabbaticals - no new 2025 actions); and training/development (First Leadership Program, Gallup Strengths Finder, Development Pool Candidates program). A roadmap for strategic HR and succession planning is being developed to address the material HR-risk identified in the 2025 DMA.

Reference: pages 187-189.

Three ESRS-aligned targets: Employee training and development (ESG STI) - target of 3.0 average training days per employee for 2025; achieved 3.49 days. Women in management positions (ESG LTI) - tranche 1 targets 16% by 2027; tranche 2 (set 2025) targets 17% by 2028; 2025 achievement 17.26%. Women in senior management positions (FüPoG II) - statutory targets of 15%/3 women at the first management level and 22%/26 women at the second level below the Executive Board by 31 December 2027; 2025 achievement was 13.04% (first level) and 15.20% (second level).

Targets are recommended by the CS Board and decided by the Executive Board (and, where relevant to compensation, the Supervisory Board); employee input is gathered via the annual PulseCheck, discussed with the Works Council.

Reference: pages 189-190.

Total workforce (2025 vs 2024): 12,670 (11,953) employees - 10,410 male, 2,259 female, 1 other. Permanent employees: 11,933 (11,330); temporary employees: 737 (623); MTU has no non-guaranteed-hours employees.

Employees in countries of significant employment: Germany 9,672 (9,241); Poland 1,410 (1,299). Apprentices, interns, working students and doctoral candidates are not classified as employees.

Employee turnover: the calculation methodology changed in 2025 to divide departures by average (rather than year-end) headcount; the rate held at 4% in both years, with 447 departures in 2025 (2024: 497). MTU notes it continued on its growth path in 2025, driving the year-on-year headcount increase.

Reference: pages 190-191.

77.9% of MTU employees at sites in the European Economic Area (EEA) are covered by collective bargaining agreements (2024: 78.5%), under three collective bargaining agreements in the EEA; 98.7% of EEA employees have workers' representation (2024: 99.7%). MTU has no European Works Council, SE or SCE Works Council agreement in place.

MTU states it "neither favors nor disadvantages employees based on their membership or nonmembership in a union or workers' representation." MTU applies the ESRS 1 phase-in option to omit S1-8 datapoints for its own employees in non-EEA countries for the FY2025 sustainability statement.

Reference: page 191.

Gender distribution at top management levels (2025 vs 2024): 181 (170) headcount total - 155 (144) male (86%), 26 (26) female (14%).

Employees by age group (2025 vs 2024): under 30: 2,136 (2,055), 17%; 30-50: 7,515 (6,935), 59%; over 50: 3,019 (2,963), 24%.

Top management is defined as the two management levels below the Executive Board (first-level managers, "OFK," and second-level managers, "FK"). Data is reported as headcount at 31 December, sourced from the HR IT environment or, at smaller sites, local HR business partners.

Reference: page 191.

"All MTU employees in EEA countries are paid an adequate wage in comparison to European minimum wage directives." A wage is deemed adequate where basic salary plus all guaranteed and fixed payments does not fall below a specified adequate-wage benchmark. "All MTU employees in non-EEA countries receive an adequate wage in line with the applicable national minimum wage or living wage benchmark," using internationally recognized living-wage reference values where relevant. No employees are identified as falling below the adequate-wage threshold, and no separate quantified metric is disclosed beyond this qualitative assurance.

Reference: page 192.

Coverage refers to employees under MTU's Integrated Management System or ISO 45001 certification (seven sites). The 2025 coverage-rate calculation was broadened to include apprentices, trainees, working students and interns; the 2024 comparative was recalculated on the same basis (result unchanged at 97%). MTU applies the ESRS 1 phase-in option to omit S1-14 datapoints on non-employees and on work-related ill-health/days lost for FY2025.

Reference: pages 192-193.

Unadjusted gender pay gap: 2.9% in 2025 (2024: 2.3%), calculated Group-wide as the percentage difference between average male and female gross hourly wages.

Total remuneration ratio (highest-paid individual, the CEO, to median annual total remuneration of all employees, Executive Board excluded from the median): 1:50 in 2025 (2024: 1:41).

Both metrics are calculated at Group level from the gross amount subject to wage tax, using payroll-system data or, for smaller sites, data requested from payroll service providers.

Reference: page 193.

The 2025 discrimination cases spanned sexual harassment, bullying, ageism and racism; all confirmed cases led to employment-law consequences. The 15 complaints mainly concerned dissatisfaction with management behavior, career progression and insults. The 2025 methodology change - recording both confirmed and unconfirmed cases meeting discrimination characteristics, and separating dignity-related complaints - led to a restated 2024 figure (down 2 discrimination cases and 1 complaint from originally reported).

Reference: pages 195-197.

MTU's Policy Statement on the Protection of Human Rights (see S1-1) extends to the upstream value chain. Dedicated policies include the Supplier Code of Conduct (child labor, slavery, forced labor, freedom of association, collective bargaining, discrimination, minimum wage, occupational H&S, grievance mechanisms, GHG reduction, chemical management, anti-corruption; a contractual component of supplier agreements, aligned to ESRS E1, S2 and G1); the Terms and Conditions of Purchase, which include conflict-minerals requirements; and the manual for human rights risk management (LkSG), focused on tier-1 suppliers.

Compliance with the Supplier Code is monitored via an external ESG assessment and regular on-site visits. "In the reporting year, MTU was not informed of any cases of non-respect of the UN Guiding Principles on Business and Human Rights, the ILO Declaration on Fundamental Principles and Rights at Work, or the OECD Guidelines for Multinational Enterprises" involving value-chain workers.

Reference: page 198.

MTU is not itself an active participant but draws on insights from the International Aerospace Environmental Group (IAEG) Sustainability Assessment Program, which focuses on upstream value-chain risks; findings are shared twice yearly through an IAEG working group on upstream-value-chain sustainability and feed into MTU's materiality assessment. Participation and integration of findings sit with purchasing management.

Beyond the specific requirements of ESRS S2, broader stakeholder dialogue with upstream and downstream value-chain actors is described under SBM-2 (Interests and views of stakeholders).

Reference: pages 198-199.

Value chain workers can report concerns confidentially, including anonymously, via the compliance officer or the multilingual iTrust whistleblower system, available worldwide to MTU employees, third parties and suppliers' workers. The Supplier Code of Conduct additionally requires suppliers to implement their own grievance mechanism ensuring anonymity and no retaliation.

The human rights officer oversees effectiveness in collaboration with compliance officers; remedial actions range from clarifying communication to contract termination. Effectiveness is reviewed annually and on an ad hoc basis. MTU states its reporting channels "explicitly state that MTU will not tolerate any form of retaliation" against users, a minimum requirement it also imposes on suppliers' own channels.

Reference: pages 199-201.

Five actions address upstream human-rights and labor-standards risks: an annual risk analysis for direct suppliers using likelihood/damage criteria; an ESG assessment by an external provider, required from key suppliers, with scope expanded in 2024 giving MTU broader supplier ESG coverage in 2025; contractual safeguarding (the Supplier Code as a binding contract component, with termination rights for serious violations such as corruption or child labor); knowledge management for purchasers (a dedicated platform and new sustainable-procurement e-learning introduced in 2025); and supplier visits to OEM production sites, conducted several times a year.

"Severe human rights issues or other incidents connected to the upstream and downstream value chain have not been reported." Actions currently focus mainly on direct (tier-1) suppliers; lower-tier coverage is being examined ahead of CSDDD implementation.

Reference: page 202.

"For the upstream value chain, no quantitative targets can be reported that meet the requirements of the ESRS." MTU attributes this to the risk situation and general maturity of upstream sustainability data; nonetheless, action implementation and progress are regularly monitored and improvement actions defined, without being tied to fixed numeric targets.

Qualitative targets exist for embedding sustainability criteria in procurement processes, drawn from the 2025 purchasing-organization roadmap, focused on increasing upstream transparency and data collection - framed by MTU as groundwork for formulating concrete quantitative targets in the future.

Reference: pages 206-209.

MTU's corporate culture centers on an "open no-blame and speak-up culture." Its compliance management system (CMS) covers risk identification, preventive measures and continuous monitoring. Governing policies include the Code of Conduct (Group-wide, abridged public version); the rules of procedure for complaints and whistleblowing; and the whistleblower protection policy, implementing Section 16 of Germany's Whistleblower Protection Act (HinSchG).

The iTrust whistleblowing system enables secure, confidential and anonymous reporting worldwide, with protections including time off for whistleblowers/affected persons during investigations. MTU condemns corruption per the UN Convention against Corruption. In the 2025 materiality assessment, MTU identified for the first time a material positive impact from policies encouraging employees to raise concerns without fear of repercussions.

Reference: pages 209-210.

MTU applies a "zero-tolerance management approach to anti-corruption" as a UN Global Compact signatory and participant in TRACE International. The compliance officer reviews sales-related consultancy contracts for corruption risk before conclusion or renewal; Corporate Audit assesses CMS effectiveness. MTU follows the IDW AsS 980 assurance standard and OECD Good Practice Guidance, and has signed ASD/BDLI anti-corruption standards for the aerospace sector.

"The definition of functions-at-risk at MTU in the area of corruption and bribery covers around a quarter of all employees." Training-coverage of functions-at-risk rose to 93% in 2025 from 71% in 2024, against a target range of 90-95%. The Group compliance officer reports monthly to the Executive Board and quarterly to the Compliance Board; Supervisory Board members have not yet been included in the formal training program.

Reference: page 210 (Tracking the effectiveness of policies and actions through targets). MTU's FY2025 sustainability statement is prepared under the 2023 ESRS, which had no standalone business-conduct targets DR; this content is drawn from MTU's MDR-T-equivalent disclosure.

"For the sustainability matter of business conduct, no quantitative targets can be reported that meet the requirements of the ESRS." In place of a numeric target, MTU states that "the effectiveness of the actions and guidelines is monitored through structured reporting processes, regular internal audits, and the evaluation of complaints and incidents."

This mirrors MTU's approach for other topics without ESRS-compliant numeric targets (see E5-3, S2-5), and is consistent with a 90-95% training-coverage target range for functions-at-risk disclosed under G1-3 as the closest quantified proxy for tracking anti-corruption effectiveness.

Reference: page 210.

"No convictions for violations of anti-corruption and anti-bribery laws were reported in the reporting period. Furthermore, no incidents were recorded with actors in the value chain in which MTU or its employees were involved."