Salzgitter

The Supervisory Board of Salzgitter AG comprises 21 members: specifically ten shareholder and ten employee representatives plus one other member. This composition has been laid down under the provisions of the Co-Determination Amendment Act applicable to the company, in conjunction with Article 7 of the company's Articles of Incorporation.

The core tasks of the Supervisory Board are to advise and supervise the Executive Board in its management of the company. In accordance with the statutory requirements, certain fundamental decisions may only be made with its approval. The Supervisory Board has determined that, in addition, certain types of transactions require its approval.

The Supervisory Board and the Executive Board discussed the corporate plan in detail prepared and submitted by the latter for the financial years 2025 through 2027. The Supervisory Board was also brought up to date on the SALCOS® program. Other topics of consultation in this meeting included the imminent defining of the qualitative criteria determining variable Executive Board remuneration in 2025 for assessing the performance of the individual Executive Board members, as well as the stakeholder objectives for the performance period from 2025 through 2028.

Special expertise in matters of sustainability is represented on the Audit Committee by the person of Prof. Dr. Schindler who has dealt intensively over many years with sustainability reporting and the respective audit as part of his supervisory board activities, and by Ms. Hardekopf.

A recurring, key topic addressed by the Supervisory Board in its work concerns sustainability issues. The Executive Board regularly reports on general developments of significance and progress in the area of sustainability, since May 2024 at each regular meeting of the Supervisory Board.

The Supervisory Board regularly assesses how effectively it performs its tasks overall and the effectiveness of its committees. In the financial year 2024, this self-assessment took place with the aid of an external consultant by way of a survey directed at members of the Executive Board and the Supervisory Board.

The Executive Board regularly reports on general developments of significance and progress in the area of sustainability, since May 2024 at each regular meeting of the Supervisory Board. Regarding these sustainability issues, the SALCOS® program that is geared to the company's virtually climate-neutral steel production forms the centerpiece of this work.

The compliance management system and investigated compliance activities are regularly debated at the Supervisory Board plenum's autumn meeting, prepared beforehand by the Audit Committee's in-depth deliberations on this topic.

In determining the variable remuneration of the Executive Board members, the Supervisory Board also agreed non-financial targets with the members of the Executive Board in 2023 for 2024 and in 2024 for 2025. These non-financial targets are mainly attributable to the area of sustainability (managing demographic change, reducing the number of accidents, increasing the proportion of women in management positions, securing the supply of green electricity).

The variable remuneration amounts granted to Executive Board members are 36 % based on shares. The Supervisory Board considers this proportion appropriate.

The Audit Committee focused on the independence of the statutory auditor and of the auditor of sustainability reporting, in particular the scope of non-audit services provided by the auditor and the quality of the audit. The consultations of further meetings of the Audit Committee concerned IT security and IT structures, monitoring the accounting process, as well as the effectiveness of the accounting-related and non-accounting-related internal control system, the risk management system, and the internal audit system.

The Salzgitter Group operates a groupwide monitoring system for the early risk detection and a risk management system.

Business Activities and Products

With external sales of € 10.0 billion and more than 24,000 employees in the financial year 2024, the Salzgitter Group ranks among Europe's leading steel and technology corporations. The Group has an annual capacity of around 7 million tons of crude steel and comprises more than 130 subsidiaries and affiliated companies.

Our core competences lie, on the one hand, in the production and processing of rolled steel and tubes products and global trading in these products. Strip steel articles, seamless and welded steel pipes and tubes, sections and heavy plate count among our most important products in this field. On the other hand, we also operate a business in special machinery and plant engineering.

Customer Sectors

A breakdown by customer sector shows that around 25 % of our external sales in the reporting year was attributable to trading and the Steel Service Centers that sell directly or process beforehand – generally in smaller batches. Other significant customer sectors include primarily the food and beverages industry (17 %), the vehicle manufacturing (16 %) and the construction sector (11 %).

Geographic Focus

In the financial year 2024, we generated 76 % of our external sales in Europe. With a share of 41 %, Germany is traditionally by far our most important single market.

Group Structure

The Salzgitter Group is structured into four business units:

• Steel Production Business Unit: Including Salzgitter Flachstahl GmbH (SZFG) with crude steel capacity of around 4.7 million tons a year, and Peiner Träger GmbH (PTG) with around one million tons annual capacity
• Steel Processing Business Unit: Concentrates on downstream value chain links and combines heavy plate activities and steel tubes producing companies
• Trading Business Unit: Maintains distribution network with stockholding locations for steel products in Europe
• Technology Business Unit: Three manufacturers of special machinery, with KHS Group accounting for more than 90% of sales

Interests and views of stakeholders

Stakeholder groups and engagement mechanisms

Salzgitter identifies the following key stakeholder groups with their engagement mechanisms:

Integration of stakeholder interests into strategy and decision-making

General approach:

Openness and transparency toward partners form part of Salzgitter's guiding principles. Dialog with stakeholder groups is conducted on different levels and in different ways and is perceived as a key factor for long-term success. It acts as a driving force and helps identify relevant impacts of business activities as well as opportunities and risks at an early stage.

The ESG organization informs Group bodies of insights gleaned from activities in relation to stakeholder commitment and any ensuing material impacts, risks and opportunities.

Employee representation and co-determination:

The interests, viewpoints, and rights of employees are represented by trade unions, works councils, and other forms of employee representation. In addition to entrepreneurial objectives and performance under the law, these bodies represent the interests and viewpoints of employees.

Key co-determination bodies:

• Group Works Council: Central co-determination and participation body of the employees. The Executive Board regularly participates in events organized by the Group Works Council and works councils, which facilitates extensive exchange of information and ideas between the company and employee representation.
• Business unit work groups: Each business unit has its own work groups within the works councils.
• Coal-and-steel co-determination system: Endows employee representatives on the Supervisory Board with extensive right to influence key transactions and the appointing of a labor relations director.

Specific mechanisms for integration:

1. Executive Board engagement: The Executive Board regularly participates in events organized by the Group Works Council and works councils. The Supervisory Board regularly sets targets for the Executive Board with respect to sustainability aspects including occupational health and safety or further training.

2. Collaboration agreements: Supported by Group works agreements on "Composition and Duties of the Group Works Council" and "Works Council Work Groups." Various discussion and workshop formats at company level as well as regular works meetings serve to disseminate information and enter into dialog with the workforce.

3. Joint declaration: A joint declaration by the Executive Board and the Group Works Council and IG Metall on the "Salzgitter AG 2030" Group strategy and the transformation contract defines the necessity of the transformation process and the foundations of the planned transformation process.

4. Information flow: The ESG organization enables strategic decision-making processes and translates material sustainability aspects into corresponding Group directives, operating instructions and target agreements, always taking account of professional and strategic expertise.

External stakeholder integration:

Besides regular dialog with each other, relevant specialist departments and Group companies integrate stakeholder groups on a bilateral basis in separate dialog events.

In the context of sustainability and non-financial reporting, Salzgitter relies on separate discussion panels with representatives of different groups in public life, politics, associations and organizations, the capital market and the press, customers, as well as employees and workers' representatives.

Climate protection engagement:

Climate protection and policies for avoiding carbon equivalent emissions are an ever-present topic of conversation with stakeholders. Salzgitter continually compares its "Salzgitter AG 2030" Group strategy and SALCOS® transformation program as well as the actions and targets defined in them against the interests of most important internal and external stakeholders.

Engagement occurs via various channels such as trade fairs, workshops and other formats to offer direct access to concepts. Within the Salzgitter Group, the ESG roundtable involving representatives from relevant Group companies has proved to be a suitable medium for targeted communication.

Distinction between affected stakeholders and users of information

The disclosure identifies employees as both affected stakeholders (those impacted by the business through co-determination and workplace issues) and implicitly as users of information through various communication channels.

Investors and banks are clearly identified as users of sustainability information through specific engagement mechanisms including roadshows, shareholder events, and discussions on ESG components for financing.

Frequency and changes in stakeholder relations

Salzgitter states: "Thanks to this regular dialog and the early inclusion of our stakeholders' interests in our strategy, we are not expecting any changes in our relationship with these stakeholders and are not planning any shift in the way in which their interests are included."

Specific frequencies mentioned:

• Executive Board and Group Works Council: Regular participation in events, at least twice a year for HR Board and Group Works Committee
• Employee information: Continuous through Intranet, printed matter, digital formats, video blogs, podcasts
• Manager conferences: Annual Group forum and regular seminars
• Energy committees: Quarterly meetings ("Operational Energy Steering Committee" and "Strategic Energy Steering Committee")
• ESG Steering Committee: Regular bi-monthly meetings

Strategic partnerships in transformation

Salzgitter pursues a "Partnering for Transformation" mission to secure central sections of the value chain for the long term with strategic partnerships. Examples include:

• Power Purchase Agreements (PPA): With Vattenfall (approx. 300 GWh per year), Iberdrola Deutschland (approx. 60 GWh per year), RWE (up to 64 GWh/a from 2027), IG Merbitz Solar GmbH (71 GWh/a from 2025), Octopus Energy (126 GWh/a from 2024)
• Green steel partnerships: Norsk Stål AS (Norway) and Terramet Stålcenter AB (Sweden) have secured plate steel made from SALCOS® steel through Ilsenburger Grobblech
• Hydrogen infrastructure: Partnership with Gasunie, where Mannesmann Line Pipe GmbH supplied pipes made from SALCOS® steel for long-distance pipeline network

Material impacts, risks and opportunities and their interaction with strategy and business model

List of material IROs

The following table presents the material impacts, risks and opportunities (IROs) identified by Salzgitter Group, including their classification, explanation, time horizon, and allocation within the business model:

Interaction with strategy and business model

Climate protection

Implementation of the SALCOS® transformation program as an integral part of the Group strategy facilitates the positive impact on climate protection in our "Pioneering role in decarbonizing the industry" as well as seizing the opportunities presented by "Climate protection as a driver of value creation" and "Climate protection as a competitive advantage". Together with the implementation of further individual measures for using our decarbonization levers, we are reducing the negative impact caused by our contribution towards "Increasing global greenhouse gas concentrations". We are countering the long-term risk in relation to "Imponderables in the transformation of primary steel production" by means of a dedicated organizational unit and holding Executive Board meetings at short intervals.

SALCOS® Decarbonization Path:

Salzgitter AG's decarbonization path shows a reduction from 32.7 Mt CO₂ in the baseline to 8.3 Mt CO₂ in 2030 and 26.7 Mt CO₂ avoided cumulatively by 2033.

With our Group strategy from 2022, we took the necessary steps to set the stage for adapting our business model to fit the challenges of climate change. The SALCOS® (Salzgitter Low CO2 Steelmaking) program is the central building block. Thanks to the SALCOS® program and through the use of renewable energies, we intend to hit our 2030 target of a 50% reduction in our Scope 1 and 2 emissions against the baseline year of 2021. The implementation of the first SALCOS® expansion stage, consisting of a direct reduction plant, an electric arc furnace and a 100 MWel electrolysis plant, is key to this. With the gradual complete implementation of the SALCOS® program, Salzgitter AG is positioning itself for the future in order to contribute to more sustainable steel production over the long term and in technological terms, to cut out 95% of its Scope 1 emissions from steel production by as early as 2033. The first stage of the program is set to convert around 30% of today's production capacity for primary steel production from 2026 onward.

Energy

Increasing their volume of green electricity forms part of the Group planning of our Group companies. As part of this supporting action, SZFG has concluded further Power Purchase Agreements (PPAs) on behalf of the Group. In the reporting year, these include PPAs with RWE (up to 64 GWh/a from 2027), Iberdrola Deutschland (more than 60 GWh/a from 2025), IG Merbitz Solar GmbH (71 GWh/a from 2025), Octopus Energy (126 GWh/a from 2024) and Vattenfall (300 GWh/a from 2028).

Our efforts to achieve our target of meeting all of our requirements for purchased electricity from renewable energy sources not only reduce our negative impact caused by the "use of finite fossil fuels", but at the same time become a driver of our positive impact of "promoting the energy transition". With our current hydrogen tender, we aim to seize the opportunity of "Hydrogen as an energy source of the future" while by contrast the dedicated organization consisting of a "Strategic Energy Steering Committee" and an "Operational Energy Steering Committee" manages the potential risk comprising "Uncertain development of energy costs".

Circular Economy

Steel and steel products form our largest product group. Steel is not only a key pre-material in numerous value chains from automobiles to wind turbines, but above all a durable material well suited to a circular economy that can be recycled almost without end with no loss of quality. We therefore intend to further expand our scrap recycling activities and feed more of our by-products into the material cycle, as exemplified by the recovery of zinc from filter dust.

Both our own steel production capacity and most of our Group companies' steel processing are located in Europe, particularly here in Germany. By swapping notes with relevant stakeholder groups, we are together refining our processes. For example, we are not only making a major contribution to reducing our own CO2e-emissions but also to providing our customers with the option of lowering their CO2e emissions. Low emission steel is growing in importance and demand for it is rising.

Resilience to material IROs

Resilience Analysis and Climate Scenarios

In the reporting year, a resilience analysis was conducted with a time horizon stretching to 2050 and using relevant climate scenarios. It comprises Group companies in the Steel Production and Steel Processing business units that are responsible for more than 95% of Scope 1 and Scope 2 emissions by all subsidiaries of the Salzgitter Group.

In order to evaluate the impacts of physical climate risks, we drew upon the SSP5-8.5 IPCC scenario. With regard to transitory climate risks, we used the 1.5 degree scenario of the International Energy Agency from their publication "Net Zero Emissions by 2050". This publication contains a specific decarbonization pathway for the iron and steel industry. At the same time, this pathway is the basis for SBTi targets specific to the "iron and steel production" sector which we used for our short-term intensity target.

Results of the Resilience Analysis:

As our transition plan and the ongoing measures derived from them meet the requirements for the 1.5 degree pathway, no additional material impacts, risks and opportunities were identified from examination of the scenario. With our Group strategy from 2022, we took the necessary steps to set the stage for adapting our business model to fit the challenges of climate change.

Even in the IPCC SSP5-8.5 scenario, the analysis showed that no physical climate risks had been identified which lead to material impacts, risks and opportunities for Salzgitter AG that, in turn, might put the implementation of our strategy and with it our business model, at risk. For that reason, the sub-topic of "climate change adaptation" is not material and therefore not reportable.

Risk Management

The result of the simulation showed that Salzgitter AG is not exposed to any existential threat. The risks determined lie within tolerable limits with the result that Salzgitter AG will remain viable even in the event of adverse developments.

In the long term, we take into account climate-related premises and assumptions with increased uncertainties in the impairment test carried out as part of the consolidated financial statements, particularly for the transformation phase up to the mid-2030s in connection with the SALCOS® program. These include demand forecasts for CO2e-reduced steel, current and expected future legal and economic framework conditions, for example in connection with border adjustment regulations and CO2 allowance trading.

Current and anticipated financial effects

Current Financial Impacts:

No actual financial effects were reported resulting from the material risks and opportunities identified for the 2024 financial year.

Expected Financial Effects:

Financial impacts to be expected as well as short- and medium-term material risks and opportunities that need to be recognized in profit or loss in the next reporting period, are considered when the Group budget is drawn up.

The Group budget process is enacted before the start of each new financial year. It usually begins in August and ends with the presentation and adoption of the results at the final meeting of the Supervisory Board in the relevant financial year.

Long-term Financial Effects:

The financial impacts of long-term material risks and opportunities do not entail any adjustments to carrying amounts. They are evaluated in qualitative terms by central risk management and viewed as part of strategic corporate planning, taking account of the economic environment.

Details of the measures and action plan behind the first stage of the SALCOS® program as well as the expenditure associated with them, can be found in the topic-specific sections.

Value chain considerations

In determining and analyzing the materiality of the impacts, risks and opportunities, we took account of the Salzgitter Group's upstream and downstream value chain. Where necessary, we provide information on upstream and downstream activities in accordance with ESRS 1. Where policies, measures, targets and indicators extend across the value chain, we explicitly point this out.

Upstream Value Chain:

With regard to our Scope 3 ambitions and targets, we work closely with our partners and suppliers in order to reduce the emissions from the value chain in terms of the goods and services purchased. SZFG maintains a dialog with relevant raw materials suppliers on reducing upstream greenhouse gas emissions.

Downstream Value Chain:

For many of our customers, replacing energy and carbon-intensive gray steel with green steel represents an important lever for reducing their carbon footprint in the upstream value chain and achieving their own sustainability targets. We therefore perceive opportunities in the potential excess demand for green steel, particularly in the early years of the transformation of our industry. The keen interest of customers from various customer segments in the early supply of carbon-reduced steel is reflected in further agreements concluded in the 2024 financial year and underpins this assessment.

The KHS Group engages with its customers in workshops in order to reduce the emissions of machines in their use phase. The Trading Business Unit is securing increasing volumes of green steel.

By doing so, we aim to extend our responsibility for climate protection to include the value chain and ensure that here, too, our targets are hit.

Description of the process to identify and assess material impacts, risks and opportunities

Double materiality analysis process

To determine material sustainability aspects and information, Salzgitter conducted a double materiality analysis in accordance with the ESRS. The process is described below, detailing how the company determined the impacts, risks and opportunities (IROs) and evaluated their materiality.

The basis for carrying out the double materiality analysis was an examination of the business model, strategy and value chain. All business divisions and key activities were included in the materiality analysis process in order to take possible differences into account. A further breakdown was therefore not necessary at this point.

The value chains examined reflect all the Salzgitter Group's business units and activities as well as the business relationships within the upstream and downstream value chain. The process for conducting the double materiality analysis did not focus on different geographical circumstances or other factors.

Stakeholder perspectives included

As part of the materiality analysis, the most important internal and external stakeholders were identified and classified according to the degree to which they are affected by our business activities (whether actually, potentially, positively or negatively) as well as their role as a user of sustainability reports. On the basis of this analysis, the most important stakeholders were grouped and summarized in a list.

To ensure that the views and interests of stakeholders are taken into account within the process for carrying out the double materiality analysis, the stakeholder groups were assigned to the internal experts of the Salzgitter Group concerned with the materiality analysis. The internal experts are familiar with the views of the relevant stakeholder groups, remain in regular touch with them and can thus reflect their perspectives. The internal experts were therefore responsible for contributing their knowledge of the degree to which stakeholders are affected in the course of determining and evaluating the IROs. The sustainability aspects addressed as part of the materiality analysis which affect own workers were discussed with employee representatives in a joint workshop. No external experts were consulted as part of the double materiality analysis.

Basis for determining impacts, risks and opportunities

To determine the key contents of the report, a comprehensive list was prepared containing both overarching sustainability aspects and company-specific, along with sector-specific aspects. The underlying sources are:

• The topic-specific ESRS sustainability aspects
• The Global Reporting Initiative
• The World Economic Forum
• SASB
• The results of the materiality analysis from the 2023 financial year

The risks were determined either via the risk inventory or the risk analysis in accordance with the Supply Chain Due Diligence Act. Opportunities that may have a positive impact on the business are identified at an early stage. This is achieved by means of regular analyses of market and sector trends examined and discussed in more detail as part of regular strategy workshops or Group budget discussions.

The above-mentioned list was categorized along the three dimensions of Environment, Social and Governance on the basis of the overarching ESRS sustainability aspects. It forms the basis both for determining positive and negative impacts brought about by business activities and business relationships along the Salzgitter Group's value chain and identifying risks and opportunities with respect to business success.

To determine the IROs, research is conducted on the one hand such as the analysis of studies and publications on relevant sustainability aspects as well as drawing on competitive analyses while, on the other, workshops were held with internal experts which added to and validated the list of IROs determined. This participatory approach ensured that the perspectives of affected stakeholders were also taken into account.

To evaluate and prioritize the impacts, they were divided into positive or negative and actual or potential impacts. Impacts in the value chain were also discussed and a time horizon defined that differentiates between short-term, medium-term and long-term impacts. To ensure that the time horizons match the periods of risk management and the Salzgitter Group's corporate planning, they are defined as follows:

• Short term: 1 year (reporting period)
• Medium term: 1 to 3 years
• Long term: more than 3 years

Evaluating the impacts, risks and opportunities

Actual impacts were evaluated on the basis of their severity, made up of their scale, extent and the irreversibility of the impacts. Potential impacts were also evaluated in terms of their probability in addition to their severity. The evaluations were carried out by internal experts. Negative impacts were evaluated in all three severity categories on the basis of a 5-point scale while positive impacts were only assessed in accordance with their scale and extent – again on a 5-point scale. The overall result of the evaluation is given by the average of the criteria assessed.

In the event of negative impacts on human rights violations, the fact was taken into account that severity takes precedence over probability.

The impacts of the company's own business activities and business relationships are often linked to risks and opportunities and may have (potential) financial effects. These dependencies between impacts and risks and opportunities were analyzed and can be found in the descriptions wherever such dependencies exist.

In order to determine, evaluate, prioritize and monitor the financial effects, they were divided into risks and opportunities and the relevant time horizon defined similar to the previously mentioned time horizons with respect to impacts (short-term, medium-term, long-term). The analysis also stated whether a risk or opportunity plays a role in the upstream and/or downstream value chain in addition to the company's own business activities. The risks and opportunities were evaluated on the basis of their probability of occurrence and the size of the potential financial scale on the basis of a 5-point scale so that the overall result is given by the average of the evaluations of scale and probability.

Integrated risk management

Integrated risk management is set up as follows within the organizational structure. The Executive Board bears the overall responsibility for the integrated risk management system and is monitored by the Supervisory Board in the process. Central risk management (CRM) bears responsibility for managing and controlling the risks arising.

Organization of risk management:

                                        SUPERVISORY BOARD
                           Monitoring of the Integrated Risk Management System

                                    EXECUTIVE BOARD/GROUP MANAGEMENT BOARD
                                 Overall responsibility for the Risk Management System

                                    CENTRAL RISK MANAGEMENT (CRM)

            ESG Team                               Group Controlling Team                              Internal Audit
         Responsible for                         Responsible for the process                               Review
      integrating ESG risks

                                          ESG Risks Committee
                                         Prioritization, assessment,
                                      recommendation risk calculation
                                        Chaired by the ESG Team

                                    Integrated Risk Management Forum
                   Communication and control of Integrated Risk Management | Headed by CRM

                              DECENTRALIZED/OPERATIONAL RISK MANAGEMENT

                     Group companies                                             Specialist departments (holding company)
              Substantive responsibility for risks                                       Substantive responsibility for risks

Determination of the risks in the ESG context is already integrated into the established risk management procedure and plays a key role in evaluating the risk profile. It begins with identifying risks with an ESG link in the course of a systematic, bottom-up survey by the Salzgitter Group's risk management and thereafter it follows the standardized risk management process.

Risks of ESG relevance are assessed with respect to the probability of their occurrence and the level of losses to be expected by drawing on the expertise of the ESG Committee. Here assessments and classifications are based on the Commission Delegated Regulation (EU) 2021/2139.

Climate-related process specifics

Identifying material impacts

As part of the materiality analysis, experts from the relevant specialist departments of the holding company were brought together in workshops to examine and discuss the relevance of the main effects.

Physical climate risks

A climate risk analysis was conducted examining short-term, medium-term and long-term impact by 2050 with the aid of a data-driven risk analysis for the Salzgitter Group's facilities and two extreme climate scenarios. The climate scenarios used are SSP1-2.6 and SSP5-8.5.

Identification of transitory climate risks and opportunities

The result of the resilience analysis is the starting point for identifying transitory climate risks. Potential negative and positive financial impacts were recorded by drawing on the results of the processes of Integrated Risk and Opportunity Management.

The ESG Committee conducts a key initial exploration as part of Integrated Risk Management. Potentially material transitory risks are identified and subsequently coordinated with Group companies in the "Integrated Risk Management" Group forum.

The identification of opportunities is integrated with the ongoing strategy process and conducted akin to the process of opportunity management described in the ESRS 2 section.

Assessment, control and monitoring of climate risks

Taking account of their own business activities and assets, Group companies assessed any physical and transitory climate risks identified with respect to the level of losses and probability of occurrence. Subsequently, the ESG Committee examined the individual risks reported for plausibility and completeness, where possible aggregating them and identifying their materiality.

Climate-related opportunities were initially explored in the Strategy and Corporate Development department before being subsequently prioritized and validated by specialist committees and taken into consideration in the double materiality analysis.

The climate scenarios in the resilience analysis served as the basis for identifying and assessing climate-related risks, transitional risks and opportunities. In the 2024 financial year, no significant short-term or medium-term climate-related physical or transitory risks or impacts were identified that would require the integration of additional critical climate-related assumptions within the annual financial statements.

Sources of estimation and outcome uncertainty

The key figures listed below were subject to estimates and uncertainties based on databases and expert estimates:

Frequency of review

The materiality analysis was conducted in the 2024 financial year. The analysis from the 2023 financial year formed one of the inputs to the current assessment.

Value chain mapping

In determining and analyzing the materiality of the impacts, risks and opportunities, the Salzgitter Group's upstream and downstream value chain was taken into account. Where necessary, information is provided on upstream and downstream activities in accordance with ESRS 1. Where policies, measures, targets and indicators extend across the value chain, this is explicitly pointed out.

The value chains examined reflect all the Salzgitter Group's business units and activities as well as the business relationships within the upstream and downstream value chain.

SALCOS® Transformation Program

Virtually climate-neutral steel production is to be achieved as part of the SALCOS® program by incrementally switching to a hydrogen-based route. In contrast to the former process involving blast furnaces, hydrogen and green electricity replace the carbon formerly required for producing steel. This technology enables steel production's carbon footprint to be reduced by around 95%.

Implementing the first stage of SALCOS® commenced back in 2022. At the end of 2026, products from the new production route that are generated with a mix of natural gas and hydrogen should be on the market. Once connected to the hydrogen core network, the proportion of hydrogen can gradually increase. We plan to have completed the technical transformation of the steelworks to accommodate the new procedures by the year 2033.

The technical approach of SALCOS® consists of avoiding carbon emissions directly in the production process (Carbon Direct Avoidance) through replacing the carbon formerly required for producing steel incrementally - initially mainly by natural gas and subsequently by 100% green hydrogen - in direct reduction plants to be built.

Implementation Progress

SALCOS® is being implemented in stages. The first stage that is already underway consists of a direct reduction plant, an electric arc furnace, and a 100 MW electrolysis plant generating hydrogen. With this as a foundation, we aim to supply our customers with low carbon steel on an industrial scale as from 2026. Following a ramping up phase, we will be producing 2 million tons via this route, thereby realizing 30% of Salzgitter Flachstahl GmbH's primary steel production without the use of coking coal.

By the end of 2033, the transition to virtually carbon-neutral steel production at the Salzgitter location is to have been completed – well ahead of statutory requirements. Full alignment to low carbon steel production will be instrumental for us in achieving the target of eliminating 95% of Germany's emissions. As part of the transformation, the technical foundation for reducing emissions by up to 2.5 million tons a year as from 2026 and 8 million tons a year as from 2033 has been set in place.

Policies related to climate change mitigation and adaptation

Climate Change Corporate Guideline

Salzgitter AG has established a "Climate change" corporate guideline (also referred to as "Climate protection" corporate guideline) that describes policies related to climate protection.

Scope:

• Covers all Group companies at home and abroad

Governance and oversight:

• The Executive Board of Salzgitter AG bears the responsibility and has the decision-making authority for the topic of climate change
• The Strategy & Corporate Development department is responsible for the sub-topic of "climate protection" on a strategic level and uses the ESG Committee structure
• Operational responsibility lies with the Group companies

Key content and principles:

• Framework consisting of responsibilities to manage material impacts, risks and opportunities
• Defines targets, levers and measures for climate protection
• Climate protection targets are enshrined in the guideline
• Stipulates that by 2030, 100% of the Salzgitter Group's requirements for purchased electricity should come from renewable sources
• Encompasses developing and operationalizing ambitious targets as part of the decarbonization strategy

Implementation and monitoring:

• Management and monitoring are carried out by the relevant specialist departments in accordance with the "Climate Change" corporate guideline
• Assessment, control and monitoring of the materiality of impacts are based on absolute, direct effects (such as emission of greenhouse gases or use of fossil fuels) or indirect effects (such as signaling effects of actions)

Public availability:

• Not explicitly disclosed in the excerpts

Links to international standards:

• The company's approach aligns with the Science Based Targets Initiative (SBTi) and participates in the "Business Ambition for 1.5 °C" campaign
• The company follows the framework offered by the Task Force on Climate-Related Financial Disclosures (TCFD)
• Assessments and classifications are based on the Commission Delegated Regulation (EU) 2021/2139

Supporting organizational structures

While not named as separate policies, the company has established dedicated governance structures:

Energy-related governance:

• "Strategic Energy Steering Committee" sets guiderails for the topic of energy
• "Operational Energy Steering Committee" managed by SZFG's Energy Management department
• These committees are responsible for energy procurement, including electricity from renewable sources, natural gas, emission certificates, and long-term supply of external hydrogen

Energy management systems:

• Systematic introduction of certified energy management systems in accordance with DIN EN ISO 50001 standard in manufacturing companies
• As of the reporting date, 65% of facilities certified to ISO 50001 (based on number of employees)

Actions and resources in relation to climate change policies

SALCOS® Program

Our current action plan comprises the four relevant measures of the first SALCOS® stage which represent the first steps of implementing the SALCOS® program. This includes the following construction measures in the implementation phase:

• Direct reduction plant
• Electric arc furnace
• 100 MWel electrolysis
• 380 kV grid connection

together with ancillary facilities.

Scope: Own operations (Steel Production Business Unit)

Time horizon:

• First blast furnace to be decommissioned by end of 2026
• Direct reduction plant with connecting electric arc furnace using hydrogen from 100 MWel electrolyzer to account for roughly 30% of SZFG's primary steel production (prerequisite: 380 kV grid connection established)
• Complete conversion of Salzgitter facility to low-carbon crude steel production by 2033
• 50% reduction in total Scope 1 and Scope 2 carbon equivalent emissions by 2030

Resources allocated:

• Significant amounts invested in non-current assets (advance payments and assets under construction) in current fiscal year
• Financing through borrowing, customer financing (partnering agreements), and grants from the Federal Ministry for Economic Affairs and Climate Action
• Grant notification received by Salzgitter Flachstahl GmbH in fiscal year 2023
• Long-term power purchase agreements concluded to ensure future supply of electricity generated from renewable sources
• Borrowing costs are capitalized from the start of construction

Expected outcomes:

• By 2028: 20% reduction in CO2e emissions per ton of hot-rolled steel (subject to SBTi "Iron & Steel" guideline methodology)
• By 2030: 50% reduction in total Scope 1 and Scope 2 carbon equivalent emissions
• Decarbonization path breakdown (in million tonnes CO2e):
  • 2021 total: 32.7 (Scope 1&2: 23.9, Scope 3: 8.3)
  • 2028 total: 26.7 (Scope 1&2: 20.1, Scope 3: 6.6)
  • 2030 total: 24.5 (Scope 1&2: 20.1, Scope 3: 4.4)
  • Activity growth: 0.5
  • CO2e-reduced production processes contributions shown
  • Use of renewable energies and reduced consumption contributions shown
  • Energy efficiency contributions shown
  • Purchasing reduced goods contributions shown
  • Reduction of CO2e emissions in the use phase contributions shown

Links to targets: Directly linked to SBTi short-term targets (2028) and 1.5 degree pathway

Individual decarbonization measures at Group company level

Individual measures in terms of the decarbonization levers identified will be implemented on the Group company level.

Scope: Group companies across value chain

Examples:

• KHS Group: Engages with customers in workshops to reduce emissions of machines in their use phase (downstream)
• Trading Business Unit: Securing increasing volumes of green steel (upstream)
• SZFG: Maintains dialog with relevant raw materials suppliers on reducing upstream greenhouse gas emissions (upstream)

Expected outcomes: Extension of responsibility for climate protection to include the value chain and ensure targets are met

Note on progress

In relation to the baseline year, no relevant savings of greenhouse gas emissions were achieved in the reporting year which are not related to economic fluctuations. We expect to see a significant lowering of CO2e emissions with the implementation of SALCOS® Stage 1.

Climate Targets

Salzgitter AG's ambitious climate targets were ratified by the Science Based Targets Initiative in June 2024. The Salzgitter Group's SBTi reduction targets accord with the 1.5°C target of the Paris Agreement. The year targeted for short-term objectives is 2028. In adopting this time horizon, the Salzgitter Group is underscoring its pioneering role in transforming the steel industry. All Group companies in Germany and abroad have now been taken under responsibility to contribute to achieving the targets. In the long term, Salzgitter AG intends to reach the net zero target by 2050 at the latest.

In 2026, we aim most particularly to have completed the first step in laying the cornerstone of our SALCOS® program that will make it technically possible for us to reduce our Scope 1 and Scope 2 CO₂e emissions by 30% compared with 2018.

Energy consumption and mix

Salzgitter reported total energy consumption of 13,975,507 MWh in 2024. The disclosure covers all Group companies in which the Group holds a greater than 50% interest, plus joint operations consolidated on a pro rata basis in accordance with the Group's interest. The emissions boundary corresponds to the financial control approach.

Energy consumption and mix (2024)

Self-generated energy

In 2024, the Group generated 1,612,092 MWh of electricity (almost 100% from non-renewable sources, primarily by-product gases from coal-based processes) and 720,041 MWh of steam. Less than 1,000 MWh of renewable electricity was produced in own generation systems.

Energy intensity

Energy intensity for activities in high climate impact sectors: 3,316 MWh / million EUR (calculated on the basis of net revenues of €9,944 million from high climate impact sectors in 2024).

Methodology note: Total energy consumption includes direct fuel consumption (coal, oil, gas, biomass), purchased electricity/heat/steam/cooling, and self-generated non-fuel renewable energy. Renewable electricity purchased in 2024 was covered by certificates of origin from PPAs. 0% of direct electricity purchased from renewable sources originates from biomass incineration or biodegradation.

Gross Scopes 1, 2, 3 and Total GHG emissions

Overview

The Salzgitter Group has committed to Science Based Targets aligned with the 1.5°C pathway of the Paris Agreement. Short-term reduction targets are set for 2028, with a long-term net zero target by 2050 at the latest. The climate targets were validated by the Science Based Targets initiative (SBTi) in June 2024.

Emission Reduction Targets

The Group aims to reduce Scope 1 and 2 CO₂e emissions by 30% compared with 2018 levels through the first stage of the SALCOS® transformation program by 2026. By 2033, the transition to virtually carbon-neutral steel production at the Salzgitter location is planned to be complete, enabling a reduction of up to 8 million tons of CO₂e per year.

GHG Emissions Data

Detailed emission figures for Scope 1, 2, and 3 are not provided in tabular form in the excerpts. The report mentions:

• Scope 1 and 2 reduction goal: Reduce by 30% vs. 2018 baseline by 2026 (first SALCOS® stage).
• Technical emission avoidance potential: Up to 2.5 million tons CO₂e per year from 2026, and up to 8 million tons CO₂e per year from 2033.
• Germany's national emissions: The transformation is expected to eliminate ~2.5% of Germany's total emissions.

Scope 1 Emissions

Not disclosed in tabular form.

Scope 2 Emissions

• Target: Source 100% of electricity for the Group's processes from climate-compatible production by 2030.
• Green power purchase agreements (PPAs): Approximately 1,200 GWh contracted for 2027 for major consumers.

Detailed Scope 2 location-based and market-based figures are not provided.

Scope 3 Emissions

No breakdown by GHG Protocol category (1–15) is provided.

Total GHG Emissions

No aggregated Scope 1+2+3 total is disclosed.

GHG Intensity

No GHG intensity metrics (e.g., tCO₂eq per € million revenue or per ton of product) are disclosed.

Biogenic CO₂

Not disclosed.

Regulated Emissions (EU ETS)

The report discusses the EU Emissions Trading Scheme (EU ETS) and the phase-out of free allowances with the introduction of the Carbon Border Adjustment Mechanism (CBAM) from 2026. However, specific volumes of CO₂ allowances or emissions subject to EU ETS are not quantified.

Methodology and Scope

The Group states that all German and international Group companies are included in the responsibility to contribute to achieving the SBTi targets. The SALCOS® program focuses on direct carbon avoidance (CDA) by replacing blast furnaces with direct reduction plants using natural gas and green hydrogen, followed by electric arc furnaces.

Note: The excerpts do not contain a formal E1-8 / E1-6 disclosure table with historical Scope 1, 2, 3 emissions data broken down by year and by GHG Protocol category. References to emissions are strategic and forward-looking, primarily describing the transformation program and targets rather than past performance metrics.

Circular Economy Strategy

As a key component of the strategy, the PIONEERING FOR CIRCULAR SOLUTIONS vision clearly illustrates the Salzgitter Group's leadership aspiration in the field of circularity. Our understanding of circularity consists of keeping resources once sourced from nature for as long as possible in economic use, thereby minimizing the additional introduction of finite resources into the economic cycle.

In our case, the circular economy is focused on ramping up scrap recycling, considerably accelerating the decarbonization of steel production, as well as sourcing power from renewable energies.

Scrap Recycling Expansion

The primary goal in the field of circularity is to increase the use of scrap in steel production, from currently 2 million tons p.a. to at least 3 million tons p.a. (+50%) through to 2030.

In the second quarter of 2024, Salzgitter AG commissioned the construction of a large shredding facility in Salzgitter. Entailing an investment volume of almost €30 million, the plant will secure the supply of low carbon steel production with qualitatively high-grade scrap in sufficient quantities. Commissioning has been scheduled to coincide with the start of the first stage of the SALCOS® transformation program in 2026.

DEUMU Deutsche Erz- und Metall-Union GmbH set about developing scrap type 4 SALCOS® together with its partners. This scrap is in line with the properties required in the SALCOS® production process.

Policies related to own workforce

Salzgitter discloses several policies and directives related to its own workforce across the excerpts provided:

Code of Conduct

Policy name: Code of Conduct (also referred to as "YOUNITED" mission statement)

Scope: Binding on all employees across all Group companies

Key content/principles:

• Commitment to observe all laws at all times and in all places
• Observance of human rights
• Compliance with the law
• Commitment to fair competition
• Rejection of corruption of any kind
• Fair and honest dealings with colleagues and business partners
• Values including reliability, fairness and sustainability
• Respect for internationally recognized human rights (European Convention on Human Rights, Universal Declaration of Human Rights)
• Rejection of forced labor and child labor
• Recognition of the right of employees to form unions and employee representations
• Appropriate remuneration for all employees
• Zero tolerance for discrimination or harassment in the workplace based on race, ethnic origin, gender, religion, ideology, disability, age, sexual identity, skin color, political opinions, national heritage, social background
• Occupational health and safety as a high-quality asset

Governance: Executive Board explicitly declares commitment and oversees implementation

Links to international standards:

• Based on the ten principles of the UN Global Compact
• European Convention on Human Rights
• Universal Declaration of Human Rights
• Declaration of the ILO on Fundamental Principles and Rights at Work
• OECD Guidelines for Multinational Enterprises
• United Nations Guiding Principles on Business and Human Rights (though mapping identified that individual aspects do not yet fully reflect this standard)

Monitoring: Compliance Management System; whistleblower system FAIR TOGETHER; internal auditing department reviews efficacy

Group Directive "Corporate Compliance"

Policy name: "Corporate Compliance" Group directive

Scope: All Group employees

Key content/principles:

• Making clear that observance of statutory regulations and internal company rules represents an unshakable framework (zero tolerance for breaches)
• Clarifying responsibility for compliance
• Specifying organizational measures for Executive Board members, managing directors, managers, and all employees
• Providing guidelines for preventing corruption, ensuring correct anti-trust behavior, avoiding money-laundering risks, preventing forbidden insider trading

Governance: Executive Board (CEO bears responsibility for compliance); Compliance Committee consisting of CEO, CFO, Head of Legal, Compliance & Insurance, and Head of Internal Audit

Monitoring: Compliance risk analysis conducted annually by all consolidated companies; Internal Audit department verifies suitability and efficacy during regularity audits; annual compliance report to Supervisory Board

Group Directive "Occupational Health and Safety"

Policy name: "Occupational Health and Safety" Group directive

Key content/principles:

• Defines safety policy
• Defines elements and standards of health and safety management
• Occupational safety is a high-priority corporate goal
• Requires companies to draw up targets, priorities and programs
• Requires monitoring and reviewing efficacy of measures

Scope: All Group companies, though regulated on a decentralized basis due to different requirements in individual business units

Governance: Decentralized - each company management bears responsibility; Executive Board sets annual targets for occupational health and safety in strategy scorecard

Links to international standards:

• 71% of employees work in companies certified to ISO 45001
• Commitment to "Luxembourg Declaration on Workplace Health Promotion" since 2004

Monitoring: Continuous monitoring of accidents; risk assessments; accident analyses; regular occupational health and safety meetings in Group management; audits for ISO 45001 certification; occupational safety working group supports companies

Group Umbrella Works Agreement "Training"

Policy name: Group umbrella works agreement "Training"

Scope: Employees and trainees of domestic Group companies (with exception of minority interest HKM)

Key content/principles: Defines framework conditions and standards for training

Governance: Concluded between company and Group Works Council

Monitoring: Group HR controlling surveys number of trainees and subsequent employment; "Joint Vocational Education Advisory Board" discusses training questions

Group Umbrella Works Agreement "Further Training"

Policy name: Group umbrella works agreement "Further Training"

Scope: Employees of domestic Group companies (with exception of minority interest HKM)

Key content/principles:

• Defines framework conditions and standards for further training
• Access to qualification offers
• Target-group oriented qualification and development opportunities

Governance: Concluded between company and Group Works Council

Monitoring: Implementation conducted at company level; HR Board and Group Works Council committees address training and further education topics

Group Directive "Corporate due diligence in the supply chain"

Policy name: "Corporate due diligence in the supply chain" Group directive

Scope: All Executive Board members, CEOs and Group employees within their assigned remit

Key content/principles:

• Ensures respect for human rights standards in own operations and supply chain
• Based on three pillars: Identification, Prevention and Remedy
• Expectations that all obligations relating to human rights and environment are observed

Governance: Human Rights Officer monitors supply chain risk management system; Executive Board issues Policy Statement on human rights strategy

Links to international standards:

• Based on Supply Chain Due Diligence Act (LkSG)
• United Nations Guiding Principles on Business and Human Rights
• Declaration of the ILO on Fundamental Principles and Rights at Work
• OECD Guidelines for Multinational Enterprises

Monitoring: Annual reporting by operating Group companies on human rights situation; Human Rights Officer monitors; Internal auditing department reviews whistleblower system efficacy

Group Framework Inclusion Agreement

Policy name: Group framework inclusion agreement

Key content/principles:

• Promotion of participation of employees with severe disabilities in training measures
• Integration of people with severe disabilities through adapted workplaces
• Companies can set up "Inclusion Teams" to draw up specific measures

Governance: Representative bodies for people with severe disabilities at Group level and local level in Group companies

Health and Safety Strategy

Policy name: Health and safety strategy (in development as of reporting year)

Key content/principles: Aims to mesh occupational health and safety and health protection more closely, and further standardize offers and measures across the Group

Public availability: The Code of Conduct, Policy Statement on human rights strategy, and Supplier Code of Conduct are referenced as available on the Salzgitter AG website. The Declaration of Corporate Governance is accessible on Salzgitter AG's website.

Taking action on material impacts on own workforce

The company states that with regard to impacts and risks identified as material, various individual issue-specific measures are implemented. However, there are currently no comprehensive action plans. The company dispenses with the minimum disclosure requirements in accordance with MDR-A Sec. 69 a to c which are not applicable.

Resource Allocation

The corresponding human resources, financial means and material resources required to implement all the measures mentioned which serve to manage material impacts will be provided by the company or Group companies. No specific quantified amounts are disclosed.

Internal Directives and Policies

• "Occupational Safety" Group directive and code of conduct are intended to ensure that own practices do not have negative impacts on the workforce
• Internal company rules and relevant statutory provisions constitute important company principles

Occupational Health and Safety Actions

The aim is to avoid and counteract negative impacts such as accidents and risks, and reinforce the safety culture in the company.

Specific measures implemented at local level:

• Facility-specific and operation-specific measures developed and implemented in Group companies to prevent, mitigate or stop negative impacts
• Systematic documentation, investigation and analysis of accidents including circumstances, course and reasons
• Accident analyses, regular risk assessments, inspections and audits to identify and eliminate accident black spots, unsafe conditions and risks
• First aid, investigations, discussions of accident events, repetition of safety briefings or training, drawing up or changing safety instructions
• Temporary creation of alternative jobs or measures to reintegrate employees into operations
• Constant communication on occupational safety issues or incidents to raise employee awareness

Personal Protective Equipment (PPE):

• Defined selection and approval process involving technical departments and employee representatives to ensure quality and suitability of PPE

Hazardous Substances Management:

• E-learning module for employees on general work with hazardous substances (e.g. at Salzgitter Flachstahl GmbH)
• Specific training on risks and protective measures by company supervisors based on operating instructions in accordance with Hazardous Substances Ordinance

Occupational Safety Group Working Group:

• Reports directly to the Chief Personnel Officer and Group Industrial Relations Director
• Supports Group companies in constantly improving occupational health and safety
• Conducts "smart audits" in Group companies to identify strengths and areas in need of development
• Promotes dialog between companies and knowledge transfer on appropriate measures
• Provides support in selecting possible instruments of occupational health and safety via a "toolbox"
• Conducts specialist seminars including annual get-together of safety officers and qualification measures

Co-determination:

• Various company agreements in place in Group companies reflecting comprehensive health and safety at work
• Inclusion of co-determination bodies and employees in occupational safety processes such as risk assessments
• Development and introduction of preventive occupational safety mechanisms

Communication and Awareness

• Rollout of in-house employee app "SZMAPP" in domestic Group companies containing information, employee services, dates and documents to support internal communication
• Decentralized communication formats such as company Intranets or employee magazines

Targets related to own workforce

Occupational Health and Safety - Lost Time Injury Frequency (LTIF)

Target metric: Lost Time Injury Frequency (LTIF) - number of work-related accidents with days and occupational accidents lost per 1 million hours worked

Scope: Worldwide active workforce (permanent staff and trainees). Note: Temporary workers have been included in the LTIF target for the Executive Board for the first time in the reporting year.

Targets:

• 2025 target: Reduce accidents by 35% compared with 2021
• 2030 target: Reduce accidents by 50% compared with 2021

Target type: Percentage reduction (intensity-based metric - per 1 million hours worked)

Baseline year: 2021

Progress to date:

• 2024 target value: LTIF of 7.90
• 2024 actual value: LTIF of 7.45

Governance: Reduction in accidents/LTIF is a regular component of targets set by the Supervisory Board for the Executive Board and cascaded to top management throughout the Group.

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Further Training and Skills Development

Previous target (2020-2023): 95% of employees worldwide should have taken part in at least one further training measure by 2023

Progress achieved: 99.87% achieved for the 2023 financial year

Status: Target successfully met in 2023. The Group initially refrained from defining a follow-on target on "Further training" after 2023.

Monitoring (2024): Regular monitoring maintained without a specific target:

• 20,426 further training participants across the Group in 2024
• 76,143 further training measures carried out in 2024

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Skills Shortages

Approach: The Group has refrained from setting a quantitative target due to the multifaceted nature of this issue. Relying on implementing specific qualitative measures instead.

Workforce Data

As of December 31, 2024, the core workforce of the Salzgitter Group numbered 22,381 employees, which is 757 people less than at the end of the financial year 2023 (23,138). Including trainees and employees in non-active age-related part-time work, the total workforce of the Salzgitter Group came in at 24,473 persons (previous year: 25,183).

Regional Distribution

At the end of the financial year 2024, we also employed 779 temporary staff outsourced (previous year: 835), which corresponds to 56 persons less compared with the previous year. The share of external staff outsourced in the sum total of core workforce members and staff outsourced stood at 3.4% (previous year: 3.5%).

Due to temporary capacity utilization problems in a number of companies, short-time work was also necessary in the financial year 2024. At the end of the reporting period, 201 employees were working short time in the domestic Group companies (previous year: 167). An average of 423 employees a month were affected by short-time work in 2024 (previous year: 290).

Collective bargaining coverage and social dialogue

Works councils and employee representation

Salzgitter AG is subject to the coal-and-steel co-determination system with regard to Salzgitter AG and the original iron and steel producing Group companies. This system endows employee representatives on the Supervisory Board with an extensive right to influence key transactions and the appointing of a labor relations director.

The Group Works Council is the central co-determination and participation body of the employees. In addition, each business unit has its own work groups within the works councils. The Group Works Council's members are delegated to the council from works councils in domestic companies operating in the relevant business units.

Collective agreements and social dialogue

Collaboration between companies and employee representatives is supported by Group works agreements on the "Composition and Duties of the Group Works Council" as well as the "Works Council Work Groups". These agreements govern the composition, duties and working methods of these co-determination bodies as well as aspects of their collaboration with the company.

The Executive Board and senior management regularly participate in events organized by the Group Works Council and the works councils, which guarantees an extensive exchange of information and ideas between the company and employee representation. Steering and control committees staffed on equal terms foster the participation of employees in the development of the company.

Group umbrella works agreements

Group umbrella works agreements have been concluded with the Group Works Council covering:

• Training: Defines framework conditions and standards for training for employees and trainees of domestic Group companies (with the exception of the minority interest HKM)
• Further Training: Defines framework conditions and standards for further training and access to qualification offers for employees of domestic Group companies (with the exception of the minority interest HKM)
• Succession planning: Defines the process and participation arrangements for non-pay-scale employees in Germany (with the exception of the minority interest HKM)
• Talent management: Defines the process and participation arrangements for non-pay-scale employees in Germany (with the exception of the minority interest HKM)
• Health and safety: Various company agreements in place in Group companies that reflect comprehensive health and safety at work

Engagement process

The Chief Personnel Officer (Group Industrial Relations Director) is the link between the Group Works Council and the company and responsible for incorporating the results and suggestions arising from dialog with employees and employee representatives in concepts and actions.

Regular engagement includes:

• Regular meetings with the chair of the Group Works Council
• Participation in meetings of the Group Works Council
• Annual Group Works Council Conference with Executive Board participation
• Regular plenary sessions for the working groups of the business units
• HR Board and head body of the Group Works Council (Group Works Committee) convene at least twice a year
• Committees specifically set up for topics such as occupational health and safety, environmental protection, training and further education

Joint declaration on transformation

In the joint declaration by the Executive Board and the Group Works Council and IG Metall on the "Salzgitter AG 2030" Group strategy and the transformation contract, the necessity of the transformation process is defined as an important step toward securing the future and preserving the independence of Salzgitter AG. These agreements describe the foundations of the planned transformation process and define the underlying conditions.

Supervisory Board representation

On Salzgitter AG's Supervisory Board, employee representatives play an active role in preparing the Supervisory Board's targets for the Executive Board and monitoring their implementation. The Supervisory Board regularly sets the Executive Board targets with respect to sustainability aspects including occupational health and safety and further training.

Note: Quantitative metrics on percentage of employees covered by collective bargaining agreements or works councils are not disclosed in the provided excerpts.

Women in Management Targets

Furthermore, we pursue the goal of raising the proportion of women in newly to be filled non-tariff and management positions to 25% by 2025 and to 30% by 2030. In this context, Salzgitter AG is working tirelessly to enhance its employer appeal, particularly also for women.

Women's Networks and Development

Following on from last year when the "Women of Steel" network was set up at Salzgitter Flachstahl GmbH, female employees of Peiner Träger GmbH and the two heavy plate companies came together in the reporting year for a cross-company and a company-specific "women's network meeting", with the aim of expanding the network of female employees. As a flanking measure, cross-departmental input sessions were held in the three companies in which female employees and management developed ideas and measures to increase the proportion of women and promote women in management.

Social protection

Pension and retirement coverage

Salzgitter provides pension coverage to employees primarily in Germany through various schemes:

Main pension arrangements:

• Salzgitter pension (collective Group agreement, 2006): Employer pays annual fixed percentage contribution into individual pension accounts. Payment as monthly pension with no lump-sum option.

• Final-salary pension commitments: Pre-2006 entitlements based on income at departure, transferred to Salzgitter pension via transition arrangements.

• Deferred compensation: Employees can convert gross salary into pension benefits invested in fund units with guaranteed minimum interest (for entitlements acquired until 2021).

• SZplus commitment (2023): For managing directors and senior executives without Essener Verband commitments. Employer base contribution up to doubled via matching employee salary conversion. Securities-based commitment paid as lump sum.

• Essener Verband pension tables: Individual commitments for managing directors and selected executives, with maximum entitlement after 25 years.

• Executive Board defined contribution commitments (from 2019): Fixed annual contributions invested in fund units, paid as capital payment or 10-year installments.

Personnel expenses related to pensions:

Defined contribution pension expenses: €119.4 million (2023: €114.5 million)

Past service cost for defined benefit commitments: €25.6 million (2023: €20.0 million)

Net pension provision: €1,638.4 million as of December 31, 2024 (2023: €1,667.8 million)

Geographic scope:

• Pension commitments exist predominantly for German employees
• Foreign companies have immaterial pension commitments, minimally covered by plan assets (mainly insurance policies)

Other social protection

No quantitative disclosure on percentage of employees covered by social protection schemes for sickness, maternity, paternity, disability, or unemployment benefits.

Personnel Development

Our established FORWARD personnel development program functions as a central component for securing specialist and management staff within the Salzgitter Group. With a view to stepping up the program, activities to link our talent management and our mentoring program for women were undertaken in the reporting year. The aim is to involve women mentees from the mentoring program in a more targeted manner in the future in the talent management nomination process and to identify female high potentials in order to promote the process of recruiting female employees for management roles.

A groupwide network event designed to support all mentees took place in 2024. A day was reserved for discussing aspects of career development for women in various workshops, keynotes and presentations, thereby strengthening the groupwide network.

Health and safety metrics

Coverage by health and safety management system

71% of Salzgitter's employees work in companies certified to ISO 45001 in Germany and abroad.

Fatalities

In the reporting year, a work-related accident occurred on the site of Hüttenwerke Krupp Mannesmann GmbH (HKM; 30% share) in which an employee of an external company was fatally injured during loading work within their own sphere of responsibility. Official investigations into this incident had not yet been completed as of the end of the reporting year.

Recordable work-related accidents

The Lost Time Injury Frequency Rate (LTIF) is calculated as occupational accidents per 1 million hours worked for the core workforce. The LTIF target for 2024 was 7.90; the actual figure stood at 7.45.

The Salzgitter Group is striving to reduce the LTIF by 35% by 2025 measured against the reference year of 2021 and by 50% by 2030.

From 2023 onwards, the monitoring of accidents was extended to temporary workers worldwide and in the first quarter of 2024 to the employees of external companies in Germany. Temporary workers have been included in the LTIF target for the Executive Board for the first time in the reporting year.

Days lost

No data on days lost to work-related injuries or fatalities is disclosed.

Compensation metrics (ESRS S1-16)

Salzgitter has phased in the disclosure of S1-16 compensation metrics under ESRS 1 Appendix C in their first year of reporting.

Pay gap

Not disclosed.

Remuneration ratio

Not disclosed.

Methodology

The company states in the Non-Financial Report section on General Information (GOV-5) that it is using parts of the European Sustainability Reporting Standards (ESRS) for the first time as a framework for the financial year 2024. While the report contains extensive disclosures on remuneration systems, targets for women in management (13.3% at first level, 22.2% at second level by June 30, 2027), and detailed Executive Board remuneration structures including share-based remuneration programs, no specific gender pay gap percentages or CEO-to-median remuneration ratios are provided in accordance with S1-16 requirements.

YOUNITED Corporate Mission

Under its "Salzgitter AG 2030" strategy, the Salzgitter Group has positioned itself to meet the challenges of the future. In our YOUNITED mission statement, we have formulated our understanding of ourselves based on the three pillars of Goals, Paths, Values. A review of the mission in the reporting year produced clear evidence that YOUNITED and its values are instrumental in assisting us to achieve our new strategic goals.

In addition, in the context of an "upgrade" in 2023, ten corporate culture levers were identified that translate our values into specific measures and activities. The four levers of greatest relevance were prioritized for the purpose of evolving our corporate culture: "Focusing on the Customer", "Enabling Agility", "Taking Responsibility" and "Demonstrating and Recognizing Performance".

Compliance Management

The compliance management system and investigated compliance activities are regularly debated at the Supervisory Board plenum's autumn meeting, prepared beforehand by the Audit Committee's in-depth deliberations on this topic. The head of the Group's Legal Department generally reports to the full Supervisory Board and the head of the Group's Compliance Management to the Audit Committee.

Incidents of corruption or bribery

Confirmed incidents

The company does not report any confirmed incidents of corruption or bribery for the 2024 financial year. The Compliance Committee's priorities report for 2024 states that "No new compliance matters of heightened relevance or major new findings with respect to already familiar issues were identified."

Convictions and fines

Not disclosed.

Disciplinary actions

Not disclosed.

Contracts terminated

Not disclosed.

Investigation procedures and speak-up mechanisms

The Salzgitter Group has established the FAIR TOGETHER whistleblower system to enable all employees, customers, suppliers, and other business partners to report infringements of the law in the company. The system is available through:

• An electronic reporting portal in German and 26 different languages
• A compliance hotline (German or English)
• An ombudsperson

All information is treated confidentially, and anonymous tip-offs are possible. The ombudsperson will not pass on the identity of the whistleblower if they so wish.

The company states: "All suspicious cases of infringements of internal or external regulations in connection with the Salzgitter Group's business activities are investigated immediately wherever possible. The aim is to investigate and evaluate whether and to what extent an infringement can be identified."

The efficacy of the whistleblower system (complaints procedure) is regularly reviewed by the Group's internal auditing department.

Compliance management organization

The company has implemented a comprehensive Compliance Management System (CMS) with:

• A Compliance Committee consisting of the CEO, CFO, Head of Legal, Compliance & Insurance, and Head of Internal Audit
• A dedicated Compliance Management department with a compliance officer
• Regular compliance training for employees in compliance-sensitive activities
• Regular compliance risk analysis across all consolidated companies

The company's "Corporate Compliance" Group directive and Code of Conduct explicitly reject corruption of any kind and establish a zero-tolerance policy for breaches of statutory regulations and internal company rules.

Payment practices

Average payment time

The average time in days required to pay a bill based on its document date is 27 days for Group companies with relevant operating activities in terms of their share of Group sales.

A figure that deviates significantly from this is not to be expected even if all Group companies are included.

Standard payment terms

Standard payment terms provide for payment within 90 days at the latest, in many cases earlier, and, if so agreed, with the application of a discount.

These payment terms were uniformly applied to around 93% of all payments in the 2024 financial year, regardless of whether the payee was a small, medium-sized or large company.

Legal proceedings for late payment

The company is not aware of any pending court cases against companies in the Salzgitter Group due to the non-payment of uncontentious invoices due.

Reverse factoring

KHS Group companies conclude reverse factoring agreements with financial institutions. Trade payables as at December 31, 2024 include:

Reverse factoring gives suppliers the opportunity to refinance independently of the agreed payment terms. The long-term plant construction business requires payment terms of up to 180 days.