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Kendrion: Motion Technology and Control
Integrated Annual Report 2025
KENDRION 2025
HOW OUR PRODUCTS IMPACT EVERYDAY LIFE
Even potato chips need perfect, gentle motion
In snack factories, chips must flow smoothly or quality suffers.
Kendrion oscillating solenoids create controlled vibrations that feed
and dose products evenly, helping avoid breakage, blockages, and
downtime. Simple, robust motion control keeps high-speed food
lines running reliably, batch after batch.
A warning you can feel under your foot
In the operating room, feedback reduces risk. Kendrion brakes
integrated into surgical pedals add a clear, controllable resistance
that signals when a critical threshold is near. This intuitive feel helps
surgeons stay precise without shifting attention, supporting safer
procedures.
Accurate lung tests start with stable pressure
During lung function testing, patients rely on equipment that must
stay consistent and safe. Kendrion pressure regulators keep medical
airflows and working pressures steady so downstream valves and
sensors perform correctly. Biocompatible designs support clean
operation, helping clinicians trust every measurement.
Balancing machines that keep production on track
From e-motors to precision rotors, balance is quality. Kendrion
control and I/O solutions help automated balancing machines
measure and correct faster and more accurately, reducing scrap and
rework. Manufacturers gain higher throughput, consistent
performance, and flexible lines that adapt to new products.
Battery tools that perform when lives depend on it
Rescue crews and forestry teams need cordless tools that won't fail
in harsh conditions. Kendrion motor control and power management
help deliver strong, efficient performance while protecting batteries
and logging faults. The payoff is dependable operation, where
reliability can save time and lives.
Safe, steady medical gases in critical care
In ventilators and anesthesia systems, the right gas pressure cannot
be optional. Kendrion low-flow regulators precisely reduce supply
pressure to the stable levels devices need for oxygen and other
medical gases. Reliable control supports patient safety and
dependable treatment when every second matters.
2
Integrated Annual Report 2025
HOW OUR PRODUCTS IMPACT EVERYDAY LIFE
Holding satellites steady on their way to orbit
Launching small satellites demands absolute reliability. Kendrion
custom holding magnets help secure CubeSat dispensers through
vibration, vacuum, and extreme temperature swings, then release on
command. It's a small component with a big job: enabling safe,
predictable deployment in space.
Guiding surgeons with pinpoint magnetic detection
In breast-conserving surgery, finding the exact target is crucial. With
Kendrion engineering, magnetic localization systems can guide
surgeons in real time with visual and acoustic cues, improving
accuracy and comfort. Robust software development and
compliance support reliable performance in the Operating Room.
Safety that supports climbers in tough forests
Forestry climbers depend on gear that must hold without hesitation.
Kendrion holding brakes can secure a rope winch in an emergency,
preventing dangerous slips, and allow controlled manual release for
descent. A reliable braking moment can make the difference when
conditions turn risky.
Power tools that stop instantly, work efficiently
Cordless tools are getting smaller, stronger, and more electrified.
Kendrion compact brake solutions help high-performance motors
stop and hold safely, improving control and energy efficiency. From
workshops to job sites, users get confident handling and
dependable safety, without adding bulk.
Precise positioning for scans that must be right
For MRI and CT procedures, patient tables must move smoothly,
then lock perfectly still. Kendrion brakes help medical couches
position and hold with confidence, supporting accurate imaging and
targeted therapy. Quiet, dependable holding improves workflows
and helps clinicians focus on care.
Turning used oil into new value
Mountains of used oil from vehicles and machines do not have to be
waste. With Kendrion's inductive heating, recycling plants can heat
and separate oil cleanly and precisely, turning it back into high-grade
lubricants. The result: less burning, lower emissions, and more value
recovered.
3
Integrated Annual Report 2025
This document is the PDF version of the 2025 Integrated Annual Report of Kendrion N.V. and has been prepared for ease of use.
The European Single Electronic Format (ESEF) reporting package is available on the company’s website at www.kendrion.com.
In case of discrepancies or ambiguities between this PDF version and the ESEF reporting package, the latter prevails.
2 How our products impact everyday life
5 Profile
6 Organization
7 Facts and figures
9 World map
10 Preface Joep van Beurden, CEO
12 Members of the Executive Board
13 Business Groups
25 Strategy and financial objectives
27 Financial review
CONTENTS
PHOTOGRAPHY
AND IMAGES
Wessel de Groot Fotografie
Kendrion N.V.
Shutterstock
iStock
A digital version of this Report
is available on the website
www.kendrion.com
along with other publications
such as press releases.
30 Outlook
31 Risk management
38 Corporate governance report
43 Sustainability statements
102 Preface Frits van Hout,
Chairman of the Supervisory Board
103 Members of the Supervisory Board
105 Report of the Supervisory Board
109 Remuneration report
125 Share and shareholder information
128 Financial statements
203 Other information
204 Independent auditor’s report financial statements
215 Limited assurance report of the independent
auditor on the sustainability statements
217 Principal subsidiaries
219 Glossary – definitions of non IFRS financial
measures
221 Reconciliation of non IFRS financial measures
Integrated Annual Report 2025
4
PROFILE
Kendrion shapes the future with high precision
brakes, electromagnetic components, fluid
technology, control systems and embedded
systems.
Our solutions deliver precise control, maximum safety and
smooth motion across a wide range of applications. These
include machinery, robotics, automation, medical technology,
energy and process industries, and industrial mobility solutions.
We offer a broad portfolio of standard products and strong
project and coengineering capabilities. We work closely with
customers to develop solutions tailored to their needs. We
combine deep technical expertise across multiple technologies
with the ability to integrate them intelligently. This is how we
deliver precision, safety and reliability for tomorrow’s challenges.
Kendrion is headquartered in the Netherlands, with strong
engineering roots in Germany. We serve customers across
Europe, the Americas and Asia. For more than a century, we
have engineered precision solutions for leading innovators in
industrial applications. Kendrion N.V. is listed on Euronext
Amsterdam.
Innovative solutions for
tomorrow, built on precision,
safety and reliability
5
Integrated Annual Report 2025
Industrial Brakes
ORGANIZATION
Industrial Actuators
and Controls
We enable motion and process control for medical technology, energy
and industrial automation. Our portfolio includes solenoids, fluid
assemblies, inductive heating systems and precision electronics.
Customers benefit from reliable actuation, consistent control and
efficient performance in demanding applications.
We offer electromagnetic braking solutions for electric drives and safety
critical industrial applications. Our portfolio includes spring applied and
permanent magnet brakes, as well as engineered braking systems.
Customers rely on our solutions for precise stopping, holding and
controlled emergency braking within motion control systems, where
reliability, functional safety and precise axis control are essential.
6
Integrated Annual Report 2025
1
Non-IFRS financial measure. For the definition and reconciliation of the most directly comparable IFRS measure, refer to reconciliation of non-IFRS financial measures, starting on page 219.
2
Invested capital excluding intangibles arising from acquisitions.
3
Not Meaningful
Revenue
(EUR million)
1%
245.5
2024 247.5
Profit for
the period
(EUR million)
NM
3
19.5
2024 (4.5)
Normalized
EBITDA
1
(EUR million)
15%
38.1
2024 33.2
Dividends
(proposed)
(EUR million)
57%
11.0
2024 7.0
ROI
1, 2
(in %)
105%
24.6%
2024 12.0%
FACTS AND FIGURES
Free cash flow
1
(EUR million)
89%
83.9
2024 44.3
7
Integrated Annual Report 2025
For more information we refer to our sustainability statements on page 43.
Total number
of employees
by gender
(in % F vs M)
1%
44/56
2024 43/57
Total number of
employees (FTE)
(at 31 December)
7%
1,269
2024 1,359
Illness rate
(in %)
0%
5.9%
2024 5.9%
Accidents
(per 1,000 FTE)
27%
11
2024 15
Relative energy
consumption (in
tonnes kWh/million
added value)
20%
93.1
2024 117.1
Relative CO
2
e
emission
(in tonnes kWh/
million added value)
27%
12.2
2024 16.8
Number of
CSR supplier
audits
19%
13
2024 16
8
Integrated Annual Report 2025
FACTS AND FIGURES
WORLD MAPWORLD MAP
Revenue (in EUR million) segmented by customer location
FTE segmented by region
18.6
8%
Kendrion
business
location
1
Including other countries with revenue of EUR 2.0 million.
18.7
8%
208.2
84%
15% 85%
54
45% 55%
1,167
42% 58%
48
EUROPE
THE AMERICAS
ASIA
1
9
Integrated Annual Report 2025
PREFACE
Kendrion 2025: completing the industrial transformation
In the summer of 2023, after a thorough strategic review of the
automotive market and Kendrion’s position, we took a bold
decision to transform Kendrion into a pure-play industrial
technology leader. I am proud to report that this transformation
has been completed by the end of 2025.
Why the shift: After several challenging years for our
Automotive Business Group, we recognized that the issues
facing the automotive sector were fundamental rather than
temporary. With full support from our Supervisory Board, we
determined that staying in this sector would restrict our
potential to capitalize on the numerous opportunities within the
industrial sector, limit our profitability, and strain our finances.
Amid global uncertainty, geopolitical tensions and rising tariffs,
we chose to take a decisive action by focusing exclusively on
industrial markets.
A multi-year transformation
This transformation has been driven by a sequence of strategic
projects and continuous operational improvement. In 2025, we
completed three defining steps: the sale of our European and
USA automotive operations to Solero Technologies, the
transition of our China-based businness to local management,
and a long-term cooperation with Knorr-Bremse for the Sibiu
mobility electronics operations.
In parallel, we simplified structures, removed automotive-related
complexity, and have initiated the implementation of a new,
simpler, ERP system. With these actions now in place, we are
faster, leaner, and more responsive.
The initial results are good: in 2025 we exceeded our 15%
EBITDA target ahead of schedule. To achieve this while
completing such a significant transformation demonstrates the
strength, focus, and execution discipline of our teams.
Strong industrial portfolio and market position
Our industrial technologies – including valves, actuators,
brakes, and advanced control systems – are used in over 30
different industrial market segments. Fast-growing segments
we serve include parcel locker security, medical flow-control
devices, robotics, warehouse automation, and sectors driven
by electrification. With deep technical knowledge and a solid
presence in these areas, we consistently deliver solutions that
offer distinct competitive benefits. In every segment, we have
the technology, the scale, and the credibility to make an impact
on the industries we support.
Joep van Beurden, CEO
10
Integrated Annual Report 2025
Financial strength and shareholder value
The much-improved profitability – our normalized EBITDA
1
over
2025 was 15.5% of revenue – and stronger-than-expected
cash flow reflect the benefits of our industrial shift and
disciplined execution. It has enabled us to return value to
shareholders through a EUR 1.00 per share special dividend
and the start of a share buyback program of up to EUR 10
million, while continuing to invest in growth.
Trust and teamwork
A transformation of this scale requires courage, persistence,
resilience, and trust. Trust in the strategy, trust in each other,
and trust in our ability to deliver. Our progress is the result of
the talent and dedication of our teams worldwide. Their
commitment has turned the bold decision of 2023 into reality
and positions Kendrion for sustainable, long-term growth.
I thank everyone at Kendrion for their confidence, drive, and
teamwork that made this transformation possible. Together,
we have created a stronger, more focused, and future-ready
company.
Joep van Beurden
CEO
1
Non-IFRS financial measure. For the definition and reconciliation of
the most directly comparable IFRS measures, refer to reconciliation
of non-IFRS financial measures, starting on page 219.
2025 was a pivotal year for Kendrion as we
completed the transformation to a focused, pure-
play industrial company. Going forward we are
entirely focused on high value industrial niches, and
aim to be significantly more profitable.
11
Integrated Annual Report 2025
PREFACE
J.H. (Jeroen) Hemmen
Position Chief Financial Officer
Year of birth 1973
Nationality Dutch
Joined Kendrion 1 June 2005
Appointment to position
Current term
1 July 2019
1July 2023 – 1 July 2027
(second term, AGM 17 April 2023)
Other positions None
MEMBERS OF THE EXECUTIVE BOARD
J.A.J. (Joep) van Beurden
Position Chief Executive Officer
Year of birth 1960
Nationality Dutch
Joined Kendrion 1 December 2015
Appointment to position 1 December 2015
Current term 1 December 2023 – 1 December 2027
(third term, AGM 17 April 2023)
Other positions
Vice-chair of the Supervisory Board and member of the Nomination
and Remuneration Committee of Adyen N.V.
12
Integrated Annual Report 2025
OUR PRODUCTS ARE USED IN
Cranes & Hoists
Electric Motors
Elevators
Industrial Robots
Industrial Trucks & AGV
Medical Surgical Robots
Wind Power
OUR CUSTOMERS INCLUDE
Bosch Rexroth AG
Bonfigioli
Liftket
Juli
Lenze
Nord
Raymond
Schneider Electric
SEW
Siemens
Toyota
BUSINESS GROUPS
Industrial Brakes
Industrial Brakes is a full-line provider of high-
performance electromagnetic brakes for electric
motors, serving diverse industrial markets. With a
focus on precision and safety, the business group
offers both standard and customized braking
solutions.
INDUSTRIAL BRAKES REVENUE
(in EUR)
93.7 million
2024 95.9 million
Europe
90%
Asia and
Rest of the world
3%
The Americas
7%
Kendrion locations with regional revenue breakdown
13
Integrated Annual Report 2025
OUR CUSTOMERS INCLUDE
ABB
ASML
Collins Aerospace
Dräger
Electrolux
Euchner
Fresenius
Gorenje
Oerlikon
Schmersal
Siemens
OUR PRODUCTS ARE USED IN
AGV
Aviation
Energy generation & distribution
Food & beverage machinery
Industrial appliances
Industrial automation
Robotics
Print & paper handling
Analysis Technology
Anesthesia & respiration machines
Dental treatment units
Dialysis machines
Laboratory equipment
Industrial Actuators and Controls develops
customized solutions for industrial applications,
leveraging expertise in electromagnetic
actuators, control technology, and fluid
technology. With a focus on precision and
reliability, the business group delivers tailored
solutions for a wide range of industries.
INDUSTRIAL ACTUATORS AND
CONTROLS REVENUE
(in EUR)
110.4 million
2024 111.7 million
Europe
92%
Asia and
Rest of the world
0%
The Americas
8%
Kendrion locations with regional revenue breakdown
Industrial Actuators and Controls
14
Integrated Annual Report 2025
BUSINESS GROUPS
In an era demanding smarter, more efficient and more resilient
industrial systems, Kendrion delivers automation and intelligent
motion control across a broad range of industries — including
robotics and factory automation, medical technology, and
sustainable energy systems.
Specializing in high-performance electromagnetic brakes,
actuators, and control technologies, Kendrion translates
complex engineering requirements into reliable, mission-critical
motion-control solutions. These solutions support safe, precise
and energy-efficient automated motion, helping customers
improve productivity, system reliability, and sustainability.
Kendrion operates through two Business Groups, each
focused on core motion and control functions within automated
systems: Industrial Brakes (IB), specializing in electromagnetic
braking solutions for application in robotics, wind power,
intralogistics and electric motors, and Industrial Actuators and
Controls (IAC), focused on advanced actuators, valves and
control systems.
Industrial Brakes (IB): Enabling safe, precise
and reliable motion control
The Industrial Brakes (IB) Business Group develops high-
performance electromagnetic braking systems for a wide range
of automation and motion-control applications, including AGVs,
industrial automation, intralogistics, medical devices, robotics,
and wind energy.
Demand is driven by the need for more efficient and compact
system designs and electric motors with higher power and
energy density. As motion systems become faster and more
automated, also driven by the significant developments in
Artificial Intelligence (AI), reliable braking and holding functions
are increasingly critical for safety, precision, and system
availability.
Kendrion is unique in its worldwide offering of a complete
portfolio of both spring-applied and permanent-magnet brake
technologies. This broad technology base positions IB as a
preferred partner for electric motor manufacturers and system
integrators seeking suppliers with deep application knowledge
in automation and motion control.
IB maintains a strong global presence with operations in
Germany, the United States of America and India. With AI
driving increasing demand for advanced automation, growth is
anticipated in all geographies, with India in particular emerging
as a key market.
Industrial Actuators and Controls (IAC):
Advancing automation and control
technologies
The Industrial Actuators and Controls (IAC) Business Group
serves industries including machine automation, energy
distribution, medical technology, aviation, industrial appliances,
and motion control.
Enabling automation and intelligent
motion control across industries
Industrial Activities – IB & IAC
15
Integrated Annual Report 2025
BUSINESS GROUPS
Long-term trends such as AI driven automation electrification,
automation, and the global energy transition support these
markets.
IAC has built strong positions in actuation, control, and
specialized system solutions, including inductive heating,
industrial locks, energy-distribution components, and high-
performance valves for nuclear and critical infrastructure
applications. These tailored solutions give Kendrion a
competitive advantage in complex and safety-critical
environments where reliability and precision are essential.
The retained Mobility activities, following the Automotive
divestments, are integrated into IAC, but reported separately.
2025 Group financial performance
Kendrion’s industrial activities generated EUR 204.1 million
in revenue in 2025, compared to EUR 207.6 million in 2024.
IB reported EUR 93.7 million in revenue (FY 2024: EUR 95.9
million), IAC EUR 110.4 million (FY 2024: EUR 111.7 million),
and other revenue, including retained Mobility activities,
EUR 41.4 million (FY 2024: EUR 39.9 million).
The slight decline reflects weaker industrial conditions in
Germany and broader Europe, particularly in the first part of the
year, as low industrial production and subdued investment
activity persisted. High interest rates and continued uncertainty
weighed on demand for capital goods. Despite these
headwinds, Kendrion demonstrated strategic resilience, making
progress in its core industrial markets. Mobility activities
performed comparatively better, supported by price increases
and the ramp-up of projects stemming from prior development
work.
Key milestones - Industrial Brakes
In 2025, IB took strategic and operational steps to address
diverging regional conditions and the growing differentiation
between standard products and technologically demanding,
integrated and safety-critical motion-control applications.
Rather than focusing on short-term volumes, IB prioritized
structural focus, disciplined decision-making and execution
capability.
IB conducted a systematic review of market segments and
project pipelines, assessing customer inquiries, development
activities, and new projects against defined criteria, including
technological differentiation, system integration requirements,
and long-term value creation potential. Resources were
deliberately shifted toward technologically demanding,
integrated, and safety-critical motion-control applications,
where application know-how and reliability are key value
drivers. At the same time, IB consciously discontinued or
avoided projects in segments where competition is primarily
price-driven and differentiation is structurally limited.
Within the product portfolio, IB accelerated the transition from
individual developments to clearly defined product platforms.
The Slim Permanent Magnet (PM) platform represents a key
milestone, providing a scalable technical foundation for multiple
applications and markets, including advanced robotics such
as medical robots. This approach enables faster product
implementation, reduced variant complexity, and improved
economic efficiency, while maintaining technological depth.
Operational execution was further strengthened through
a realignment of sales and business development activities.
IB shifted from reactive key-account management to structured
market development supported by clearer priorities and
dedicated business development teams. This realignment
improved visibility of market potential, raised lead quality, and
strengthened positioning based on value and application
expertise.
Targeted cost measures, including selective investment
approvals and tighter resource allocation, reinforced resilience
and profitability. IB completed the year with a more focused
portfolio, clearer strategic positioning, expanding project
pipeline and improved operational control, laying the foundation
for sustainable growth in structurally attractive automation and
motion-control markets.
Key milestones Industrial Actuators and Controls
The second half of 2025 saw an increase in demand from
existing customers and a higher level of customer inquiries,
allowing IAC to compensate for weaker conditions in the first
half of the year.
Targeted sales initiatives in Asia delivered new contracts in
South Korea, India, and Singapore. In the medical technology
sector, Kendrion developed its first biocompatible pressure
regulator, designed for use in anesthesia and respiratory
applications. The increasing implementation of Medical Device
Regulations in Europe further created market opportunities,
where Kendrion is well-positioned with compliant and
application-specific solutions.
In the logistics sector, actuator solutions for automated
warehouse applications grew through new project wins. In
preparation for the next phase of logistics automation, Kendrion
advanced a new parcel locker locking solution, built on a new
technology platform designed to deliver a structural cost
advantage. These initiatives allowed IAC to offset continued
weakness in the German machinery market, while
strengthening its competitive position in Europe.
Despite the continued downturn in the European machinery
market, IAC secured new business in machinery applications,
particularly with safety control systems, inductive heating, and
embedded control technologies. In the United States of
America, Kendrion strengthened its position in the beverage
dispenser market, working closely with partners and customers
on both existing and newly developed valve solutions, with
revenue ramp ups expected in future periods.
The retained Mobility activities, integrated into IAC, achieved
16
Integrated Annual Report 2025
BUSINESS GROUPS
strong results through a simplified organization, targeted cost-
saving measures, and efficient execution across sales,
engineering, and production, delivering above-average EBITDA.
IAC simplified collaboration between sales, product
management and development, shortening decision-making
time, and aligning responsibility more closely with market and
product requirements.
Development resources were concentrated on strategically
relevant products and applications, with a keen focus on
developing IP to protect its inventions. Leadership in this
context meant setting direction, making decisions, and
ensuring consistent implementation.
Focus and opportunities for 2026 and beyond
Industrial Brakes
IB enters 2026 with a clear strategic positioning, a more
focused portfolio, an expanding project pipeline and a
strengthened organizational foundation. The basis for the next
phase of development has been firmly established, shaped by
platform-based innovation, a continued focus on
technologically demanding and safety-critical motion-control
applications, and disciplined execution. Growth in these areas
will be increasingly driven by advancements in robotics,
automation and advanced motion systems.
Looking ahead, IB will continue to strengthen its position as a
supplier of high-performance braking solutions for robotics,
and intralogistics. The group will reinforce its leadership in the
wind energy sector, focusing on pitch and yaw braking systems
for both onshore and offshore wind turbines, where reliability
and lifetime performance are critical. In addition, IB will continue
to expand its medical technology activities where high technical
requirements offer attractive long-term growth opportunities.
Industrial Actuators and Controls
IAC will focus on expanding its product portfolio and deepening
its application expertise, particularly across its three medical
technology segments. Priorities include addressing increasing
biocompatibility requirements driven by stricter medical device
regulations and developing high-flow capabilities for advanced
clinical and industrial applications.
In parallel, IAC will strengthen its position in the electronic
locking market, introducing new technologies and patented
solutions tailored to customer-specific requirements. Growing
demand across energy generation, energy distribution, and
energy-efficiency applications will be addressed through the
development of new inductive heating solutions, motor control
systems, and actuator technologies.
IAC’s expertise in niche market identification, combined with its
technological capabilities and a cost-conscious execution
approach, positions the business to navigate economic volatility
while delivering above-average profitability and sustainable
growth over the medium term.
Conclusion
Kendrion’s IB and IAC Business Groups are well positioned to
capture structurally attractive opportunities in their respective
markets.
Across both Business Groups, Kendrion’s emphasis on
technological differentiation, disciplined market selection, and
consistent execution underpins sustainable value creation. By
focusing on innovation aligned with customer requirements,
Kendrion is well positioned to support safer, more precise and
more reliable industrial applications worldwide.
17
Integrated Annual Report 2025
BUSINESS GROUPS
Decentralized parcel locker networks increasingly operate with
solar or battery power, making energy efficiency and compact
integration key differentiators for Original Equipment
Manufacturer (OEM) platforms. Kendrion specializes in locking
solutions for industrial applications and is among the market
leaders for industrial locks in Europe. This focus enables
continuous innovation and customer specific adaptation,
particularly where large standard suppliers often offer limited
flexibility. In 2025, Kendrion introduced a new technology
platform that further advances performance and
miniaturization, resulting in one of the smallest high load locks
available for industrial use.
Ultra low power locking enables Decentralized parcel locker networks
The Ultra Compact Lock combines very low power
consumption of 1 watt with compact dimensions of 45 x 45 x
15 millimetres and high locking performance. The solution
delivers static locking force up to 5000 newtons and is
designed for challenging environments, including high humidity
and temperatures from minus 25 to plus 50 degrees Celsius.
This supports OEMs in building reliable locker platforms at
scale without compromising security.
Kendrion focuses on specific industrial areas where
requirements are demanding, and our expertise truly
matters. In these markets, there is typically less
competition, and customers appreciate partners who are
reliable, flexible, and knowledgeable. With a wide range of
brakes, locks, actuators, valves, and control solutions, we
combine proven products with custom engineering to
deliver solutions that fit well and perform reliably in tough
conditions. The examples below show how this approach
creates distinctive value across different applications.
Global niche leader turning specialization into strength
18
Integrated Annual Report 2025
BUSINESS GROUPS
Forestry climbing systems represent one of the most
demanding environments for brake technology. Components
must perform reliably under moisture, dirt, cold, vibration and
high dynamic loads, often after long idle times in the field.
Kendrion’s BFK458 06 serves as a holding brake in these
systems, ensuring that the rope winch locks safely during a fall
arrest and allows controlled manual release for a secure
descent.
Consistent performance in such conditions depends on stable
torque behavior, robust mechanical design and materials that
withstand corrosion and wear. Kendrion’s brake portfolio is
engineered to deliver this reliability through precision
Forestry safety brakes provide reliable holding in extreme conditions
In many industrial processes, the heating step defines
product quality and throughput, while electrification
increases the need for cleaner and more efficient process
heat. Kendrion’s induction heating systems generate heat
directly in the tool or roll, with dynamically controllable and
reproducible heating patterns. Compared with conventional
concepts using thermal oil, water or steam, this can
significantly reduce energy use and associated emissions,
with reported savings of up to 50 percent in energy costs
depending on the application.
manufacturing, defined air gaps and careful selection of friction
materials. Decades of experience in safety critical applications
and testing under real environmental conditions enable
Kendrion to provide tailored braking solutions that maintain
performance where failure is not an option.
This specialization reflects Kendrion’s broader strategy of
turning complex requirements into technological strength,
backed by verified safety, endurance and the ability to
adapt each brake configuration to the specific
environment and load case.
To make this technology practical for machine builders,
Kendrion combines a modular heating platform consisting
of a controller and up to seven generator modules with a
standardized portfolio of roller, surface and contour inductors
that can be adapted to individual geometries and heating
zones. Typical applications include food equipment, such as
waffle baking machines, where compact
integration and precise thermal control are
decisive, as well as printing and paper processes
including roller heating for embossing, lamination
and finishing in converting lines.
Inductive heating delivers efficient precision process heat
19
Integrated Annual Report 2025
BUSINESS GROUPS
Breast conserving procedures depend on accurate localization
and a workflow that supports surgeons while improving patient
comfort. Together with Sirius, Kendrion supported the
development of the Sirius Pintuition System, using a titanium
encased magnetic marker positioned through a fine needle and
a compact probe that measures the magnetic field to determine
the marker location. During the procedure, the system provides
visual and auditory guidance and enables point source
localization without radioactive markers, offering an effective
alternative to wire localization.
Precise tumor localization supports breast conserving surgery
Many machines in special purpose engineering are built in
small series and remain in operation for years, yet they
increasingly require connectivity and local intelligence.
This creates a space where classic Programmable Logic
Controller (PLC) architectures can be too rigid and large
standard automation suppliers too inflexible, while
consumer grade compute is often not robust enough for
industrial duty. Kendrion develops compact edge control
solutions built around the Raspberry Pi Compute Module 4,
designed for industrial reliability and real time capable
automation tasks.
By combining industrial interfaces, scalable IO and CODESYS
control, Kendrion helps customers integrate automation and
connectivity in one compact platform that can be adapted to
specific machine concepts and lifecycle needs.
Kendrion contributed the electronics, embedded software
and optimized detection algorithms, applying model driven
development to achieve millimetre precision. Development was
aligned with relevant medical device software and electrical
safety requirements, and Kendrion supported the path to
market approval in Europe and North America. Certified
development services according to ISO 13485 complement this
capability and help reduce risk for customers in highly regulated
applications.
Compact edge control enables adaptable industrial automation
20
Integrated Annual Report 2025
BUSINESS GROUPS
Automation and robotics
Precision. Safety. Motion. built into every movement
Automation and robotics are becoming faster,
more compact and increasingly collaborative.
This increases expectations for repeatable
accuracy, functional safety and predictable
motion in real production environments.
Precision that starts at the point of contact
Precision in robotics is not only about the
robot’s path. It also depends on how reliably
parts are gripped, positioned and held.
Kendrion contributes with end of arm tooling
such as finger grippers based on high
performance linear solenoids for continuous
pick and place operation, designed for energy
efficient handling. These grippers use a widely
adopted ISO robot mounting interface and are
plug and play capable, which supports fast
integration into cobot applications.
Safety that holds when control or power fails
In robotics, safety must remain effective even
during a control fault or power loss. Kendrion
addresses this with electromagnetic brakes
installed in robot axes to hold the robot arm
safely in position in case of malfunction.
For compact joints in small articulated arms,
SCARA robots and cobots, high torque
solutions in limited installation space are
essential. Kendrion’s portfolio includes
permanent magnet brakes for high torques in
small space, as well as specialized designs
such as flat brakes that allow cable routing.
Functional safety also depends on control.
Kendrion control and safety modules support
certified safety functions such as STO, SS1
and SLS, and enable sensor integration and
emergency stop concepts for robotic
platforms.
Motion that stays controllable at high
dynamics
Smooth motion is what makes speed and
productivity usable. It requires fast, repeatable
actuation and coordinated drive control across
the cell. Kendrion supports the shift toward
electrified automation with electromagnetic
actuators and assemblies, ranging from linear
to vibrating and rotary solenoids. These
components enable simple controllability, very
fast switching and clean operation compared
with pneumatic alternatives.
Around robotic cells, vibratory feeding systems
with oscillating solenoids help ensure accurate
dosing, continuous material flow and reliable
part orientation, supported by electronic
control units for precise adjustment to the
material. Where customers need deeper drive
and control integration, Kendrion’s electronics
and embedded systems capabilities include
scalable, software programmable motor
control platforms that support multiple motor
types and interfaces.
FOCUS INDUSTRYFOCUS INDUSTRY
21
Integrated Annual Report 2025
BUSINESS GROUPS
Medical technology
Regulatory confidence through collaboration
and decades of know-how
Medical technology demands more than
performance. Regulatory requirements,
traceability, and risk management shape every
design decision, from material selection to
validation and change control. Kendrion
supports customers with solutions developed
for critical applications, backed by high
standards of cleanliness in manufacturing and
careful material choices. This helps prepare
products for biocompatibility requirements and
testing in line with DIN EN ISO 10993 and DIN
EN ISO 18562. We also offer development
services in accordance with ISO 13485,
including for Class III medical devices.
Collaboration is essential in this environment.
Requirements often evolve during
development, and the cost of late changes is
high. Kendrion works with customers early to
translate clinical and regulatory needs into
robust components and assemblies. In
ventilation and anaesthesia equipment, for
example, Kendrion solutions support safe and
efficient handling of medical gases.
Our bistable solenoid valve is used in
anaesthesia machines for energy efficient and
quiet switching of medical oxygen. Pressure
regulators from the Pure Flow series are
designed for medical gases and focus on
reliable, precise pressure regulation even in
continuous operation.
This capability builds on decades of know-
how across fluid technology, electromagnetics,
and embedded intelligence. Holding brakes
help provide accurate positioning and stability
in surgical devices and robots, where safety
and precision are non negotiable. Where a
device needs more than a component, our
subsidiary company 3T adds electronics and
embedded systems expertise, with over 40
years of experience in mission critical designs
for medical applications. Together, these
strengths help customers meet regulatory
expectations, reduce development risk, and
deliver reliable performance in life critical use
cases.
FOCUS INDUSTRYFOCUS INDUSTRY
22
Integrated Annual Report 2025
BUSINESS GROUPS
AGVs are rapidly moving from isolated
applications to scalable fleets in modern
warehouses and production sites. At the same
time, intralogistics is undergoing a broader
transformation. Conventional industrial trucks
are becoming increasingly electrified,
connected and automated. This shift raises
expectations for safety, energy efficiency,
uptime and seamless system integration.
Kendrion supports this transformation with
components and systems that help make
mobile platforms safer and more reliable.
Our electromagnetic brakes provide precise
stopping, secure holding and controlled
emergency braking for electric drives,
including applications with higher loads and
demanding duty cycles. Complementary
actuation and control solutions add
functionality for vehicle subsystems and
automated material handling tasks. Together,
these technologies help manufacturers design
compact platforms with predictable behavior
and stable performance.
As electrification and automation accelerate,
requirements are changing across the full
lifecycle of a vehicle or fleet. Energy efficient
operation, robust safety concepts and reliable
availability become critical differentiators.
Kendrion contributes with proven technology,
application expertise and a broad portfolio that
supports both standard platform designs and
customer specific configurations. This helps
customers manage complexity, speed up
development and keep intralogistics moving
safely and efficiently as the industry evolves.
AGVs and intralogistics
Enabling the shift to electrified,
automated material handling
FOCUS INDUSTRYFOCUS INDUSTRY
FOCUS INDUSTRYFOCUS INDUSTRY
23
Integrated Annual Report 2025
BUSINESS GROUPS
Brake innovation for servo
motor platforms
The servo motor market is shifting fast. Many manufacturers are pushing modular motor
architectures that reduce variant complexity and total cost, while keeping qualification effort and
production processes stable.
Kendrion’s response is rooted in customer
proximity and a willingness to challenge one
size fits all concepts. Instead of equipping
every motor variant with one high performance
brake, Kendrion has expanded its permanent
magnet brake offering into a scalable platform.
The Slim Permanent Magenet (PM) Line,
launched in November 2025, was developed
specifically for low and mid torque servo
motors and complements the High Torque
Line. Both lines share the same mechanical
and electrical interface, enabling a true kit
approach for brake selection across an OEM
motor family and helping avoid unnecessary
oversizing.
For motor manufacturers, the value goes
beyond a new component. A shared interface
supports standardized integration, consistent
documentation and efficient production setups
across multiple motor sizes. Slim PM Line is
engineered to be cost efficient while leveraging
the functional advantages of permanent
magnet technology, combining reliable holding
performance and a compact design with
a cost level suited to the volume segment.
This launch underlines Kendrion’s ability
to translate market pressure into practical
innovation. With a two brake platform that
covers the relevant torque ranges while
keeping interfaces consistent, Kendrion
strengthens its role as a partner for the next
design cycles of industrial servo motor
platforms.
24
Integrated Annual Report 2025
BUSINESS GROUPS
STRATEGY AND FINANCIAL OBJECTIVES
In 2025, the global economy continued to face significant
headwinds, with challenging trading conditions across most
regions. Global GDP growth remained subdued – projected at
between 2.8% and 3.2%, reflecting ongoing policy uncertainty,
trade tensions, and weak investment.
Industrial production in Europe showed modest improvement,
but the recovery was uneven and fragile. The euro area
recorded a slight annual increase in industrial output, however,
Germany experienced stagnation, after two years of
contraction. Structural challenges, including demographic shifts
and high energy costs, continued to weigh on German industry,
while investment remained subdued.
GDP in the United States of America still outpaces Europe and
China. The USA economy benefited from robust consumer
demand, continued investment in technology, and a resilient
labor market, although growth moderated slightly compared
to 2024.
On the monetary front, interest rates were lowered in both the
USA and Europe during 2025. The European Central Bank cut
its main rate to 2.15% by November, while the USA Federal
Reserve maintained its target range at 4.25-4.50% for much
of the year, with expectations of further easing as inflation
pressures receded. Despite these reductions, lower rates did
not lead to a significant rebound in capital investment or
economic activity, as uncertainty and weak sentiment persisted.
The New Kendrion: more focused, more profitable
25
Integrated Annual Report 2025
ACTUAL
24.6%
TARGET
23-27%
ACTUAL
15.5%
TARGET
15-18%
ACTUAL
193%
TARGET
≥ 50%
Return on
investment
1, 2
EBITDA margin
2
Dividend pay-out
1
Invested capital excluding intangibles arising from acquisitions.
2
Non-IFRS financial measure. For the definition and reconciliation of the most directly comparable IFRS measures, refer to reconciliation
of non-IFRS financial measures, starting on page 219.
Amid this challenging environment, 2025 was a
transformational year for Kendrion. The company completed
the divestment of its European and USA automotive operations
to Solero Technologies in February and sold its China-based
business to local management in August. In September,
Kendrion began a phased cooperation with Knorr-Bremse to
transfer Sibiu Mobility electronics and implemented further
organizational streamlining to remove automotive-related
complexities. These strategic actions marked a major shift,
enabling Kendrion to focus exclusively on industrial growth in
Europe, the USA, and Asia. By concentrating on the industrial
sector and maintaining strict cost controls, Kendrion achieved
stronger profitability and robust cash flow. This performance
enabled the distribution to shareholders of both a regular
dividend of EUR 0.45 per share in May and a special dividend
of EUR 1.00 per share in November.
Our strategy
With our focus now fully on industrial opportunities within our
Industrial Brakes (IB) and Industrial Actuators and Controls (IAC)
business groups in Europe, the USA, and Asia, we now present
a clear investment narrative. As a global niche leader, we select
industrial market segments that support a minimum EBITDA
margin of 15%. We target opportunities where our expertise in
valves, actuators, brakes, and control technology allows us to
clearly differentiate our products.
In IAC, we have identified several niche segments offering
strong and profitable growth potential. These include induction
heating systems for industrial processes, industrial locks for
professional kitchens and parcel lockers, safety valves for
nuclear power plants and solenoids for high-voltage circuit
breakers. With Kendrion’s renewed industrial focus, IAC is well
positioned to capitalize on these opportunities.
IB is a leading player in permanent magnet- and spring-applied
brakes. As these brake technologies are closely integrated into
electromotors, the accelerating transition towards electrification
presents significant opportunities. Our focus is on high-potential
applications such as industrial robots, collaborative robots,
wind turbines, and intra-logistics.
The niche markets we focus on are expected to drive average
annual growth of at least 5%. Over the medium- to long-term,
we are also exploring opportunities within the European
defense industry. By concentrating on specialized areas where
our technical know-how provides a clear competitive
advantage, we ensure that every investment aligns with our
profitability and growth objectives.
Financial targets
As a pure-play industrial company, Kendrion is strategically
positioned to deliver sustainable, superior profitability. By
focusing on carefully selected niche opportunities that leverage
our deep expertise in valves, actuators, brakes, and control
technology we drive disciplined growth and long-term value
creation. In 2025, we achieved our minimum EBITDA target of
15% ahead of schedule, underscoring the strength of our
execution and strategic focus. While growth remains important
and is available within our chosen niche segments, we will
pursue it only at a minimum EBITDA margin of 15%,
safeguarding profitability as our primary objective.
Aligned with our updated strategy and financial targets, we aim
to achieve an EBITDA margin of 15-18% from 2025 onwards
and an ROI of 23-27% by 2027. Under our dividend policy, we
strive to distribute at least 50% of normalized annual net profit
as of 2025, emphasizing our commitment to delivering
consistent shareholder returns.
26
Integrated Annual Report 2025
STRATEGY AND FINANCIAL OBJECTIVES
FINANCIAL REVIEW
27
Integrated Annual Report 2025
Key figures
2025 2024
EUR million Reported Adjustments Normalized Reported Adjustments Normalized
Revenue 245.5 - 245.5 247.5 - 247.5
Other income 4.4 - 4.4 1.7 - 1.7
Total revenue and other income 249.9 - 249.9 249.2 - 249.2
Changes in inventories of finished goods and work in progress 0.4 - 0.4 (0.9) - (0.9)
Raw materials and subcontracted work 106.6 (0.1) 106.7 114.3 1.0 113.3
Staff costs 87.6 1.9 85.7 86.3 0.6 85.7
Impairments of fixed assets 0.0 - 0.0 1.0 1.0 0.0
Other operating expenses 19.0 0.0 19.0 17.9 0.0 17.9
EBITDA
1
36.3 (1.8) 38.1 30.6 (2.6) 33.2
EBITDA margin %
1
14.8% 15.5% 12.4% 13.4%
Depreciation and amortization 15.0 - 15.0 16.0 - 16.0
Finance income and expense 3.7 - 3.7 3.9 - 3.9
Share profit or loss of an associate 0.3 - 0.3 0.1 - 0.1
Income tax expense 3.7 (1.3) 5.0 2.2 (1.1) 3.3
Profit for the period continuing operations 13.6 (0.5) 14.1 8.4 (1.5) 9.9
Amortization after tax 1.6 - 1.6 2.4 - 2.4
Net profit before amortization from discontinued operations 5.9 3.7 2.2 (12.9) (12.4) (0.5)
Profit for the period before amortization
1
21.1 3.2 17.9 (2.1) (13.9) 11.8
Cash flows
Cash flow from operations 30.4 6.2 36.6 18.5 5.2 23.7
Cash flow from investing activities 53.5 (64.5) (11.0) 25.8 (52.5) (26.7)
Free cash flow
1
83.9 (58.3) 25.6 44.3 (47.3) (3.0)
1
Non-IFRS financial measure. For the definition and reconciliation of the most directly comparable IFRS measures, refer to reconciliation of non-IFRS financial measures, on page 219.
Group performance
Kendrion reported revenue of EUR 245.5 million from continued
operations in 2025, compared to EUR 247.5 million in the
previous year. Currency translation did not have a material
impact, and revenue at constant exchange rates decreased by
1%. The Industrial Brakes business group generated revenue of
EUR 93.7 million, down 2% from the previous year reflecting
weak global industrial production and particularly continued
challenging conditions in Germany’s machine building sector.
The decline was concentrated in the first half of the year, with
revenue dropping by 5%, while the second half showed gradual
improvement leading to 3% year-on-year revenue growth in the
last quarter of the year. Revenue in Industrial Actuators and
Controls reached 110.4 million, a 1% decline from the EUR
111.7 million revenue in the previous year. While IAC revenue
was also impacted by weakness in German manufacturing, the
business benefited from its diversified segment exposure. The
Mobility segment achieved revenue of EUR 41.4 million, up
from EUR 39.9 million in the prior year. The increase was driven
by increased pricing and the ramp-up of two projects that
were awarded prior to the Automotive divestment. Kendrion
recorded EUR 4.4 million other operating income (2024: EUR
1.7 million). This primarily relates to IT transition services, rental
income from the buyer of the divested Automotive business,
and contributions under the cooperation agreement for the
Mobility sound and electronics plant in Sibiu, Romania.
Profit for the period ended at 19.5 million, compared to a loss
of EUR 4.5 million in the previous year. Profit from continued
operations was EUR 13.6 million (2024: EUR 8.4 million, while
discontinued operations recorded a profit of EUR 5.9 million
(2024: loss of EUR 12.9 million). Profit from discontinued
operations includes EUR 0.6 million profit from the operations
and EUR 5.3 million gain on the disposal, including transaction
costs.
For a meaningful analysis of the group’s underlying financial
performance, Kendrion presents certain performance measures
on a normalized basis. The normalized performance measures
exclude costs and benefits outside the ordinary course of
business and include restructuring charges, asset impairments
and other items of an incidental nature. Definitions and detailed
reconciliations of these alternative performance measures to
the closest applicable IFRS performance measures are
available on page 219 of this integrated annual report.
Normalized EBITDA
1
from continued operations in 2025 was
EUR 38.1 million, compared to EUR 33.2 million in the previous
year. As a percentage of revenue, normalized EBITDA stood
at 15.5% (2024: 13.4%). Normalized costs for raw materials
and subcontracted work decreased by EUR 6.6 million, or 6%,
driven by the lower sales volumes. Normalized staff costs
1
were stable as cost-saving measures offset wage inflation.
Normalized other operating expenses
1
rose by EUR 1.1 million,
largely due to reduced income from group services following
the Automotive and China divestments. This was more than
offset by EUR 2.7 million in additional other operating income,
primarily from rent and IT services provided to the divested
Automotive activities and income related to the co-operation
agreement for the Mobility sound and electronics plant
in Romania. Depreciation charges were stable at
EUR 12.8 million. Normalized net finance expenses
1
slightly
decreased to EUR 3.7 million, from EUR 3.9 million in 2024.
The share of profit or loss of an associate related to a 30%
shareholding in CFV Innovations Inc, a US-based developer of
constant-flow valve technology, was a loss of EUR 0.3 million,
against a loss of EUR 0.1 million in the previous year.
Normalized tax charges
1
increased by EUR 1.7 million to
EUR 5.0 million, resulting in a normalized effective tax rate of
26.1% (2024: 25.0%). Normalized net profit from discontinued
operations
1
amounted to EUR 2.2 million, improving from a loss
of EUR 0.5 million in the previous year. Total normalized profit
before amortization
1
totaled EUR 17.9 million, (2024:
EUR 11.8 million). In 2025, continued operations incurred
EUR 1.8 million in costs outside the normal course of business
(2024: EUR 2.6 million). These costs were mainly related to
restructuring charges to offset dissynergies following the
divestment of China in October 2025. After tax, the normalized
costs amounted to EUR 0.5 million (2024: EUR 1.5 million) and
also include a EUR 0.8 million deferred tax gain resulting from
a reduction in German corporate tax rates.
Net cash flow from operating activities totaled EUR 30.4
(2024: EUR 18.5 million). Cash flows from investing activities
amounted to EUR 53.5 million (2024: EUR 25.8 million),
bolstered by EUR 64.5 million in cash receipts from the final
payment of the Automotive divestment in February 2025 and
the divestment of the China business in October 2025. In 2025,
cash flows included EUR 6.2 million (2024: EUR 5.2 million)
related to normalized costs, primarily related to restructuring
expenses and transaction costs linked to the Automotive and
China divestments. Total normalized free cash flow
1
was
25.6 million (2024: negative EUR 3.0 million). Continuing
operations contributed EUR 25.4 million to normalized free
cash flow
1
, while discontinued operations contributed
EUR 0.2 million.
Total net debt
1
as of 31 December 2025 stood at
EUR 30.3 million, marking a decrease of EUR 73.1 million
compared to 31 December 2024. This reduction was driven
by the proceeds from the divestments of the Automotive
and China businesses and strong cash flow generation,
partially offset by cash dividends of EUR 19.7 million and
the repurchase of own shares for EUR 2.5 million under
the EUR 10 million share buyback program commenced
in November 2025.
1
Non-IFRS financial measure. For the definition and reconciliation of the most directly comparable IFRS measures, refer to reconciliation of non-IFRS financial measures, on page 219.
28
Integrated Annual Report 2025
FINANCIAL REVIEW
Total invested capital as of 31 December 2025 was EUR 99.2
million (31 December 2024: EUR 162.6 million), excluding
goodwill and other intangibles from acquisitions. Return on
invested capital
1
was 24.6% (2024: 12.0%).
Liquidity position
Kendrion’s liquidity position comprises freely available cash
balances and undrawn credit facilities. As of 31 December
2025, cash balances amounted to EUR 29.4 million (2024:
EUR 8.5 million). Additionally, Kendrion had EUR 78.9 million
(2024: EUR 64.0 million) available under undrawn credit
facilities. The Company’s primary debt funding instruments
consist of a EUR 52.5 million Schuldschein private placement
loan maturing on 26 April 2027 and a EUR 75.0 million
revolving credit facility with HSBC Bank and ING Bank, which
runs until 26 April 2027. The revolving credit facility will be
reduced by EUR 25 million in February 2026 reducing the total
credit facilities after the divestment of the China business to fit
the new Kendrion. The facility is subject to certain covenants,
including a maximum leverage ratio of 3.25, with a temporary
spike to 3.75 under certain conditions. Kendrion’s leverage
ratio
1
based on the definitions in the facility agreement as of 31
December 2025 was 0.8 (31 December 2024: 2.7).
Research & Development
R&D expenses for 2025 amounted to EUR 11.6 million
(2024: EUR 11.5 million), of which EUR 9.6 million related to
staff costs, of which EUR 0.5 million in R&D expenses (2024:
EUR 0.2 million) was capitalized on the balance sheet. R&D
costs represented 4.7% of revenue in 2025 (2024: 4.6%).
The Kendrion Group employed 95 FTE in R&D during the year.
Key R&D activities focused on developing locking solutions for
industrial applications, refining inductive heating technology for
industrial processes and advancing electromagnetic brake
technology for growth markets, including collaborative robots
and automated guided vehicles (AGVs).
Management statement
Pursuant to article 5:25c of the Financial Supervision Act
(Wet op het Financieel Toezicht), the Executive Board
confirms, to the best of its knowledge, that:
(i) The consolidated financial statements present a true and
fair view of the assets, liabilities, financial position, and profit
and loss of Kendrion N.V. and its consolidated companies.
(ii) The Integrated Annual Report provides a true and fair
account of Kendrion N.V.’s position as of 31 December
2025, as well as the developments during the financial year
of Kendrion N.V. and its group of companies included in
the consolidated financial statements.
(iii) The Integrated Annual Report outlines the primary risks
faced by Kendrion.
The members of the Executive Board have signed the
consolidated financial statements in compliance with their
statutory obligations under Article 2:101, paragraph 2 of the
Dutch Civil Code and article 5:25c of the Financial Supervision
Act.
1
Non-IFRS financial measure. For the definition and reconciliation of the most directly comparable IFRS measures, refer to reconciliation of non-IFRS financial measures, on page 219.
29
Integrated Annual Report 2025
FINANCIAL REVIEW
OUTLOOK
Looking back on 2025, trading conditions remained
challenging. The European economy – particularly Germany –
stayed weak, interest rates were lowered during the year but
did not lead to a meaningful increase in capital investment or
economic activity.
In 2025, Kendrion underwent a significant transformation.
The company completed the divestment of its European and
USA automotive operations to Solero Technologies in February
and sold its China automotive business to local management in
August. In September, Kendrion entered into a cooperation
agreement with Knorr-Bremse to ultimately transfer the Sibiu
mobility electronics facility in phases over the coming years.
At the same time, the organization was streamlined to remove
automotive-related complexities.
These actions marked a major shift, enabling Kendrion to focus
exclusively on industrial growth in Europe, the USA, and Asia.
By concentrating on the industrial sector and maintaining tight
cost controls, the company achieved stronger profitability and
robust cash flow. This performance enabled the distribution of
a regular dividend of EUR 0.45 per share in May, along with
a special dividend of EUR 1.00 per share in November.
Going forward, our focus will remain solely on industrial
opportunities within our Industrial Brakes (IB) and Industrial
Actuators and Controls (IAC) business groups worldwide. We
target projects where our expertise in valves, actuators, brakes,
and control technology provides a sustainable competitive
advantage. We will invest only where we have a clear edge,
expect a minimum EBITDA of 20% and anticipate annual
revenue growth of at least 10% in the area of investment and
preferably more.
Looking ahead to 2026, industrial output across Europe, the
USA, and China is expected to remain broadly in line with 2025
levels. Our primary focus is to sustain and further enhance the
profitable results achieved last year. Key strategic sectors
The New Kendrion
include induction heating systems for industrial processes,
industrial locks for professional kitchens, laboratory equipment
and parcel lockers, safety valves for nuclear facilities, brakes for
industrial and collaborative robotics, and intra-logistics.
In 2025, we achieved our minimum EBITDA profitability target
of 15% of revenue ahead of schedule. Despite continued
economic uncertainty, we remain committed to our financial
objectives: a normalized EBITDA
1
margin of 15%-18% from
2026 onwards, and an ROI of 23-27% by 2027. We also
commit to distributing annual dividends of at least 50% of
normalized net profit before amortization.
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Integrated Annual Report 2025
1
Non-IFRS financial measure. For the definition and reconciliation of the most directly comparable IFRS measures, refer to reconciliation of non-IFRS financial measures, starting on page 219.
Effective risk management
Effective risk management is critical to executing Kendrion’s
strategy, delivering long-term value for stakeholders, protecting
the company’s reputation, and ensuring sound corporate
governance. While Kendrion promotes entrepreneurship and
empowers management to exercise appropriate discretionary
powers, its risk management approach acknowledges that
exposure to risk is an inherent part of doing business.
Kendrion seeks to balance fostering an entrepreneurial spirit
with maintaining a strong culture of risk awareness. The goal is
to manage risks in line with Kendrion’s risk appetite, reducing
the likelihood and impact of adverse events while staying
competitive in a dynamic business environment. In the context
of the updated Dutch Corporate Governance Code, the
Executive Board has further validated and documented its
internal risk management and control systems and the
effectiveness thereof. Based on this assessment the Executive
Board concludes that Kendrion’s risk management and control
systems are effective and provide sufficient comfort.
Nonetheless they cannot guarantee the achievement of
objectives or entirely prevent material errors, losses, fraud,
or regulatory breaches.
Risk management framework
Kendrion’s risk management framework is based on the ISO
31000 framework and seamlessly integrated into its business
practices, encompassing culture, policies, processes, and
behaviors. This comprehensive approach comprises two main
complementary elements: a top-down strategic view of risk at
the enterprise level and a bottom-up view of risk at the
operational level. Together, these perspectives ensure a
consistent and systematic approach to identifying risks and
implementing appropriate controls in line with Kendrion’s risk
appetite. By fostering a culture of risk awareness, the
framework empowers employees at all levels to actively
contribute to risk mitigation and management.
RISK MANAGEMENT
The Executive Board oversees the comprehensive risk
management and internal control system, ensuring alignment
with the company’s strategic objectives and activities. The
Executive Board is responsible for embedding these systems
into daily operations and regularly reviewing their effectiveness.
An annual risk assessment is conducted to evaluate potential
adjustments to the risk management and internal control
system as market conditions and circumstances evolve. This
assessment includes a dedicated focus on fraud risks relevant
to Kendrion. The outcomes of the annual risk assessment are
discussed within Kendrion’s Management Team and
subsequently shared with the Supervisory Board. To enhance
risk management and oversight, risk owners are assigned to
the most significant risks identified. Each risk owner is tasked
with preparing and updating mitigation plans during the
subsequent years.
At the operational level, Kendrion’s plants maintain
internationally recognized certifications that assess and improve
their processes. Local management is responsible for
implementing internal controls and procedures, regularly
testifying their effectiveness, and maintaining full awareness of
operational risks. Corporate oversight is effectively maintained
trough a framework of group-level controls, including internal
audits and business review meetings. This approach ensures
that internal controls remain robust and aligned with Kendrion’s
overarching risk management framework.
CONTROL ENVIRONMENT
Annual corporate
risk management
cycle
Code of conduct
Speak-up procedure
Corporate policies
Internal audit
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OPERATIONAL
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Periodic business reviews
Planning & Control cycle
Local policies and procedures
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ENTERPRISE
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Project risk
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Certificates
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Corporate
top 10
31
Integrated Annual Report 2025
Risk appetite
Kendrion’s risk management framework balances risk and
opportunity, while clearly identifying the Executive Board’s
appetite for risk. The Executive Board and the Management
Team periodically review and discuss Kendrion’s approach to
risk management, as the company’s risk appetite may evolve in
response to societal developments, geopolitical shifts, the
competitive and customer landscape, and internal changes.
Kendrion’s risk appetite provides an indicative bandwidth that
guides decision-making processes across the organization.
This bandwidth is defined for each of the following risk areas:
Strategic, Operational, Financial, (financial and sustainability
reporting) and (tax) Compliance. The width of the bandwidth
and its position on the risk spectrum —from risk averse to risk
taking —vary by risk area. For instance, as illustrated in the
visual, Kendrion adopts a risk-averse approach to compliance
risks, while the bandwidth for strategic risks is significantly
broader, enabling a higher degree of risk-taking in pursuit of
strategic objectives.
RISK AREA RISK APPETITE TARGET
Risk averse Risk taking
Strategic
Operational
Financial & reporting
Compliance
Entrepreneurial
Innovative
Punctual
Sincere
32
Integrated Annual Report 2025
RISK MANAGEMENT
Risk overview
Risk area Risk name Risk description
Strategic M&A activities or strategic projects fail to deliver results Mergers, acquisitions or strategic projects may fail to deliver the anticipated synergies or expected results and
could adversely affect the company’s financial performance, operational effectiveness or strategic objectives.
Uncertainties of (global) economic and political conditions An inability to respond swiftly and effectively to volatile economic and political conditions or sudden market
disruptions may impair our ability to manage operations efficiently and could negatively affect financial
performance and strategic objectives.
Operational IT system reliability and implementation risk Issues with IT hardware, software, or implementation delays could disrupt system transactions, create data
gaps, or fail to meet business requirements, leading to potential revenue losses or increased costs.
IT and cyber security risks Cyber risks, such as failures in information systems or unauthorized access leading to the alteration,
destruction or theft of data, could cause business interruptions, loss of confidential data, or damage to the
company’s reputation.
Sourcing disruptions and purchase price increases Disruptions in the availability of raw materials, components or services, as well as increases in purchase prices,
may negatively impact production continuity, cost levels and margins.
Order volatility or project cancellation risk Significant volatility in order intake or the cancellation, postponement or modification of projects by customers
may adversely affect revenue visibility, capacity utilisation and financial performance.
Intellectual property protection Insufficient protection of intellectual property could allow potential competitors to use or copy our products,
potentially undermining growth and impacting product margins.
In addition to the key risks outlined in the table above,
Kendrion explicitly identifies risks associated with climate
change, tax compliance, and fraud. Each of these risk areas,
along with their corresponding key risks, will be elaborated
on in more detail.
Strategic risks
M&A activities or strategic projects fail to deliver results
Strategic risks arise when mergers, acquisitions, or internal
strategic projects fail to deliver the anticipated benefits, such
as margin expansion, cost reductions or the realization of
synergies. This could result in inefficiencies, missed financial
targets, or a loss of stakeholder confidence.
Kendrion recognizes the importance of planning and executing
strategic changes, as well as remaining flexible to adapt to
changing circumstances. For strategic projects, including M&A,
dedicated oversight teams are established to ensure focused
execution and accountability. Additionally, regular reviews of
actions related to strategic projects, such as the sale of the
China activities in 2025, are conducted to monitor progress,
address bottlenecks, and ensure alignment with strategic and
financial objectives. Kendrion also undertakes an in-depth
annual strategic review process in which concrete strategic
options are evaluated. This includes a review of the M&A
strategy to ensure alignment with overarching business goals
and adjustments based on market conditions and strategic
priorities.
Uncertainties of (global) economic and political conditions
Kendrion operates in markets that are exposed to volatile
economic and political conditions, geopolitical developments and
structural industry changes. Such uncertainty may affect
customer investment behavior, order intake, supply chains and
cost levels, and may complicate planning, forecasting and
operational decision-making. An inability to respond swiftly and
effectively to volatile economic and political conditions or sudden
market disruptions may impair our ability to manage operations
efficiently and could negatively affect financial performance and
strategic objectives. Kendrion mitigates the impact of economic
and political uncertainty through sensitivity analyses and frequent
updates of forecasts and outlook assumptions. The Group
maintains financial flexibility through a disciplined capital
allocation approach, adequate liquidity buffers and access to
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Integrated Annual Report 2025
RISK MANAGEMENT
committed financing. Operational flexibility is supported by
variable cost structures, flexible capacity management and
diversification across end markets. Timely and transparent
management information enables early identification of
developments and supports informed decision-making in volatile
market conditions.
Operational risks
IT system reliability and implementation risk
Issues relating to IT hardware, software or system
implementations may disrupt business operations. Such issues
could result in transaction failures, data loss or corruption, and
limitations in meeting business or regulatory requirements.
These disruptions may lead to operational inefficiencies,
increased costs, revenue loss and a reduced ability to serve
customers effectively. Kendrion is undertaking an ongoing
transition of its ERP landscape, which increases the importance
of disciplined system implementation, testing and change
management. To mitigate these risks, the Group applies a
structured approach to IT governance and system
management. Rigorous testing is performed prior to the
deployment of new systems, hardware or software to identify
and address potential issues before they affect operations.
Critical IT systems are supported by redundant infrastructure
and robust backup and recovery solutions to safeguard
business continuity. Implementation risks and delays are
mitigated through detailed project planning, clear milestones
and close collaboration between IT teams and business
stakeholders. Targeted user training supports effective system
adoption and reduces operational errors. In addition, regular
maintenance, continuous performance monitoring and strong
vendor partnerships contribute to the reliability and resilience of
the IT environment.
IT and cyber security risks
Cyber risks, including failures of information systems and
unauthorised access to, alteration, destruction or copying
of data, may lead to business interruptions, compromise
confidential or sensitive information and adversely affect the
Group’s reputation. Ensuring the security and resilience of IT
systems is critical to Kendrion’s operational integrity and
stakeholder trust. Kendrion maintains a comprehensive
cybersecurity framework designed to prevent, detect and
respond to cyber threats. This framework includes continuous
security monitoring with 24/7 threat detection, network
surveillance and real-time alerting to enable timely identification
and mitigation of potential incidents. Business continuity is
supported by robust contingency planning, including redundant
data storage, backup solutions and disaster recovery
arrangements. In addition, Kendrion applies a multi-layered
defence strategy combining technological, organizational and
procedural measures. These include regular software updates
and patch management, ongoing vulnerability assessments,
and targeted employee awareness and training programs.
Through this structured and continuously evolving approach,
Kendrion aims to protect its digital infrastructure and sensitive
data and to maintain secure, resilient and responsible
operations.
Sourcing disruptions and purchase price increases
Kendrion depends on the continuous availability of raw
materials and components to operate its production facilities
and meet customer demand. Disruptions in the supply chain
or sustained increases in purchase prices may adversely affect
production continuity and margins. Supply chain disruptions
may arise from a variety of factors, including transport
constraints, supplier insolvency, material scarcity, geopolitical
developments or increased demand at suppliers. In addition,
rising raw material prices or capacity shortages at suppliers
may result in higher purchase prices for Kendrion. Kendrion
mitigates these risks through an active and structured sourcing
and supplier management approach. Where possible, the
Group seeks to diversify its supplier base and increase the
availability of alternative sources for critical materials, while
ensuring procurement from reliable and reputable suppliers.
Supply continuity is supported through advance capacity
commitments and regular financial assessments of suppliers.
Critical suppliers are identified and subject to enhanced
monitoring to safeguard supply chain continuity. Kendrion
predominantly applies a local-for-local sourcing strategy to
reduce logistical dependencies and exposure to global
disruptions. Where single-source dependencies exist,
contingency measures are evaluated and implemented where
feasible, including alternative sourcing options, insourcing
opportunities and increased monitoring, to ensure risks remain
within the Group’s risk appetite. In the event of supply chain
disruptions, Kendrion engages proactively with affected
customers to communicate potential impacts and jointly identify
appropriate mitigation measures.
Order volatility or project cancellation
Order intake may be subject to significant volatility, and
customer projects may be postponed, modified or cancelled
as a result of external factors such as economic downturns,
geopolitical uncertainty, supply chain disruptions, regulatory
changes or shifts in customer preferences. Such developments
may lead to a structural decline in demand for certain products
or to short-term fluctuations in order volumes. In addition,
shortages of raw materials or components at customers may
result in order adjustments or cancellations, increasing
uncertainty in demand patterns. Order volatility and project
cancellations may adversely affect capacity utilisation, require
rapid adjustments to production planning and sourcing, and
lead to inefficiencies such as underutilised capacity, production
backlogs or elevated inventory levels. These effects may
negatively impact profitability, cash flow and working capital.
34
Integrated Annual Report 2025
RISK MANAGEMENT
Kendrion mitigates this risk through active customer
engagement and close monitoring of order volumes and project
timelines. Where possible, frame contracts are aligned with
both customers and suppliers to reduce supply chain volatility.
Contractual arrangements are structured to protect Kendrion
against adverse volume developments, including mechanisms
for price adjustments and recovery of investments in tools and
equipment in the event of cancellations or unmet volume
commitments. Demand developments are continuously
monitored, and production capacity, inventory levels and
purchasing volumes are adjusted to maintain operational
flexibility and limit adverse impacts on profitability and working
capital.
Intellectual property protection
Insufficient protection of intellectual property (IP) may allow
competitors to replicate or use Kendrion’s products, potentially
impacting growth and Kendrion’s competitive advantage. This
risk could result in reduced market share, and diminished
profitability. To mitigate this risk, Kendrion employs a
comprehensive IP protection strategy. Key innovations and
product designs are safeguarded through patents, trademarks,
and copyrights, filed in all relevant markets to ensure legal
protection. Confidentiality agreements and secure data-
handling protocols are strictly enforced to minimize the risk of
unauthorized disclosure or misuse. Additionally, Kendrion
actively monitors competitor activities and responds decisively
to any IP infringement through appropriate legal action. These
combined efforts help Kendrion maintain its competitive edge,
protect product margins, and support sustainable growth by
securing the value of its intellectual property.
is embedded in the reporting process and discussed
periodically with finance leadership and senior management.
Financial risks related to debt financing, credit exposure and
movements in interest and foreign exchange rates are managed
through dedicated policies and controls and are disclosed
separately in the financial statements (page 128). These risks
are monitored at appropriate levels within the organization and
mitigated in line with the Group’s risk appetite.
Compliance risks
Kendrion is committed to conducting business in full
compliance with its Code of Conduct, the values underpinning
the Code, and all applicable laws and regulations. These
include employment laws, data protection laws and regulations,
accounting standards, tax laws, health and safety requirements,
and governance and statutory filing obligations relevant to the
countries in which it operates. Senior management is
responsible for promoting awareness and ensuring adherence
to these laws and regulations.
To support compliance, Kendrion develops and maintains
global and local policies. Its global policies include a range of
procedures and policies, such as the Code of Conduct, Insider
Trading Code, Speak-up procedure, among others. The Code
of Conduct, central to Kendrion’s operations, reflects the core
values of “The Kendrion Way,” an inspiring motto that lies at the
heart of the organization.
The Code of Conduct outlines the principles and expectations
that guide the behavior of everyone at Kendrion. To support
employees in navigating compliance dilemmas, Kendrion
provides guidance and training, enabling them to recognize
issues and report actual or suspected misconduct or
Financial & reporting risks
As a globally operating, publicly listed company, Kendrion is
subject to extensive financial reporting, disclosure and
compliance requirements. Material misstatements or
deficiencies in financial or non-financial reporting could
adversely affect Kendrion’s reputation, stakeholder confidence
and stock market valuation. Kendrion reports quarterly in
accordance with IFRS and applicable regulatory requirements.
Given the low-risk appetite in this area, the Group has
implemented a robust governance, control and reporting
framework to ensure the accuracy, completeness and
consistency of reported information across all operating entities.
All entities report in line with uniform accounting policies,
reporting standards and timelines, as defined in the Group
Reporting Manual. Standardised planning and control cycles
provide financial and non-financial information on a weekly,
monthly and annual basis, enabling timely consolidation,
analysis and decision-making at Group level.
The integrity and reliability of reporting processes are supported
by up-to-date segregation of duties and a strong reliance on
general IT controls, including segregation of duties, system
access controls, data integrity safeguards and change
management procedures across critical accounting and
reporting systems. These IT-based controls are designed to
reduce dependency on manual controls and to support
consistent, high-quality reporting.
On a quarterly basis, responsible officers provide written
representations confirming the completeness and accuracy
of reported information and compliance with applicable laws,
regulations and internal policies, including the Kendrion Code of
Conduct. Ongoing monitoring of developments in accounting
standards, reporting requirements and regulatory frameworks
35
Integrated Annual Report 2025
RISK MANAGEMENT
irregularities through the Speak-up procedure. For more details
about “The Kendrion Way”, refer to the People & Culture
section of this Integrated Annual Report.
Compliance with Kendrion’s internal policies, procedures, and
applicable local laws and regulations is regularly assessed by
the internal audit department managed by our finance function.
The Group Finance & Control department is responsible for
designing and executing the annual audit plan, which evaluates
the adequacy of Kendrion’s internal control systems. Audit
findings are reported to the Executive Board, and key insights
are discussed with the Audit Committee and external auditors
on a regular basis. In 2025, audit results were reviewed with
local management, and identified significant control deficiencies
were addressed through agreed remediation actions and
follow-up procedures.
Tax compliance risks
In line with its overall risk-averse appetite for compliance risks,
Kendrion specifically reiterates this approach for tax compliance
and associated risks. Tax risks arise from local tax rules and
regulations as well as international regulatory frameworks.
These include transfer pricing risks on intercompany cross-
border deliveries of goods and services, tax risks related to
acquisitions and divestments, tax losses, taxes carried forward,
permanent establishments and potential changes in tax law.
Such risks may result in financial impacts, including tax
expenses and payments, tax adjustments, accrued interest,
fines, litigation against Kendrion’s management, and damage to
Kendrion’s reputation with (local) authorities and stakeholders.
The Group Finance & Control department is responsible for
establishing and overseeing group wide tax policies. Potential
risks are periodically monitored and assessed based on their
likelihood of occurrence and potential impact on both local and
group-wide financial tax results. For the most significant tax
jurisdictions, Kendrion holds regular meetings with external tax
specialists to review the tax position, evaluate tax risks, and,
where applicable, assess the impact of potential changes in tax
laws and legislation. To actively mitigate risks, Kendrion involves
external tax advisors where specialist knowledge is required
and consults (local) authorities when interpretations of tax
requirements could have a significant impact.
CSRD compliance and assurance requirements
The regulatory framework for sustainability reporting under the
Corporate Sustainability Reporting Directive (CSRD) is still
evolving in the Netherlands and at EU level, including the
scope, timing and assurance requirements, as well as potential
amendments arising from the proposed Omnibus regulation.
Based on the current interpretation of applicable legislation and
the new threshold, Kendrion does not expect to fall within the
scope of mandatory CSRD reporting with limited or reasonable
assurance for the 2025 reporting year.
However, changes in legislation, regulatory guidance or
enforcement practice may result in Kendrion becoming subject
to CSRD reporting and assurance requirements with retroactive
effect. In such circumstances, Kendrion could be required to
prepare and obtain assurance over sustainability information for
prior reporting periods, which may lead to additional costs,
increased workload, pressure on internal resources and the
need to accelerate data collection, controls and
documentation. Kendrion closely monitors regulatory
developments related to CSRD, ESRS and assurance
requirements and assesses their potential impact on reporting,
governance and internal processes. Where appropriate,
preparatory measures are taken to ensure that the Group
remains able to respond in a timely and controlled manner to
changes in sustainability reporting obligations.
Climate change
Society, shareholders and other stakeholders increasingly
expect companies to address environmental challenges and
the impacts of climate change, driving demand for more
sustainable operations, solutions and products. Climate change
and the related transition towards a low-carbon economy
present Kendrion with both risks and opportunities across its
value chain.
The direct physical impact of climate change on Kendrion’s
facilities is currently limited due to their geographical locations.
However, indirect effects such as extreme weather events may
disrupt supply chains, delay production, reduce operational
efficiency and contribute to material shortages. In addition,
rising raw material and energy costs, as well as potential
regulatory measures such as carbon pricing or environmental
levies, may increase cost levels. The extent to which these
costs can be recovered will depend on market dynamics and
the ability to pass on price increases across the value chain.
Climate change and the sustainability transition are also
expected to influence customer preferences, regulatory
requirements and demand patterns. Kendrion anticipates
growth opportunities in markets aligned with long-term
sustainability trends. These include solutions supporting
electrification and automation of industrial processes and
energy transition, such as inductive heating control units,
electromagnetic brakes for wind turbines and safety-critical
components for low-carbon energy applications.
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Integrated Annual Report 2025
RISK MANAGEMENT
Overall, Kendrion’s Business Groups are well positioned to
benefit from the ongoing transition towards electrification of
industrial processes, reduced reliance on fossil fuels and lower
greenhouse gas emissions. The Group continues to invest in a
responsible and future-proof product portfolio while supporting
customers in achieving their sustainability and emission-
reduction objectives. Kendrion mitigates climate-related risks by
reducing its own environmental footprint through energy
efficiency initiatives, increased use of renewable energy, waste
reduction and recycling programs, while continuously assessing
climate-related developments and their potential impact on
operations, supply chains and markets.
Fraud
Given its global footprint, Kendrion is exposed to a broad range
of fraud risks. As an industrial manufacturing company, the
most relevant fraud risks arise in areas such as the supply chain
(including kickbacks, bribery and false invoicing), inventory and
asset management (including theft and manipulation),
administrative and financial processes (including fraudulent
payments and falsified records), and cyber-related fraud. Fraud
incidents may result in financial losses, operational disruption,
reputational damage and loss of stakeholder trust, particularly
in jurisdictions with strict regulatory and enforcement regimes.
Fraud risk is explicitly included as a separate category in
Kendrion’s annual enterprise risk assessment. This ensures
systematic identification, monitoring and discussion of fraud
risks and supports ongoing awareness among senior
management of the importance of fraud prevention and
detection. Kendrion applies a comprehensive set of preventive
and detective measures to reduce exposure to fraud. Access to
systems, data and physical locations is restricted to what is
necessary for employees to perform their roles, supported by
segregation of duties to prevent the concentration of
incompatible responsibilities. User access rights and
segregation of duties are reviewed periodically and adjusted
where required to remain aligned with the Group’s risk appetite.
Fraud prevention and detection are further supported by a
combination of IT-based and business controls, including
transaction monitoring, variance and margin analyses, and
reviews of changes to key master data. Where limitations in
automated controls are identified, complementary controls are
applied to mitigate residual risks.
Clear authorization limits are defined for financial and
operational transactions, ensuring that decisions involving
increased risk are subject to appropriate approval levels. Ethical
conduct and fraud awareness are reinforced through Kendrion’s
Code of Conduct, which is introduced to all employees upon
joining the Group and addresses expected behavior and
common fraud scenarios. Awareness of the Code of Conduct
and related topics is refreshed regularly through targeted
communication and training initiatives, including e-learning,
workshops and internal communications.
In control statement
Based on the approach described above, the Executive Board
is of the opinion that, to the best of its knowledge:
■ this chapter provides sufficient insights into any failings in
the effectiveness of the risk management and internal
control systems (if any);
■ the risk management and internal control systems provide
reasonable assurance that the financial reporting, including
tax reporting, does not contain any material misstatements;
■ the risk management and internal control systems provide
limited assurance that the sustainability report does not
contain any material misstatements;
■ in reference to our risk appetite and the complexity of our
organization, our internal risk management and control
systems provide sufficient comfort that operational and
compliance risks were effectively managed, while keeping
in mind inherent limitations;
■ based on the current state of affairs, it is justified that the
financial reporting is prepared on a going concern basis;
and
■ this chapter describes the material risks and uncertainties
that are relevant to the expectation of Kendrion’s continuity
for the period of twelve months after the date of this
Integrated Annual Report.
The Executive Board acknowledges that, while well-designed
and effectively implemented risk management and internal
control systems significantly reduce risks, they cannot provide
absolute assurance. Such systems may be subject to inherent
limitations, including human error, errors of judgement,
deliberate circumvention of controls, fraud, violations of laws
and regulations, or unforeseen circumstances. In addition,
the design and maintenance of these systems involve a cost-
benefit consideration.
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Integrated Annual Report 2025
RISK MANAGEMENT
Kendrion’s governance framework is rooted in the statutory
requirements applicable to public limited liability companies in
the Netherlands. This framework incorporates the principles
and best practice provisions outlined in the Dutch Corporate
Governance Code, most recently updated on 20 March 2025
(the ”Code”), along with Kendrion’s Articles of Association, last
amended on 25 June 2020. Key topics from the Code are
addressed in the various sections of this Integrated Annual
Report. The Articles of Association, alongside related policies
such as the Supervisory Board Regulations and the regulations
for its committees form a framework for Kendrion’s governance
and operations. This framework establishes a sound and
transparent system of checks and balances. For the Articles of
Association, the Supervisory Board Regulations, the regulation
of its committees, and additional information about Corporate
Governance at Kendrion, please visit our corporate website at
www.kendrion.com.
Kendrion N.V.
Kendrion N.V. is a public limited liability company incorporated
under the laws of the Netherlands, with its corporate seat in
Amsterdam, the Netherlands. Details regarding Kendrion N.V.’s
share capital can be found in the section ‘Share and
Shareholder Information on page 125 of this Integrated Annual
Report.
As the ultimate parent company, Kendrion N.V. holds all shares
in Kendrion Finance B.V., a private limited liability company
incorporated under Dutch law, with its corporate seat in Zeist,
the Netherlands. Kendrion Finance B.V., directly or indirectly,
holds shares in all Kendrion’s operating companies, each of
which is directly or indirectly a wholly owned subsidiary.
Kendrion N.V. is not subject to the large company structure
regime. Additionally, no works council has been established at
the level of Kendrion N.V., nor is there a statutory requirement
to establish one. For information on works councils and
employee representation within certain Kendrion operating
CORPORATE GOVERNANCE REPORT
companies, please refer to the ‘Sustainability Statements -
Social’ section on page 83 of this Integrated Annual Report.
Two-tier governance structure
The Executive Board, consisting of the CEO and the CFO, is
responsible for managing Kendrion, under the supervision of
the Supervisory Board. Members of the Executive Board and
the Supervisory Board are appointed and dismissed by the
General Meeting of Shareholders. The General Meeting of
Shareholders may amend the Articles of Association upon a
proposal by the Executive Board, provided it has received prior
approval of the Supervisory Board. Such amendments require
an absolute majority of the votes cast at the General Meeting
of Shareholders.
Executive Board
The Executive Board is responsible for managing Kendrion and
ensuring the continuity of Kendrion’s long-term, sustainable
value creation strategy, objectives, results, and policies. This
includes defining strategies and plans that align with the goals
of the Paris Agreement to limit global warming. In carrying out
its duties, the Executive Board considers the impact of
Kendrion and its affiliated enterprise on people and the
environment, carefully balancing the interests of all relevant
stakeholders. A key aspect of the Executive Board’s
responsibilities is fostering and maintaining a culture focused
on sustainable long-term value creation. A strong, healthy
company culture, as outlined in the ‘Sustainability Statements -
Social’ section in this Integrated Annual Report, plays a vital
role in preventing misconduct and irregularities. The Executive
Board is accountable to the Supervisory Board and the General
Meeting of Shareholders. Major decisions made by the
Executive Board require approval from the Supervisory Board.
In accordance with Kendrion’s Articles of Association, which
stipulate that the Executive Board must consist of at least two
members, the Supervisory Board determines the number of
members on the Executive Board. Executive Board members
are appointed by the General Meeting of Shareholders, based
on recommendations from the Supervisory Board. In line with
provision 2.2.1 of the Code, Executive Board members are
appointed for a maximum term of four years, with the possibility
of reappointment for successive terms of no more than four
years each. The selection process for Executive Board
members takes into account the diversity objectives outlined in
Kendrion’s diversity policy, which can be found on the
corporate website at www.kendrion.com.
Other than upon proposal of the Supervisory Board, members
of the Executive Board can also be suspended or dismissed by
the General Meeting of Shareholders. In that case, a resolution
to suspend or dismiss Executive Board members is adopted by
an absolute majority, representing at least one-third of the
issued share capital. If the Supervisory Board recommends
suspension or dismissal, the resolution is adopted by an
absolute majority of the votes cast at a General Meeting of
Shareholders. Executive Board members comply with statutory
requirements regarding the number of supervisory or non-
executive roles they may hold in large enterprises.
For further details on the composition of the Executive Board
and its members, please refer to page 12 of this Integrated
Annual Report.
An Executive Board member must refrain from participating in
deliberations or decision-making on any matter where they
have a direct or indirect personal interest that conflicts with
Kendrion’s interests. In such cases, the Executive Board
member must promptly report the conflict to the Chairman of
the Supervisory Board and to the other members of the
Executive Board. Transactions involving a conflict of interest
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Integrated Annual Report 2025
with an Executive Board member require Supervisory Board
approval. In 2025, no transactions involving conflicts of interest
with Executive Board members occurred. Kendrion maintains a
policy of not providing loans or guarantees to Executive Board
members.
Management Team
The Management Team comprises the CEO, CFO, and
executives with clear accountability for delivering all aspects of
the strategic plan. It includes the Business Group Directors
from Industrial Actuators and Controls and Industrial Brakes.
Functional areas such as Information Technology, Compliance
and Sustainability, are represented by the CIO and General
Counsel within the Management Team.
The number of members of the Management Team is
determined by the Executive Board in consultation with the
Supervisory Board. For Management Team members who are
not part of the Executive Board, appointments and dismissals
are made by the Executive Board, following consultation with
the Supervisory Board. The diversity objectives outlined in
Kendrion’s diversity policy are considered when appointing
members to the Management Team.
The Management Team convenes regularly, and members not
part of the Executive Board are often invited to attend
Supervisory Board meetings.
Leadership Team
The Leadership team comprises the Management Team and
the executives reporting to its members, all playing a key role in
delivering Kendrion’s strategic and operational performance.
Consisting of approximately 30 executives, the Leadership
of the Supervisory Board, serving a term of four years.
The Supervisory Board internally elects a Chairman from
among its members.
The Chairman presides over Supervisory Board meetings,
ensuring their effective operation, as well as that of its
committees. The Chairman also facilitates communication
between the Supervisory Board, the Executive Board, the
Management Team, and the General Meeting of Shareholders.
Regular contact is maintained between the Chairman and the
CEO on matters within the Supervisory Board’s scope. Similarly,
the Chair of the Audit Committee maintains regular contact with
the CFO regarding the Audit Committee’s responsibilities.
Supervisory Board members step down in accordance with a
rotation schedule adopted by the Supervisory Board. Members
whose term expires may be reappointed, with consideration
given to their performance, the diversity objectives outlined in
Kendrion’s diversity policy, and best practice provision 2.2.2 of
the Code regarding appointment and reappointment periods.
Each Supervisory Board member may be dismissed by the
General Meeting of Shareholders.
New members of the Supervisory Board undergo an
introductory program, providing them with an overview of
Kendrion’s business activities, including manufacturing
operations, and essential internal procedures and processes
required for fulfilling their duties as Supervisory Board members.
Regular meetings of the Supervisory Board typically involve the
attendance of the Executive Board and, periodically, members
of the Management Team. The Supervisory Board also holds
independent meetings, without the Executive Board present.
The Company Secretary assists the Supervisory Board by
ensuring adherence to correct procedures, statutory
obligations, and the Articles of Association. The Company
Secretary also facilitates communication between the Executive
Team represents all operating companies of Kendrion across
Europe, the US and Asia. For members of the Leadership Team
not part of the Management Team, appointments and
dismissals are made by the Executive Board.
The Leadership holds monthly online meetings and convenes
annually in person at the ‘Top Management’ meeting.
Supervisory Board
The Supervisory Board supervises and advises the Executive
Board in executing its responsibilities, while overseeing
Kendrion’s overall development and performance. It prioritizes
the interests of Kendrion and its stakeholders, emphasizing the
effectiveness of risk management, internal control systems, and
the integrity and quality of financial and sustainability reporting.
The composition of the Supervisory Board ensures that its
members can operate critically and independently, free from
influence by each other, the Executive Board, the Management
Team, or any specific interests. Each member brings the
expertise, experience, and background required to perform
their duties, in line with the 'Profile outline' for the Supervisory
Board, and the diversity objectives outlined in Kendrion’s
diversity policy. Both the 'Profile outline' and the diversity policy
are available on the corporate website at www.kendrion.com.
The Supervisory Board currently comprises four independent
members, as defined by the Code. All members comply with
statutory requirements regarding the maximum number of
supervisory or non-executive functions in large enterprises.
The Supervisory Board’s composition also aligns with the
statutory provisions of the Dutch Gender Balance Act.
Members of the Supervisory Board are appointed by the
General Meeting of Shareholders upon the recommendation
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Integrated Annual Report 2025
CORPORATE GOVERNANCE REPORT
Board and the Supervisory Board and assists the Chairman in
organizing Supervisory Board affairs.
The Supervisory Board has established two committees: the
Audit Committee and the HR Committee (which combines the
Remuneration Committee and the Selection and Appointment
Committee). These committees are responsible for preparing
decisions for the Supervisory Board. The regulations outlining
the tasks and procedures of the committees can be found on
the corporate website at www.kendrion.com. For detailed
information on the composition of the Supervisory Board, its
committees, and its members, please refer to the section
‘Report of the Supervisory Board’ on page 105 of this
Integrated Annual Report.
Annually, the Supervisory Board evaluates its own functioning,
the performance of its committees, and that of individual
Supervisory Board members. The results of this evaluation are
discussed among the members of the Supervisory Board, and
the Chairman subsequently informs the Executive Board as
appropriate.
Members of the Supervisory Board do not receive shares or
rights to acquire shares in Kendrion as compensation. Kendrion
does not provide loans or guarantees to Supervisory Board
members. In accordance with the Supervisory Board
regulations, a member may not participate in the deliberation or
decision-making process on any matter in which they have a
personal interest that conflicts with Kendrion’s interests. In
2025, there were no transactions involving a conflict of interest
with any member of the Supervisory Board.
As of 31 December 2025, the following Supervisory Board
members hold shares in Kendrion: Mr. Van Hout (26,500
shares) and Mrs. Slijkhuis (3,500 shares).
Diversity within the Executive Board,
Management Team, Leadership Team and
Supervisory Board
Kendrion places significant importance on fostering diversity
across its workforce, including the Executive Board, the
Management Team, the Leadership Team and the Supervisory
Board. As part of Kendrion’s sustainability program, the Social
and Human Capital pillar emphasizes advancing diversity
throughout the organization. Ambitious diversity targets, aligned
with Kendrion’s diversity framework, have been set for each
Business Group. Details of the framework and targets can be
found in the ‘Sustainability Statements - Social’ section on
page 83 of this Integrated Annual Report.
A diverse range of competences, skills and backgrounds within
the Executive Board, the Management Team, the Leadership
Team and the Supervisory Board enhances decision-making
and contributes to long-term, sustainable value creation.
Kendrion prioritizes diversity aspects such as gender,
nationality, and background (including education and (work)
experience) as essential to its business. The company remains
committed to ongoing efforts to improve diversity across all
leadership levels.
According to Kendrion’s diversity policy, at least 33% of the
members of the Supervisory Board must be women, and at
least 33% of the Supervisory Board members must be men.
The current composition of the Supervisory Board, with two
female members and two male members, meets the 33%
gender diversity target.
Gender diversity targets have also been set for Kendrion’s
Leadership Team and for the global so-called Indirect staff.
Kendrion is committed to reshaping the composition of both
groups so that, per 2028, at least 33% of the Leadership Team
and the Indirect staff will be women, and at least 33% will be
men. As of December 31, 2025, the Leadership Team
comprises 81% men and 19% women, while the Indirect Staff
comprises 27% women and 73% men. These figures indicate
that the targets for both groups have not yet been met. In 2025,
there were no changes to the Executive Board and there was
one change to the Management Team, because of the sale of
the company’s China-based business.
As a global company, Kendrion has also set nationality-related
targets. According to the diversity policy, the Management
Team must include representatives from at least two regions
where Kendrion operates. This nationality diversity objective for
the Management Team was met in 2025. For the Supervisory
Board and the Executive Board, the objective is to maintain
appropriate nationality diversity. In the Supervisory Board one
member holds German nationality, reflecting Kendrion’s
significant operations in Germany.
Furthermore, Kendrion’s diversity policy includes a background
diversity objective. According to this policy, at least one member
of the Executive Board and at least three members of the
Management Team must have experience in international
industrial business. For the background diversity objective of
the Supervisory Board, please refer to the Supervisory Board
‘Profile outline’, available on Kendrion’s corporate website.
The compositions of the Executive Board, the Management
Team and the Supervisory Board align with their respective
background diversity objectives.
The Supervisory Board’s composition is both diverse and
experienced, reflecting a balanced participation of two female
members and two male members. The Executive Board
comprises qualified, knowledgeable, and experienced
members. The Management Team demonstrates a strong blend
of skills, nationalities, ages, backgrounds, and other relevant
factors.
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CORPORATE GOVERNANCE REPORT
Kendrion’s diversity policy outlines specific objectives that will
be explicitly considered – beyond functional requirements –
when selecting individuals for (re)appointment to the
Supervisory Board and Executive Board, as well as when filling
vacancies within the Management Team. When engaging
external recruitment consultants, Kendrion provides search
instructions underpinning the diversity policy. The diversity
policy is available on the corporate website at www.kendrion.
com.
General Meeting of Shareholders
At least once a year, Kendrion convenes a shareholder meeting.
These meetings are convened by the Executive Board and/or
Supervisory Board. Additionally, meetings may be convened at
the request of shareholders jointly representing at least 10% of
Kendrion’s issued share capital, subject to authorization by the
competent Dutch court. Shareholders holding at least 3% of
the issued share capital have the right to propose items for
inclusion on the agenda. Kendrion will generally include such
items if a substantiated proposal, clearly stating the matter to
be discussed or a draft resolution, is submitted in writing, at
least 60 days before the meeting date. Each shareholder is
entitled to attend shareholder meetings in person or by written
proxy and may exercise voting rights in accordance with the
Articles of Association. Each outstanding share carries one
vote. Resolutions are adopted by an absolute majority of votes
cast unless otherwise specified by the Articles of Association or
applicable law.
Shareholders representing 53.07% (2024: 59.17%) of the total
number of shares entitled to vote were represented at the
General Meeting of Shareholders held on 14 April 2025.
Kendrion maintains an internal audit department managed by
our finance function, with reporting lines to the CFO. The
internal audit department, managed by our finance function,
evaluates the design and effectiveness of the internal risk
management and control systems. In line with the Code,
both the Executive Board and the Audit Committee of the
Supervisory Board are involved in preparing and approving
the internal audit plan.
The annual internal audit plan is submitted for approval to the
Executive Board and the Supervisory Board. Internal audit
reports are reviewed with the Executive Board and the Audit
Committee, and the external auditor is informed accordingly.
For further details on the Audit Committee and the performance
of its duties, reference is made to the ‘Report of the
Supervisory Board’ on page 105 of this Integrated Annual
Report.
For the management statement of the Executive Board,
required under article 5:25c of the Financial Supervision Act
(Wet op het Financieel Toezicht), please refer to the ‘Financial
Review’ on page 27 of this Integrated Annual Report.
Agreements in the meaning of the decree for
the implementation of article 10 of the takeover
directive (besluit artikel 10 overnamerichtlijn)
The credit facilities of Kendrion N.V. include a change of control
provision. An early repayment obligation is triggered if a party
acquires more than half of Kendrion’s issued share capital or
voting rights.
For further details about the authority of the General Meeting
of Shareholders and Kendrion’s Articles of Association, please
refer to the corporate website at www.kendrion.com.
Special Provisions Relating to Shares
Unless otherwise indicated, there are no restrictions on the
transfer of shares, the exercise of voting rights, or the term for
exercising those rights Additionally, no special controlling rights
are attached to shares. On 14 April 2025, the General Meeting
of Shareholders granted the Executive Board the authority to:
(i) issue shares or grant rights to acquire shares and restrict or
exclude pre-emptive rights in relation to such issuances of
shares; and (ii) acquire shares in Kendrion N.V., within the limits
prescribed by the Articles of Association and applicable
statutory provisions. This authority was granted for a period
of 18 months from the date of the General Meeting of
Shareholders (i.e. until 14 October 2026) and is subject to
the prior approval by the Supervisory Board.
Auditor
Before being presented to the General Meeting of Shareholders
for adoption, the annual financial statements, as prepared by
the Executive Board, must be audited by an external certified
public auditor. The General Meeting of Shareholders holds the
authority to appoint the auditor. On 15 April 2024, the General
Meeting of Shareholders appointed Mazars Accountants N.V.
for an initial three-year term, beginning with the financial year
2024. The General Meeting of Shareholders may direct
questions to the external auditor regarding their opinion on the
financial statements. As a result, the external auditor is required
to attend and is entitled to address the General Meeting of
Shareholders.
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Integrated Annual Report 2025
CORPORATE GOVERNANCE REPORT
Corporate Governance Statement
This Corporate Governance Report, along with the section
‘Share and shareholder information’ on page 125 of this
Integrated Annual Report, contains the information specified in
the Decree for the implementation of article 10 of the Takeover
Directive. Furthermore, when combined with the sections ‘Risk
management’ and 'Report of the Supervisory Board' included
in this Integrated Annual Report, it should be considered as the
Corporate Governance Statement as required by the Decree on
the contents of the management report (Besluit inhoud
bestuursverslag).
Relevant Documents on Corporate Website
■ Articles of Association
■ Supervisory Board Regulations and Committee Regulations
■ Diversity Policy for the Supervisory Board, Executive Board
and Management Team
■ Profile outline for the Supervisory Board
■ Insider Trading Code
■ Policy on Bilateral Contacts with Shareholders
■ Code of Conduct
■ Speak-Up Procedure
Taxes
Kendrion’s tax policy is based on the core values embedded
in Kendrion’s Code of Conduct and aligned with Kendrion’s
strategy and the rationale underlying the value creation pillar
‘Responsible Business Conduct’, which is part of Kendrion’s
global sustainability program.
Taxable profits are recognized in jurisdictions in which value is
created, in accordance with the applicable tax regulations and
standards, including the OECD Guidelines for Multinational
Enterprises and local transfer pricing and other applicable tax
regulations. Tax is not limited to corporate income tax but also
includes VAT, wage withholding tax, social security
contributions, dividend withholding tax, real estate tax and
any other taxes payable by Kendrion in the relevant
jurisdictions. Kendrion explicitly avoids tax practices that result
in double non-taxation, profit shifting, or the artificial transfer of
profits to low-tax jurisdictions and does not seek to establish
aggressive tax-driven structures that are not compliant with the
letter or spirit of applicable tax regulations. This means that
Kendrion does not pursue any aggressive tax planning or has
entities established in tax haven jurisdictions solely for tax
optimization purposes and without commercial substance.
Kendrion provides adequate transparency towards tax
authorities and builds and maintains a professional relationship
with them. When appropriate, tax authorities are consulted in
advance on certain material transactions or business
restructuring to, for instance, ascertain compliance with the
applicable tax regulations. Kendrion makes tax-related
disclosures in accordance with the applicable statutory
regulations and applicable reporting requirements and
standards, such as IFRS. Stringent controls are implemented
to identify, monitor and address (potential) tax risks, aiming to
mitigate and avoid these risks. Accredited tax advisors are
engaged in reviewing and preparing material corporate income
tax returns, if appropriate. Tax compliance is integrated into
Kendrion’s internal audit plan, with material tax risks and topics,
including Kendrion’s tax policy, reported and discussed within
the Audit Committee.
Kendrion takes responsibility and shows prudence regarding
corporate tax obligations. The effective tax rate of Kendrion
or any of its affiliates is not a key performance indicator for
Kendrion’s finance and tax department, nor do individual bonus
schemes contain effective tax rate performance targets.
Kendrion’s tax strategy and compliance are reviewed annually
by the Audit Committee, ensuring alignment with the
company’s ethical and strategic objectives. Additional
information about the reconciliation of the effective tax rate can
be found on page 191 of this Integrated Annual Report.
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Integrated Annual Report 2025
CORPORATE GOVERNANCE REPORT
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Integrated Annual Report 2025
Content sustainability statements
SOCIAL 83
ESRS S1 – Own workforce 83
Impacts, Risks & Opportunities 83
Policies 83
Actions 84
Metrics & targets 87
ESRS S2 – Workers in the value chain 92
Impacts, Risks & Opportunities 92
Policies 92
Actions 93
Metrics & targets 94
GOVERNANCE 95
ESRS G1 – Business conduct 95
Impacts, Risks & Opportunities 95
Policies 95
Actions 96
Metrics & targets 97
Reference Table 98
GENERAL 44
ESRS 2 General disclosure requirements 44
Introduction to Sustainability 44
General basis for preparation 44
Strategy and ESG Program 47
Double materiality assessment 48
Impacts, Risks and Opportunities 52
Value Chain Overview 57
Stakeholder engagement 58
Key figures overview 60
ENVIRONMENT 64
Climate Scenario Analysis 64
ESRS E1 – Climate Change 66
Strategy 66
Impacts, Risks and Opportunities 67
Policies 68
Actions 68
Metrics & targets 69
EU Taxonomy 76
ESRS E2 – Pollution 77
Impacts, Risks & Opportunities 77
Policies 77
Actions 78
Metrics & targets 78
ESRS E5 – Resource Use and Circular Economy 80
Impacts, Risks & Opportunities 80
Policies 80
Actions 80
Metrics & targets 81
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Integrated Annual Report 2025
Introduction to sustainability
Sustainability is integral to our business approach. In an
environment shaped by geopolitical uncertainty and the
growing impact of climate change on economies and societies,
advancing toward a more sustainable future remains important.
At Kendrion, we focus on limiting the environmental footprint of
our operations while contributing to the transition to a more
sustainable world. Our commitment to sustainability
encompasses environmental, social, and governance
dimensions. Employees play a pivotal role in driving these
efforts, supported by governance structures that enable
responsible decision-making and uphold ethical standards.
Together, these principles form the foundation for long-term
resilience and our contribution to a sustainable future.
We recognize that meaningful progress depends on a
consistent approach across the entire industry supply chain.
Our efforts are supported by customers, suppliers, and other
stakeholders who actively contribute to and encourage the
sustainability transition. We remain committed to strengthening
our own initiatives and working with supply chain partners to
advance these shared objectives.
Kendrion’s 2024–2028 ESG program (our “ESG Program”) is an
integral part of our strategic plan and supports both short- and
long-term objectives. Continuously improving our sustainability
performance requires ongoing cultural and organizational
development, which remains a key focus across the company.
Our ESG Program and its objectives are embedded within our
organizational structure, ensuring that decision-makers are
empowered to prioritize and strengthen sustainability
performance. These objectives have been cascaded to our
GENERAL
ESRS 2 General disclosure requirements
Business Groups and incorporated into the performance-based
remuneration framework for Kendrion’s management team.
Further details on remuneration for the Executive Board and
Supervisory Board can be found in the Remuneration Report
on pages 109 to 124.
We are confident that our ESG Program supports the long-term
interests of all stakeholders, including the communities in which
we operate. As sustainability (reporting) expectations continue
to grow, we remain committed to refining, strengthening, and
implementing our ambitions and strategy in this area in a
manner that aligns with the size and responsibilities of our
company.
The following sections of this Integrated Annual Report outline
how we identify impacts, risks and opportunities through a
double materiality assessment. For detailed information on
each topic, including related policies, actions, targets, and
performance data, please refer to the sections on
‘Environment’, ‘Social’, and ‘Governance’.
General basis for preparation
The Corporate Sustainability Reporting Directive (“CSRD”) has
not yet been transposed into Dutch national law, and the final
approach and timeline for its implementation remain uncertain
as of the date of this publication. Subject to the implementation
of the Omnibus regulation into Dutch law, Kendrion is expected
to fall out of scope of the CSRD, meaning that mandatory
CSRD reporting and assurance would no longer apply.
Nevertheless, Kendrion decided to proceed with CSRD
reporting in a manner consistent with our 2024 approach. We
only moved back to the assurance scope applied to reporting
years 2023 and earlier, focusing on a set of KPIs, in alignment
with our ESG Program, only. Under the CSRD, reporting must
follow the European Sustainability Reporting Standards (the
“ESRS”) issued by the European Financial Reporting Advisory
Group (“EFRAG”). For our 2025 disclosures, we considered the
quick-fix amendments to the ESRS dated 11 July 2025.
Compared to the previous reporting year, ESRS S4 was not
identified as material for reporting year 2025 and as such, no
disclosures are therefore provided. The agreed amendments
through the quick fix applicable to the phase-in of ESRS E1,
E5, and S1 have also been applied. All data points presented in
the ‘Environment’, ‘Social’, and ‘Governance’ sections have
been assessed as material based on our Double Materiality
Assessment (the “DMA”) as defined by the CSRD. The
sustainability statement addresses the Impacts, Risks, and
Opportunities (the “IROs”) related to our operations and those
arising from our upstream and downstream value chain.
Further details on our DMA methodology and scope limitations
are available on pages 48 to 52 of this Integrated Annual
Report. All greenhouse gas (“GHG”) data points for Scopes 1
through 3 are reported in accordance with the Greenhouse Gas
Protocol. Our Scope 3 emissions for the upstream value chain
have been calculated using a cost-based approach supported
by a Scope 3 Analyzer tool. We plan to conduct our Scope 3
calculations using a different calculation tool in future reporting
years to further improve data accuracy and methodological
robustness. Refer to pages 69 to 74 for comprehensive details
on the calculation of Scopes 1–3.
Our 2025 waste hierarchy data and Scope 3 calculations are
subject to a degree of uncertainty. The waste hierarchy for
2025 is estimated based on reported data from 2024, as
complete information was not available in time for the year-end
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Integrated Annual Report 2025
audit. Additional details are provided in Chapter ESRS E5 –
Resource Use and Circular Economy. Scope 3 data carry
higher uncertainty than other datasets due to the cost-based
methodology, which is sensitive to market price fluctuations.
Further information on Scope 3 can be found in Chapter ESRS
E1 – Climate Change.
The sustainability information disclosed in this report has been
compiled using the Company’s internal methodologies and
data management processes. The reported figures are not
prepared in accordance with any European standards
developed or adopted by the European Standardisation
System, including CEN, CENELEC, or EN ISO standards. In
addition, no external third party has assessed or confirmed that
the reported information conforms to any such standards.
The policies described in this Integrated Annual Report apply
across the organization unless otherwise specified in individual
sections. These policies are generally developed with the
involvement of the General Counsel, adopted by the Executive
Board, and, where applicable, approved by the Supervisory
Board. They are accessible to all employees through our
internal intranet and, when relevant, made available to external
stakeholders on our corporate website.
We use the ESRS reference claims for most of the general
information and material topics, including economic
performance, anti-corruption, energy efficiency, emissions to air,
occupational safety and health, non-discrimination and equal
opportunities, and gender pay gap. For the material themes
‘responsible procurement practices’, and ‘disability’ Kendrion
has developed its own indicators. No other sustainability
reporting standards or frameworks have been applied in the
preparation of this Integrated Annual Report.
Data has been sourced from existing internal management and
reporting systems. Any figures presented as estimates or
forecasts are clearly identified as such.
The short-, medium-, and long-term time horizons have been
determined based on Kendrion’s risk assessment and are
defined as follows: short-term refers to one to two years,
medium-term to three to five years, and long-term to more than
five years.
Each of the ‘Environment’, ‘Social’, and ‘Governance’ sections
of the sustainability statements includes references to the
definitions and reporting scope applied to each data point. This
Integrated Annual Report has been reviewed to ensure that no
classified information has been omitted.
As part of our compliance with CSRD, we conduct due
diligence processes and have integrated the DMA process. Our
approach further includes value chain analysis, stakeholder
engagement, and continuous monitoring of structural changes.
We are in the process of integrating our sustainability risks into
our overall corporate risk framework and conducting resilience
analyses and already have CSRD-related questions in our
annual risk assessment procedure.
Core Elements of Due Diligence Paragraph in the sustainability
statement
a) Embedding due diligence
in governance, strategy and
business model
General basis for preparation;
Remuneration report (not in
sustainability statement); Double
materiality assessment; Impact,
Risks and Opportunities
b) Engaging with affected
stakeholders in all key steps
of the due diligence
General basis for preparation;
Stakeholder engagement
c) Identifying and assessing
adverse impacts
General basis for preparation;
Double materiality assessment;
Impact, Risks and Opportunities
d) Taking actions to address
those adverse impacts
Action chapters under ESRS E1,
ESRS E2, ESRS E5, ESRS S1,
ESRS S2; ESRS E1 Metrics &
Targets
e) Tracking the effectiveness of
these efforts and communicating
Metrics & Targets Chapters under
ESRS E1, ESRS E5, ESRS S1,
ESRS G1
Consolidation
The quantitative ESG data presented in this report include
information for Kendrion N.V. as the parent company and all its
wholly owned subsidiaries, whether held directly or indirectly,
unless explicitly stated otherwise. The overall scope of the
sustainability statement is fully aligned with the scope of the
financial statements. Both financial and non-financial reporting
are prepared using consistent organizational boundaries to
ensure comparability and compliance with ESRS requirements.
The only metric that extends beyond our consolidation scope is
Scope 3 – Purchased Goods and Services, which covers
emissions associated with our upstream value chain.
Divestments are reported separately as discontinued operations
in the calendar year in which the divestment is completed, and
the activity is removed from Kendrion N.V.’s consolidation
scope. For the financial year 2025, this applies to the ESG data
for our China-based business, including our entity in Suzhou,
China (the “China Divestment”), which was divested during the
reporting year. For a comprehensive overview of all entities
included in the reporting scope, please refer to page 217 of this
Integrated Annual Report.
Threshold for restatements
Adjustments to financial figures are reflected in line with the
financial statements. For changes to ESG data, we assess on a
case-by-case basis whether a restatement is necessary.
Wherever re-presented data is used, it is clearly indicated.
External review
A selected number of quantitative KPIs will be covered by the
ESG review (limited assurance), performed by our auditor Forvis
Mazars N.V.. This approach differs from 2024, where the scope
of limited assurance covered our full statement. The selected
KPIs in scope of the limited assurance engagement will be
highlighted accordingly throughout the Sustainability Statement
with the following symbol .
GENERAL
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Integrated Annual Report 2025
The limited assurance engagement is focused on the continued
business KPIs. For further details, please refer to the auditor’s
assurance report on page 215 of this Integrated Annual Report.
How to read our sustainability statements
Our sustainability statements are organized into four main
sections: ‘General’, ‘Environment’, ‘Social’, and ‘Governance’.
Certain strategy and governance disclosures requested under
ESRS have been integrated into other parts of this Integrated
Annual Report where they fit more appropriately within the
context. To support readability, cross-references to these
sections are included in the sustainability statements where
relevant.
Leadership and Accountability in Sustainability
Sustainability is embedded within Kendrion’s governance
framework to ensure clear accountability and oversight at all
leadership levels. The Executive Board holds primary
responsibility for managing the company’s long-term value
creation strategy and setting targets, with sustainability as a
core component. The General Counsel, as part of the
Management Team (MT), represents sustainability interests,
ensuring timely communication of material topics and updates.
The Supervisory Board monitors sustainability matters—
including the DMA, IROs, and targets—through updates,
reviews, and discussions to support informed decision-making
and effective oversight. Our governance bodies integrate the
assessment of IROs into strategic planning, major transactions,
and risk management by incorporating these considerations
into board discussions and evaluations. This approach ensures
that trade-offs between financial performance, sustainability
objectives, and stakeholder interests are carefully assessed.
Stakeholder engagement (see page 58) is an essential part of
our sustainability approach. Results from the refreshment of our
DMA, performed in the reporting year 2025, including key
findings from internal and external stakeholders, have been
communicated to the Leadership Team, the Management
Team, and the Supervisory Board facilitating well informed
decisions. Employee representation in the DMA process is
facilitated through the involvement of representation from
various departments within the organization. Representation of
the interests of our employees specifically is covered by the
involvement of our Human Resources department. We continue
to explore ways to strengthen employee participation.
Both the Executive Board and Supervisory Board bring
expertise relevant to Kendrion’s sectors, products, and
geographic markets. The members of our Executive Board and
Management Team have experience in international industrial
and/or automotive businesses or related industries.
Sustainability-related expertise is supported through internal
knowledge, including from our Sustainability Manager and
General Counsel, and complemented by external specialists
where required, ensuring that sustainability requirements are
well understood and properly integrated into our governance
and decision-making processes.
Strategy and 2024-2028 ESG program
Focus on projects that deliver on our environmental targets
Our Environment framework focuses on reducing the negative
impact of climate change by increasing energy efficiency and
use of renewable energy, reducing CO
2
e emissions and
strengthening pollution practices and resource use and circular
economy transitions.
A culture that empowers our people to contribute
The Social framework is centered around the well-being of both
our workforce and our customers and end-users. For our
employees, we prioritize maintaining a high-quality, safe work
environment. For our customers and end-users, we focus on
delivering products designed to ensure safety and promote
health.
Governance that enables responsible business
The Governance framework focuses on business conduct,
integrity, accountability, and transparency. Material themes
revolve around the principles of ethical business conduct.
■ Achieve a further 12%*
reduction in CO
2
e emissions
for Scope 1&2
■ Establish reporting
frameworks for Scope 1, 2
and 3 reporting (including
disclosure)
Implement gender diversity
targets at Business Group level
for indirect staff
■ Sustainable sourcing:
Enhance supplier selection
and screening through
integration of ESG metrics
into sourcing process
■ Sustain ESG ratins from
EcoVadis and CDP
Read more >
p. 64 - 82
Read more >
p. 83 - 94
Read more >
p. 95 - 97
Environmental
Social
Governance
GENERAL
Table 1: ESG overview
*
The target has been recalculated excluding the China Divestment.
47
Integrated Annual Report 2025
Our policies and related documents undergo a structured
review process. Depending on their scope, these documents
are prepared and reviewed with input from the General Counsel
and adopted by the Executive Board. Local policies for specific
jurisdictions or entities may follow separate approval processes
under the responsibility of local management where the
aforementioned process is not required in view of their scope.
The Sustainability Manager, who reports directly to the General
Counsel, is generally responsible for sustainability management
and ensures effective communication across all entities within
scope and relevant departments. The Sustainability Manager
provides regular updates to the General Counsel and Executive
Board who collectively oversee this topic.
We apply a structured monitoring process for sustainability
metrics and targets. Scope 1 and 2 emissions are measured
quarterly. Health and safety KPIs—including illness rates,
accident rates, and Lost Time Injuries (LTI (Days Lost))—are
reported monthly to the Executive Board and quarterly to the
Supervisory Board.
Strategy and ESG Program
The ESG Program was launched at the beginning of 2024, and
this program includes targets and objectives that align with our
company, business and industry. The targets are based on the
reported values for 2023, as included in our 2019-2023 ESG
program, which have been re-presented to reflect the impact of
the China Divestment. To arrive at our objectives, we used
various external and internal analyses of possible areas for
improvement and an evaluation of the targets from the 2019-
2023 program.
An overview of the key components and targets of the ESG
Program is included in the table on page 46.
Our Scope 1 and 2 emission reduction target of 48% as
disclosed in 2024 has been adjusted to 12% to reflect the
China Divestment. This divestment materially altered the
Group’s emissions baseline and reduction potential. In addition,
we have set a target to achieve 96% renewable electricity
consumption by 2028. Since 2015, Kendrion has already
achieved a substantial reduction in Scope 1 and Scope 2 CO
2
e
emissions, as further detailed in the ESRS E1 chapter. As a
result, the remaining emissions predominantly relate to more
difficult-to-abate sources, enabling future reductions
increasingly challenging. The adjusted target reflects a realistic
and credible trajectory that remains aligned with Kendrion’s
long-term sustainability ambitions and continued efforts to limit
its environmental footprint. In 2025, we continued exploring
opportunities to further reduce CO
2
e emissions in alignment
with our 2028 reduction target. Our efforts focused primarily on
Scope 1 emissions, with particular attention to replacing
heating technologies currently powered by fuel oil. We are
currently investigating possible solutions and assessing their
feasibility for implementation.
Kendrion remains dedicated to advancing the quality and
impact of our responsible product portfolio (page 75), which is
designed to support the safety and well-being of our customers
and the industries we serve. Around 40% of our revenue from
sold products already stems from our sustainable product
portfolio, reflecting our commitment to integrating sustainability,
safety, and collaboration into the way we develop and deliver
our solutions.
Natural Capital
■ Renewable energy
■ Energy efficiency
■ CO
2
e emission
values cradle to gate
■ Waste prevention /
Waste management
Social and Human Capital
■ Human Rights
■ Labour Rights
■ Diversity, equality
and inclusion
■ Occupational health
and safety
Responsible Business Conduct
■ Export controls and
economic sanctions /
Sanction monitoring
■ Environmental
management system
(ISO14001)
Materials
■ Percentage of recycled materials
■ Product less CO
2
e impact than
comparable products
■ Reuse and recycling
■ Regulations - Conflict Minerals,
RoHS, REACH, VDA etc.
■ Hazardous substances
Ecology
■ Land, forest and water rights
■ Biodiversity, land use and
deforestation
■ Soil quality
Compliance
■ Whistleblower / Anti-Corruption
& anti-bribery
■ Data Security / personal data
protection
■ Intellectual Property
GENERAL
Table 2: Sustainable sourcing metrics
48
Integrated Annual Report 2025
Our commitment to the ESG Program remains strong, with
continued progress in sustainable sourcing. The tools
introduced in 2024, a sustainability supplier questionnaire and a
supplier risk assessment, are now fully operational. These tools
provide deeper insights into our Tier-1 suppliers and enable
more effective evaluation of potential risk factors.
The supplier risk assessment tool leverages globally recognized
indices to evaluate suppliers, allowing us to identify high-risk
areas within our Tier-1 supply chain. The results of this
assessment guide the selection of suppliers for on-site CSR
audits and determine which suppliers receive the sustainability
questionnaire. This questionnaire, based on our sustainable
sourcing metrics (see Table 2 on page 47), covers key areas
such as environmental impact, human rights, labour standards,
business conduct, materials sourcing, and compliance. While
these metrics do not directly correspond to material ESRS
topics, they address a broad range of sustainability topics
relevant to our supply chain. These metrics were defined prior
to initiating the initial DMA process in 2023/2024.
During 2025, we invited our top 50 suppliers and 50 high-risk
suppliers identified through our internal tool, to complete the
sustainability questionnaire. These 100 suppliers represent
approximately 20% of our annual sourcing volume. Further
details on the outcomes of this disclosure request are provided
in Chapter S2 – Workers in the Value Chain (page 92).
By embedding sustainability in our sourcing processes, we
ensure it remains a core requirement in line with stakeholder
expectations and regulatory compliance. This strengthens risk
management and supports continuous improvements in social
and environmental practices across our supply chain.
Our ESG strategy was defined prior to the DMA, and based on
the outcomes of this assessment, we did not identify a need for
adjustments at this stage. Nevertheless, we will continue
reviewing our strategy on a regular basis, including assessing
whether DMA-related considerations should be embedded.
Double Materiality Assessment
DMA Introduction
As defined by the CSRD, we have conducted our initial DMA in
2023/2024 in alignment with the ESRS guidelines. In 2025, we
performed a refreshment of this DMA. This refreshed DMA
remains a critical component of our strategy for CSRD
reporting.
Building on previous, sustainability-specific materiality
assessments, our initial approach evaluated materiality through
two dimensions: (i) significance to stakeholders and (ii)
significance to Kendrion. These assessments identified the
most relevant topics for our activities and shaped our ESG
program (2019–2023). Since 2024, we have adopted a double
materiality perspective and finalized our first comprehensive
DMA that year. In 2025, we performed the refreshment of our
DMA, aimed to further improve the quality and robustness of
our DMA process and to validate the outcome of our DMA of
2023/2024.
DMA Methodology
We developed our initial methodology with reference to the
principles outlined in the ESRS and other available guidelines.
Learnings from previous materiality assessments, including
stakeholder dialogues, were incorporated to support the
process. For the refreshment in 2025, we also integrated
lessons learned from first DMA process, our first CSRD
reporting cycle and considered insights from available
guidelines and practices shared by Wave 1 companies.
Scoping boundaries
The DMA was carried out across all Kendrion entities without
excluding any legal entity. The resulting Impacts, Risks, and
Opportunities (IROs) were evaluated collectively across the two
Business Groups, as their operational structures are largely
uniform and do not require separate assessments unless
specific, relevant IROs are identified.
We actively monitor any material changes such as mergers,
acquisitions, divestments, or internal reorganizations that could
affect the outcome of our DMA. When significant changes
occur, we conduct a detailed assessment to determine their
impact on both financial materiality and impact materiality. This
assessment focuses on:
■ New or former entities or divisions: Identifying changes in
environmental, social, or governance risks, as well as
opportunities for positive impact.
■ Operational scale or geographic presence: Evaluating
changes that may influence risk exposure, particularly in
regions with differing regulatory or sustainability challenges.
■ Integration of new technologies or business models:
Assessing opportunities to improve sustainability
performance.
Each of these factors is reviewed in line with the principles of
double materiality, ensuring that both sustainability impacts on
external stakeholders (impact materiality) and risks to financial
performance (financial materiality) are thoroughly considered.
Outside-in-effect
Inside-out-effect
Double Materiality Assessment
GENERAL
49
Integrated Annual Report 2025
As part of this structural change analysis, any newly identified
IROs are incorporated into our materiality matrix through the
following steps:
■ Risk Identification: Assessing emerging sustainability-related
risks, including supply chain vulnerabilities and regulatory
developments.
■ Opportunity Exploration: Identifying ways to leverage
sustainability trends, such as improving energy efficiency,
advancing circular economy initiatives, and innovating in
sustainable product design.
■ Stakeholder Engagement: Consulting relevant
stakeholders—including employees, investors, suppliers,
and customers—to understand how structural changes
may influence their expectations and introduce new
sustainability priorities.
DMA Process
After our first year of CSRD reporting in 2024 we conducted a
benchmark analysis comparing our CSRD disclosures with
those of other Dutch stock-listed companies. The comparison
focused on key areas such as the structure and depth of
others´ DMA process, stakeholders engagement processes,
integration of ESRS topics, and transparency in reporting
practices. Through this analysis, we gained a better
understanding of the appropriateness of our disclosures.
Considering our size, our approach is considered appropriate
and aligned with industry expectations.
While our benchmarking confirmed the appropriateness of our
approach, we also undertook a refreshment of our DMA. This
refreshment was carried out through a structured, step-by-step
process across the whole Kendrion organization. Initially, our
Sustainability Manager and General Counsel established the
refreshment action plan based on auditor’s input and own
insights on improvement possibilities. Subsequently, the IRO list
was updated, and materiality thresholds were challenged by
internal and external stakeholders.
Following this, a detailed review of the value chain was carried
out to identify key activities. Additional data sources included
the SASB Materiality Finder, the MSCI Industry Materiality Map,
and the EcoVadis industry risk benchmark. These tools were
also used to incorporate perspectives from affected
communities and to identify potential IROs related to
environmental matters within the DMA.
As part of the assessment, we considered dependencies
related to suppliers and social actors, including employees.
Given that our operations do not rely directly on biodiversity or
ecosystem services, no material dependencies on these factors
were identified within our value chain.
We reviewed the locations of our sites using the WWF Risk
Filter, a recognized biodiversity risk assessment tool. This
analysis highlighted sites situated in biodiversity-sensitive areas,
including Atlanta (USA), and Maharashtra (IN). However, the
review did not reveal any significant impacts from our activities
that would lead to the deterioration of natural habitats,
disruption of species, or degradation of designated protected
areas.
Following this, we validated the outcome of the refreshment
and completed the identification of material issues followed by
the adoption of the refreshed DMA by the Executive Board
which was then presented to and approved by the Supervisory
Board.
Our DMA process, its outcome and our IROs will be reviewed
on a recurring basis to ensure it remains aligned with our
current business, strategy and global developments,
considering emerging risks, mitigating actions, and ongoing
developments in our business operations and supply chain, all
in collaboration with relevant internal and external stakeholders.
Impact of China Divestment
The China Divestment took place after completion of the DMA
refreshment. It was assessed if this had any potential
implications on our DMA and ESRS considerations. However,
our analysis confirmed that the integrity and conclusions of the
assessment remain unaffected, as we continue to operate
some retained automotive activities.
While the underlying set of IROs remained unchanged
compared to the 2023-2024 DMA, the scope of involved
stakeholders was affected by the divestment. The group
involved in 2025 were predominantly drawn from the continuing
industrial-oriented businesses. As a result, the evaluation of the
same IROs reflects a stronger industrial focus than in previous
years, leading to changes in the relative prioritization and a
reduction of certain risks. This outcome reflects the
composition of the participating stakeholders rather than a
change to the DMA process, criteria or identified IROs.
Although the divested operations were significant, our industrial
segment represents a substantial share of our financial
performance. This segment continues to generate strong
revenue and earnings, ensuring that the financial risks and
opportunities identified in our assessment remain valid and
resilient.
The environmental and social impacts of the remaining
Business Groups, including emissions, energy consumption,
and responsible supply chain practices, are comparable to
those previously associated with the divested operations.
Consequently, our refreshed DMA remains robust, as these
sustainability challenges and opportunities persist across our
ongoing activities.
In this Integrated Annual Report, sustainability data related to
the divested China-based business are disclosed separately.
Please refer to pages 60 to 63 for ESG data on these divested
GENERAL
50
Integrated Annual Report 2025
ESRS Matrix
S1 Own Workforce
S2 Workers in the value chain
G1 Business Conduct
S3 Affected communities
S 4 Consumers and end users
E3 Water and
marine resource
E4 Biodiversity
and ecosystems
E2 Pollution
E1 Climate change
E5 Circular economy
High
Low
Medium
Financial Materiality
Impact Materiality
25
20
15
10
5
0
25
20151050
High
Low Medium
activities. Comparable data for the previous year have been
re-presented accordingly.
Stakeholder involvement
The stakeholder engagement process for our DMA was
structured to ensure high-quality qualitative input,
complemented by a targeted set of stakeholder interviews. This
approach is closely integrated with our ongoing stakeholder
interaction activities.
In the previous year, interviews were conducted with a selective
group of employees across all Kendrion entities and group
functions to provide a comprehensive input for the DMA, while
the assessment itself was carried out by a smaller stakeholder
group. For 2025, we expanded this approach by involving a
broader group of employees from various departments to
assess IROs within their area of expertise. We selected internal
stakeholders, with one group being responsible for reassessing
the list of IROs (the so-called “IRO Stakeholders”), with a
second group being responsible for validating the materiality of
the IROs (“Materiality Stakeholders”). On the external side, we
revisited and validated the input from our major customer in
Industrial Brakes and a key copper supplier. Additionally, we
engaged two major customers from Industrial Actuators and
Controls to gain deeper insights from the customer perspective.
Outreach was also extended to steel suppliers—given the
importance of steel in our products—although these suppliers
declined to participate. Regular engagement with lenders
continues as part of our sustainability-linked financing
arrangements.
Our primary copper wire supplier is critical to our operations, as
copper wire—alongside steel components—is essential for
producing electromagnets and valves. Their extensive market
knowledge and importance within our supply chain establish
them as a key contributor to the DMA. Steel suppliers are
GENERAL
equally important; however, it was not possible to engage with
them this year, partly because we primarily interact with
distributors rather than direct producers. We will maintain a
strong focus on involving steel suppliers in future assessments
to ensure comprehensive input across all critical materials.
Given the substantial investment from our largest shareholder,
their expectations and priorities influence our strategic direction.
The importance of Environmental, Social, and Governance
topics for future alignment underscores the value of this
stakeholder’s perspective in shaping our sustainability initiatives
and identifying potential risks and opportunities.
Our major customer has articulated their commitment to
sustainability, expressing a clear expectation for collaboration
with their suppliers who prioritize sustainability. This customer
51
Integrated Annual Report 2025
has already implemented sustainability measures, making them
a valuable partner for further collaboration and knowledge
exchange in the DMA.
Our primary copper wire supplier is critical to our operations,
as copper wire—alongside steel components—is essential for
producing electromagnets and valves. Their extensive market
knowledge and importance within our supply chain establish
them as a key contributor to the DMA. Steel suppliers are
equally important; however, it was not possible to engage with
them this year, partly because we primarily interact with
distributors rather than direct producers. We will maintain a
strong focus on involving steel suppliers in future assessments
to ensure comprehensive input across all critical materials.
The feedback gathered from various stakeholders was
validated and given equal consideration throughout the DMA
process. The insights obtained were largely aligned with the key
IROs previously identified in the initial DMA in the year
2023/2024.
We maintain direct collaboration with major customers across
both Business Groups to address their sustainability
requirements, which provides us with a clear understanding of
their expectations for supply chain practices. Additional details
on supplier engagement can be found in the Stakeholder
Engagement section of this report (see page 58). We intend
to further maintain and strengthen our close connection with
stakeholders and integrate their insights into our overall
sustainability efforts in the coming years.
Scoring and thresholds
In line with ESRS guidance, we assessed our impacts using
the parameters of scale, scope, and irremediability (the latter
applicable only to negative impacts). For risks and
opportunities, we evaluated both the potential magnitude and
likelihood for each ESRS topic.
The highest-rated risk or opportunity within each ESRS
determines its overall financial materiality, while the highest-
rated impact reflects its total impact materiality.
Materiality thresholds were set at 16 for impact materiality and
financial materiality, based on a maximum possible score of 25.
This means that any impact, risk, or opportunity meeting or
exceeding these thresholds—along with their associated ESRS
topics—are considered material to Kendrion.
DMA Result
We have identified and assessed our impacts—both positive
and negative—on the environment and society through an
impact materiality assessment, as well as the sustainability-
related risks and opportunities to which we are exposed
through a financial materiality assessment. In addition, all
impacts were classified as either ‘actual’ or ‘potential,’ and the
same categorization was applied to risks and opportunities.
The results of our refreshed DMA have been consolidated by
ESRS topic and are illustrated in the tables on pages 53 to 56.
As shown, the following topics are considered our most
material sustainability priorities:
E1 Climate change
E2 Pollution
E5 Resource use and circular economy
S1 Own workforce
S2 Workers in the value chain
G1 Business conduct
Please note that, compared to the previous reporting year,
ESRS S4 is excluded from the scope of our DMA 2025 as it
was not defined to be material in 2025.
Kendrion anticipates future enhancements in its ongoing due
diligence process. Due diligence is a continuous practice that
may trigger conversations about updates to the company’s
strategy, business model, activities, relationships, and
operating, sourcing, or sales contexts. The sustainability
statement may not capture every impact, risk, opportunity, or
entity-specific disclosure that individual stakeholder groups
might consider significant in their own assessments.
The processes for identifying, assessing, and managing IROs
have not yet been fully integrated into Kendrion’s overall risk
management and broader management systems, as outlined in
points (e) and (f) of ESRS IRO-1. These processes will be
reassessed in the next reporting year to determine if and how
they can be incorporated into the company’s risk and
management frameworks. This evaluation aims to ensure
alignment with Kendrion’s broader risk management practices
and strategic objectives.
GENERAL
52
Integrated Annual Report 2025
Impact, Risks and Opportunities
The following tables present the sustainability related IROs
identified and assessed as material through our DMA process.
For each material ESRS topic, we outline the relevant subtopics
associated with IROs. We indicate whether these factors are
actual or potential and provide brief descriptions in the tables.
Additional details on how we address the effects of these IROs
and how those have changed compared to the previous
reporting year can be found in the subsequent sections
covering ‘Environment,’ ‘Social,’ and ‘Governance.’ While last
year’s IROs assessment followed a pragmatic mid-level
granularity approach, this year we have adjusted the IROs and
ESRS topics in line with ESRS 1.
The financial impacts of the identified IROs have not been
precisely defined or calculated. However, Kendrion has utilized
estimated bandwidths to assess potential impacts and support
decision-making processes. We will continue to review and
refine this approach, as appropriate, in future reporting periods
as more data becomes available. A resilience analysis, as
required under ESRS 2 SBM- 3, was not conducted for this
reporting period. For future reporting years, we will consider
including a resilience analysis to evaluate the robustness of our
business model in addressing these material IROs, ensuring our
strategy remains resilient and adaptable to evolving conditions.
Sustainable procurement
Responsible & innovative product portfolio
Resource extraction
Pollution
Mobility & Logistics Management
Inclusive workplace
Human right
Energy management & emissions
Employee health & safety
Ecosystem preservation
Diversity
Business ethics & integrity
Financial Materiality Impact Materiality
Material topics
GENERAL
53
Integrated Annual Report 2025
E1 | Climate change
Climate change mitigation
Impact or Financial
Materiality
Impact, Risk or
Opportunity
Actual or
Potential
Material Topic
Description Topic Description
Location
in value chain Time horizon
Impact Positive Impact Actual Responsible &
innovative product
portfolio
Product portfolio Positive contribution to climate change by reducing GHG emissions
through product portfolio that enables a clean energy transition
(downstream)
Downstream Longterm
Impact Negative Impact Actual Energy management &
emissions
Own production &
facilities
Negative contribution to climate change through GHG emissions
from own production and facilities
Own operations Longterm
Impact Negative Impact Actual Sustainable
procurement
Production of raw
materi-als and
component
Negative contribution to climate change through GHG emissions in
the upstream supply chain
Upstream Longterm
Impact Negative Impact Actual Mobility & logistics
management
Business travel Negative contribution to climate change through GHG emissions
from own business travel
Own operations Longterm
Impact Negative Impact Actual Mobility & logistics
management
Transport &
logistics
Negative contribution to climate change through GHG emissions
from transport & logistics in the upstream & downstream supply
chain steps
Upstream,
Downstream
Longterm
Impact Negative Impact Actual Responsible &
innovative product
portfolio
Product use
phase & end of life
Negative contribution to climate change through GHG emissions in
the product use phase & end of life treatment (downstream)
Downstream Longterm
Impact Negative Impact Actual Mobility & logistics
management
Company cars
(fleet)
Negative contribution to climate change through green-house gas
emissions when commuting with own fleet (com-bustion engine)
Own operations Longterm
Financial Opportunity Potential Responsible &
innovative product
portfolio
Low-carbon
products
Increase revenue by retaining and attracting customers who are
increasingly demanding low-carbon products (low carbon footprint)
Own operations Longterm
GENERAL
54
Integrated Annual Report 2025
E2 | Pollution
Pollution of air, water and soil
Impact or Financial
Materiality
Impact, Risk or
Opportunity
Actual or
Potential
Material Topic
Description Topic Description
Location in value
chain Time horizon
Impact Positive Impact Actual Responsible &
innovative product
portfolio
Product portfolio
enables less
pollution
Positive contribution to reducing air pollution through a product
portfolio that enables a clean energy transition
Downstream Longterm
Impact Negative Impact Actual Resource extraction Resource
extraction and
processing
Contribution to water and air pollution through the release of
pollutants during resource extraction and processing of raw
materials in the upstream supply chain
Upstream Longterm
Impact Negative Impact Actual Pollution Pollution in the
use phase
Contribution to environmental pollution caused by the release of
pollutants into natural ecosystems during the use phase of certain
products
Downstream Longterm
Impact Negative Impact Actual Resource extraction Mining Contribution to environmental pollution (soil, water, air) due to
mining
Upstream Longterm
Use of microplastics
Impact or Financial
Materiality
Impact, Risk or
Opportunity
Actual or
Potential
Material Topic
Description Topic Description
Location in value
chain Time horizon
Impact Negative Impact Actual Responsible &
innovative product
portfolio
Microplastics
creation during
transport
Contribution to environmental pollution caused by micro-plastics
from transport that end up in natural ecosystems
Upstream,
Own operations,
Down-stream
Longterm
GENERAL
E5 | Resource Use & Circular Economy
Resource inflows
Impact or Financial
Materiality
Impact, Risk or
Opportunity
Actual or
Potential
Material Topic
Description Topic Description
Location in value
chain Time horizon
Impact Negative Impact Actual Ecosystem
preservation
Natural resource
depletion
Contribution to natural resource depletion using various input
materials and rare earth metals
Upstream Longterm
Resource outflows
Impact or Financial
Materiality
Impact, Risk or
Opportunity
Actual or
Potential
Material Topic
Description Topic Description
Location in value
chain Time horizon
Impact Negative Impact Actual Responsible &
innovative product
portfolio
Non-circular
product portfolio
Contribution to a linear use of resources through product design
that follows a linear life cycle
Own operations,
Downstream
Longterm
55
Integrated Annual Report 2025
S1 | Own Workforce
Equal treatment and opportunities for all
Impact or Financial
Materiality
Impact, Risk or
Opportunity
Actual or
Potential
Material Topic
Description Topic Description
Location in value
chain Time horizon
Impact Positive Impact Actual Inclusive workplace Empower women
in ca-reers
Positive impact on women and female employees by equal pay and
opportunities
Own operations Longterm
Financial Opportunity Potential Diversity Effectiveness
through diversity
Increased company performance through higher perfor-mance in
diverse teams
Own operations Longterm
Financial Risk Actual Diversity Diversity in
management
roles
Revenue loss through decreased team performance be-cause of
non-diverse leadership positions
Own operations Longterm
Working conditions
Impact or Financial
Materiality
Impact, Risk or
Opportunity
Actual or
Potential
Material Topic
Description Topic Description
Location in value
chain Time horizon
Impact Negative Impact Actual Employee health &
safety
Occupational
accidents and
injuries
Negative impact on individuals who experience an accident at work
and get injured
Own operations Longterm
GENERAL
S2 | Workers in the value chain
Equal treatment and opportunities for all
Impact or Financial
Materiality
Impact, Risk or
Opportunity
Actual or
Potential
Material Topic
Description Topic Description
Location in value
chain Time horizon
Impact Negative Impact Potential Human rights Forced labour in
metal supply
chain
Negative impact on workers in the upstream value chain due to
forced labour practices
Upstream Longterm
Impact Negative Impact Potential Human rights Child labour in
metal supply
chains
Negative impact on workers in the upstream value chain due to
regional practices like child labour
Upstream Longterm
56
Integrated Annual Report 2025
G1 | Business Conduct
Corruption and bribery
Impact or Financial
Materiality
Impact, Risk or
Opportunity
Actual or
Potential
Material Topic
Description Topic Description
Location in value
chain Time horizon
Impact Positive Impact Actual Business ethics &
integrity
Ethical business
behavior
Positive contribution to ethical business conduct regarding fraud
and corruption through various internal and external policies
Upstream,
Own operations,
Down-stream
Longterm
Corporate culture
Impact or Financial
Materiality
Impact, Risk or
Opportunity
Actual or
Potential
Material Topic
Description Topic Description
Location in value
chain Time horizon
Impact Positive Impact Actual Business ethics &
integrity
Ethical business
behavior
Positive contribution to ethical business conduct regarding
harassment and discrimination through various internal and external
policies
Upstream,
Own operations,
Down-stream
Longterm
GENERAL
57
Integrated Annual Report 2025
GENERAL
Value chain overview
Environmental
E
Governance
G
1
4
5
Biodiversity and ecosystems
Circular economy
Climate change
Pollution
Water and marine resources
Social
S
3
2
1
Own workforce
Workers in the value chain
Affected communities
Index
• Material
Non-material
3
2
1
Business conduct
OWN ENTITIES DOWNSTREAMUPSTREAM
Customer engagement
1
5
4
1
• Human rights
2
• Business ethics & integrity
1
1
Community involvement
1
3
• Diversity
1
• Employee health & safety
1
Fair labour conditions
1
2
• Inclusive workplace
1
• Business ethics & integrity
1
1
• Business ethics & integrity
1
1
Fair labour conditions
1
2
Employee development
1
2
Employee development
1
2
Customer engagement
1
5
4
1
Customer engagement
1
5
4
1
• Human rights
2
• Human rights
2
• Resource extraction
1
2
5
1
• Responsible & innovative
product portfolio
1
2
4
5
1
1
• Responsible & innovative
product portfolio
1
2
4
5
1
1
• Resource extraction
1
2
5
1
• Responsible & innovative
product portfolio
1
2
4
5
1
1
• Mobility & logistics
management
1
• Energy management &
emissions
1
Resource price dynamics
1
1
• Mobility & logistics
management
1
Resource price dynamics
1
1
• Mobility & logistics
management
1
Data security
1
1
Regulation & Policies
1
2
4
5
3
Data security
1
1
Regulation & Policies
1
2
4
5
3
Data security
1
1
• Ecosystem preservation
4
5
Material & waste management
2
5
Climate change
1
Water management
3
• Sustainable procurement
1
2
3
1
• Pollution
2
• Ecosystem preservation
4
5
Material & waste management
2
5
• Ecosystem preservation
4
5
Material & waste management
2
5
Climate change
1
Water management
3
• Sustainable procurement
1
2
3
1
• Pollution
2
• Sustainable procurement
1
2
3
1
• Pollution
2
58
Integrated Annual Report 2025
Stakeholder engagement
In addition to stakeholder involvement as part of the DMA
(refreshment) process, we maintain an open and ongoing
dialogue with our stakeholders on sustainability topics to
deepen our understanding of their needs and expectations.
This recurring engagement supports the management, and
execution of our global ESG Program. Through these
interactions, we aim to build trust, identify emerging trends, and
address critical issues such as the implications of climate
change for our operations and products, as well as the broader
impact of our activities on the environment and society.
Through these dialogues we also aim to provide transparency
regarding our plans and actions to mitigate climate-related
impacts and tackle associated challenges. Stakeholder input is
consistently considered when developing strategies and
mitigation measures.
Our key stakeholder groups include customers, suppliers,
employees, shareholders, local communities, technical
universities, and institutions of higher technical education.
We improved the engagement with internal stakeholders
compared to our approach in the 2024 reporting year.
Additional information in this regard is disclosed on page 50
in the chapter “Stakeholder involvement”. Engagement
Engagement with these groups occurs through both formal
and informal channels, with varying frequency depending on
the group. The following section outlines our key stakeholder
groups, the communication resources and channels used,
and their relevance to Kendrion’s ESG Program.
Relevance
Communication sources
and channels Topics discussed
Relevance to Kendrion’s ESG
Program
Customers
Kendrion’s customer base comprises industrial
companies that use our components to manufacture
a range of industrial applications as well as Tier 1
suppliers and OEMs in the automotive sector.
Kendrion’s customers are increasingly implementing
sustainability requirements for their suppliers.
Kendrion focuses on consistent compliance with
these requirements.
Customer and sales meetings, Kendrion
websites, contract meetings, press releases.
Engagement with customers takes place at
regular intervals.
Quality of products and services, Kendrion’s
ESG Program and objectives, customer
satisfaction, waste, energy, water
use, use of rare earth materials, conflict
minerals, responsible business conduct, ISO
and IATF certification.
Obtain views and observations concerning
sustainability from the customer’s
perspective, further insight into customer
needs and expectations, sharing experiences
and best practices, continuous improvement,
and development of sustainability
contribution.
Suppliers
Kendrion is consistently looking for ways to increase
transparency in the supply chain and expects its
suppliers to adhere to the standards of the Kendrion
Supplier Code of Conduct and follows a consistent
approach towards the performance of supplier audits
to verify compliance. In addition, we have implemented
a sustainability questionnaire to gather more in-depth
information on the ESG commitment of our suppliers.
These efforts contribute to a continuous improvement
in compliance with the Supplier Code of Conduct.
Supplier Code of Conduct, supplier
sustainability and quality audits,
Kendrion websites, supplier, and contract
meetings.
Engagement with suppliers takes place at
regular intervals.
Quality of products and services, Kendrion’s
ESG Program and objectives, management
of supply chain risks (e.g.
material shortages) and joint pursuit of
improvements in the supply chain,
responsible business conduct, Supplier
Code of Conduct, waste, energy, water use,
use of rare earth materials, conflict minerals.
Obtain views and observations concerning
sustainability from the supplier’s perspective
(incl. the improvement of transparency in the
supply chain), further insight into supplier
needs and expectations, sharing experiences
and best practices, continuous improvement
and development of sustainability
contributions.
GENERAL
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Integrated Annual Report 2025
Relevance
Communication sources
and channels Topics discussed
Relevance to Kendrion’s ESG
Program
Employees
Our talented and highly skilled employees play a crucial
role in the way in which Kendrion operates its business.
Kendrion fosters a culture that empowers its employees
to reach their full potential and to achieve the best
results. As reflected in ‘The Kendrion Way’ and the
Code of Conduct we create an open and inclusive
culture to recruit, motivate and retain a highly
diverse workforce that reflects the communities in
which we operate.
An engaged and committed workforce contributes to
the achievement of Kendrion’s financial and non-
financial targets.
Works Council meetings, meetings with
employee representatives, employee
satisfaction and culture surveys, workshops,
training courses, intranet, internal personnel
magazine, e-mail newsletters, feedback
meetings, staff and townhall meetings
Engagement with employees takes place
on a daily basis.
Kendrion’s ESG Program and objectives,
particularly regarding health and safety,
employability, training, and development,
employee satisfaction and company culture,
responsible business
conduct, compliance and ethical behavior.
Obtain views and observations concerning
sustainability from the employee’s
perspective, further insight into employees’
capabilities and motivations, strengthening
business sustainability culture, enhancing
employee commitment, participation, and
awarenes.
Shareholders
The endorsement of sustainable development and
addressing ESG related issues is becoming increasingly
important for Kendrion’s shareholders. Kendrion
engages with its major shareholders and financiers,
not only concerning Kendrion’s ESG Program and its
material topics and objectives, but also with respect to
the ESG policies and activities of its major shareholders
and financiers. Kendrion provides adequate
transparency towards its shareholders and financiers
about climate change and reducing the negative impact
of climate change and addressing other social issues,
strategy, and financial performance.
General Meeting of Shareholders, analyst,
and investor meetings, conferences, Capital
Markets Day, press releases, Kendrion’s
corporate website Engagement with
shareholders takes place at least on a
quarterly basis.
Kendrion’s ESG Program and objectives. Obtain views and observations concerning
sustainability from the investor’s perspective
(incl. climate change and reducing the
negative impact of climate change and
addressing other social issues), further
insight into shareholders needs and
expectations, sharing experiences and best
practices, continuous improvement, and
development of sustainability contributions.
Local
communities
Kendrion is making a positive contribution to the
reduction of social and economic gaps. Kendrion
appreciates the importance of maintaining constructive
and appropriate contacts with local communities and
authorities.
Local meetings, Kendrion websites, open
days Engagement with local communities
takes place at regular intervals.
Communities’ participations and
investments.
Community connection, involvement and
participation.
Technical
universities and
institutions of
higher technical
education
Active engagement with students is key to
understanding their views and observations on
sustainability and forms a valuable platform for the
exchange of knowledge and experiences. Dialogues
with students are often inspirational and stimulate the
formulation of innovative sustainability goals and
ambitions, including our ambition to encourage
young talented female students to take an interest in
Science, Technology, Engineering and Mathematics
(STEM) related studies. These dialogues also raise
awareness among students about sustainability and
its importance.
Presence at fairs, organization of student
events, projects and internships engagement
with universities, schools, and institutes
takes place at regular intervals.
Kendrion’s ESG Program and objectives
(incl. advancement of gender diversity), also
with a view to creating
awareness and stressing the importance and
relevance of sustainability.
Obtain
views and observations concerning
sustainability of new generation and raise
awareness.
GENERAL
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Integrated Annual Report 2025
Key figures overview
This section offers a detailed overview of our ESG KPIs,
presenting figures for continued operations compared to the
previous year, alongside our targets. Our China-based
business, including the Chinese legal entity and site, was
divested in 2025. In accordance with ESRS 1, paragraph 62,
sustainability statements shall be prepared for the same
reporting undertaking as the financial statements. As the
financial disclosures focus on the continued business following
the divestment, the sustainability disclosures have been
prepared on the same basis. Consequently, the reported figures
reflect the continued operations of Kendrion. To ensure
comparability, prior-year values have been recalculated to
exclude the divested China-based business. Metrics for the
divested entity in 2025 are shown in a separate column, with an
additional combined total for both continued and divested
operations. It is presented as a discontinued operation in the
financial statements. Management considers continued
operations most relevant for sustainability reporting, as policies,
actions, targets, and metrics focus on the future of the
business. To provide transparency, we have included metrics
for the divested business up to the date of completion of the
divestment (21 October 2025), where possible in the KPI
Overview on page 60 to 63. The data largely followed the same
reporting processes as continued operations, and flow
information such as energy usage was primarily collected
during the year. Ratio information based on year-end data
relates to continued business. Following the completion of the
China Divestment, access to detailed information for the
divested business was no longer available. Where necessary,
certain figures have been estimated. Consequently, the metrics
related to the divested business are subject to a higher degree
of estimation uncertainty compared to those for continued
operations. Further details are provided below and in the
‘Reporting Definition & Scope’ section.
Divested KPIs
Environmental KPIs:
For the divested business, all figures presented in the
corresponding column were reported as actual data, except for
Scope 3 values, which were calculated based on the previous
year’s emissions and cost-based data reported by the divested
entity. Product-related hazardous waste was not reported as
actual data, and waste management figures were estimated
Sustainability matter Value chain Time horizon UoM 2025 2024 Target 2028
Divested
Business 2025
Divested +
Continued
Business 2025
Environment
E1 Direct Energy Consumption Own operations ST, MT, LT kWh 6,164,509 5,642,196 - 122,215 6,286,724
Indirect Energy Consumption Own operations kWh 6,879,574 7,577,712 - 3,223,666 10,103,240
Relative Direct Energy Consumption - Added value Own operations - 44,006 45,555 - 6,457 39,536
Relative Direct Energy Consumption - Revenue Own operations - 25,112 22,636 - 2,382 21,183
Relative Indirect Energy Consumption - Added value Own operations - 49,110 61,183 - 170,311 57,081
Relative Indirect Energy Consumption - Revenue Own operations - 28,025 30,401 - 62,827 34,042
Self-generated renewable energy - solar energy Own operations kWh 666,673 540,583 - 586,674 1,253,347
GENERAL
using reported 2025 data and estimated based on added value
developments between 2024 and 2025. All values shown
under E1 represent consumption recorded from January
through September 2025.
Social KPIs:
For the divested business, the information pertains to former
Kendrion employees. All figures shown in the divested business
column are based on actual data up to and including Q3 2025.
For continued operations, workforce ratio metrics are
calculated using headcount figures as of 31 December 2025.
Certain data related to the workforce of the divested business
could not be included due to the manual collection process at
year-end, by which time the divested business had already
been sold. For S1, all numbers in the divested column reflect
values as of 30 September 2025, except for illness, accidents,
LTI (Days Lost), employee departures, family leave, and supplier
audits, which represent cumulative values from January up to
and including September 2025.
Governance KPIs:
These KPIs remain independent of the continued or divested
business and are therefore only reported under the continued
business.
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Integrated Annual Report 2025
Sustainability matter Value chain Time horizon UoM 2025 2024 Target 2028
Divested
Business 2025
Divested +
Continued
Business 2025
Self-generated non-renewable energy - fossil sources Own operations kWh 1,479,124 1,621,879 - 0 1,479,124
Renewable electricity Own operations % 92 83 - 100 95
Scope 1 Own operations t CO
2
e 1,406 1,224 - 61 1,467
Biogenic emissions in Own operations t CO
2
e 33 33 - 0 33
Scope 2 location-based Own operations t CO
2
e 3,149 3,456 - 2,315 5,464
Scope 2 market-based Own operations t CO
2
e 303 667 305 0 303
Total Gross indirect Scope 3 Upstream t CO
2
e 70,195 109,932 - 20,669 90,864
3.1 Purchased Goods Upstream t CO
2
e 62,686 99,385 - 17,690 80,376
3.2 Capital Goods Upstream t CO
2
e 1,314 3,755 - 256 1,570
3.3 Fuel- and Energy Related Activities Upstream t CO
2
e 467 484 - 122 589
3.4 Upstream Transportation and Distribution Upstream t CO
2
e 3,149 3,430 - 2,097 5,246
3.5 Waste generated in Operations Upstream t CO
2
e 225 204 - 46 271
3.6 Business Travel Upstream t CO
2
e 474 622 - 85 559
3.7 Employee Commuting Upstream t CO
2
e 1,802 1,924 - 373 2,175
3.8 Upstream Leased Assets Upstream t CO
2
e 78 128 - 0 78
Relative Scope 1 Emission - Added value Own operations - 10.0 9.9 - 3.2 9.2
Relative Scope 1 Emission - Revenue Own operations - 5.7 4.8 - 1.2 4.9
Relative Scope 2 Emission - Added value Own operations - 2.2 5.4 - 0 1.9
Relative Scope 2 Emission - Revenue Own operations - 1.2 2.7 - 0 1.0
Total GHG (location-based) per net revenue (tCO
2
e/EUR
1,000)
Own operations - 305 460 - 449 330
Total GHG (market-based) per net revenue (tCO
2
e/EUR
1,000)
Own operations - 293 449 - 404 312
E5 Copper inflow Own operations t 556 637 - 318 874
Waste total in t Own operations t 607.4 567 - 111.1 718.5
Hazardous waste in t Own operations t 76.3 69.3 - 23.2 99.5
Non-hazardous waste in t Own operations t 531.0 497.7 - 87.9 619.0
Waste recycling rate in % Own operations % 77.0 76.8 - 79.2 77.3
GENERAL
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Integrated Annual Report 2025
Sustainability matter Value chain Time horizon UoM 2025 2024 Target 2028
Divested
Business 2025
Divested +
Continued
Business 2025
Social
S1 % Male / Female employee Own operations ST, MT % 56 / 44 57 / 43 - 51 / 49 55 / 45
% Male / Female employee Leadership team Own operations % 81 / 19 84 / 16 67 /33 100 / 0 81 / 19
Employees represented by works´council Own operations % 89.6 86.9 - 2.1 78.9
Employees covered by collective bargaining agreements Own operations % 73.0 69.5 - 100 76.3
Permanent employee Own operations FTE 1,199 1,270 - 73 1,272
Fixed term employee Own operations FTE 58 69 - 117 175
Temporary employee Own operations FTE 12 18 - 73 85
Total FTE Own operations FTE 1,269 1,359 - 263 1,532
Headcount by age - Under 30 years Own operations Headcount 201 232 - 23 224
Headcount by age - 30 - 50 years Own operations Headcount 683 717 - 162 845
Headcount by age - Over 50 years Own operations Headcount 486 514 - 5 491
Number of Accidents (Own criteria) Own operations 11 15 - 0 11
Lost Time Injuries (Days Lost) (Own criteria) Own operations Days 172 248 - 0 172
Number of Accidents (2) (ESRS) Own operations 23 - - - 23
Days Lost (2) (ESRS) Own operations Days 225 - - - 225
Illness rate Own operations % 5.9 5.9 - 0.8 5.3
Number of nationalities Own operations 33 37 - 1 34
Total remuneration pay ratio Own operations 19 21 - N/A 19
Gender Pay Gap Total in % Own operations % 41.7 40.7 - N/A 41.7
Gender Pay Gap adjusted Direct / Indirect in % Own operations % 14 / 13 - - N/A 14 / 13
Gender Pay Gap Leadership Team in % Own operations % 45 - - - 45
Male Employees that took family related leave Own operations FTE 64 24 - 16 80
Female Employees that took family related leave Own operations FTE 34 19 - 16 50
Employees with disabilities Own operations % 3.3 3.6 - 0 3.3
Overall employee turnover rate Own operations % 12 20 - 12 12
Employees who left the company Own operations Headcount 162 305 - 22 184
Employee at top management level % Own operations % 2.3 2 - 0.05 2.0
Wage cost per FTE Own operations x1.000 € 67.6 61.3 - 24.1 60.1
S2 Number of Supplier CSR audits Upstream 13 16 15 0 13
S4 Responsible product portfolio (% of revenue) Own operations,
Downstream
% 42.8 >40.0 - N/A 42.8
GENERAL
63
Integrated Annual Report 2025
Sustainability matter Value chain Time horizon UoM 2025 2024 Target 2028
Divested
Business 2025
Divested +
Continued
Business 2025
Governance
G1 Reports Speak-Up line Own operations ST, MT 4 2 - 1 5
Legend ST: Short term, MT: Medium Term, LT: Long Term KPIs in scope of limited assurance engagement
GENERAL
64
Integrated Annual Report 2025
ENVIRONMENT
Climate Scenario Analysis
As our climate scenario analysis has a long-term
outlook, the findings from our 2024 analysis
remain relevant. We did not update or expand
this assessment in 2025, as the results continue
to provide meaningful guidance for
understanding potential long-range climate-
related risks across our operations. The
information below therefore summarizes our
initial conclusions, still being accurate for our
current perspective on climate-related
exposures.
In line with the Intergovernmental Panel on Climate Change
(IPCC) scenario framework, we examined possible climate
developments for the regions in which we operate in 2024. The
analysis considered projected shifts in temperature,
precipitation patterns, sea-level rise, and other physical climate
indicators across key locations. The intention was to build an
early understanding of potential climate vulnerabilities and to
consider how our assets, operations, and employees may be
affected over the long term.
To develop these insights, we drew on established resources
such as the IPCC’s CMIP6 Interactive Atlas for climate
projections and Climate Central’s Coastal Risk Screening Tool
for sea-level rise. Our assessment was based on the high-
emissions SSP5-8.5 pathway, using a 2°C warming threshold
as a reference point. Time horizons included sea-level
projections for 2050, and median temperature and precipitation
changes through to 2100. While this work enabled us to identify
overarching physical risks, we did not evaluate the likelihood or
65
Integrated Annual Report 2025
duration of individual hazards, nor did we integrate geospatial
coordinates, supply-chain exposure, or transition-related risks
into this stage of the assessment. These areas may remain part
of our future development roadmap.
Western, Eastern, and Central Europe
In the Netherlands, our headquarters in Amsterdam and our
location in Drachten are expected to experience significant
vulnerabilities due to sea-level rise, even with minimal increases
(starting at 0.1 meters from 2030 onward) representing a
potential flooding risk due to the country’s low-lying topography.
Posing challenges to infrastructure resilience and continuity of
operations. For our sites in Eindhoven and Enschede, no risks
were identified.
Our German and Austrian locations (in Villingen,
Donaueschingen, Malente, Aerzen, and Linz, respectively) were
projected to experience moderate annual temperature
increases (median 2.7°C) and slight changes in precipitation,
conditions that may contribute to more frequent heatwaves,
pressure on water systems, and operational inefficiencies.
For Romania, the assessment did not identify material climate-
related risks.
Northern Europe
For our Swedish facility in Kristianstad, projected temperature
rises of about 2.7°C, together with an estimated 5.9% increase
in precipitation, may affect snowfall patterns in winter and lead
to more rainfall in summer. Without improvements to drainage
capacity or supportive infrastructure, these conditions could
challenge water management and seasonal operations.
ENVIRONMENT
United States of America
In Atlanta, projections indicate an approximate 2.5°C increase
in average annual temperatures accompanied by a 3.9% rise in
precipitation. These trends could intensify heavy rainfall events,
increase flooding risks, and raise cooling demands. At this
stage, no specific adaptation measures, such as flood
management enhancements or dedicated heat resilience
initiatives, have been implemented at our local site.
South Asia
In Pune, projected changes include a 1.8°C rise in mean
temperatures and a 5.6% increase in precipitation, potentially
contributing to increased heat stress and heightened risks of
urban flooding.
Outlook
The insights gained from our scenario analysis continue to
shape our understanding of long-term physical climate risks,
particularly regarding sea-level rise, higher temperatures, and
shifting precipitation patterns across our locations. Although we
have not yet initiated specific adaptation measures or
undertaken a detailed transition-risk assessment, we recognize
the importance of these insights and are committed to
incorporating them into our future planning if necessary. As part
of this, we intend to explore site-level adaptation needs, invest
in climate-resilient infrastructure where appropriate, and
collaborate with local stakeholders to enhance preparedness.
Our intention is to refine and expand our climate scenario
capabilities in the coming years as we continue to respond to
the evolving climate landscape and support the resilience and
sustainability of our business in the future.
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Integrated Annual Report 2025
ESRS E1 - Climate Change
At Kendrion, we are dedicated to limiting our contribution to
climate change and supporting the global shift toward cleaner
energy systems. We continue to take steps to lower the
environmental footprint of our operations, with a strong
emphasis on improving energy efficiency, expanding the use of
renewable energy, and reducing CO
2
e emissions across the
design and manufacturing of our products.
Strategy
Limiting our environmental footprint remains an important
objective, and we have introduced measures to reduce our
carbon emissions and improve energy efficiency. These efforts
include a broad transition to renewable energy sources and the
implementation of energy-efficiency initiatives over the past
years, e.g. transition to LED lighting, and heat recovery
systems. The main reduction measures currently focus on
emissions from our own entities, which remain the primary area
of attention within our climate-change commitment.
As part of our ongoing climate-related work, we have reviewed
the requirements and expectations associated with transition
plans and assessed their relevance to our current emission
profile. Following significant reductions in Scope 2 emissions in
recent years, mainly through the increased use of renewable
electricity, our focus has shifted toward opportunities to further
reduce our Scope 1 emissions. These emissions are primarily
linked to the use of fuel oil for heating at several of our entities.
We closed a building at our Aerzen site in Q2 2025, eliminating
its fuel-oil consumption. For the remaining locations that still rely
on fuel oil, the evaluation of potential alternatives is still ongoing,
as the suitability of replacement technologies depends on local
infrastructure, investment requirements, and operational
conditions.
The assessment also examined the broader feasibility of
developing a transition plan aligned with the 1.5°C target of the
Paris Agreement. Based on the current technological,
infrastructural, and economic constraints, particularly regarding
Scope 1 reductions, such a plan is not presently achievable for
Kendrion. Nevertheless, the insights gained through this
process will inform our future planning, and we will continue to
monitor emerging solutions that could support further
decarbonization across our operations.
The ongoing energy transition is transforming the markets in
which we operate, with sustainable technologies increasingly
becoming the preferred option. As a developer and producer of
advanced actuator systems, we are well positioned to support
global electrification efforts and the move toward cleaner
energy solutions.
Our broad portfolio plays a direct role in meeting the rising
demand for clean energy applications and the growing
electrification of industrial operations and mobility.
Developments in wind energy, industrial automation, and
induction heating technology are key drivers of this shift, and
our solutions enable the replacement of fossil fuel–based
systems with electric alternatives. Our strategic priorities are
aligned to further strengthen our presence in these areas.
Within our Industrial Brakes Business Group, growth is driven
by sectors such as wind power, intralogistics, and robotics.
Industrial Actuators and Controls supports the increasing need
for sustainable technologies through electrified induction
heating systems, circuit breakers for electricity distribution, and
safety actuators for nuclear power facilities. In addition, within
3T we develop embedded solutions for smart buildings that
control and measure heating and the CO
2
e emissions of
buildings.
Impact Opportunity
+
Product portfolio that enables a clean energy transition
-
GHG emissions through own production facilities
-
GHG emissions through production of raw materi-als and
component in up-stream supply chain
-
Business travel & company cars
-
Transport & logistics of acquired and sold products
-
GHG emissions in the product use phase & end of life treatment
+
Increase revenue by retaining and attracting customers who are
increasingly demanding low-carbon products
ENVIRONMENT
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Integrated Annual Report 2025
Impacts, Risks and Opportunities
To ensure a robust and up-to-date identification of climate-
related IROs, we established two dedicated stakeholder groups
(as specified in the chapter “Stakeholder involvement” on page
50 of this Integrated Annual Report) validating our existing
IROs. The refreshment of the DMA led to a consolidation and
refinement of several IROs and provides a more accurate
reflection of our current organizational structure, strategic
priorities, and evolving climate-related context, and forms the
basis for the updates to our IROs outlined in the following
section.
As part of the refreshed 2025 DMA, we reviewed all climate-
related IROs ensuring continued alignment with our business
structure, stakeholder expectations and ESRS requirements.
On the impact side, several upstream climate impacts
stipulated in our Integrated Annual Report for financial year
2024, being purchase and consumption of raw materials such
as steel, copper and aluminium and GHG emissions from the
acquisition of pre-processed parts, have been consolidated into
a single, broader IRO on GHG emissions associated with the
production of raw materials and components. This merged IRO
provides a better reflection on how these upstream Scope 3
impacts are managed within our sustainable procurement
approach.
Other impact IROs remain unchanged because of their
continued relevance in Kendrion´s climate footprint. This
concerns IRO such as GHG emissions through own production
facilities, business travel and company car fleet, transport and
logistics of acquired and sold products, and GHG emissions in
the product use phase and end-of-life treatment.
On the opportunity side, low-carbon products remain a key
area for financial materiality. For the growing market demand for
environmentally friendly products, the materiality score was
updated.
For risks, certain climate-related financial risks identified in
2024, such as rising energy market prices, extreme weather
events affecting the upstream supply chain, and increased
costs of raw materials, fell below the updated materiality
threshold in our 2025 DMA. We will continue monitoring these
risks, due to their potential relevance in the longer term.
In summary, the 2025 DMA provides a further developed IRO
landscape providing an improved reflection of Kendrion’s
climate impacts, strategic priorities and value chain realities.
The next sections outline these updated IROs in detail,
including which areas are being actively addressed and how
they influence our climate-related actions.
The IRO related to our product portfolio that enables a clean
energy transition is addressed through our corporate strategy.
The IROs concerning GHG emissions from our own production
facilities, GHG emissions in the product use phase and end-of-
92%
renewable
electricity
Global Sites with renewable electricity
renewable electricity
grey electricity
ENVIRONMENT
68
Integrated Annual Report 2025
life treatment, as well as GHG emissions arising from the
production of raw materials and components in the upstream
supply chain will be further detailed under ‘Actions’ The
remaining IROs are reflected in our Scope 3 GHG emission
calculations but have not yet been addressed through
dedicated actions or measures.
The opportunity to increase revenue by retaining and attracting
customers who are increasingly demanding low-carbon
products was revalidated in 2025. Due to current limitations in
producing low-carbon products at scale, this opportunity is
presently constrained; however, it will remain under observation
for future strategic development.
Policies
We are still exploring the feasibility and added relevance of
developing an environmental policy that incorporates climate
change considerations and aligns with our broader
sustainability strategy. At present, no policy exists specifically
addressing the ESRS Climate Change requirements.
Actions
Reducing Operational Emissions
We prioritize reducing CO
2
e emissions and optimizing resource
use across our production processes, aligning our initiatives
with the United Nations Sustainable Development Goal (SDG)
13: Climate Action. By integrating sustainability into our
business operations, we aim to contribute to a more
responsible and climate-conscious future.
At our Romanian site in Sibiu, solar panels supply
approximately 68.5% of the plant’s electricity needs, while our
facility in Aerzen, Germany, covers around 20.0% of its energy
consumption through photovoltaic systems. For the remaining
energy demand, we have committed to purchasing green
electricity via Renewable Energy Certificates (RECs), further
reducing reliance on non-renewable sources in Romania.
Our German and Dutch operations are already fully supplied
with renewable electricity through the acquisition of RECs.
Our ESG Program will continue to guide our progress in
embedding sustainability across our operations. In 2025, we
enhanced our energy reporting processes, enabling more
detailed analysis of Scope 1 and Scope 2 emissions. To
measure the effectiveness of our initiatives, we monitor energy
reductions achieved through renewable energy measures. As
we further strengthen our data foundation, we will evaluate how
it can support the assessment of future climate-related actions.
Implementing an effective sustainability strategy requires
significant time and resource commitments, particularly when
addressing impacts across the broader value chain. While we
remain committed to funding our planned climate mitigation
and adaptation measures, we have not yet allocated dedicated
resources upfront. To advance progress, we intend to
collaborate closely with customers and suppliers who share
our commitment to climate action, aiming to drive emissions
reductions throughout the supply chains in which we operate.
As referenced on page 52, a resilience analysis has not yet
been conducted.
In 2025, we also examined the topic of transition planning.
Transition-related climate risks are recognized as material, and
initial assessments have initiated to identify further opportunities
to reduce Scope 1 emissions and raise the share of renewable
electricity. Scope 3 emissions are likewise essential for
developing a meaningful transition plan. Establishing a reliable
data foundation remains a priority, as the planned shift to an
average-based calculation method for Scope 3 reporting was
postponed in 2025 due to other priorities. Strengthening the
accuracy of our Scope 3 reporting is therefore the next step.
With improved data quality, we intend to ex-plore potential
transition planning options in future years ensuring our actions
are both informed and impactful.
At the end of 2025, our employees were invited to select a
project for the company to make a Christmas gift donation.
The projects involved all reflected our values in sustainability,
human right, and global health. One of the pre-selected
organizations focuses on safeguarding wetlands worldwide
through restoration, policy advocacy, and community
engagement, thereby contributing to climate mitigation and
ecosystem protection. In total, an amount of EUR 4,800 was
donated to this initiative, based on 32% of participating
employees selecting the initiative.
Strengthening Sustainable Procurement
As outlined in our strategy on page 48, we continue to collect
information from our suppliers through a dedicated
sustainability questionnaire to strengthen our understanding
of their climate-related practices. The questionnaire includes
requests for information on the use of renewable energy, the
measurement of Scope 1, Scope 2, and Scope 3 emissions,
initiatives to reduce GHG emissions associated with their
products, and the application of the waste hierarchy. By the
end of 2025, approximately 30% of the initially 100 suppliers
contacted have responded. Nearly half of these respondents
indicated that they use renewable electricity and measure their
GHG emissions. Suppliers with lower performance in the
questionnaire results are prioritised for more detailed on-site
CSR audits. However, on-site CSR audits are only conducted
by companies with more than 50 employees.
ENVIRONMENT
69
Integrated Annual Report 2025
Improving Product Sustainability Beyond Our Operations
To reduce the climate impact of our products, Kendrion
develops, where possible, solutions that lower energy use and
emissions across their lifecycle. A key example is the Slim PM
Line, a compact and lightweight permanent-magnet brake,
which was introduced in Q4 2025 and added to Kendrion’s
product portfolio. By lowering material intensity while delivering
higher performance than comparable brake systems, the Slim
PM Line helps reduce downstream GHG emissions, including
those associated with end-of-life treatment. This development
supports our strategy to offer energy-efficient, low-impact
products and represents a tangible action addressing our
climate-related IROs in the use phase and end-of-life stage.
Sustainability Rating & Environmental Certification
For many years, we have actively worked to reduce our
environmental impact, utilizing a systematic reporting system to
monitor CO
2
e emissions and energy use across all production
facilities. Our dedication to sustainable improvement continues
to enhance our processes, lowering the environmental footprint
of our operations. Building on the progress reported in 2024,
we received again an improved sustainability rating from
EcoVadis in 2025, marking the fourth consecutive year of
advancement and placing us in the 91st percentile with a silver
medal. Our CDP score improved as well, from B– to B,
demonstrating continued progress in the effectiveness of our
environmental management efforts. Our commitment to
sustainability is further reinforced through global certifications:
ISO 50001 supports our energy management, guiding facilities
to optimize energy efficiency, while ISO 14001 sets the
standard for enhancing environmental performance. Currently,
our locations in Donaueschingen / Engelswies and Malente are
ISO 50001 certified, and all our largest production sites are ISO
14001 certified, underscoring our proactive approach to
sustainable and responsible operations.
Metrics & targets
We have achieved meaningful progress in reducing our Scope
1 and 2 CO
2
e emissions. Since 2015, we have realized a
relative reduction of 60% and a further 27% reduction
compared to the 2024 reporting year. These reductions have
primarily been driven by the procurement of RECs, the
implementation of energy-efficiency measures, and the
installation of photovoltaic systems. In 2025, approximately
92% of the electricity consumed was sourced from renewable
energy (2024: 83%). As a result of this progress, our largest
production entities are now fully powered by renewable
electricity.
Relative emissions are calculated against the company´s
group’s added value. In 2025, added value increased because
of improved margins and strict cost control. This development
contributed to a more favourable emissions intensity, despite
only a slight decrease in absolute emission.
We aim to increase the share of renewable electricity to 96% by
2028 for the Scope 2 market-based KPI, and reduce Scope 1
and 2 emissions by 12% compared to 2023, which represents
the highest feasible level under the current conditions. This
target was adjusted following the China Divestment and is
intended to be achieved through additional REC acquisitions
without reliance on emerging technologies. The target was
established independently of any scenario analysis.
A significant reduction in total Scope 3 emissions of 36.1 %
was recorded in 2025, primarily driven by cost reductions
during the year. As Scope 3 emissions are calculated using a
cost-based methodology, the full effect of these cost changes
is reflected in the reported KPI. Regarding the readjusted
Scope 3 values for 2024, it should be noted that the
extrapolation was also performed using a cost-based
approach. The divestment of our business in China, where
conversion factors are comparatively high could not be fully
reflected in the results because the Scope 3 Analyzer previously
used for emissions calculations is out of commission.
Consequently, the adjusted Scope 3 emissions for 2024 are
higher than they would have been if this effect had been fully
reflected.
The baseline year for measuring progress toward this target is
2023. This aligns with our phased target framework, which has
been structured across three periods: 2015–2018, 2019–2023,
and now the current phase using 2023 values. This approach
ensures consistency in tracking emissions reductions over time
while maintaining a continued focus on lowering Scope 1 and
Scope 2 emissions. At present, no baselines or targets have
been set for Scope 3 emissions, and no 2030 targets have
been established for any scope.
Our target-setting process has been driven by our commitment
to minimizing environmental impact and further supported by
stakeholder expectations encouraging reductions in
greenhouse gas emissions. However, the planned target does
not meet the reductions required to align with the 1.5°C target
of the Paris Agreement and has not been validated by a third
party. No science-based methodology, sectoral decarbonization
pathway, or climate and policy scenario has been applied in its
development. Instead, the target is based on an assessment
of our current energy consumption and greenhouse gas
emissions, with the long-term ambition to reduce Scope 1 and
Scope 2 emissions to zero - an aspiration that is not currently
attainable. In addition, no assessment has yet been conducted
on potential future developments such as regulatory changes,
shifts in customer expectations, or technological
advancements. Our current approach largely relies on
transitioning our electricity supply entirely to renewable sources,
independent of consumption levels.
ENVIRONMENT
70
Integrated Annual Report 2025
In line with our sustainability commitments and the
requirements of ESRS E1, we recognize the importance of
addressing climate change comprehensively. We will further
evaluate the potential development of mitigation targets,
associated actions, and the financial implications of such
measures in the future. This evaluation will examine our current
strategy and determine the most appropriate next steps. Going
forward, we intend to place greater emphasis on reducing
Scope 1 emissions and exploring additional approaches to
lower these emissions as part of our ongoing environmental
efforts. At present, we are not yet able to report on specific
actions or the resources required for their implementation.
This following section presents and explains our energy
consumption as well GHG emissions for the reporting year
2025 compared to 2024.
Please note that comparative data of 2024 has been
re-presented to exclude the divested China-business, including
our site in Suzhou, China. Where additional adjustments to the
prior-year figures have been made, a corresponding notification
is provided.
ENVIRONMENT
71
Integrated Annual Report 2025
Energy consumption
Direct Energy
Country
Consumed kWh
2025 2024 Diff. %
Germany 5,202,651 4,724,145 10.1%
Austria 43,472 60,831 -28.5%
India 191,055 188,748 1.2%
Romania 328,986 282,851 16.3%
Netherlands 135,038 138,168 -2.3%
Sweden 13,113 10,131 29.4%
USA 250,195 237,322 5.4%
Total 6,164,509 5,642,196 9.3%
Relative Direct Energy Consumption – Added value 44,006 45,555 -3.4%
Relative Direct Energy Consumption - Revenue 25,112 22,636 10.9%
Indirect Energy
Country
Consumed kWh
2025 2024 Diff. %
Germany 4,198,004 4,871,293
1
-13.8%
India 212,351 218,852 -3.0%
Romania 2,039,830 2,059,563 -1.0%
Netherlands 123,114 129,187 -4.7%
USA 306,275 298,817 2.5%
Total 6,879,574 7,577,712 -9.2%
Relative Indirect Energy Consumption – Added value 49,110 61,183 -19.7%
Relative Indirect Energy Consumption - Revenue 28,025 30,401 -7.8%
1
In addition to the adjustments of the divestment of our China-based business, the figure has been corrected due to a wrong reported energy
consumption number in 2024. The indirect consumption value for Germany increased by 4.773 and the energy related to the vehicle fleet is also
added in direct energy.
Reporting definition & scope
Energy Consumption & Source
The information on energy consumption is based on the consumption
of Kendrion´s production facilities and office locations (with a workforce
exceeding 5% of the Kendrion group´s total FTEs) with electricity, natural
gas, fuel oil and biogas. The consumed values derive from the invoices
supplied from the energy provider and are centrally reported as energy
consumption values.
Direct Energy The disclosed direct energy figures include the
consumption (converted to kWh) of the vehicle fleet and natural gas,
biogas, as well as fuel oil for heating our buildings. Our organization
sources direct energy primarily from natural gas, fuel oil, and biogas.
The comparative figures of the Netherlands, including natural gas
consumption, have been estimated based on developments in added
value.
Indirect Energy For the indirect energy we rely on a diversified
energy mix that includes electricity sourced from solar, wind, water, coal,
and nuclear sources. Renewable energy is secured through both on-site
solar panels and REC provided by our energy suppliers. This information
is sourced directly from entities with solar installations
and from our general energy provider. The comparative figures of the
Netherlands, including electricity consumption, have been estimated
based on developments in added value.
REC are acquired as bundled certificates in Germany, the Netherlands
and Romania that cover 82.8% of our consumed electricity. Kendrion has
not sold any REC.
Further information on relative energy consumption is provided on
page 72 under the Scope 1 & 2 definition.
In line with our commitment to sustainability, we are actively working
to reduce reliance on grey (non-renewable) energy sources, as well as
nuclear energy, in favour of renewables. Our global strategy prioritizes
the shift toward renewable energy sources, which undergo continuous
assessment to maximize renewable input wherever possible across our
operations.
ENVIRONMENT
72
Integrated Annual Report 2025
Self-generated renewable energy
Energy source
Self-generated
kWh
Self-consumed
kWh
Solar energy 666,673 500,417
Scope 1 & 2
Kendrion applies the reporting scope for energy consumption to
greenhouse gas emissions too, covering production facilities and office
locations representing more than 5% of the Kendrion Group’s total FTEs.
In our calculations we included CO
2
e emissions.
Scope 1 The gross Scope 1 emissions values represent the natural
gas emissions, as well as fuel oil for heating our owned buildings and
gasoline / diesel for the owned vehicle fleet. The emissions from the
Netherlands have been estimated based on added value developments.
We aim to continue to compensate the consumption of natural gas
through compensation certificates. Exact quantities cannot be quantified
as of now, as it depends on the consumed resources.
Scope 2 The Scope 2 emissions values represent the electricity
consumed to power our buildings.
The absolute and relative energy consumption and CO
2
e emissions are
reported for a 12-month period. Where information is timely available, the
absolute and relative energy consumption and CO
2
e emissions are
reported for the period 1 January 2025 up to and including 31 December
2025. Comparative figures for previous years are calculated based on
identical timeframes. Calculation of the CO
2
e emissions is based on the
following conversion factors:
Scope 1
■ Natural gas for other plants (average):
0.219 kg/kWh (2024: 0.212 kg/kWh)
■ Fuel oil (average): 0.325 kg/kWh (2024: 0.322 kg/kWh)
Scope 2
■ Electricity generated from renewable sources: 0 (market-based)
■ Electricity generated from non-renewable sources (average):
0.585 kg/kWh (2024: 0.259 kg/kWh) (market-based)
■ Electricity generated from renewable and non-renewable sources: 0.458 kg/kWh
(2024: 0.457 kh/kWh) (location-based)
Internal Carbon Pricing Internal carbon pricing is not applied at Kendrion.
Relative Added value The relative energy consumption and CO
2
e
emissions are calculated based on the direct or indirect energy
consumption, or Scope 1 and 2 emissions, divided by the added value of
the relevant production facilities. Added value is defined as revenue plus
other income, minus the changes in inventory and work in progress, raw
materials and subcontracted work. The added value used cannot be
directly compared to the financial statements, as it reflects only the added
value of the entities included in the energy reporting scope.
Self-generated non-renewable energy
Energy source
Self-generated
kWh
Self-consumed
kWh
Fossil sources 1,479,124 1,117,014
Energy Source
Direct Energy in kWh
(in %)
Natural Gas
Fuel Oil
Biogas
0 10% 20% 30% 50%40% 70%60%
10%
11%
13%
76%
Non-renewable energy Renewable energy
Indirect Energy in kWh
(in %)
Water
Solar
Wind
Coal
Nuclear
0% 10% 40%20% 50%30%
35%
2%
8%
50%
5%
Non-renewable energy Renewable energy
ENVIRONMENT
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Integrated Annual Report 2025
Relative Revenue The relative energy consumption and CO
2
e emissions
are calculated based on the revenue of the relevant production facilities.
Revenue figures are disclosed in the financial statements on page 130.
The conversion factors applied for Scope 1 and Scope 2 market-
based emissions are primarily sourced from the relevant energy providers.
In cases where provider-specific emission factors are unavailable,
secondary data from publicly available databases is applied, including the
VDA emission factors for electricity, district heating, and fuels, and the
IGES grid emission factor list. For the application of VDA emission factors,
the gross generation conversion factor was used, reflecting a more
conservative approach and ensuring consistency with the methodologies
applied by energy reporting entities. For Scope 2 location-based
emissions, the conversion factors are derived from the aforementioned
VDA database.
Scope 3
Scope 3 emissions are calculated using a cost-based method with the
Scope 3 Analyzer, a tool provided by the Ministry of the Environment in
Baden-Württemberg, Germany. This tool, accessible through the
Umwelttechnik BW website, allows organizations to estimate their
emissions by inputting specific operational data, though the underlying
emissions data remain invisible to users. The tool is free of costs and can
be used by all types of companies. We have validated the reliability of the
tool through its approval by the Science Based Targets initiative (SBTi), the
Greenhouse Gas Protocol, and the CDP sustainability rating system.
For these calculations, several data types are required, including
purchasing revenue by commodity and country, energy consumption for
electricity, gas, fuel oil across different countries, and upstream
transportation data taken from financial transportation accounts. Since the
Scope 3 Analyzer was decommissioned by 31 December 2025, we have
calculated the values for January through October in advance and will
extrapolate the year-end values based on cost developments observed in
the final two months.
Waste management emissions are calculated separately based on the
organization’s primary data from the waste hierarchy management, using
average emission factors provided by the United Nations Framework on
Climate Change (UNFCCC). As mentioned in chapter E5 our waste
hierarchy is reported retrospectively due to data availability and reporting
cycle mismatches.
As a result, the provided waste emission value is an estimation of the
2025 waste hierarchy based on the waste quantities of 2024 and the
development of the added value between those years.
GHG Emissions
Scope 1 by country and relative emissions
(in tonnes)
Country 2025 2024 Diff. Diff. %
Germany 1,155 1,015 140 13.8%
India 49 43 6 14.0%
Romania 79 53 26 49.1%
Netherlands 33 34 -1 -2.9%
Austria 11 12 -1 -8.3%
Sweden 3 3 0 0.0%
USA 77 63 14 22.2%
Total 1,406 1,224 184 15.0%
Relative Scope 1 CO
2
e Emission - Added value 10.0 9.9 0.1 0.0%
Relative Scope 1 CO
2
e Emission - Revenue 5.7 4.8 0.9 18.8%
Scope 2 by country and relative emissions (market-based)
(in tonnes)
Country 2025 2024 Diff. Diff. %
Germany 0 0 0 0%
India 161 201 -40 -19.9%
Romania 0 330 -330 -100
Netherlands 0 0 0 0%
USA 143 136 7 5.1%
Total 303 667 -364 -54.6%
Relative Scope 2 CO
2
e Emission - Added value 2.2 5.4 -3.2 -59.3%
Relative Scope 2 CO
2
e Emission - Revenue 1.2 2.7 -1.5 -55.6%
Total GHG emissions intensity
Country 2025 2024 Diff. Diff. %
Total GHG (location-based) per net revenue
(tCO
2
e/EUR 1,000) 305 460 -155 -33.7%
Total GHG (market-based) per net revenue
(tCO
2
e/EUR 1,000) 293 449 -156 -34.7%
ENVIRONMENT
74
Integrated Annual Report 2025
Scope 1, 2 & 3
Retrospective Milestones and target years
2024 2025 Diff. Diff. % 2025 2030
Annual %
target /
Base year
Scope 1 GHG emissions
Gross Scope 1 GHG emissions (tCO
2
eq) 1,224
1
1,406 182 15.9% - - 0%/2023
Percentage of Scope 1
GHG emissions from regulated emission trading
schemes (%) 0% 0% 0% 0% - - -
Biogenic emissions in (tCO
2
eq)
33 33 0 0% - - -
Gross location-based Scope 2 GHG emissions
(tCO
2
eq) 3,456
2
3,149 -307 -8.9% - - -
Gross market-based Scope 2 GHG emissions
(tCO
2
eq) 667 303 -364 -54.6% - 305 12%/2023
Total Gross indirect (Scope 3) GHG emissions
(tCO
2
eq) 109,932 70,195 -39,737 -36.1% - - -
3.1 Purchased Goods and Services 99,385
3
62,686 -36,699 -36.9% - - -
3.2 Capital Goods 3,755 1,314 -2,441 -65.0% - - -
3.3 Fuel- and Energy Related Activities 484 467 -17 -3.5% - - -
3.4 Upstream Transportation and Distribution 3,430 3,149 -281 -8.2 % - - -
3.5 Waste generated in Operations 204 225 21 10.3% - - -
3.6 Business Travel 622 474 -148 -23.8% - - -
3.7 Employee Commuting 1,924 1,802 -122 -6.3% - - -
3.8 Upstream Leased Assets 128 78 -50 -39.1% - - -
Total GHG emissions 111,823 71,904 -31,919 -35.7% - - -
Total GHG emissions (location-based) (tCO
2
eq) 114,612 74,750 -39,862 -34.8% - - -
Total GHG emissions (market-based) (tCO
2
eq) 111,823 71,904 -31,919 -35.7% - - -
1
In addition to divestment-related adjustments, the figure was corrected due to an incorrect refrigerant value reported in 2024.
Gross Scope 1 emissions decreased by 164, while emissions from upstream leased assets (Scope 3.8) were reduced by 586.
Also, Scope 1 emissions from the Netherlands were estimated based on added value developments and increased by 25.
2
Scope 2 location-based emissions from the Netherlands were estimated based on added value developments and increased by 55. Scope 2
market-based emissions are estimated based on renewable electricity in the Netherlands in 2025; therefore, the value remains unchanged.
3
In addition to divestment-related adjustments, the figure was corrected to account for unexcluded intercompany values in 2024.
Emission from Purchased Goods and Services (Scope 3.1) was reduced by 32.065.
ENVIRONMENT
Additional data include travel expenses categorized by type, such as
flights, train travel, hotel stays, car use, and other categories, along with
commuting information, for which the number of employees is entered
directly into the Scope 3 Analyzer. The annual fuel consumption of leased
and owned vehicles is also considered. Once entered, the results from
these various inputs are processed in the Scope 3 Analyzer and
subsequently visualized in a report.
0.4% of the disclosed Scope 3 emissions are calculated using primary
data. Those include emissions from Scope 3.5 Waste generated in
Operations and Scope 3.8 Upstream Leased Assets containing leased
company cars and air conditioning emissions from leased buildings.
As an intermediate product manufacturer, we serve a diverse range of
industries and end-use applications, each with unique greenhouse gas
(GHG) emissions profiles. Given the wide variety of potential downstream
uses, it is not feasible to accurately estimate the emissions associated
with each possible application of our products. Therefore, in alignment
with the guidance provided in the GHG Protocol’s Scope 3 Standard, we
have excluded the reporting of Scope 3, categories 9 to 12 (downstream
transportation and distribution, processing of sold products, use of sold
products, and end-of-life treatment of sold products) from our GHG
emissions disclosures. This approach allows us to maintain transparency
and accuracy in our reporting by focusing on emissions sources we can
reasonably quantify. Scope 3 categories 3.9 to 3.12 are currently
considered out of scope.
Currently, our Scope 3 emissions are calculated primarily using a cost-
based method. We aim to enhance our calculation approach by
transitioning to, at least, the average data method. This improvement will
provide a more accurate and comparable understanding of our Scope 3
emissions, laying the groundwork for identifying reduction opportunities.
75
Integrated Annual Report 2025
ENVIRONMENT
INDUSTRIAL ACTUATORS AND CONTROLS INDUSTRIAL BRAKES MOBILITY RETAINED
Products that reduce climate impactProducts that keep you safeProducts that keep you healthy
Inductive heating and energy distribution Windpower and automated warehouses Electric vehicles
Products that keep you healthy • Products that keep you safe • Products that reduce climate impact
ENVIRONMENTALLY SUSTAINABLE ECONOMIC ACTIVITIES
76
Integrated Annual Report 2025
ENVIRONMENT
Total Mio. €
Proportion of Taxonomy
eligible activities %
Taxonomy aligned
activities Mio. €
Proportion of Taxonomy
aligned activities %
Proportion of enabling
activities %
Proportion of transitional
activities %
Not assessed activities
considered non-material %
Taxonomy aligned activities
in 2024 Mio. €
Proportion of Taxonomy
aligned activities in 2024 %
EU Taxonomy
The EU Taxonomy Regulation (Regulation (EU) 2020/852)
provides a common framework for identifying which economic
activities can be considered environmentally sustainable. Its aim
is to support transparency by clarifying the conditions under
which an activity contributes meaningfully to one or more of the
EU’s six environmental objectives, without causing significant
harm to other objectives and meeting applicable minimum
social safeguard requirements.
As part of the Sustainability Omnibus, the European
Commission has adopted an amended EU Taxonomy
Delegated Act 2026/73 of 4 July 2025 (the “Omnibus
Delegated Act”), which has been published in the Official
Journal of the European Union and has entered into force on
28 January 2026. Kendrion has chosen to early adopt the
Omnibus Delegated Act for the 2025 reporting year, as
permitted under Article 4 of this Omnibus Delegated Act. This
includes the use of the updated simplified reporting templates
and the application of the materiality threshold, enabling
proportionate and decision-useful disclosure.
Based on Kendrion’s assessment, only a limited number of
economic activities were identified as EU Taxonomy-eligible.
However, the shares of EU Taxonomy-aligned revenue, CapEx
and OpEx each remained below the 10% materiality threshold.
In addition, none of the identified activities met all applicable
technical screening criteria, including DNSH and minimum
safeguards, to be classified as aligned.
Turnover
The revenue is generated by the manufacturing and sale of
electromagnetic brakes for wind power turbines, components
for electric vehicles, components and subsystems for induction
heating, and embedded electronic solutions. As per the
assessment performed, these products fall within the scope of
the relevant Omnibus Delegated Act. Moreover, the
technologies relevant to these products contribute to the
reduction of CO
2
e emission. The amount of taxonomy eligible
turnover does not qualify as taxonomy aligned. The total
revenue used for the calculation of the taxonomy revenue
performance indicator can be reconciled with to our
consolidated financial statements on page 130 of this
Integrated Annual Report.
CapEx and OpEx
Kendrion performed an assessment of its CapEx in accordance
with the EU Taxonomy Regulation. Based on this analysis, 0%
of the company’s total CapEx was identified as EU Taxonomy-
eligible.
Taxonomy eligible OpEx relate to costs relevant to research and
development of components and subsystems for inductive
heating. The amount of taxonomy eligible operating
expenditures does not qualify as taxonomy aligned. Total
operational expenditures consist of direct non capitalized costs
related to research and development, repair and maintenance
and any other direct expenditure relating to the day-to-day
servicing of assets of property, plant and equipment as further
specified in note 21 of the financial statements in this Integrated
Annual Report.
Kendrion will continue to monitor regulatory developments and
further refinements of the EU Taxonomy technical screening
criteria. As technologies, products and reporting methodologies
evolve, Kendrion aims to further enhance the transparency,
robustness and consistency of its EU Taxonomy disclosures in
future reporting periods.
FINANCIAL YEAR 2025
KPI
Breakdown by environmental objectives of Taxonomy aligned activities %
Climate change
mitigation
Climate change
adaption Water Pollution
Circular
Economy Biodiversity
TURNOVER 22.8 9.3 0 0
CAPEX 0 0 0 0
OPEX 0.6 4.0 0 0
77
Integrated Annual Report 2025
ESRS E2 – Pollution
Impacts, Risks & Opportunities
To ensure a robust and up-to-date identification of climate-
related IROs, the IRO Stakeholders and the Materiality
Stakeholders reviewed all existing IROs and validated their
significance. This process, together with additional interviews
with selected external stakeholders, refreshed the initial DMA
conducted in 2023/2024. The result hereof provides a more
accurate reflection of our current organizational structure,
strategic priorities, and evolving pollution-related context, and
forms the basis for the updates to our IROs outlined below.
In 2025, our assessment of pollution-related impacts highlights
several areas of continued material relevance as well as
targeted changes introduced through the stakeholder-driven
reassessment. One of the most notable updates is the
re-evaluation of our product portfolio, which is now recognized
as having a positive actual impact in terms of enabling reduced
pollution for customers and end-users. While previously
classified as a less negative impact, improvements in product
performance and innovation have strengthened our contribution
to pollution reduction. This represents both a confirmed
material impact and a strategic opportunity, as it reinforces the
role of cleaner and more sustainable solutions within our
product offering.
At the same time, several negative pollution-related impacts
remain materially relevant and consistent with 2024
conclusions. Resource extraction and processing continue to
generate pollution across upstream value chain activities,
reflecting the ongoing environmental pressure associated with
the sourcing of raw materials. Similarly, microplastic creation
during transport remains a negative actual impact, although its
significance now has a slightly lower score compared to 2024.
Pollution generated during the use phase of certain products
also persists as a material impact, underlining the importance of
ongoing product redesign, user guidance, and end-of-life
considerations.
Another notable change concerns the assessment of mining-
related impacts within the supply chain. Previously classified as
a potential impact, mining is now recognized as an actual
negative pollution impact in 2025, driven by a clearer
understanding of environmental conditions at extraction sites
and the potential for contamination of land, air, and water. This
update reflects an enhanced visibility of upstream risks and the
outcome of our improved and refreshed DMA.
Conversely, the topic of nuclear waste, earlier identified as a
negative impact, is no longer part of our list of IROs. Following
a detailed review, stakeholders now concluded that nuclear
waste should not be considered a pollution-related impact for
our organization. Its removal ensures that the IRO list more
accurately reflects our operational reality and the pollution
issues genuinely associated with our value chain.
Regarding financial materiality, regulatory and policy changes
continue to represent a pollution-related risk. While the risk has
shifted from a potential to an actual financial impact in 2025, it
is no longer considered material due to our updated materiality
thresholds. Despite its non-material classification, we continue
to monitor regulatory developments closely, given the dynamic
nature of environmental legislation and the potential implications
for product compliance, production processes, and reporting
requirements.
Overall, the updated list of IROs for ESRS E2-Pollution reflects
a more precise and stakeholder-aligned understanding of how
our business interacts with pollution-related issues. The
identification of a strengthened positive impact associated with
our product portfolio, the elevation of certain upstream impacts,
and the removal of irrelevant topics such as nuclear waste all
contribute to a more meaningful and actionable evaluation and
will further guide our pollution-related priorities, risk
management activities, and opportunity-driven innovation
efforts.
Policies
As part of our initial DMA, we identified a potential need for a
more targeted approach to managing pollution-related issues
across our operations and value chain. While we considered
implementing a dedicated environmental policy in 2025, we
decided to postpone this decision due to other internal
priorities. In the coming years, we will reassess the feasibility
and added relevance of establishing such a policy, considering
our evolving strategic focus, resource allocation, and the
current outcome of our DMA.
Impact
+
Product portfolio enables less pollution
-
Resource extraction and processing
-
Pollution in the use phase
-
Mining of raw materials
ENVIRONMENT
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Integrated Annual Report 2025
Actions
Low-Pollution Product Portfolio
Our most significant positive contribution to pollution reduction
results from our responsible product portfolio, particularly
components used in wind turbines that support renewable
energy generation. This directly aligns with our strategic
ambition to maintain a strong presence in responsible product
applications (see page 47).
These products help reduce pollution at a systemic level by
supporting clean energy production. While no additional
pollution-specific actions were initiated in 2025, we remain
committed to strengthening our contribution to low-pollution
value chains through innovation and product development.
Use-Phase Impacts in a Changing Portfolio
Pollution risks associated with the use phase of our products
are limited to our retained automotive activities in Romania. In
September 2025, Kendrion entered into a long-term
cooperation with Knorr-Bremse, securing a phased capacity
sharing and agreed future ownership transfer. As such, these
use-phase–related pollution considerations will no longer be a
priority area for us, and we did not initiate new use-phase
pollution actions in 2025 due to this future transfer.
Upstream Resource Extraction
Pollution impacts linked to resource extraction, processing, and
mining occur primarily in our upstream supply chain. In line with
our sustainability strategy (see page 47), we introduced a
supplier sustainability questionnaire to improve visibility into
how suppliers manage environmental impacts, including
pollution arising from extraction activities.
Approximately 30% of suppliers have responded by the end of
2025. Responses indicate that most participating suppliers
have implemented measures such as environmental policies
and ISO 14001 certification to mitigate pollution impacts at
extraction and processing sites. After collecting and reviewing
the full set of questionnaire results, we will evaluate what
potential next steps may be feasible in future years.
Microplastic Creation During Transport
Microplastic creation during transport remains one of our
identified negative pollution impacts. At present, no specific
actions have been implemented, as the potential microplastic
generation occurs at minimum, trace levels and cannot be
reliably quantified with current methods. In addition, there are
currently no viable alternatives to the transport solutions
required for our products, which limits our ability to influence
this impact at this stage.
Pollution Assessment of Own Operations
Although pollution has not been identified as a material topic for
our own operations under ESRS E2, our largest production
entities undergo internal assessments covering key
environmental and energy-related aspects, including emissions,
exhaust gases, noise, discharges into sewer systems, potential
soil contamination, use of input materials, energy consumption,
release of heat and other forms of energy, waste and
by-products, and energy-saving potential. These assessments
are conducted by qualified internal quality personnel and are
aligned with the processes established under our ISO 14001
environmental management systems. They are performed
without the involvement of external third parties, and no
dedicated financial resources are specifically allocated to these
activities. Until the end of 2025, these assessments have not
revealed any major findings, and where minor issues are
identified, appropriate countermeasures are implemented.
Metrics & targets
At this stage, we have not defined pollution-related targets
under ESRS E2. Our relevant IROs, particularly those occurring
in upstream extraction processes or during product use, are
difficult to quantify reliably, which limits the feasibility of setting
outcome-oriented targets. As our methodologies evolve and
more robust measurement approaches become available, we
will continue to evaluate whether target-setting in this area may
be appropriate in the future.
Although no targets are currently in place, we continue to apply
a range of measures ensuring responsible pollution
management within our own operations and across our Tier-1
supply chain. Although hazardous substances are listed an IRO
in our overview and are not assessed as material under the
ESRS framework, we nevertheless recognise the importance of
maintaining strict internal controls. Our production sites
continue to follow established processes for the safe handling
and management of hazardous substances, ensuring
compliance with relevant regulations and internal safety
standards. We do not have any products or services that are,
or contain, substances of concern or substances of very high
concern. Once our product is finalized, the substances within
the product are in a solid state and therefore are not considered
substances of concern or very high concern. As a result, the
percentage of net revenue made with such products or services
is 0%.
In parallel, our CSR audits for Tier-1 suppliers include checks
on pollution-related management practices, including
responsible handling of hazardous substances where relevant.
These measures allow us to uphold high expectations for
environmental management within our direct supply chain, even
in the absence of materiality under ESRS E2.
ENVIRONMENT
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Integrated Annual Report 2025
At present, we do not allocate specific operating or capital
expenditures to pollution-related incidents, as no such incidents
occurred during the reporting period. The company has not
incurred any environmental protection or remediation costs
during the reporting period, nor are there any known obligations
or provisions required as of the reporting date. We considered
potential pollution-related effects, related impacts and relevant
time horizons; however, based on the current nature of our
operations, no material anticipated financial effects were
identified. Consequently, no critical assumptions or estimation
uncertainties were required, and no products or services were
assessed as being at risk. Additionally, we did not experience
any material pollution-related incidents or deposits during the
reporting period that resulted in negative environmental impacts
or are expected to adversely affect our financial position,
financial performance or cash flows.
ENVIRONMENT
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Integrated Annual Report 2025
ESRS E5 – Resource use and circular economy
regulations, reputational risks and resource inefficiencies, while
accelerating our shift toward circularity presents opportunities
for cost savings, waste reduction, and new market potential,
albeit accompanied by challenges such as upfront investments,
limited access to recycled materials at scale, and the need for
deeper collaboration with partners to enable closed-loop
systems. At this stage, no financial effects related to the
identified IROs have been determined.
Policies
As part of our initial DMA, we identified a potential need for a
more targeted approach to managing resource use and
circularity across our operations and value chain. While we
considered implementing a dedicated circular economy and
resource efficiency policy in 2025, we decided to postpone this
decision due to other internal priorities. In the coming years, we
will reassess the feasibility and added relevance of establishing
such a policy, considering our evolving strategic focus, available
resources, and the current outcome of our DMA.
Actions
Resource-Efficient Innovation
To meet evolving market requirements, Kendrion introduced the
Slim PM Line — a compact and lightweight permanent-magnet
brake that additionally contributes to improved resource
efficiency by using approximately 30% less weight compared
with the previous line. This reduction in material demand
supports more efficient use of raw materials and decreases the
volume of materials ultimately entering end-of-life treatment.
The development also directly helps to mitigate our identified
negative impact IRO on natural resource depletion, as it lowers
the use of input materials such as steel, copper, and rare earth
metals.
Assessing Recycled Material Supply
Our facilities are supported by an extensive supplier network.
Frequently used materials are steel components, aluminium
components, copper wire, and plastic components. In many
cases, semi-finished products are purchased based on
specifications of Kendrion’s customers.
As part of our sustainability questionnaire to Tier-1 suppliers,
we assess which recycled materials are used in the
components they deliver to us. The questionnaire requests
information on whether suppliers incorporate recycled content
and the estimated share of recycled materials in their products.
Until the end of 2025, most respondents indicate either having
no visibility into the recycled content of their components or
using only minimal amounts of recycled materials. This limited
availability and traceability of recycled input materials presents
an additional challenge in addressing our identified negative
impact IRO on natural resource depletion, as advancing
circular-economy practices relies on access to secondary raw
materials. Strengthening data transparency and supplier
engagement on recycled content remains an important focus of
our ongoing actions under ESRS E5.
Waste Management
We continue to prioritize minimizing waste generation and
ensuring responsible waste handling across our operations,
Impacts, Risks & Opportunities
Climate-related IROs were updated through the refreshment of
our initial 2023/2024 DMA through internal and external
stakeholder validation. For a more detailed explanation of this
approach, please refer to the introduction of “Impacts, Risks
and Opportunities” under E2 on page 77.
Kendrion’s approach to evaluating resource use and circular
economy practices encompasses all production entities across
the organization, as outlined in our DMA process. This scope
covers not only internal resource management but also
collaboration with suppliers to better understand the recycled
materials incorporated in the components they supply.
Furthermore, we have reviewed customer requirements—
particularly for solenoid production—to identify potential internal
adjustments that align with evolving expectations regarding
sustainability and circularity.
Our assessment under ESRS E5 highlights two material actual
negative impacts that remain consistent across 2024 and
2025: the non-circular elements within our product portfolio
and the associated depletion of natural resources, both of
which underscore the continued relevance of responsible
product design and resource extraction as material topics.
Although a previously identified financial opportunity relating to
the use of sustainability criteria in strategic product
development is no longer deemed material after the 2025 DMA
refreshment, we continue to embed sustainability into decision-
making processes and ongoing product redesign initiatives,
pursuing circular practices with a long-term perspective to
extend product lifecycles, reduce waste and enhance value
chain sustainability. Maintaining traditional linear business
models could increase exposure to evolving environmental
Impact
-
Natural resource depletion
-
Non-circular product portfolio
ENVIRONMENT
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Integrated Annual Report 2025
guided by the waste management hierarchy of prevention,
reuse, recycling, recovery, and landfill disposal. All ISO
14001-certified Kendrion manufacturing facilities systematically
monitor waste generation and processing, working with
certified waste handlers in accordance with local regulations.
As part of maintaining ISO 14001 certification, we implement
new waste-reduction measures supporting continuous
improvement each year.
To improve consistency in waste monitoring, we centralized
waste data collection using standardized registrations. This
harmonized reporting framework enables detailed reviews of
waste categories and helps us address variations in local waste
management practices arising from different production
processes or regulatory requirements.
Our waste management task force—consisting of specialists in
waste management and quality from the Business Groups—
continues to assess the feasibility of introducing new indicators
and monitoring parameters for zero landfill waste, recycling
(including Critical Raw Materials, or CRMs), and waste per unit
sale (kg). Kendrion also works to implement environmentally
responsible waste-disposal methods and maximize recycling
rates within our operations. Through these ongoing practices
and planned improvements, we aim to reduce environmental
impact and support our long-term sustainability ambitions.
Metrics & targets
At this stage, no specific targets have been set for ESRS E5 –
Resource Use and Circular Economy, as the measurability of
our identified negative impact remains challenging.
Consequently, establishing precise, quantifiable targets is not
yet feasible. We continue to focus on improving data collection
and monitoring processes to enable potential target-setting in
the future.
In 2025, our operations relied on 556 tons of copper (2024:
637), which continues to be the only raw material for which
exact consumption volumes are available.
Reporting criteria copper inflow
This KPI covers producing entities only and measures the total
volume of copper consumed (in tonnes) including acquired raw
material copper as well as copper contained in purchased coils,
during the reporting period.
Waste components in tonnes
Hazardous Non-hazardous
Iron and Steel
cardboard
commercial waste
cooling fluide, solvent
plastic
wood
others
copper
packaging of hazardous substances
permanent magnets
aluminum
dissolvent, flux
electrical appliances
old oil
workshop waste
batteries
paints and varnishes
spray cans
toner cartridges/ printer cartridges
fluorescent tubes
0 100 200
1
In addition to divestment-related adjustments, the figure was corrected due to an incorrect copper value reported in 2024. The value reduced by 124.
ENVIRONMENT
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Integrated Annual Report 2025
Copper plays a central role in our products and is characterized
by substantial price fluctuation, which is why it remains the
primary focus of our material tracking. Other input materials are
sourced as pre-designed components rather than in raw form,
and suppliers typically do not provide detailed weight
information for such parts. As a result, we are currently unable
to calculate the total volume of all materials incorporated into
our products.
To enhance data completeness, we have initiated a systematic
effort to collect weight data for these purchased components.
This requires detailed, component-by-component verification
and is progressing in a phased manner. Improving the accuracy
of our material data and our related internal process remains a
priority.
Kendrion products are designed and tested for a target
durability of 20,000 hours, delivering long-lasting performance
under standard operating conditions. Actual lifetimes depend
on specific use cases and the environments in which products
operate. End-of-Line (EOL) testing remains a key cornerstone
of our quality approach, ensuring every product meets stringent
performance, durability, and safety criteria.
We also aim to enhance other sustainability aspects of our
products. A standardized returns process is in place addressing
customer issues efficiently and collecting insights that may
support improvements in reparability. However, we cannot
provide full recyclability information for our products or their
packaging. This is due to insufficient recyclability data from
Total waste in tonnes
76.3
(12.6%)
531.0
(87.4%)
Waste by disposal method in tonnes
5
00
400
300
200
100
0
Recycling Incineration
(mass burn)
Recovery,
including
enery
recovery
Not
provided
Reuse
99
10
10
10
412
26
29
Hazardous Non-hazardous
suppliers and the fact that some manufacturing processes,
such as moulding, result in products which cannot be easily
separated into recyclable components.
ENVIRONMENT
Reporting criteria waste hierarchy
Our KPIs for resource use and circular economy are primarily
based on waste hierarchy data. Due to the timing of external
data collection, our reporting inherently includes a lag: this
report contains waste figures for 2024, supplemented by
estimated values for 2025 derived from developments in added
value. This timing is consistent with our established reporting
cycle and data validation procedures.
The total waste quantity between the estimated value of 2024
and the final value of 2024 was adjusted by 9 tonnes.
The most recent analysis shows an increase in total waste
generation, resulting in an overall recycling rate of 77.0 %
(2024: 76.8 %). This corresponds to 467.5 tonnes of recycled
waste and 139.9 tonnes of non-recycled waste. Hazardous
waste accounted for 12.6 % (2024: 12.2 %), while non-
hazardous waste represented 87.4 % (2024: 87.8 %). No
waste was disposed of in landfills, enabling us to maintain our
zero-landfill status. No radioactive waste was generated across
our operations.
To ensure comparability, last year’s KPIs have been represented
to reflect the China Divestment. Cooling fluids, solvents,
dissolvent, and packaging of hazardous waste make up the
largest hazardous waste categories, while iron and steel,
cardboard, and general commercial waste remain the dominant
non-hazardous waste streams.
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Integrated Annual Report 2025
SOCIAL
materiality reflects consistently high impact scores, their
strategic relevance, and the significance of these issues for our
workforce and long-term business success.
A key driver behind the materiality of the occupational
accidents and injuries IRO is our strong focus on employee
health and safety. At Kendrion, health and safety have the
highest priority in every aspect of our operations, and we are
committed to full compliance with all applicable occupational
health and safety regulations. We apply stringent quality and
safety standards to minimize workplace risks and prevent
incidents, which is essential in our manufacturing environment.
Our continued focus on safe production processes has led to
strong safety performance across our plants. These efforts
directly reinforce the materiality of this IRO, as they address one
of the most significant potential negative impacts on our
workforce. In addition, our health and safety programs support
UN SDG 3 (Good Health and Well-being) and SDG 8 (Decent
Work and Economic Growth).
Similarly, the diversity-related IROs—covering both the
opportunity presented by a diverse workforce and the risk
associated with insufficient diversity in management roles—
remain material due to their strong influence on innovation,
organizational resilience, and long-term strategic performance.
Diversity is important for fostering a fair and inclusive
workplace, promoting equal opportunities, and countering
prejudice and unconscious bias. We recognize that
management diversity is linked to enhanced decision-making
and stronger business outcomes. These considerations also
underpin the continued materiality of the empowering women in
careers IRO, as gender diversity remains an important factor in
achieving balanced representation and unlocking talent
potential. We strive to create an environment in which all
employees—regardless of age, background, gender, nationality,
ethnicity, religion, or any other protected characteristic—have
equal opportunities to develop and contribute to the execution
of our strategy.
Through our DMA refreshment, we ensure that our most
significant IROs are accurately reflected and appropriately
managed, supporting transparent and consistent CSRD-
aligned reporting for 2025.
Policies
Code of Conduct
Our Code of Conduct supports the ongoing development and
implementation of our corporate norms and values, with a
particular emphasis on integrity. It sets guidance for our
business decisions and provides principles of ethical business
behavior. At Kendrion, we believe that, when taking business
ESRS S1 – Own workforce
Impacts, Risks & Opportunities
Social-related IROs were updated through the refreshment of
our initial 2023/2024 DMA through internal and external
stakeholder validation. For a more detailed explanation of this
approach, please refer to the introduction of “Impacts, Risks
and Opportunities” under E2 on page 77.
In the context of our transition toward greener and climate-
neutral operations, we found that no transitional risks are
expected to materially impact our workforce, and no specific
workforce groups are at heightened risk due to their
characteristics, roles, or working conditions.
The 2025 DMA refreshment resulted in adjustments to the
materiality of several social IROs under ESRS S1 due to revised
materiality thresholds and a correction applied to the scoring
formula. As a result, certain previous material IROs are no
longer defined as such in 2025.
Although IROs related to job creation and social prosperity,
equal opportunities at work, and international teams are no
longer considered material following the threshold adjustments,
they continue to have positive impacts on our workforce and
broader society.
Other IROs remained material and continue to be prioritized in
our management approach. These include empowering women
in careers, occupational accidents and injuries, and financial
materiality topics related to diversity—both the opportunity
created by a diverse workforce and the risk associated with
limited diversity in management roles. Their continued
Impact Opportunity Risk
+
Empower women in careers
-
Occupational accidents and injuries
+
Effectiveness through diversity
-
Diversity in management roles
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Integrated Annual Report 2025
decisions, high ethical standards should be applied. Our Code
of Conduct describes the behavior we expect of our people.
Driven by the value integrity, the Code of Conduct contains
obvious and universal standards and expected behaviors, and
it contributes to a safe, respectful, and inclusive work
environment. We do not tolerate discrimination, harassment, or
misconduct of any kind, including discrimination based on
racial or ethnic origin, colour, sex, sexual orientation, gender
identity, disability, age, religion, political opinion, national or
social origin, or any other protected characteristic. We are
committed to conducting our business in a transparent and
responsible manner and will continue to review and update our
Code of Conduct to ensure its continued relevance and
effectiveness. The Code of Conduct is available on our
corporate website at www.kendrion.com.
Raising awareness through education, training, and practical
examples continues to be essential for embedding our values.
With the support from value teams, managers play a key role in
guiding employees in understanding how these values apply to
their work and the broader organization. A mix of interactive
trainings helps employees internalize the principles outlined in
the Kendrion Way and the Code of Conduct. It is essential that
every employee understands and adheres to the ethical
standards set out in our internal policies and procedures.
Our policies and procedures form the foundation of responsible
conduct throughout the company. Senior management is
responsible for leading by example and ensuring that
employees are aware of and act in the spirit of our policies and
procedures. Our Intranet page includes a dedicated Code of
Conduct page with additional explanations. The Code of
Conduct is also integrated into the onboarding process, where
employees are required to acknowledge and comply with it. To
further support ongoing awareness and compliance, employees
are obliged to complete an online training module covering
topics such as corruption, bribery, and conflicts of interest.
Fair Labour & Human Rights Policy
We are committed to endorse fair labour practices and
respecting human rights across all of our business operations.
This commitment is embedded in our Fair Labour and Human
Rights Policy. The policy covers key topics such as (the
prohibition of) forced labour and, child labour, and human
trafficking. In line with these commitments, we uphold the
highest standards of human rights and ethical conduct
throughout our value chain. We confirm that no entities within
our operations are at risk of engaging in, or being linked to,
incidents of child labour, forced labour, or human trafficking.
The Fair Labour and Human Rights Policy is available on our
corporate website at www.kendrion.com. No material human
rights or labour concerns were reported in connection with our
activities in 2025.
Health & Safety
While a global health and safety framework has not yet been
formalized, each site has implemented its own tailored policies
to align with local safety management systems. These
measures may include work instructions for production
environments, procedures for managing hazardous materials,
and protocols for emergency contacts, all designed to meet
local regulations and operational requirements.
Diversity
As part of the Social Capital and Human Capital value-creation
pillar within our ESG Program, we are committed to building
and sustaining a diverse and inclusive workforce in which every
employee feels welcomed and respected. This commitment is
reflected in our diversity policy for the Supervisory Board,
Executive Board, and Management Team. We actively promote
diversity throughout the entire employee lifecycle, using this
framework to address related challenges and the complexity of
(gender) diversity—particularly relevant for a company like
Kendrion, where the demand for technical and Science,
Technology, Engineering and Mathematics (STEM) expertise is
significant.
Speak-Up Policy
To foster a culture grounded in trust, transparency, and
accountability, it is essential that we ensure that employees
have a secure and anonymous channel to express their
concerns. Our Speak-Up Policy emphasizes our commitment
to creating an environment where individuals feel confident
raising issues without fear of retaliation.
The Speak-Up Policy outlines the value of open
communication, reflects our core principles of integrity and
respect, and establishes a clear, confidential process for
reporting concerns. By allowing anonymous submissions, the
company demonstrates its commitment to identifying and
resolving potential issues promptly, helping to maintain a
workplace where everyone can thrive. Further details on the
Speak-Up Procedure can be found on page 96.
Actions
Tracking and measuring specific actions related to employees,
human rights, health & safety, diversity, and workforce
engagement remains challenging, as these aspects are
inherently embedded in daily business operations. Due to their
integrated nature, allocating dedicated resources solely to
these topics and defining clear, standalone actions is complex.
While initiatives and policies are in place, we aim to explore the
feasibility of defining specific actions and planning targeted
further enhancing visibility and strategic alignment.
We believe in the importance of reporting comprehensively on
all initiatives that reflect our commitment to employees. As
such, the actions presented in this chapter go beyond those
required in connection with our material IROs.
SOCIAL
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Integrated Annual Report 2025
Engaging with own workforce
Our culture and its underlying values underpin all we do. The
key values exemplifying our culture are articulated in The
Kendrion Way: ‘A global team of actuator specialists, with
courage to act, curiosity to learn from successes and mistakes,
confidence to share, and open to feedback’. The Kendrion Way
offers our employees guidance on ‘’how we do things” at our
company, irrespective of location, level of responsibility or
functional role. We are also committed to maintaining the
highest standards of conduct in all our business activities.
Kendrion respects freedom of association and the right to
collective bargaining. Works councils and employee
representatives operate within Kendrion’s major German
entities, as well as within organizations in the Netherlands and
Romania. In accordance with local labour regulations, these
groups take part in a wide range of matters related to
employment, health and safety, and social topics. Regular
dialogue and ongoing communication give employees the
opportunity to raise questions and share their perspectives.
We view constructive cooperation with our works councils and
employee representatives as an important factor in building an
engaged and satisfied workforce, which supports overall
productivity and morale. We value the contributions of these
corporate bodies in articulating and addressing the needs and
concerns of our employees.
At certain German locations, a dedicated representative body
supports employees with disabilities. Elected by employees
with disabilities, this group advocates for their interests and
ensures their needs are appropriately considered. In close
collaboration with management and the works council, it
contributes significantly to maintaining an inclusive and
supportive work environment.
Kendrion conducts regular employee satisfaction and culture
surveys to monitor developments within the organization and to
ensure we continue to foster a positive, engaging, and inclusive
company culture. As planned, we carried an employee survey
in 2025, achieving a participation rate of 68% across the
workforce, slightly higher than the results of the previous survey.
The results provide valuable insight into the current experiences
of our employees and support our ongoing efforts to further
strengthen the employee experience.
Overall, the outcomes indicate strong performance in several
key areas. Employees reported a clear understanding of their
roles and responsibilities, and the survey reflected a positive
perception of inclusion within the organization. Psychological
safety also emerged as a notable strength, with employees
expressing confidence in their ability to speak up, share ideas,
and raise concerns. Engagement, alignment with organizational
goals, and team leadership were likewise assessed positively,
with some areas showing improvement compared to the
previous survey.
ESG-related questions were introduced into the employee
survey in 2025. Results showed that employees consider
sustainability important to the company’s long-term success
and are interested in learning more about the company’s
sustainability commitments and actions.
At the same time, the results pointed two areas where we can
further strengthen our approach. Employees noted that change
processes could benefit from enhances support and that
providing additional resources or conditions would help them in
their daily work. Change management and enablement remain
therefore important areas for ongoing improvement.
The results reinforce the strengths of our organizational culture
while offering clear direction on where additional support and
focus can enhance the employee experience and overall
organizational performance. The results have been made
publicly available through our Intranet platform. Several
management meetings have taken place, addressing and
ensuring understanding with the results. The results together
with the management meetings provided a strong foundation
for further action. Plans for action have already been launched
at both global and local levels. The company´s CEO ultimately
remains the most senior role in the company overseeing and
ensuring effective engagement with the internal workforce, and
the follow up process for the 2025 employee survey.
Kendrion encourages employees to report any concerns
regarding potential violations of the Code of Conduct or related
policies. Our Speak-up Policy outlines the procedures for
raising concerns and explains how reports are handled.
Employees and external stakeholders can use our
independently managed global Speak-up line to report issues
confidentially or anonymously at any time via phone or web. Full
details of the Speak-Up line are available on page 96.
Human Rights
Respecting human rights is a cornerstone of a sustainable
society and a key element in fostering responsible business
practices across our organization. We support and adhere to
the human rights principles outlined in the United Nations
Global Compact.
We also recognize the compliance with the minimum
employment age and associated regulations. Kendrion strictly
prohibits any form of forced or involuntary labour and aligns its
practices with the UN Guiding Principles on Business and
Human Rights.
SOCIAL
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Integrated Annual Report 2025
Ensuring fair labour practices and respect for human rights
remains central to our approach to promoting sustainable and
ethical business standards throughout the company.
We are committed to being a responsible corporate citizen.
We take responsibility for the living conditions and career
opportunities at our locations and maintain strong connections
with the communities in which we operate. Key areas of focus
for our corporate citizenship initiatives include intercultural
understanding and respect, fair working conditions, career
development, diversity and inclusion, and employee
representation. Through these efforts, we also contribute to the
advancement of selected UN Sustainable Development Goals,
particularly SDG 5 (Gender Equality) and SDG 8 (Decent Work
and Economic Growth).
Kendrion is committed to promoting human rights and
humanitarian values across all aspects of our business. At the
end of 2025, our employees were invited to select a project for
the company to make a Christmas gift donation. The projects
involved all reflected our values in sustainability, human rights,
and global health. One of the pre-selected organizations was
Doctors Without Borders to which 52% of employee´s votes
were allocated to resulting in EUR 7,800 of donations.
Through this initiative, we aim to support humanitarian efforts
and reinforce our dedication to ethical and responsible
corporate citizenship.
Health & Safety
At Kendrion, health and safety are a central responsibility within
our Business Groups, where they are managed systematically
and consistently through clear rules and procedures aligned
with recognized industry standards and best practices. These
are formalized in our Health, Safety & Environmental (HSE)
policies, which affect 100% of employees across the company.
Each production site also implements targeted initiatives to
enhance HSE standards based on plant-specific needs,
production lines, and technologies.
Regular HSE audits assess adherence to policies and help
identify areas for improvement. All employees follow local health
and safety procedures and participate in training programs
covering the proper use of machinery, protective equipment,
handling of substances, emergency procedures, and other safe
work practices. Employees in production areas, who face
higher inherent risks, are supported by comprehensive health
and safety management systems designed to proactively
mitigate hazards, ensure compliance, and promote a strong
culture of safety.
Recognizing that employee well-being extends beyond physical
health, Kendrion places a strong emphasis on mental health as
a key part of our workplace culture. Fostering cohesion within
an inclusive professional community, where all employees feel
valued and respected, supports engagement, innovation, and
overall performance. Initiatives such as partnerships with
psychological institutions provide timely access to
psychological consultation for employees.
Employees are encouraged to work on meaningful tasks and
innovative projects, while a variety of programs support a safe,
healthy, and sustainable workplace culture. These include
annual ‘Health Days,’ medical check-ups, sports activities and
gym memberships, and access to mental help. Raising
awareness of mental health and creating an environment of
respect and acceptance helps to remove barriers for
employees seeking support, contributing to a resilient and well-
supported workforce.
Our internal Health Task Force, chaired by the CEO, reviews
global health, illness rates and safety metrics on a monthly
basis. Sites with higher illness rates receive additional attention
with coordinated improvement measures if needed.
Diversity
Diverse and inclusive teams contribute to higher organizational
agility, creativity, and innovation. Kendrion embraces diversity in
its broadest sense, with a current strategic focus on improving
gender balance in leadership and technical roles. By engaging
managers and senior employees, implementing targeted
actions, and addressing potential barriers, we aim to strengthen
and sustain gender diversity across the organization.
Leadership commitment and shared responsibility underpin our
approach and guide the development of an inclusive working
environment. Key priorities within our diversity framework
include:
■ Recruitment of diverse employees: Ensuring that our
recruitment process is unbiased, signalling our interest in
a diverse candidate pool; supporting applications from a
diverse group; and clearly communicating these
expectations to our recruitment teams.
■ Developing and maintaining a robust pipeline of diverse
talent.
■ Retention and promotion of talents with diverse
backgrounds, nationalities, and genders: Covering various
aspects such as reward, recognition, benefits, work
allocation, performance management, and career
development.
■ Advancement into management roles: Preserving an
environment that fosters the growth of a diverse group of
talents into management, technical, and other leadership
roles.
Advancing gender equality and improving outcomes for female
employees remain important themes. Achieving meaningful
progress requires continuous commitment from both the
organization and its workforce. Strengthening our holistic
approach across employee well-being, Kendrion established
The Circle of Trust, providing female employees with access to
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Integrated Annual Report 2025
a trusted network and a confidential support line. Its primary
objective is to foster a safe and ethical working environment
and to promote female empowerment and well-being.
Kendrion participates in Girls’ Day, an initiative aimed at
increasing the interest and participation of young female
students in technical and traditionally male-dominated
professions. As part of this program, we host students at our
facilities to introduce them to a range of vocational and
technical career paths, provide hands-on insights into our
operations, and encourage awareness of opportunities within
STEM-related fields. Through Girls’ Day, we aim to contribute to
a more balanced talent pipeline and support long-term gender
diversity in roles where women have historically been
underrepresented.
Kendrion remains a committed signatory of the German Charta
der Vielfalt (Diversity Charter). The Charter, supported by the
German Commissioner of the Federal Government for
Migration, Refugees and Integration, promotes the recognition,
appreciation, and integration of diversity within corporate
culture. These principles continue to align with and reinforce
Kendrion’s own diversity and inclusion objectives.
Employee Development and Retention
Kendrion continues to invest in talent attraction and employer
branding to support the recruitment of qualified employees.
Our approach includes targeted advertising, participation in
networking events, and partnerships with technical universities
and institutions. Digital channels play an increasingly important
role, enabling targeted marketing campaigns through various
social media platforms and facilitating access to broader talent
pools. Attracting young and early-career professionals remains
a priority. Our cooperations—such as with the High Tech
Campus in Eindhoven—and our participation in job fairs in
Germany further strengthen our recruitment efforts. Career
development opportunities, international exchange programs,
workstyle flexibility, and an inclusive company culture are key
components of our employee value proposition.
We believe in the importance of fostering professional growth of
our employees. Our development programs are designed to
prepare talent for future leadership roles. Kendrion has
implemented a structured succession management process
that identifies successors for critical positions and monitors
their progress. Our talent management and succession-
planning tool supports performance reviews and the
identification of development needs. It integrates our
competency framework, which forms the basis of our
performance evaluation processes.
We aim to retain employees by providing an engaging and
supportive work environment. Flexible workstyles contribute to
employee performance, well-being, and satisfaction. Kendrion
offers competitive compensation and benefits to promote
fairness and transparency, including performance-based and
share-based components that align incentives with sustainable
long-term objectives. Through our focus on talent attraction,
development, and retention, we aim to create an environment
in which employees can grow, perform, and build sustainable
careers.
Metrics & targets
Health & safety
Specific and measurable performance targets for Kendrion’s
Business Groups and local management include health and
safety metrics, which are determined by the number of
accidents per 1,000 FTE, Lost Time Injury (LTI (Days Lost))
rates and illness rates. For accidents, LTI (Days Lost), and
illnesses, our objective is ensuring that these metrics do not
exceed the previous year’s figures, with the aim of achieving
consistent reductions over time. No additional targets have
been established at this stage for other workforce-related
topics. No work-related fatalities occurred in 2025.
Diversity
Kendrion is committed to reshaping the composition of
Kendrion´s Leadership Team with an ambition that at least 33%
of the team comprises women, and at least 33% comprises
men. To meet the minimum threshold requirement of 33%, our
ESG Program sets a current necessary improvement of 18.2%
in female FTE for our indirect staff within our Business Groups,
to be achieved over multiple years. According to Kendrion’s
diversity policy, at least 33% of the Supervisory Board shall
consist of women, and at least 33% shall consist of men. The
current composition of the Supervisory Board, with two female
members and two male members, meets this 33% gender
diversity target.
We developed our diversity targets through a detailed
assessment of the current state across business groups,
focusing on diversity within functional areas. The Management
Team then discussed and set ambitious yet achievable targets,
considering diversity metrics and staff turnover rates to gauge
feasibility. The HR Committee reviewed and aligned the
approach with Kendrion’s diversity objectives before the final
targets were presented to leadership, ensuring clarity and
commitment across the organization.
To track progress and effectiveness, the diversity figures are
reviewed regularly and reported to the Executive Board and
Supervisory Board. This allows us to monitor the progress of
the targets, assess trends, and adjust where necessary. While
the target-setting process was based on internal discussions
and data, it is an ongoing effort to continuously improve and
address any lessons learned or challenges along the way.
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Integrated Annual Report 2025
Kendrion has also established targets related to nationality.
According to the diversity policy, the Management Team should
include representatives from at least two regions where
Kendrion operates. Furthermore, Kendrion’s diversity policy
incorporates a background diversity objective. At least one
member of the Executive Board, and at least three members of
the Management Team, and 30% of the Leadership Team
should possess experience in international industrial and/or
automotive business or an industry adjacent thereto.
Kendrion’s workforce comprises 33 nationalities (2024: 37)
across 8 countries (2024: 8). Furthermore, 44% of our
workforce is female (2024: 43%), reflecting a healthy balance of
backgrounds, nationalities, and gender throughout the
organization. The Leadership Team consists of 19% women
and 81% men, thereby the identified gender diversity targets for
the Leadership Team have not yet been met. The composition
of the Executive Board, the Management Team and the
Supervisory Board align with their respective background
diversity objectives. The nationality diversity objective for the
Management Team has been met. In the Supervisory Board
one member holds German nationality, reflecting Kendrion’s
significant operations in Germany. For the background diversity
objective for the Supervisory Board, please refer to the
Supervisory Board ‘Profile outline’ which is available on
Kendrion’s corporate website.
Engaging with own workforce
Allowing employees to form unions and engage in collective
bargaining forms a part of fair labour practices and human
rights. Kendrion upholds freedom of association and the right
to collective bargaining. Works’ councils are established at
Kendrion’s major operating companies and a holding company
in Germany and at a subsidiary in the Netherlands and in
Romania. Approximately 89.6% (2024: 86.9%) of all Kendrion
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employees are represented by these works’ councils and
employee representatives. Moreover, approximately 73.0%
(2024: 69.5%) of employment contracts are governed by or
follow the collective bargaining agreements for the metal
industry. We do not have any agreements in place for employee
representation through a European Works Council (EWC), a
Societas Europaea (SE) Works Council, or a Societas
Cooperativa Europaea (SCE) Works Council. Reports of
potential or suspected misconduct or other issues can be
made by employees in their native language. In 2025, 4 (2024:
2) reports were made through the Speak-up line. These reports
were assessed by the Compliance Committee and, where
appropriate, further investigated or advised upon.
Violation of the Code of Conduct may lead to sanctions,
including termination of employment. None of the reports made
through the Speak-up line in 2025 resulted in a dismissal of
employees. In addition, no material fines or damages have
been reported, and no severe human rights cases have been
identified. No specific targets are set for the engaging with own
workforce metrics.
2025 TARGET
2
15
Diversity@Kendrion
33 nationalities
8 countries
44% female workforce
2025
23
2025
11
2025 TARGET
5.9
2025
225
2025
172
2025
5.9
2025 TARGET
248
Illness rateDays Lost
(2) (ESRS)
1
Lost Time
Injuries
(Days Lost)
(Own criteria)
(in days)
Accidents
(Own criteria)
Accidents
(2) (ESRS)
1
1
Accident (2) (ESRS) and Days Lost (2) (ESRS) are the KPIs used to reflect the reporting disclosure requirement for reporting accidents and lost
time injuries starting from one day of Days Lost.
2
Target values are based on the previous year’s performance, with the objective of not deteriorating compared to the prior year.
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Integrated Annual Report 2025
FTE per country and contract type
FTE Permanent Fixed Term Temporary Total FTE
 Male Female Male Female Male Female Male Female Total FTE
Netherlands 77 15 4 0 7 1 88 16 104
Germany 428 214 33 10 3 1 464 225 689
Sweden 1 1 0 0 0 0 1 1 2
Austria 5 3 0 0 0 0 5 3 8
Romania 90 284 0 0 0 0 80 284 364
India 38 5 8 2 0 0 46 7 53
China 0 0 0 1 0 0 0 1 1
USA 29 19 0 0 0 0 29 19 48
Total 658 541 45 13 10 2 713 556 1,269
Headcount per age group and country
Headcount Netherlands Germany Sweden Austria Romania India China USA Total
Under 30
years 16 133 0 0 21 24 0 7 201
30 – 50 years 59 358 0 4 214 28 1 19 683
Over 50 years 34 292 2 4 129 1 0 24 486
Total 109 783 2 8 364 53 1 50 1,370
Employee Headcount by Country (≥50 Employees / ≥10% Total Workforce)
Collective bargaining agreement Social dialogue
Coverage
Rate
Employees – EEA (for countries with
> 50 empl. Representing
> 10% total empl.)
Employees – Non-EEA (for countries
with > 50 empl. Representing
> 10% total empl.)
Workplace representation (EEA only)
(for countries with > 50 empl.
Representing > 10% total empl)
0 – 19% Germany
20 – 39%
40 – 59%
60 – 79%
80 – 100% Germany; Romania Germany; Romania
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Integrated Annual Report 2025
% Female / Male Employee Female and Male are gender categories
based on an employee´s self-identification or administrative record as male
or female. The percentage is calculated by dividing the number of females
to the total number of employees per FTE.
Illness The reported illness rate is based on the total illness hours.
The total illness hours with and without wage continuation is divided by
the total timetable hours.
Employee & Nonemployees An employee at Kendrion is defined as a
person who holds a direct employment contract with one of Kendrion’s
legal entities. Nonemployees at Kendrion sites are exclusively temporary
workers hired through third parties.
Remuneration & Gender pay gap The annual total remuneration ratio
is the annual total remuneration of the highest paid individual divided by
the median annual total remuneration minus the highest paid individual
remuneration. The pay ratio is influenced amongst others by the
geographical locations, type of business, part-time employees and
currency volatility.
The disclosure of gender pay gap contains the basic salary plus
remunerations for each entity, separated by direct and indirect employees.
Remuneration includes payment for overtime and bonuses. For part time
employees the regular monthly salary and remuneration is calculated to
1 full time equivalent (FTE), to have a common ground for comparison.
The gender pay gap is affected by the geographical areas and types of
business (such as manufacturing or developing) in which Kendrion
operates and consequently country differences exist. Kendrion will
continue to improve on its analysis and further alignment to ensure a good
basis for future actions. We calculate the gender pay gap as the difference
between the average hourly pay for men and the average hourly pay for
women, divided by the average hourly pay for men.
Disability & family-related leave Based on the country the regulation
for disability reporting can vary. Kendrion´ s CSR reporting is aimed to
achieve an aligned reporting standard for the disability KPI. Employees
with disabilities refers individuals employed by Kendrion who have a
documented physical or mental impairment that restricts their ability to
perform certain activities. These impairments can include but are not
limited to: 1. Physical disabilities, 2. Sensory disabilities, 3. Mental
disabilities, 4. Invisible disabilities. Kendrion distinguishes two criteria for
the determination of disabled employees:
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Reporting Definition & Scope
FTE & Headcount The reported figures for FTE and Headcount
represent the year-end numbers of the reporting period. An FTE (Full-Time
Equivalent) represents the hours worked by an employee as a proportion
of the standard full-time workload. As a headcount counts each employee
independent of the number of working hours hired through a Kendrion
legal entity.
Accidents & LTI (Days Lost) (Own criteria) Kendrion reports the
total number of work-related accidents during working time or on the way
to or from work for its own employees and independent contractors under
supervision of Kendrion. Only the accidents that the group entity had to
report to an external institution are reported. Kendrion reports accidents
from all group entities that caused an absence of more than three calendar
days, not including the day of the accident. This definition is based on
regulations applicable in Germany. This assessment is based on internally
developed criteria and therefore does not fully align with the requirements
and definitions set out in the ESRS. As such, we added the second Days
Lost KPI which fully aligned with the ESRS reporting criteria. Kendrion
reports the absence resulting from these work-related accidents.
The Lost Time Injury (LTI (Days Lost)) is time (‘scheduled working days’)
that could not be worked (and is thus ‘lost’) because of an employee
being unable to perform the usual work due to an occupational accident
(‘at work accident’ as well as ‘way-to work accident’) or disease. Kendrion
makes no difference in whether the salaries or wages were paid by
Kendrion or by an external institution during that time. A return to limited
duty or alternative work for the same organization does not count as ‘lost
days’. Counting of ‘lost days’ begins with the first scheduled working day
of full absence (e.g. the day after the accident). The count of ‘absent days’
due to a work-related accident ends when the employee either is fully
back to work or is absent from work for other reasons (e.g. vacation,
reduction in overtime, etc.). A lost day counts as one full day regardless of
whether the employee has a part-time or a full-time contract. Kendrion
does not specify LTI (Days Lost) data per region, worker type or gender as
Kendrion considers this information not relevant to its current operations.
No fatalities have taken place due to work related accidents or injuries.
Accidents (2) & Days Lost (2) (ESRS) The KPI Overview on page 60
also presents the Accident (2) and Days Lost (2) values in line with the
ESRS reporting criteria stating that days lost include the first full day and
last day of absence, and are counted as calendar days, including days
when the individual was not scheduled to work. At the same time, the
Company continues to disclose accidents and LTI (Days Lost) based on
its own definition to ensure better comparability with previous reporting
cycles.
1. The reporting of a disability indicator is relevant where the company
must adjust the workplace or the defined job description to adapt to
the circumstances of the employee. The adjustments in this relation
should be beyond the standard safe and healthy measures
implemented in the company.
2. As already mentioned, the disability regulations can vary based on
the country the company is located in. These specifications should
not be neglected in the CSR reporting and as well considered in the
calculation of the disability indicators.
Both definitions add up to a set of criteria to identify the disabled
employee and to report the indicator accordingly. 6.7% of the reported
people with disabilities are subject to legal restrictions on the collection
of data.
At Kendrion all employees are generally entitled to family-related leave.
Wages We are committed to fair and competitive wages that support
our employees’ well-being and reflect their valuable contributions. We
regularly review our pay structure to meet or exceed industry standards,
ensuring our team can thrive both inside and outside of work. We
believe that adequate wages are fundamental to building a resilient,
motivated workforce and, ultimately, to the success of our company.
The wage cost used to calculate the wage cost per FTE is calculated
based on the staff costs detailed in our financial statement on page 130
subtracted by other staff costs that is not specified in detail in the
financial statement but is displayed in the total value of staffed costs.
% Female in Leadership Team Our Leadership Team consists
of around 31 executives executives and managers of the company and
include the Executive Board (CEO and CFO) and the Management
Team (which in addition to the Executive Board members also consists
of the Business Group Managers of IAC, and IB, the CIO, and the
General Counsel), General Managers of each site, as well as additional
managers from the areas Sustainability, Controlling, HR, IT, Sales,
Purchasing, and R&D. The percentage is calculated by dividing the
number of leadership team members.
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Integrated Annual Report 2025
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67.6
Wage costs per
FTE
(EUR 1,000)
2024 61.3
12
Overall employee
turnover rate
(%)
2024 20
1,000 (73%)
Employees covered
by collective
bargaining
(number)
2024 1,018 (69.5%)
162
Employee who
left the company
(number)
2024 305
31 (6 f / 25 m)
Employees at top
management
level (FTE)
2024 32
(5 f /27 m)
2.3
(19% f/ 81% m)
Employee at top
management
level (%)
2024 2.0%
(16% f/ 84% m)
98 (34 f / 64 m)
Employees that
took family
related leave
2024 43
(19 f/ 24 m
1
)
45
Employees with
disabilities
(headcount)
2024 52
601/769
(f/m)
Headcount
by gender
2024 643 f / 821 m
41.7
(%)
Gender pay gap
total
2024 40.7%
1
In addition to divestment-related adjustments, the figure was corrected due to an incorrect family-related leave value reported in 2024.
The value increased by 23.
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Integrated Annual Report 2025
ESRS S2 – Workers in the value chain
metals sector, combined with the potential severity of these
human rights violations, supports the continued classification of
this topic as material.
The decision to maintain ESRS S2 as a material standard is
further reinforced by Kendrion’s ESG Program which defines
sustainable sourcing as a strategic priority. This focus aligns
with the outcomes of the DMA and underlines the relevance of
addressing social risks in the upstream value chain as part of
Kendrion’s broader sustainability ambitions.
Kendrion’s value chain spans multiple tiers and geographies.
Labour conditions in upstream supply chains can have a
significant influence on human rights outcomes, supply chain
stability and the ethical integrity of business operations. The
extraction and processing of metals often take place in
complex, multi-tier supply chains where transparency and
direct influence significantly decrease beyond Tier 1 and Tier 2
suppliers. As a result, workers at Tier 3 and Tier 4 levels are
potentially more exposed to adverse human rights risks, while
Kendrion’s direct control over labour practices is inherently
limited.
The potential presence of forced labour and child labour in
metal supply chains represents a material negative impact on
workers in the value chain. In certain regions and segments of
the global metals industry, these practices are documented
structural risks, driven inadequate regulation, informal labour
arrangements and limited oversight in upstream tiers. Although
no confirmed cases have been identified within Kendrion’s
direct supply chain, the potential scale and severity of these
impacts justify their inclusion as material impacts under
ESRS S2.
Policies
Responsible sourcing and respect for human rights in the
supply chain are underpinned in our Supplier Code of Conduct,
which sets clear requirements for ethical business practices
and worker protection. The policy was established with the
involvement and approval of General Counsel and Executive
Board and applies to all suppliers engaged in Kendrion’s value
chain. Through the Code of Conduct, Kendrion requires its
suppliers to respect fundamental human rights, including the
provision of fair wages, safe and healthy working conditions,
and the strict prohibition of child labour and forced labour. Our
Code of Conduct also addresses environmental protection
requirements, including the responsible management of
materials, and principles of non-discrimination and freely
chosen employment.
Kendrion’s Supplier Code of Conduct does not refer to human
trafficking, but this topic is covered by the risk-based approach
aligned with industry-specific human rights risks. The Code of
Conduct includes a prohibition on the forcible removal of
individuals from their land or region, which is relevant to the
sectors and geographies in Kendrion’s upstream supply chains.
Although the Code does not formally reference specific
international frameworks, it is inspired by the core principles of
the International Labour Organization (ILO) standards and the
Universal Declaration of Human Rights.
Impacts, Risks & Opportunities
Workers throughout the value chain play a crucial role in the
responsible, efficient and sustainable production of Kendrion’s
products. From raw material extraction to production,
distribution, and beyond, workers at every stage contribute to
the creation and delivery of goods and services. To ensure that
the identification of related IROs remains robust and up to date,
Kendrion conducted a targeted refresh of its DMA in 2025. This
refresh is built on the initial DMA and involved the establishment
of two dedicated internal stakeholder groups (as specified in
the Chapter “Stakeholder involvement” on page 50 of this
Integrated Annual Report) who reviewed all previously identified
IROs and reassessed their significance. The process was
informed by input from internal experts across Kendrion’s
business groups as well as selected external stakeholders and
was complemented by a benchmark analysis against industry
peers. The resulting assessment reflects Kendrion’s current
organizational structure, strategic priorities and evolving
sustainability context and forms the basis for the disclosures in
this chapter.
Our refreshed DMA validated that ESRS S2, Workers in the
Value Chain is a material topic for Kendrion for the 2025
reporting period. The materiality scores of the impacts and their
classifications remain unchanged. The potential negative
impacts related to forced labour and child labour in metal
supply chains continue to be considered material, which are
primarily associated with upstream value chain activities linked
to the extraction and processing of key raw materials such as
steel, copper and aluminium. While Kendrion has not identified
actual cases of forced or child labour within its own operations
or direct supplier base, the inherent risk profile of the global
Impact
-
Forced labour in metal supply chain
-
Child labour in metal supply chain
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Integrated Annual Report 2025
Kendrion’ requires all its suppliers to fully comply with the
Supplier Code of Conduct. We review our supplier base on an
ongoing basis engaging with any suppliers who have not yet
formally committed to the Code of Conduct to fosters
alignment with Kendrion’s expectations.
New suppliers are required to adhere to the standards and
principles set out in the Supplier Code of Conduct as part of
the onboarding process, and Kendrion reserves the right to
audit supplier sites to assess compliance with these
requirements.
In addition, Kendrion requires its Tier 1 suppliers to cascade the
principles of the Supplier Code of Conduct within their own
supply chains, thereby reinforcing responsible business
practices beyond direct contractual relationships and
strengthening the linkage to Kendrion’s identified IROs.
Through the consistent application, and improvement, when
necessary, of our policies, Kendrion aims to foster a responsible
and sustainable supply chain that reflects its core values and
long-term commitment to social responsibility.
Actions
Kendrion seeks to promote transparency and responsibility
across its supply chain by integrating social and environmental
considerations into its sourcing and supplier engagement
activities. While supplier selection remains an important element
of this approach, Kendrion’s current focus is on establishing
clear baseline expectations for suppliers and progressively
strengthening its sustainable sourcing practices over time. As a
minimum requirement, suppliers are expected to sign and
comply with Kendrion’s Supplier Code of Conduct, which sets
out standards relating to human rights, workplace safety,
environmental protection and ethical business conduct. In
addition to our Supplier Code of Conduct, Kendrion considers
the presence of an ISO 14001–certified environmental
management system as an important indicator of a supplier’s
environmental maturity. More comprehensive sustainability-
related assessments and controls are planned to be further
developed and implemented through Kendrion’s sustainable
sourcing program, which is embedded in the ESG Program.
As part of its ongoing engagement with suppliers, Kendrion
works primarily with Tier 1 suppliers to support the quality,
sustainability and reliability of materials and end products. The
Company engages with suppliers on a continuous basis to
better understand and, where possible, encourage
improvements in their environmental and social performance.
This engagement is intended to strengthen responsible
sourcing practices while considering the varying levels of
influence and transparency across different tiers of the supply
chain.
Concerns related to human rights or other misconduct affecting
workers in the value chain can be raised through Kendrion’s
Speak-Up Policy, which is described in chapter G1 – Business
Conduct on page 96. This underlying procedure is available to
internal and external stakeholders and is designed to allow
concerns to be reported in a confidential manner.
Kendrion has an internal supplier risk assessment process,
which draws on internationally recognised indices, including the
Country Risk Classification, Global Rights Index, Global Slavery
Index, Environmental Performance Index, Transparency
International Corruption Index, Human Freedom Index and
Human Development Index. By combining country- and sector-
based risk indicators, Kendrion can obtain a more structured
and differentiated view of potential social and environmental
risks within its Tier 1 supplier base. The implementation of this
process has contributed to a more robust risk-based
assessment of suppliers and supports Kendrion in focusing its
engagement efforts on higher-risk areas of the upstream value
chain.
Building on this risk assessment, Kendrion has expanded its
supplier sustainability questionnaire as part of the
implementation of its ESG Program. In addition to the
company’s top 50 suppliers by spend, an additional 50
suppliers were included in the questionnaire process which
were chosen through our supplier risk assessment. The
questionnaire contains targeted questions aligned with
Kendrion’s sustainable sourcing objectives and ESG metrics
and is intended to provide greater transparency on suppliers’
sustainability practices. This combined approach allows
Kendrion to assess both its most significant business partners
and those suppliers that may present elevated ESG risks,
thereby supporting more informed decision-making and
ongoing engagement.
In addition to desk-based assessments and supplier
questionnaires, Kendrion conducts on-site CSR supplier audits
as part of its supplier engagement and risk mitigation activities.
The selection of suppliers for these audits is carried out by
internal auditors based on the outcomes of the supplier risk
assessment process, with particular attention given to suppliers
identified as higher risk. These on-site audits are designed to
assess the supplier’s implementation of CSR-related practices,
including compliance with human rights, labour standards,
workplace health and safety, and relevant environmental and
ethical requirements. The audits provide Kendrion with deeper
insight into actual practices at supplier sites and support a
more comprehensive evaluation of suppliers’ CSR
performance. Findings from the audits are used to inform
further engagement with suppliers and, where necessary, to
define follow-up actions aimed at improving compliance and
strengthening responsible sourcing practices.
Certain minerals, including tantalum, tin, tungsten and gold, are
associated with heightened risks related to human rights and
conflict. Although Kendrion does not source these minerals
directly, the Company seeks to mitigate related risks by
requiring suppliers to provide appropriate documentation, such
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Integrated Annual Report 2025
recent years, the annual target for on-site supplier audits will
be reassessed and adjusted in 2026 to 15 to ensure that it
remains appropriate and proportionate to the revised scope
of operations.
Kendrion applies audit-related measures to monitor supplier
adherence to the requirements set out in its Supplier Code of
Conduct. These supplier audits are carried out by trained
internal employees in accordance with an established internal
procedure. As part of the audit process, all audited suppliers
are required to provide relevant corporate responsibility and
management system documentation, to support the
assessment of their social, environmental and ethical practices.
In addition, all suppliers selected for an on-site audit are
required to complete a standardized audit questionnaire.
This approach enables Kendrion to obtain a consistent and
structured assessment of suppliers’ compliance with the
expectations defined in the Supplier Code of Conduct.
During 2025, Kendrion conducted a total of 13 supplier
audits (2024: 16). The lower number of audits compared to
previous years is primarily attributable to our recent
divestments, including the China Divestment. Considering these
structural changes Kendrion intends to reassess the
appropriate scope and number of supplier audits for the future
ensuring continued effectiveness and proportionality of its audit
activities.
In parallel, Kendrion continues to use supplier sustainability
questionnaires as a key monitoring and engagement tool. In
2025, approximately 100 suppliers received the questionnaire,
covering both high-volume suppliers and suppliers identified
through the supplier risk assessment process. At the time of
reporting, responses have been received from approximately
30% of the suppliers contacted. The feedback received to date
indicates that the majority of responding suppliers report
adherence to safe and fair working conditions and confirm that
they have implemented their own supplier codes of conduct,
which are communicated within their respective supply chains.
Kendrion’s target remains to periodically collect sustainability-
related information from its material suppliers to maintain an
up-to-date understanding of supplier practices and to support
continuous improvement. The review of questionnaire
responses is ongoing, and any additional targets or measures
identified based on the outcomes of this process will be
disclosed in future reporting periods.
Through these audit, assessment and monitoring activities,
Kendrion seeks to encourage responsible behavior among its
suppliers and to promote the continuous improvement of social
and ethical standards across its supply chain.
as a conflict minerals reporting template, to demonstrate that
supplied materials are conflict-free. Compliance with these
requirements forms part of the mandatory adherence to
Kendrion’s Supplier Code of Conduct in which provisions aimed
at preventing links to unethical or conflict-related practices are
included.
Through these actions, Kendrion aims to progressively
strengthen responsible sourcing practices, improve the
identification and management of social risks in its supply chain
and contribute to positive social and environmental outcomes,
in line with regulatory expectations and the objectives of our
ESG Program.
At the end of 2025, our employees were invited to select a
project for the company to make a Christmas gift donation. The
projects involved all reflected our values in sustainability, human
right, and global health. One of the pre-selected organizations
is Human Rights Watch. This organization investigates and
reports on human rights violations worldwide, including those
linked to mining practices. In total, an amount of EUR 2,400
was donated to this initiative, based on 16% of participating
employees selecting the initiative.
Metrics & targets
At present, our only quantitative target under ESRS S2 relates
to the number of on-site supplier audits conducted each year.
This target is intended to support the monitoring of supplier
compliance with the Supplier Code of Conduct and to
strengthen oversight of social and environmental practices
within the supply chain. Following divestments completed in
SOCIAL
Reporting criteria number of supplier audits
We report supplier audits carried out by trained internal
employees in accordance with an established internal
procedure.
Where audits identify deviations from the requirements of the
Supplier Code of Conduct, Kendrion engages with the
respective supplier to request the development of a remediation
plan. The implementation of such plans is monitored, and
continued non-compliance may result in further measures,
which may, as last resort, result in the termination of the
business relationship.
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GOVERNANCE
ESRS G1 – Business conduct
essential to safeguarding its financial performance, reputation
and stakeholder trust.
The potential risk related to harassment and discrimination was
reassessed during the DMA refreshment. Based on the
updated materiality thresholds and stakeholder discussions,
this risk is no longer classified as material under ESRS G1 for
the 2025 reporting period. While the topic was discussed
among IRO Stakeholders and remains relevant from a broader
organizational and cultural perspective, it did not meet the
revised criteria for materiality under the CSRD framework.
Kendrion’s approach to business conduct is grounded in the
principle that ethical behavior is fundamental to long-term
success and responsible business practices. The Company
strives to conduct its business with integrity and transparency
and to uphold high standards of ethical conduct across all
activities. Clear guidance is provided to employees on expected
behaviors, and expectations are also communicated to external
stakeholders, including suppliers. Kendrion seeks to foster a
strong corporate culture in which ethical values are embedded
at all levels of the organization and are supported by
appropriate governance structures. The roles and expertise of
the Executive Board, Supervisory Board and Management
Team in relation to compliance and business conduct are
further described in ESRS 2.
Based on the refreshed DMA, Kendrion will continue to report
on Business Conduct as a material topic under ESRS G1, with
a focus on maintaining ethical business behavior and managing
risks related to business ethics and integrity in line with
regulatory expectations and stakeholder interests.
Policies
Corporate values and internal policies
Kendrion’s approach to ethical business conduct is guided by a
comprehensive set of internal policies and procedures that
define expected behavior and provide a framework for
responsible decision-making and ethical behavior. These
policies are designed to ensure compliance with applicable
laws and regulations while fostering a corporate culture in
which integrity and transparency are embedded across all
activities. Key policies include the Code of Conduct, Anti-
Bribery and Anti-Corruption Policy, Speak-Up Policy, Fair
Labour and Human Rights Policy, Competition Compliance
Manual, Insider Trading Code, Data Protection Governance
Guidelines, Personal Data Breach Reporting Procedure and the
Supplier Code of Conduct, among others. Our policies are
made available through various internal and external
communication channels, including our corporate website and
Intranet page.
These policies serve not only to establish clear standards but
also to align Kendrion’s business practices with legal
requirements and internationally recognised ethical principles.
The Code of Conduct forms the foundation of this policy
framework and reflects the values of The Kendrion Way, with
integrity positioned as a core guiding principle. With a
workforce comprising more than 1,269 employees representing
33 nationalities, Kendrion recognises the importance of
maintaining a consistent set of ethical standards that apply
across all locations and cultural contexts.
Impacts, Risks & Opportunities
In 2025, Kendrion carried out a refresh of its double materiality
assessment to ensure that the identification and prioritization of
impacts, risks and opportunities related to business conduct
remain robust, relevant and aligned with the Company’s current
organizational structure and strategic direction. As part of this
process, the IRO Stakeholders and the Materiality Stakeholders
reviewed all previously identified IROs and reassessed their
significance. The assessment was informed by contributions
from internal experts across Kendrion’s business groups as well
as selected external stakeholders. The revised outcome
provides an updated and more accurate reflection of Kendrion’s
business context and forms the basis for the G1 disclosures in
this report.
The refreshed assessment confirmed that Business Conduct
continues to be a material topic for Kendrion. Ethical business
behavior remains identified as an actual positive impact with a
consistently high materiality score, reflecting the Company’s
ongoing commitment to integrity, fairness and transparency
across its operations. This positive impact is considered a core
element of Kendrion’s corporate culture and underpins the way
the Company engages with employees, business partners and
other stakeholders.
The assessment also reconfirmed the potential financial risk
related to corruption and fraud as material, although the overall
materiality score was adjusted compared to the previous
reporting period. This change resulted from the reassessment
by the Materiality Stakeholder group and reflects updated
perceptions of likelihood and financial exposure rather than a
change in the nature of the risk itself. Kendrion continues to
recognise that effective prevention of corruption and fraud is
Impact
+
Ethical business behavior
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Integrated Annual Report 2025
Anti-Bribery and Anti-Corruption Policy
Kendrion maintains a strict zero-tolerance approach to bribery
and corruption. Bribery is understood to include both the
offering, promising or giving of payments or benefits to
improperly influence business decisions, as well as the
acceptance of such advantages. Certain departments within
our organization, such as finance and sales, may be exposed
to higher inherent risks in this area. Kendrion’s Anti-Bribery and
Anti-Corruption Policy sets out clear principles and
requirements aimed at preventing unethical conduct and
safeguarding the integrity of financial reporting and business
transactions. Compliance with this policy is a shared
responsibility, and all employees are expected to act in
accordance with the highest ethical standards in their daily
activities.
Speak-Up Policy
Kendrion fosters an open culture where everybody should feel
safe and comfortable to speak up and raise their concerns. We
encourage our employees who have a concern about a
violation or suspected violations of our Code of Conduct or
related policies to speak up and express their concerns. The
Speak-Up Policy provides guidance on how to raise concerns
and the way in which those concerns are handled. Our
Speak-Up Policy holds a secure and confidential mechanism
for reporting ethical concerns, misconduct or other
irregularities, which may be reported in an anonymous manner.
The policy ensures appropriate protection for individuals who
submit reports in good faith. Kendrion’s Speak-Up Line is
compliant with applicable whistleblowing regulations and is
operated by an independent third party.
Kendrion Policies
Code of Conduct
Anti-Bribery and Anti-Corruption Policy
Speak-up Policy
Fair Labour and Human Rights Policy
Supplier Code of Conduct
Diversity Policy
The Speak-Up Line is available 24/7 via telephone and web-
based reporting channels and can be accessed in multiple
languages and is also accessible to external stakeholders.
Information about the Speak-Up Policy and how to contact the
Speak-Up Line is published on our corporate website to ensure
transparency and accessibility.
Responsible tax practices
Kendrion’s approach to taxation is aligned with the ethical
principles set out in its Code of Conduct and reflects the
Company’s commitment to responsible business conduct.
Kendrion reports taxable profits in the jurisdictions in which
value is created and complies with applicable local tax laws and
international standards, including the OECD Guidelines for
Multinational Enterprises. The Company does not engage in
aggressive tax planning or establish entities in tax haven
jurisdictions for the sole purpose of tax optimization.
Transparency and compliance form the basis of Kendrion’s tax
strategy, which is aligned with its broader sustainability and
governance objectives. Further information on Kendrion’s tax
policy is provided in the Corporate Governance Report on
page 38.
Leadership and accountability
Senior management plays a pivotal role in promoting ethical
behavior and ensuring adherence to the principles and
standards set out in Kendrion’s policies. We aim to hold
ourselves accountable to the highest standards of integrity and
strive to apply these principles consistently across all our
operations. Through this approach, Kendrion aims to maintain
the trust of its employees, customers, shareholders and other
stakeholders.
Actions
Kendrion continues to support ethical business conduct
through a combination of training, awareness-raising and
structured monitoring activities. The Code of Conduct remains
a key element of Kendrion’s governance framework and is
integrated into the onboarding process in all entities, where
employees are required to acknowledge and comply with its
principles. In addition to formal onboarding processes,
Kendrion reinforced awareness of the Code of Conduct in 2025
by sharing targeted communications through internal channels,
with the objective of keeping ethical expectations visible and up
to date across the organization.
In 2025 we enrolled an anti-bribery and anti-corruption training
for all our indirect employees, a total number of 816 employees,
including our senior management. At the end of 2025 around
41% of the targeted employee population had completed the
training. No dedicated human rights training sessions were
conducted during the reporting period, as such training is not
scheduled on an annual basis. Kendrion reassesses the scope
and timing of future human rights-related training on a recurring
basis.
To promote compliance with ethical standards, Kendrion
maintains a structured monitoring and accountability
framework. Adherence to the Code of Conduct and related
internal policies is reviewed through regular internal reporting
processes, which are discussed with senior management to
identify potential gaps and areas for improvement and to
support the consistent application of ethical principles across
the organization.
Oversight of Kendrion’s compliance framework is provided by
the Compliance Committee, which meets on a quarterly basis
or more frequently if required. The Compliance Committee is
composed of the Chief Financial Officer, the General Counsel,
who acts as Compliance Officer, and our Group Corporate
GOVERNANCE
97
Integrated Annual Report 2025
Controller. The Compliance Committee is responsible for setting
compliance priorities, monitoring their implementation and
reviewing reports raised through the Speak-Up Policy to ensure
that they are addressed appropriately and in a timely manner. In
cases where a reported concern involves a member of the
Executive Board or the Compliance Committee, the Audit
Committee is engaged to ensure an independent and impartial
review.
Through these actions, Kendrion aims to maintain a strong
culture of integrity, reinforce ethical awareness among
employees and ensure effective oversight of business conduct
in line with regulatory requirements and stakeholder
expectations.
Metrics & targets
At this stage, Kendrion has not defined specific quantitative
targets under ESRS G1 – Business Conduct. The Company
continues to focus on maintaining effective policies, controls
and reporting mechanisms to support ethical behavior and
compliance across its operations and will reassess the
appropriateness of setting targets as part of future reporting
cycles.
During the 2025 reporting period, Kendrion continued to
monitor and assess reports submitted through its Speak-Up
Line as part of its governance and compliance framework. In
2025, a total of 4 reports were received via the Speak-Up Line,
representing an increase compared to two reports submitted in
2024. All reports received were reviewed by the Compliance
Committee in accordance with established internal procedures,
and appropriate actions were taken where deemed necessary.
Apart from the 4 cases reported under the Speak-Up Policy, no
additional incidents were identified, and no further complaints
relating to business conduct were filed during the reporting
period. Kendrion considers the Speak-Up mechanism an
important element of its ethical governance system, providing
employees and external stakeholders with a secure and
confidential channel to raise concerns related to misconduct or
potential violations of company policies.
GOVERNANCE
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Integrated Annual Report 2025
Reference Table
ESRS Description Disclosure Requirement Reference chapter in annual report Pages
ESRS 2 - GENERAL DISCLOSURES
BP-1 General basis for preparation of sustainability statements General -> ESRS 2 General disclosure requirements -> General basis for
preparation
44 - 47
BP-2 Disclosures in relation to specific circumstances General -> ESRS 2 General disclosure requirements -> General basis for
preparation
44 - 47
GOV-1 The role of the administrative, management and
supervisory bodies
Members of the Supervisory Board; Corporate Governance Report; General ->
ESRS 2 General disclo-sure requirements -> General basis for preparation
103 - 104; 44 - 47
GOV-2 Information provided to and sustainability matters
addressed by the undertaking’s administrative,
management and supervisory bodies
General -> ESRS 2 General disclosure requirements -> General basis for
preparation
44 - 47
GOV-3 Integration of sustainability-related performance in incentive
schemes
Remuneration Report 109 - 124
GOV-4 Statement on due diligence General -> ESRS 2 General disclosure requirements -> General basis for
preparation
44 - 47
GOV-5 Risk management and internal controls over sustainability
reporting
Risk Management; General -> ESRS 2 General disclosure requirements ->
General basis for preparation
31 - 37; 44 - 47
SBM-1 Strategy, business model and value chain Business Groups; General -> ESRS 2 General disclosure requirements ->
Strategy and ESG Program
13 - 24; 47 - 48
SBM-2 Interests and views of stakeholders General -> ESRS 2 General disclosure requirements -> Value Chain Overview 57
SBM-3 Material impacts, risks and opportunities and their
interaction with strategy and business model
General -> ESRS 2 General disclosure requirements -> Stakeholder engagement 58 - 59
IRO-1 Description of the process to identify and assess material
impacts, risks and opportunities
General -> ESRS 2 General disclosure requirements -> Impact, Risks and
Opportunities
52 - 56
IRO-2 Disclosure requirements in ESRS covered by the
undertaking’s sustainability statement
General -> ESRS 2 General disclosure requirements -> Double materiality
assessment
48 - 51
MDR-P Policies adopted to manage material sustainability matters Reference table 98 - 101
MDR-A Actions and resources in relation to material sustainability
matters
Environment -> ESRS E1 – Climate Change -> Actions; Environment -> ESRS
E2 – Pollution -> Actions; ESRS E5 – Resource use & circular economy ->
Actions; Social -> ESRS S1 – Own workforce -> Actions; Social -> ESRS S2 –
Workers in the value chain -> Actions; Governance -> ESRS G1 – Business
conduct -> Actions
68 - 69; 78; 80 - 81; 84 - 87; 93 - 94; 96 - 97
MDR-M Metrics in relation to material sustainability matters Environment -> ESRS E1 – Climate Change -> Metrics & targets; Environment
-> ESRS E2 – Pollution -> Metrics & targets; ESRS E5 – Resource use & circular
economy -> Metrics & targets; Social -> ESRS S1 – Own workforce -> Metrics &
targets; Social -> ESRS S2 – Workers in the value chain -> Metrics & targets;
Governance -> ESRS G1 – Business conduct -> Metrics & targets
69 - 74; 78 - 79; 81 - 82; 87 - 91; 94; 97
MDR-T Tracking effectiveness of policies and actions through
targets
Environment -> ESRS E1 – Climate Change -> Actions; Environment -> ESRS
E2 – Pollution -> Actions; ESRS E5 – Resource use & circular economy ->
Actions; Social -> ESRS S1 – Own workforce -> Actions; Social -> ESRS S2 –
Workers in the value chain -> Actions; Governance -> ESRS G1 – Business
conduct -> Actions
68 - 69; 78; 80 - 81; 84 - 87; 93 - 94; 96 - 97
GOVERNANCE
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Integrated Annual Report 2025
ESRS Description Disclosure Requirement Reference chapter in annual report Pages
E1 - CLIMATE CHANGE
ESRS 2 GOV-3 Integration of sustainability-related performance in incentive
schemes
Remuneration Report 109 - 124
E1-1 Transition plan for climate change mitigation Environment -> ESRS E1 – Climate Change -> Actions 68 - 69
ESRS 2 SBM-3 Material impacts, risks and opportunities and their
interaction with strategy and business model
Environment -> ESRS E1 – Climate Change -> Impacts, Risks and Opportunities 67 - 68
ESRS 2 IRO-1 Description of the processes to identify and assess material
climate-related impacts, risks and opportunities
General -> ESRS 2 General disclosure requirements -> Double materiality
assessment; Environment -> ESRS E1 – Climate Change -> Impacts, Risks and
Opportunities
48 - 58; 67 - 68
E1-2 Policies related to climate change mitigation and
adaptation
Environment -> ESRS E1 – Climate Change -> Policies 68
E1-3 Actions and resources in relation to climate change policies Environment -> ESRS E1 – Climate Change -> Actions 68 - 69
E1-4 Targets related to climate change mitigation and adaptation Environment -> ESRS E1 – Climate Change -> Metrics & targets 69 - 74
E1-5 Energy consumption and mix Environment -> ESRS E1 – Climate Change -> Metrics & targets 69 - 74
E1-6 Gross Scopes 1, 2, 3 and Total GHG emissions Environment -> ESRS E1 – Climate Change -> Metrics & targets 69 - 74
E1-7 GHG removals and GHG mitigation projects financed
through carbon credits
Not applicable -
E1-8 Internal carbon pricing Not applicable -
E1-9 Anticipated financial effects from material physical and
transition risks and potential climate-related opportunities
Not applicable -
E2 - POLLUTION
ESRS 2 IRO-1 Description of the processes to identify and assess material
pollution-related impacts, risks and opportunities
General -> ESRS 2 General disclosure requirements -> Double materiality
assessment; Environment -> ESRS E2 – Pollution -> Impacts, Risks and
Opportunities
48 - 58; 77
E2-1 Policies related to pollution Environment -> ESRS E2 – Pollution -> Policies 77
E2-2 Actions and resources related to pollution Environment -> ESRS E2 – Pollution -> Actions 78
E2-3 Targets related to pollution Environment -> ESRS E2 – Pollution -> Metrics & targets 78 - 79
E2-4 Pollution of air, water and soil Environment -> ESRS E2 – Pollution -> Actions 78
E2-5 Substances of concern and substances of very high
concern
Environment -> ESRS E2 – Pollution -> Metrics & targets 78 - 79
E2-6 Anticipated financial effects from pollution-related impacts,
risks and opportunities
Environment -> ESRS E2 – Pollution -> Metrics & targets 78 - 79
GOVERNANCE
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Integrated Annual Report 2025
ESRS Description Disclosure Requirement Reference chapter in annual report Pages
E5 - RESOURCE USE AND CIRCULAR ECONOMY
ESRS 2 IRO-1 Description of the processes to identify and assess material
resource use and circular economy-related impacts, risks
and opportunities
Environment -> ESRS E5 – Resource use & circular economy -> Impacts, Risks
& Opportunities
80
E5-1 Policies related to resource use and circular economy Environment -> ESRS E5 – Resource use & circular economy -> Policies 80
E5-2 Actions and resources related to resource use and circular
economy
Environment -> ESRS E5 – Resource use & circular economy -> Actions 80 - 81
E5-3 Targets related to resource use and circular economy Environment -> ESRS E5 – Resource use & circular economy -> Metrics &
targets
81 - 82
E5-4 Resource inflows Environment -> ESRS E5 – Resource use & circular economy -> Metrics &
targets
81 - 82
E5-5 Resource outflows Environment -> ESRS E5 – Resource use & circular economy -> Metrics &
targets
81 - 82
E5-6 Anticipated financial effects from resource use and circular
economy-related impacts, risks and opportunities
Environment -> ESRS E5 – Resource use & circular economy -> Impacts, Risks
& Opportunities
80
S1 - OWN WORKFORCE
ESRS 2 SBM-2 Interests and views of stakeholders General -> ESRS 2 General disclosure requirements -> Stakeholder engagement 58 - 59
ESRS 2 SBM-3 Material impacts, risks and opportunities and their
interaction with strategy and business model
Social -> ESRS S1 – Own workforce -> Impacts, Risks & Opportunities 83
S1-1 Policies related to own workforce Social -> ESRS S1 – Own workforce -> Policies 83 - 84
S1-2 Processes for engaging with own workforce and workers’
representatives about impacts
Social -> ESRS S1 – Own workforce -> Actions 84 - 87
S1-3 Processes to remediate negative impacts and channels for
own workforce to raise concerns
Social -> ESRS S1 – Own workforce -> Actions 84 - 87
S1-4 Taking action on material impacts on own workforce, and
approaches to managing material risks and pursuing
material opportunities related to own workforce, and
effectiveness of those actions
Social -> ESRS S1 – Own workforce -> Actions 84 - 87
S1-5 Targets related to managing material negative impacts,
advancing positive impacts, and managing material risks
and opportunities
Social -> ESRS S1 – Own workforce -> Metrics & targets 87 - 91
S1-6 Characteristics of the undertaking’s employees Social -> ESRS S1 – Own workforce -> Metrics & targets 87 - 91
S1-7 Characteristics of non-employees in the undertaking’s own
workforce
Social -> ESRS S1 – Own workforce -> Metrics & targets 87 - 91
S1-8 Collective bargaining coverage and social dialogue Social -> ESRS S1 – Own workforce -> Metrics & targets 87 - 91
S1-9 Diversity metrics Social -> ESRS S1 – Own workforce -> Metrics & targets 87 - 91
S1-10 Adequate wages Social -> ESRS S1 – Own workforce -> Metrics & targets 87 - 91
S1-12 Persons with disabilities Social -> ESRS S1 – Own workforce -> Metrics & targets 87 - 91
S1-14 Health and safety metrics Social -> ESRS S1 – Own workforce -> Metrics & targets 87 - 91
S1-15 Work-life balance metrics Social -> ESRS S1 – Own workforce -> Metrics & targets 87 - 91
S1-16 Remuneration metrics (pay gap and total remuneration) Social -> ESRS S1 – Own workforce -> Metrics & targets 87 - 91
S1-17 Incidents, complaints and severe human rights impacts Social -> ESRS S1 – Own workforce -> Metrics & targets 87 - 91
GOVERNANCE
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Integrated Annual Report 2025
ESRS Description Disclosure Requirement Reference chapter in annual report Pages
S2 - WORKERS IN THE VALUE CHAIN
ESRS 2 SBM-2 Interests and views of stakeholders General -> ESRS 2 General disclosure requirements -> Stakeholder engagement 58 - 59
ESRS 2 SBM-
3
Material impacts, risks and opportunities and their
interaction with strategy and business model
Social -> ESRS S2 – Workers in the value chain -> Impacts, Risks &
Opportunities
92
S2-1 Policies related to value chain workers Social -> ESRS S2 – Workers in the value chain -> Policies 92 - 93
S2-2 Processes for engaging with value chain workers about
impacts
Social -> ESRS S2 – Workers in the value chain -> Actions 93 - 94
S2-3 Processes to remediate negative impacts and channels for
value chain workers to raise concerns
Social -> ESRS S2 – Workers in the value chain -> Actions 93 - 94
S2-4 Taking actions on material impacts on value chain workers,
and approaches to managing materials risks and pursuing
material opportunities related to value chain workers, and
effectiveness of those action
Social -> ESRS S2 – Workers in the value chain -> Actions 93 - 94
S2-5 Targets related to managing material negative impacts,
advancing positive impacts, and managing material risks
and opportunities
Social -> ESRS S2 – Workers in the value chain -> Metrics & targets 94
G1 - BUSINESS CONDUCT
ESRS 2 GOV-1 The role of the administrative, supervisory and
management bodies
General -> ESRS 2 General disclosure requirements -> General basis for
preparation
44 - 47
ESRS 2 IRO-1 Description of the processes to identify and assess material
impacts, risks and opportunities
General -> ESRS 2 General disclosure requirements -> Double materiality
assessment; Governance -> ESRS G1 – Business conduct -> Impacts, Risks &
Opportunities
48 - 51; 95
G1-1 Business conduct policies and corporate culture Governance -> ESRS G1 – Business conduct -> Policies 95 - 96
G1-3 Prevention and detection of corruption and bribery Governance -> ESRS G1 – Business conduct -> Actions 96 - 97
G1-4 Incidents of corruption or bribery Governance -> ESRS G1 – Business conduct -> Metrics & targets 97
GOVERNANCE
Looking back on the past year, I am proud to reflect on the
extraordinary transformation Kendrion has accomplished.
Undertaken in a period of global uncertainty, this strategic pivot
required vision, courage, and disciplined execution. The results
are clear: Kendrion is now a leaner, stronger, and focused
industrial company with a solid financial foundation.
The decision to pivot was taken after a comprehensive
strategic analysis of the automotive market, with close
involvement and support of the Supervisory Board. In the
Kendrion 2025: fully positioned for sustainable growth
achievement originally expected only in 2026. The much-
improved balance sheet and healthy cash flow have enabled
both a EUR 1.00 per share special dividend and a share
buyback program of up to EUR 10 million – clear evidence
of the company’s financial stability and its ability to create
shareholder value.
A transformation supported at every step
This strategic shift required exceptional commitment across the
organization. The Supervisory Board has been closely involved
throughout, providing oversight and guidance during each
phase of the transition. With strong positions in competitive
niche markets and deep technical expertise, we have full
confidence in Kendrion’s ability to deliver sustainable, profitable
growth as a focused industrial company.
Looking ahead
Kendrion enters 2026 in a significantly improved position:
leaner, more resilient, and fully aligned with markets offering
long-term potential.
On behalf of the Supervisory Board, I extend my sincere thanks
and congratulations to everyone at Kendrion. Your
commitment, professionalism, and trust in the strategy have
made this transformation possible. We now look ahead with
confidence.
Frits van Hout, Chairman of the Supervisory Board
capital-intensive and highly competitive automotive sector,
opportunities to deliver long-term shareholder value were
limited. By directing the company fully toward industrial
markets – where Kendrion holds meaningful market positions
across more than 30 sectors – we have aligned the business
with areas of greater stability, clearer visibility, and stronger
value creation.
Completing a multi-year transformation
In 2025, three major steps brought this long-term strategic shift
to completion: the sale of the European and USA automotive
operations to Solero Technologies, the sale of our China-based
business to local management, and a long-term cooperation
with Knorr-Bremse for our Sibiu mobility electronics operations.
Transitioning to a purely industrial company also enabled
Kendrion to simplify its infrastructure. The operational
improvements completed in 2025 – including a streamlined
corporate office, and related cost efficiencies – have resulted in
a more focused, agile organization with significantly reduced
complexity.
What stands out to me is how the entire organization embraced
this change. The willingness to move forward with trust,
confidence, and a shared sense of purpose has been pivotal in
making this transformation a success.
Financial resilience and shareholder value
The early financial results reinforce the strength of this strategy.
normalized EBITDA
1
over 2025 reached 15.5%, an
1
Non-IFRS financial measure. For the definition and reconciliation of the most directly comparable IFRS measures, refer to reconciliation of non-IFRS financial measures, starting on page 219.
102
Integrated Annual Report 2025PREFACE OF THE SUPERVISORY BOARD
F.J. (Frits) van Hout, male, 1960
Chairman /Member HR Committee
E.H. (Everien) Slijkhuis, female, 1968
Chair Audit Committee
Nationality Dutch Dutch
International expertise Yes Yes
Date of first appointment 12 April 2021 17 April 2023
Term of office 2025-2029 (second term) 2023-2027 (first term)
Current number of SB positions 7 2
Shares in Kendrion 26,500 3,500
Professional experience Semiconductors Finance/ IT, Industry
Other positions
Former positions
Member of the Investment Committee of the DeepTech Fonds (Dutch
Ministry of Economic Affairs and InvestNL); Vice-Chairman of the
Supervisory Board, Aixtron SE; Member of the Supervisory Board,
Bambi Belt Holding B.V.; Member of the Supervisory Board, Stichting
PhotonDelta; Member of the Supervisory Board, Smart Photonics
B.V.; Member of the Technical Advisory Board, BE Semi-conductors
Industries N.V.; Member of the Supervisory Board, Picterus AS
Executive Vice President and Member of the Board of Management,
ASML Holding N.V.; Other various functions, ASML; CEO, Beyeler
Blechbearbeitungsmaschinen GmbH; Chief Technology Officer,
Datacolor AG; Member of the Board of Management of Stichting
Continuïteit BESI
Co-CEO & CFO, Hydratec Industries N.V.; Member of the Supervisory
Board and member of the Audit Committee, Deventer Ziekenhuis
CFO Veco B.V.; Interim & Project Manager Finance & IT; Senior
Management function Aviko; Consultant Eiffel; Auditor Deloitte
103
Integrated Annual Report 2025MEMBERS OF THE SUPERVISORY BOARD
M.H.C. (Mirjam) Baijens, female, 1969
Chair HR Committee
E.M. (Erwin) Doll, male, 1959
Vice-Chairman/ Member Audit Committee
Nationality Dutch German
International expertise Yes Yes
Date of first appointment 15 April 2024 24 June 2020
Term of office 2024-2028 (first term) 2024-2028 (second term)
Current number of SB positions 1 2
Shares in Kendrion No No
Professional experience Human resources, Sales excellence & Sales development,
Leadership & Executive Development, Conference management
Automotive, plastics, industrial, medical, chemical
Other positions
Former positions
Member of the MSC in Management Practitioner Advisory Board at
Cranfield School of Management
Executive Vice President and Chief Human Resources Officer,
Grundfos Group; Global Head of Talent & Development, Schindler
Group; Head of Human Resources Europe North & East (EUN),
Schindler Group; Vice President Human Resources &
Communications, Amcor Flexibles Europe & Americas; Human
Resources Director, Masco Europe; Global Human Resources
Director Sales&Marketing, Hewlett Packard
Vice-chairrman of Supervisory Board, WITTE Automotive GmbH
Vice-Chairman of the Executive Board, Röchling Group; President & CEO,
Röchling Automotive SE; EVP, Plastic Omnium Auto Exterior; Managing
Director, Plastic Omnium GmbH; General Manager, Johnson Controls
GmbH; Business Manager, BASF SE; Non-Executive Director, Aeristech
Ltd.
104
Integrated Annual Report 2025
MEMBERS OF THE SUPERVISORY BOARD
The Supervisory Board provides oversight, evaluates progress
and performance, maintains a sound and transparent system of
checks and balances, and advises the Executive Board where
appropriate.
This Report of the Supervisory Board describes how the
Supervisory Board fulfilled its duties and responsibilities
in 2025.
Performance in 2025
2025 was a defining year as Kendrion transformed into a pure-
play industrial company. A transformation that positions the
company strongly for the future. Following a thorough strategic
review, and with the close involvement of the Supervisory
Board, Kendrion made the pivotal decision to step away from
the automotive sector and focus entirely on industrial markets,
where its strengths and long-term opportunities lie.
The automotive operations in Europe and the United States
were sold to Solero, the China-based business transitioned to
local management, and the company entered into a long-term
cooperation with Knorr-Bremse for its Sibiu mobility electronics
operations. These steps enabled Kendrion to simplify its
structure, reduce complexity, and create a leaner and more
agile organization ready to grow.
What made 2025 exceptional is that this strategic
transformation was matched by strong financial performance.
The company reported a normalized EBITDA margin of
15.5%—a target originally set for 2026. The strengthened
balance sheet and improved cash flow enabled a EUR 1.00 per
share special dividend and a share buyback program of up to
EUR 10 million, reflecting Kendrion’s confidence and delivering
tangible value to our shareholders.
As Kendrion enters 2026, the company stands as a focused
industrial company—stronger, more resilient, and primarly
aligned with markets offering stability and long-term potential.
Focus points in 2025
In coordination with the Executive Board, the Supervisory
Board identified several focus areas for 2025, placing particular
emphasis on the following four:
Execution of divestment of Automotive Core activities
As indicated above, Kendrion completed three defining steps in
its multi-year strategic transformation in 2025. First, the
company finalized the sale of its European and USA-based
automotive electromechanical business to Solero Technologies,
with the receipt of the final payment of EUR 8.6 million on 10
March 2025. This was followed by the divestment of our China-
based business to local management, completed on 23
October 2025, at an enterprise value of EUR 70 million. Finally,
as announced on 29 September 2025, the company entered
into a long term cooperation with Knorr-Bremse for its Sibiu
mobility electronics operations. This cooperation includes
approximately EUR 7 million in value transfer through milestone
payments and shared costs and provides a structured, phased
transfer of production capacity, ultimately leading to Knorr-
Bremse’s ownership of the facility. This approach secures
continuity, jobs, and strong cash generation throughout the
transition, while substantially reducing the risk of having to write
down assets.
Improving the operational performance of the two Business
Groups
In parallel with these strategic steps, the company streamlined
its organizational structure, reducing overhead to reflect the
smaller and more focused company following the divestments.
At the same time, management implemented a comprehensive
program to improve the added value margin across all business
units, supported by disciplined execution and clear
accountability. These initiatives strengthened the company’s
operational foundation and contributed directly to the strong
financial performance we delivered in 2025, resulting in
improved profitability, stronger cash generation, and a more
resilient cost base that positions Kendrion for sustainable
performance in the years ahead.
Optimizing Kendrion’s CSRD reporting and disclosures
Optimizing the CSRD disclosure gap in 2025 proved
challenging due to continued uncertainty regarding thresholds,
requirements and implementation timelines at both the
European and Dutch levels. Nevertheless, compared to 2024
reporting, the company further strengthened its sustainability
reporting and improved both the quality of its disclosures
and the underlying data collection processes, as detailed on
page 43 of this report.
The Supervisory Board commends and supports the
company’s strong commitment to ESG principles and
expresses its gratitude for the extensive efforts made to meet
the CSRD's sustainability reporting requirements for this year.
105
Integrated Annual Report 2025REPORT OF THE SUPERVISORY BOARD
Focus points for 2026
The Supervisory Board has identified the following attention
points for 2026:
■ Develop and implement a plan to improve R&D
effectiveness within Kendrion, with an explicit focus on
motion technology and control;
■ Finalize the implementation of the new, off-the-shelf and
cloud-based IT system;
■ Plan and implement a CO
2
e reduction roadmap, outlining
the actions required to achieve the re-presented reduction
target by the end of 2028;
■ Develop and implement a plan to strengthen Kendrion’s
diversity and inclusion initiatives.
Meetings and attendance
The Supervisory Board conducted eight regularly scheduled
meetings and three extraordinary sessions throughout 2025, for
a total of eleven sessions.
The regularly scheduled Supervisory Board meetings were
attended by the Executive Board, and, on occasion, by
members of the Management Team. In addition, pre-scheduled
meetings without the Executive Board and Management Team
were held before each regular Supervisory Board meeting. The
attendance rate for all eleven Supervisory Board meetings in
2025 was 95% (2024: 98%). Mrs. Baijens was unable to attend
two of the eleven meetings.
The Chairman of the Supervisory Board and the Chair of the
Audit Committee also held monthly meetings with the CEO and
CFO, respectively. The Supervisory Board emphasized direct
interaction with the Management Team and other senior
management, including presentations in the areas of
REPORT OF THE SUPERVISORY BOARD
responsibility and one-on-one meetings between the Chairman
and members of the Management Team.
The agenda for Supervisory Board meetings covered the focus
points outlined above, along with recurring topics routinely
addressed each year. These included discussions on
operational and financial performance, progress in the strategic
plan, principal risks associated with operations, milestone
achievements in special projects, fraud and risk management,
the internal control system, governance and compliance
matters, sustainability, and matters related to the General
Meeting of Shareholders.
Evaluation
As is customary, the Supervisory Board gave due consideration
to ongoing training on governance and compliance matters.
Each year, a comprehensive self-assessment is conducted,
covering the performance of the Supervisory Board as a whole,
its committees, and individual members. During a meeting held
without the presence of the Executive Board, the Supervisory
Board critically assessed its own performance, including
aspects such as team dynamics, competencies, and market
knowledge. In addition, a self-assessment questionnaire was
completed by both Supervisory Board and Executive Board
members. This questionnaire covered various aspects,
including the composition and expertise of the Supervisory
Board, the dynamics and functionality of both the Supervisory
Board and its committees, the performance of individual
Supervisory Board members, the interaction between the
Supervisory Board and the Executive Board, and the fulfilment
of the Supervisory Board’s tasks and responsibilities.
The outcomes of the evaluation confirm a positive and
constructive relationship between the Supervisory Board and
the Executive Board. The Supervisory Board operates with a
strong sense of responsibility, dedication, expertise, and
commitment. There is clear awareness of the respective roles
and responsibilities of the Supervisory Board and the Executive
Board, and these distinctions are duly observed.
During meetings held without the presence of the Executive
Board, the Supervisory Board also evaluated the performance
of the Executive Board members. Together with the CEO and
CFO, the Supervisory Board reflected on performance metrics
for the preceding year, strategic and operational priorities for
2025 and beyond, and relevant personal development topics.
Composition
The Supervisory Board consists of four members: Frits van
Hout (Chairman), Everien Slijkhuis (Chair of the Audit
Committee), Mirjam Baijens (Chair of the HR Committee) and
Erwin Doll (Vice-Chairman). All members of the Supervisory
Board are independent within the meaning of the Dutch
Corporate Governance Code.
The composition of the Supervisory Board is designed to
ensure that its members can act critically and independently,
free from influence by one another, the Executive Board, the
Management Team, or any other specific interests. Each
member has the required expertise, experience, and
background to fulfill their role. The Supervisory Board reflects a
balanced gender profile, consisting of two men and two
women.
The members of the Supervisory Board comply with the
statutory requirements regarding the maximum number of
supervisory or non-executive positions they may hold at large
enterprises.
106
Integrated Annual Report 2025
The composition of the Supervisory Board is in line with the
Profile for the Supervisory Board as established by the
Supervisory Board, as well as the diversity objectives set out in
the company’s Diversity Policy. Both the Profile and the
Diversity Policy are available on the corporate website at
www.kendrion.com.
Committees of the Supervisory Board
The Supervisory Board has established two committees: the
Audit Committee and the HR Committee. The primary task of
these committees is to advise and support the Supervisory
Board in fulfilling its responsibilities and to prepare decision-
making by the Supervisory Board. Each committee has its own
regulations, including a detailed description of its tasks and
responsibilities.
Audit Committee
The Audit Committee uses its knowledge and expertise to
advise and support the Supervisory Board’s decision-making,
particularly on matters relating to Kendrion’s financing, financial
statements, the integrity and quality of financial and non-
financial reporting, IT and information security, the effectiveness
of risk management and internal controls, and the design and
operation of the internal audit function and internal audit
program.
The Audit Committee consists of Everien Slijkhuis (Chair) and
Erwin Doll.
The Audit Committee held four meetings in 2025. Attendance
during 2025 was 100% (2024: 100%). The CFO and the
General Counsel attended all meetings.
REPORT OF THE SUPERVISORY BOARD
The external auditor, Forvis Mazars Accountants N.V., attended
the meetings of the Audit Committee during which the full-year
financial statements for 2025, the half-year financial statements
for 2025, and the management letter were discussed. The
Chair of the Audit Committee also met with the external auditor
without the CFO being present.
The Audit Committee monitored and reviewed recurring topics
including the quarterly financial results, the half-year and full-
year financial statements, the auditor’s report, the risk
management framework and internal control system, the
internal audit plan and key findings from internal audits
performed, the external audit plan and management letter,
transfer pricing, tax policy, treasury policy, the group insurance
program, the speak-up procedure, legal and compliance, the
annual evaluation of the external auditor and the annual
evaluation of the activities of the internal audit department,
which is managed by our finance function.
Supported by regular updates from management, the Audit
Committee also remained informed about relevant ESG
developments, including (potential changes to) CSRD legislation
and its implications for the company.
Regular updates were provided on the design, operation and
effectiveness of the risk management framework and internal
control systems in relation to strategic, operational, financial,
tax and compliance matters. Kendrion applies a structured and
systematic approach, supported by a robust risk management
framework and the internal audit program.
With reference to 1.3.6 of the Code, we believe that there is
currently no need to recommend the installation of a dedicated
internal audit function. Considering our company's size and
operational structure, we have determined that the
responsibilities typically assigned to an internal audit
department are effectively managed by our finance function.
This approach ensures robust internal controls and risk
management without the need for a separate internal audit
department. We will continue to assess this decision annually to
ensure it remains appropriate for our governance needs.
Kendrion monitors its internal controls through a systematic
approach, which is supported by a solid risk management
framework and the internal audit program. The effectiveness
of internal and external audit processes are assessed through
a qualitative rating system, evaluating key factors such as
technical skills, experience, communication, quality of findings,
availability of resources, and overall audit performance.
The Audit Committee also discussed insurance, tax and
treasury matters, including Kendrion’s policies relating to
transfer pricing. With respect to tax, the Audit Committee also
monitored and discussed the status of pending tax audits.
In addition to the above, the Audit Committee held a
comprehensive session on information security and information
security management.
At the General Meeting of Shareholders held on 14 April 2024,
Mazars Holding N.V. was appointed as the new external auditor
for a three-year term. Throughout 2025, the Audit Committee
engaged with the external auditor, overseeing its performance
and monitored the effectiveness of the external audit process.
The Audit Committee also reviewed and approved the 2025
external audit plan, including its scope and materiality
thresholds. Discussions were held regarding the findings
outlined in the auditor's management letter, and appropriate
actions were taken to address the auditor's recommendations
and observations.
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Integrated Annual Report 2025
HR Committee
The HR Committee consists of Mirjam Baijens (Chair) and Frits
van Hout. The Committee held two meetings, with an
attendance rate of 100% (2024: 100%). The CEO and the
General Counsel attended both meetings.
Succession planning
At its meetings, the HR Committee regularly reviews the
composition of the company's organization, with particular
attention to succession planning. Following the HR
Committee's recommendation, the Supervisory Board
proposed the reappointment of Mr. Van Hout as member of the
Supervisory Board. Mr. Van Hout did not participate in the
deliberations or decision-making regarding his proposed
reappointment to avoid any potential conflict of interest. Mr. Van
Hout was subsequently reappointed as a member of the
Supervisory Board by the company’s shareholders at the
Annual General Meeting of Shareholders on 14 April 2025.
Performance management and remuneration of the
Executive Board
The HR Committee considered and prepared the performance
reviews of Executive Board members for discussion by
the Supervisory Board. The outcome of these reviews was
discussed in a meeting of the Supervisory Board without
the Executive Board present.
The HR Committee also defined the financial and non-financial
performance criteria for the short-term and long-term variable
remuneration of the Executive Board and monitored progress
against these criteria.
Additionally, the Executive Board provided the HR Committee
with information on the main components of the remuneration
structure for members of the Management Team who are not
on the Executive Board. The variable remuneration of the
REPORT OF THE SUPERVISORY BOARD
Management Team is aligned with the structure of the
Executive Board’s variable remuneration.
Financial statements and auditor’s opinion
The 2025 financial statements included in this Integrated
Annual Report have been audited, and Forvis Mazars
Accountants N.V. has issued an unqualified opinion. These
statements were discussed with the Supervisory Board and the
Audit Committee in the presence of the external auditor and the
Executive Board.
The Supervisory Board is of the opinion that the 2025 financial
statements meet all requirements for transparency and
correctness. Therefore, the Supervisory Board recommends
that the General Meeting of Shareholders, to be held on
13 April 2026, adopt the 2025 financial statements and the
proposed appropriation of net income.
This Integrated Annual Report furthermore contains a limited
assurance report from Forvis Mazars N.V. on selected
sustainability performance targets
Profit appropriation
Kendrion realized a net profit of EUR 19.5 million in 2025
(2024: a loss of EUR 4.5 million). Normalized net profit before
amortization
1
of intangibles amounted to EUR 17.9 million
(2024: EUR 11.8 million).
The Supervisory Board approved the Executive Board‘s
proposal to pay out 61% of normalized net profit before
amortization as dividend (2024: 59%), in line with the dividend
policy of the company.
The members of the Supervisory Board have signed the 2025
financial statements to comply with their statutory obligation
pursuant to article 2:101, paragraph 2, of the Dutch Civil Code.
Concluding remarks
The financial year 2025 was marked by the completion of
Kendrion’s strategic reorientation and its positioning as a pure-
play industrial company, driven primarily by the execution of
various projects related to the divestment of our automotive
activities. Despite persistently challenging market conditions,
the company delivered solid financial performance and
improved its financial position. The Supervisory Board wishes to
express sincere appreciation to the Executive Board, the
Management Team, and all employees of Kendrion for their
continued flexibility, dedication and commitment throughout
another demanding year. Gratitude is also extended to
shareholders for their ongoing trust and support. Looking
ahead with confidence, the Supervisory Board believes that
Kendrion is well-positioned for growth and sustained long-term
profitability.
Supervisory Board
Frits van Hout, Chairman
Mirjam Baijens
Erwin Doll
Everien Slijkhuis
27 February 2026
1
Non-IFRS financial measure. For the definition and reconciliation of the most directly comparable IFRS measures, refer to Reconciliation of Non-IFRS information, starting on page 219.
108
Integrated Annual Report 2025
REMUNERATION REPORT
Introduction
This Remuneration Report describes the application of the
Remuneration Policy for the Executive Board and the actual
performance in 2025 against the predefined performance
criteria. In addition, the Remuneration report provides an
overview of the remuneration of the Supervisory Board in 2025.
Performance in 2025
In 2025, Kendrion underwent a significant transformation,
marking a pivotal chapter in the company’s history. Following an
in-depth strategic review conducted with the close involvement
of the Supervisory Board, Kendrion made the critical decision
to shift its focus entirely from the automotive sector to the
industrial markets, where the company’s core strengths and
long-term opportunities are most pronounced. Kendrion
divested its automotive operations in Europe and the United
States of America to Solero, while business in China were
transitioned to local management. Additionally, the company
entered a long-term cooperation with Knorr-Bremse concerning
its Sibiu mobility electronics operations. These decisive actions
have enabled Kendrion to simplify its organizational structure,
reduce operational complexity, and establish a leaner, more
agile company. This streamlined foundation positions Kendrion
strongly for future growth within its chosen industrial markets.
What set 2025 apart was that our strategic transformation went
hand in hand with robust financial results. The Company
achieved a normalized EBITDA margin of 15.5%, reaching the
goal we had originally planned for 2026 a year early. Thanks to
a stronger financial position and solid cash flow, we were able
to issue a EUR 1.00 per share special dividend and launch a
share buyback program of up to EUR 10 million, demonstrating
Kendrion’s confidence and delivering real value to our
shareholders.
Remuneration Policy Executive Board
The Remuneration Policy for the Executive Board has been
developed by the Supervisory Board and adopted by the
General Meeting of Shareholders in April 2023. During the April
2024 General Meeting of Shareholders, an amendment has
been adopted, including a further adjustment to the share
ownership guideline included in the Remuneration Policy for the
Executive Board.
The Remuneration Policy is evaluated at least once every four
years by the Supervisory Board. The Remuneration Policy
adopted by the General Meeting of Shareholders in April 2023
is applicable to (i) remuneration granted in the years 2024 up to
and including 2027 – irrespective whether pay-outs and vesting
of performance shares become due, occur or are made after
2027; and to (ii) remuneration of Executive Board members
reappointed by the General Meeting of Shareholders in April
2023 as of the date on which the new term of office of the
relevant reappointed Executive Board member commences.
The HR Committee will continue to keep the Supervisory Board
informed about relevant market and legislative developments to
support the periodic evaluation of the Remuneration Policy and
related decision-making. For more information about Kendrion’s
Remuneration Policy, please visit the corporate website at
www.kendrion.com.
Remuneration objectives
The Remuneration Policy is designed to recruit and retain, and
motivate qualified, experienced, and diverse executives who are
capable of driving Kendrion's sustainable long-term value
creation. Specifically, the policy aims to: (i) maintain an
adequate link between pay and performance, (ii) align the
interests of the Executive Board with those of shareholders and
other key stakeholders, and (iii) focus on the sustainable
delivery of high performance over the long-term by stimulating
share ownership while ensuring adherence to high standards of
corporate governance.
Given Kendrion’s size (in terms of revenue, average market
capitalization, total assets, and number of FTEs), market
position, geographical scope, and the competitive labor
market, the companies included in the AScX Index on Euronext
Amsterdam are defined as relevant reference group.
Companies in the financial services, real estate, and
entertainment sectors are excluded from the reference group.
Within the defined reference group, Kendrion is positioned
around the median in terms of the average of the
aforementioned parameters revenues, average market
capitalization, total assets, and number of FTEs. The Executive
Board’s remuneration structure and levels are set to align with
the median of this reference group.
The Remuneration Policy excludes variable incentives that may
be detrimental to the Executive Board’s responsibility to define
and achieve Kendrion’s strategy for sustainable long-term value
creation.
1
Non-IFRS financial measure. For the definition and reconciliation of the most directly comparable IFRS measures, refer to reconciliation of non-IFRS financial measures, starting on page 219.
109
Integrated Annual Report 2025
Temporary deviations
In exceptional circumstances, the Supervisory Board can
decide to temporarily deviate from the Remuneration Policy for
members of the Executive Board. Exceptional circumstances
refer to circumstances where a deviation is considered
necessary to serve the long-term interests and sustainability of
Kendrion or to ensure its continued viability. Depending on the
exceptional circumstances, the Supervisory Board can resolve
to deviate from any or all the four remuneration components
included in the Remuneration Policy for the Executive Board.
When considering a temporary deviation from the
Remuneration Policy, the Supervisory Board shall consider
Kendrion’s sustainable long-term value creation strategy,
ongoing business, and operational requirements as well as the
financial situation of Kendrion. In addition, the temporary
deviation considered should be assessed in light of the
principles of reasonableness and fairness.
Upon having resolved a temporary deviation from the
Remuneration Policy, the Supervisory Board will (i) cancel and
withdraw all temporary deviations from the Remuneration Policy
prior to the first Annual General Meeting of Shareholders
following the effective date of the deviation; or (ii) propose the
necessary amendments to the Remuneration Policy for
adoption during the first Annual General Meeting of
Shareholders following the effective date of the deviation.
Deviations from the Remuneration Policy will be reported in
Kendrion’s remuneration report.
The Supervisory Board did not decide to deviate temporarily
from the Remuneration Policy for the members of the Executive
Board in 2025.
Remuneration components
The Remuneration Policy for the Executive Board members
consists of four components: a fixed base salary, a short-term
variable remuneration, a long-term variable remuneration and
other benefits such as a pension scheme and a car allowance
or lease budget.
The sum of the fixed base salary, the short-term variable
remuneration and the long-term variable remuneration for the
Executive Board members are considered appropriate in
relation to: (i) the identity, the purpose, and values of Kendrion,
(ii) the pay-ratios within Kendrion, (iii) the (international) context
in which Kendrion operates and (iv) reasonable views of
relevant stakeholder groups.
The variable remuneration components are subject to a
maximum value determined in advance in accordance with the
Remuneration Policy. The Supervisory Board will conduct
scenario analyses to assess whether the pay-out level of
variable remuneration components appropriately reflects
performance.
Fixed base salary
Members of the Executive Board receive a fixed base salary,
the amount of which is set around the median level relative to
the aforementioned reference group. The fixed base salary
levels can be adjusted, following a decision of the Supervisory
Board, based on general market movement and inflation
figures.
In addition, any increase of the annual fixed base salary up to
and around the prevailing median level relative to the
aforementioned reference group, can be decided upon by the
Supervisory Board and will not be regarded as an amendment
to the Remuneration Policy.
In 2025, the Executive Board members received the fixed gross
base salaries as indicated in the table below.
2025 Annual base salary (gross)
CEO (J.A.J. van Beurden) EUR 601,800
CFO (J.H. Hemmen) EUR 357,000
110
Integrated Annual Report 2025
REMUNERATION REPORT
The table below provides an overview of the development of the annual gross base salary levels of the members of the Executive Board during previous financial years.
2025 gross
base salary
2024 gross
base salary
2023 annual
gross base salary
2022 annual
gross base salary
2021 annual
gross base salary
2020 annual
gross base salary
2019 annual
gross base salary
2018 annual
gross base salary
CEO (J.A.J. van Beurden) EUR 601,800 EUR 590,000 EUR 550,000
6
EUR 590,000
7
EUR 553,333.32 (actual) EUR 550,000 EUR 550,000 EUR 550,000 EUR 504,645
1
EUR 490,900
EUR 550,000
2
EUR 517,916.67
(actual)
4
EUR 508,424.58
3
(actual)
CFO (J.H. Hemmen) EUR 357,000 EUR 350,000 EUR 335,000
8
EUR 350,000
9
EUR 342,500 (actual) EUR 335,000 EUR 310,788 EUR 270,250 EUR 235,000
5
EUR 254,485.41
(actual)
4
EUR 117,500
(actual)
1
Effective until 1 December 2019.
2
Effective as of 1 December 2019 (i.e. the commencement date of the CEO’s second term).
3
The sum of EUR 462,591.25 (i.e. 11/12
th
of EUR 504,645) and EUR 45,833.33 (i.e. 1/12
th
of EUR 550,000).
4
Voluntary salary reduction of 15% during April through July 2020 inclusive and voluntary salary reduction of 10% for the month August 2020 in view of COVID-19 prompted cost measures.
5
Effective as of 1 July 2019 (i.e. the effective date of appointment to the Executive Board).
6
(CEO) As of 1 January 2023 until expiry 2nd term on 1 December 2023.
7
(CEO) As of commencement 3rd term on 1 December 2023.
8
(CFO) As of 1 January 2023 until expiry of 1st term on 1 July 2023.
9
(CFO) As of commencement 2nd term on 1 July 2023.
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Integrated Annual Report 2025
REMUNERATION REPORT
Short-term variable remuneration
The short-term variable remuneration is payable in cash,
the amount of which is based on the achievement of
predetermined, specific, and measurable financial and non-
financial performance criteria.
The overview below describes the key elements of the short-
term variable remuneration as per the Executive Board’s
Remuneration Policy.
CEO
The short-term variable remuneration ranges from 0%
to 90% of the annual fixed gross base salary of the
CEO, with 60% being the target amount.
CFO
The short-term variable remuneration ranges from 0%
to 67.5% of the annual fixed gross base salary of the
CFO, with 45% being the target amount.
Performance criteria
The performance criteria for the short-term variable
remuneration are based on Kendrion’s strategic intent to
continuously grow revenue and profitability in a sustainable way,
with a lean and focused organization, and to provide a safe and
high-quality work environment to its employees. Supportive to
Kendrion’s strategic intent, the performance criteria for the
short-term variable remuneration include financial and non-
financial criteria.
The financial performance criteria determine 60% of the short-
term variable remuneration and reflect the financial priorities of
Kendrion. The remaining 40% of the short-term variable
remuneration is determined by non-financial performance
criteria and reflect sustainability/ESG ambitions and other
priorities directly linked to Kendrion’s strategic intent.
Financial performance criteria
The financial performance criteria determine 60% of the short-
term variable remuneration. Each year the Supervisory Board
selects at least three financial performance criteria from the list
below with a view to incentivise delivery of financial priorities
that support Kendrion’s strategic and operational spearheads.
The Supervisory Board may allocate different weight
percentages to the different financial performance criteria it
selects for a particular year, provided a minimum weight of 10%
shall apply to a financial performance criterion.
Financial performance criteria
1
:
■ Net profit
■ Return on sales (ROS)
■ Return on investment (ROI)
■ Organic growth
■ Free cash flow
■ Revenue
■ EBITA
■ EBITDA
Non-financial performance criteria
The non-financial performance criteria determine 40% of the
short-term variable remuneration. Each year the Supervisory
Board selects a certain number of non-financial performance
criteria derived from the strategic and operational spearheads
for the respective performance year, which will in any event
include performance criteria in the area of sustainability/ESG
(i.e. environmental, social and/or governance criteria).
Achievement of each individual non-financial performance
criterion will be measured by applying a binary scoring model.
The amount of the pay-out for the achievement of non-financial
performance criteria depends on the number of non-
performance criteria achieved. A predefined step curve will be
applied to calculate the pay-out between the achievement of
the minimum threshold number of selected non-financial
performance criteria and achievement of all selected non-
financial performance criteria. No pay-out will be made for
below threshold performance.
Investment
Members of the Executive Board must invest at least 50% of
the net amount of the pay-out of the short-term remuneration
earned until the required ownership level has been reached as
prescribed under the ‘Share ownership guideline’ described in
the Remuneration Policy.
1
In each case excluding items that are generated outside the ordinary course of business and the amortization of intangibles arising on acquisitions or similar corporate events.
The performance incentive zone (threshold, target and
maximum) for each financial performance criterion will be
determined in advance by the Supervisory Board by reference
to the strategic and operational spearheads for the respective
performance year. No pay-out will be made for below threshold
performance. In the case of performance equal to the threshold
performance of the relevant performance criterion, the pay-out
of the short-term incentive will be equal to 50% of the relevant
target amount. A linear curve will be applied to calculate the
pay-out between threshold performance and maximum
performance.
112
Integrated Annual Report 2025
REMUNERATION REPORT
2025 short-term variable remuneration
Within the framework of the Executive Board Remuneration
Policy, the Supervisory Board takes an informed decision
relevant to the variable remuneration of the Executive Board
members. In setting the financial and non-financial performance
criteria for the 2025 short-term incentive, the Supervisory Board
considered, among other factors, the Company’s strategic
priorities for 2025. These priorities included further
strengthening Kendrion as a focused industrial company,
advancing sustainability and regulatory readiness, progressing
the ERP system transformation, and addressing performance
gaps in parts of the organization. The 2025 focus areas
assessed by the Supervisory Board comprised: (i) improving
profitability and operational performance in underperforming
areas, (ii) execution of the enterprise systems transformation in
line with the approved roadmap, (iii) enhancement of the
efficiency and effectiveness of R&D activities within Industrial
Brakes, and (iv) continued advancement of sustainability
governance and reporting in line with the Company’s ESG
ambitions.
The Supervisory Board reported on the progression made and
the key points of attention relevant to the 2025 focus items in
the Report of the Supervisory Board included in this Integrated
Annual Report.
For the 2025 short-term variable remuneration, the Supervisory
Board followed the recommendations of the HR Committee
and selected four financial performance criteria, a non-financial
performance criterion in the area of sustainability/ESG and
other non-financial performance criteria that are linked to the
Supervisory Board’s 2025 focus items and Kendrion’s strategic
plan and operational spearheads. The 2025 financial and non-
financial performance criteria reflect the collective responsibility
of the Executive Board members and make no distinction
between the applicable performance criteria for the CEO and
CFO.
In 2025, the following short-term incentive target amounts
applied to the members of the Executive Board:
2025 short-term incentive
target amount
CEO (J.A.J. van Beurden) EUR 361,080 (= 60% of 2025
fixed gross base salary of EUR
601,800)
CFO (J.H. Hemmen) EUR 160,650 (= 45% of 2025
fixed gross base salary of EUR
357,000)
For the performance year 2025, the short-term incentive
performance criteria are allocated as follows:
Short-term remuneration as percentage of annual
gross base salary
Performance
criterion Weight Minimum At target Maximum
Financial performance criteria (60%)
ROI 15% CEO 0 9% 13.5%
CFO 6.75% 10.2%
ROS 15% CEO 0 9% 13.5%
CFO 6.75% 10.2%
EBITDA 10% CEO 0 6% 9%
CFO 4.5% 6.75%
Free cash flow 20% CEO 0 12% 18%
CFO 9% 13.5%
Non-financial performance criteria (40%)
0 CEO 24% 36%
CFO 18% 27%
TOTAL 100% 0 CEO 60% 90%
100% 0 CFO 45% 67.5%
113
Integrated Annual Report 2025
REMUNERATION REPORT
2025 short-term financial performance criteria
In 2025, the actual performance against the financial performance criteria was as follows:
2025 short-term incentive performance on financial performance criteria
Financial
performance
criterion
Pay-out as % of
short-term incentive
target amount
Pay-out as % of
2025 annual gross base salary (actual) Pay-out in EUR (gross)
CEO (J.A.J. van
Beurden)
CFO (J.H. Hemmen) CEO (J.A.J. van
Beurden)
CFO (J.H. Hemmen)
ROI 22.5% 13.5% 10.2% EUR 81,243 EUR 36,414
ROS 22.5% 13.5% 10.2% EUR 81,243 EUR 36,414
EBITDA 15% 9% 6.75% EUR 54,162 EUR 24,097.50
Free cash flow 30% 18% 13.5% EUR 108,324 EUR 48,195
TOTAL 90% 54% 40.65% EUR 324,972 EUR 145,120.50
2025 short-term non-financial performance criteria
The non-financial performance criteria for the 2025 short-term incentive reflect the collective responsibility of the Executive Board
and are aligned with the Supervisory Board’s 2025 focus items, as well as Kendrion’s strategic and operational spearheads. This
results in four targets applicable to both the CEO and CFO.
The table below provides a summary description of the non-financial performance criteria.
Summarized description 2025 non-financial performance criteria
Sustainability Advance sustainability reporting and governance in line with the Company’s ESG roadmap.
ERP transformation Progress the enterprise systems transformation in line with the approved implementation
roadmap.
Performance Deliver targeted profitability and operational performance improvements in underperforming
areas.
R&D of IB Enhance the efficiency, focus and effectiveness of R&D activities within Industrial Brakes.
Consistent with the Remuneration Policy, achievement of an
individual non-financial performance criterion will be measured
by applying a binary scoring model where a non-financial
performance criterion can either be achieved or not achieved.
The amount of the pay-out for the non-performance criteria
depends on the number of non-financial performance criteria
achieved. The following step curve is applicable for the 2025
non-financial performance criteria.
Number of non-financial
performance criteria achieved
Short-term
incentive pay-out
% of target amount
All 4 non-financial performance criteria achieved 150%
3 out of the 4 non-financial performance criteria achieved 100%
2 out of the 4 non-financial performance criteria achieved 50%
1 out of the 4 non-financial performance criteria achieved 0%
0 out of the 4 non-financial performance criteria achieved 0%
Throughout the year, the Supervisory Board reviewed progress
against the non-financial performance criteria and received
detailed updates about relevant developments and actions
taken. During the December 2025 Supervisory Board meeting,
the Executive Board presented the results and progress
realized for each of the performance criteria. During its
discussion at that meeting, the Supervisory Board and the
Executive Board also considered the persistent challenging
operating environment, the need for continued focus on
operational costs, the uncertainty about ESG reporting and the
complexity around the transition to a new ERP system.
With the divestment of the China-based business in October
2025 and the establishment of a long-term cooperation with
Knorr-Bremse for the Sibiu mobility electronics facility, Kendrion
has completed its transition into a pure-play industrial company.
The Executive Board has successfully executed both projects
and finalized the company’s strategic transition. At the same
time, maintaining a strong focus on costs control and
operational efficiency remains essential.
114
Integrated Annual Report 2025
REMUNERATION REPORT
In addition, the transition to renewable energy was completed
for the Company’s major production sites.
During the annual performance reviews, the Supervisory Board
paid specific attention to the individual performance and
development of the Executive Board members against the non-
financial performance criteria and their key competencies like
leadership and organizational alignment and strategic business
orientation.
Based on these reviews, the Supervisory Board resolved that
the Executive Board members realized three out of the four
non-financial performance criteria as set under the 2025 short-
term variable remuneration.
The implementation of the Company’s new enterprise resource
planning system has progressed during 2025, although
completion has taken longer than initially anticipated. The
organization continued to work intensively on the rollout, and
completing the implementation remains a key focus area in
2026.
Operational performance improved materially in selected parts
of the organization during 2025, resulting in strong financial
results with solid revenue development and a clear
improvement in profitability.
Within Industrial Brakes, the R&D organization was restructured
during 2025. The reorganization led to a leaner cost base and
enhanced effectiveness, supported by the introduction of more
agile, growth-oriented team structures.
Following the launch of the Company’s multi-year ESG
program, Kendrion further strengthened its sustainability
governance and reporting capabilities. During 2025, this
included enhancements to the double materiality assessment,
further automation of sustainability reporting processes, and
continued improvements in external sustainability ratings.
Consistent with the step-up curve, the score on the non-
financial performance criteria results in a pay-out of 100% of
the short-term target amount corresponding to a pay-out of
EUR 144,432 (gross) for the CEO and EUR 64,260 (gross) for
the CFO, representing 24% of the CEO’s 2025 annual gross
base salary of EUR 601,800 and 18% of the CFO’s 2025
annual gross base salary of EUR 357,000.
2025 pay-out short term incentive
Overall performance resulted in the following pay-out of the
short-term incentive in 2025:
Total pay-out 2025 short-term incentive (gross) Pay-out as % of 2025 annual gross base salary (actual)
CEO (J.A.J. van Beurden) EUR 469,404
(i.e. sum of EUR 324,972 and EUR 144,432)
78% of the gross annual base salary
of EUR 601,800
CFO (J.H. Hemmen) EUR 209,380.50
(i.e. sum of EUR 145,120.50 and EUR 64,260)
58.65% of the gross annual base salary
of EUR 357,000
The table below provides an overview of the development of the pay-out under the applicable short-term incentive scheme
of the members of the Executive Board during previous financial years.
Short-term incentive
2024
*
2023
*
2022
*
2021
*
2020
*
2019
*
2018
*
CEO (J.A.J. van Beurden) EUR 291,696
(gross)
EUR 269,584
(gross)
EUR 267,438
(gross)
EUR 429,000
(gross)
EUR 358,600
(gross)
EUR 191,282.90
(gross)
EUR 117,816 (gross)
CFO (J.H. Hemmen) EUR 129,815
(gross)
EUR 111,548
(gross)
EUR 95,023
(gross)
EUR 141,408.80
(gross)
EUR 102,965
(gross)
EUR 37,012.50
(gross)
Not applicable – effective date of
appointment to the Executive Board
1July 2019
*
Pay-out amounts calculated in accordance with the then prevailing remuneration policy.
115
Integrated Annual Report 2025
REMUNERATION REPORT
Long-term variable remuneration
The long-term variable remuneration component incentivizes
members of the Executive Board to focus on long-term
sustainable value for shareholders and other stakeholders, and
to align the interests of the members of the Executive Board
with the long-term interests of shareholders and other
stakeholder groups.
The Executive Board members annually receive conditional
performance shares. The conditional performance shares will
vest upon achievement of performance measured over a period
of three years, including the year in which the conditional
performance shares are granted. Vested performance shares
are restricted by a two-year holding period as of vesting.
The size of the award is defined as a percentage of the annual
fixed gross base salary of the relevant Executive Board member
as per the year in which the conditional performance shares are
granted. The actual grant (i.e. the number of conditional
performance shares) is determined by the percentage of the
annual fixed gross base salary and calculated based on the
average share price during the fourth quarter of the year
immediately preceding the year in which the conditional
performance shares are granted.
The target value as per the year in which conditional
performance shares are granted is as follows:
CEO 60% of the annual fixed gross base salary of the CEO
CFO 50% of the annual fixed gross base salary of the CFO
The maximum opportunity for the long-term variable
remuneration shall not exceed 150% of the target value.
Performance measure
The vesting percentage of the performance shares is
conditional upon the achievement of performance measured
as:
Weight Performance measure
40% Relative total shareholder return (relative TSR)
40% Basic earnings per share (EPS)
20% Sustainability/ESG (i.e. environmental, social and/or
governance)
116
Integrated Annual Report 2025
REMUNERATION REPORT
Relative TSR
To determine achievement of this performance measure, the relative TSR is measured, which
means share price movements, including dividends and assuming that dividends are reinvested.
For the calculation of the relative TSR position, the reinvestment of cash dividend in fixed-
income securities and the reinvestment of stock dividend in the relevant share are taken into
account. The TSR performance of Kendrion is measured against the performance of 20 selected
TSR peer companies included in the table below.
# Company Industry Country
Market value
(EUR x 1 mln)*
1. Schneider Electric SE Electrical components France 74,653
2. Eaton Corporation plc Diversified industrials USA 58,485
3. Sensata Technologies
Holding NV
Electronic equipment: gauges and
meters USA 5,787
4. Aalbers Industries NV Electronic equipment: control and filter Netherlands 4,006
5. Emerson Electric Co Electronic equipment: other USA 53,229
6. Continental AG Auto parts Germany 11,272
7. Schaeffler AG Auto parts Germany 1,057
8. TKH Group NV Electrical components Netherlands 1,568
9. Borg Warner Inc Auto parts USA 8,831
10. SKF AB Metal fabricating Sweden 6,096
11. Phoenix Mecano AG Machinery: industrial Switzerland 320
12. Grammar AG Auto parts Germany 158
13. Regal Beloit Electrical components USA 7,437
14. IMI Plc Electronic equipment: control and filter UK 3,786
15. Autoneum Holding AG Auto parts Switzerland 483
16. Akwel Auto parts France 465
17. Elringklinger AG Auto parts Germany 436
18. VBG Group publ AB Auto parts Sweden 299
19. Kongsberg Automotive
ASA
Auto parts Norway 253
20. Sogefi SpA Auto parts Italy 112
# Company Industry Country
Market value
(EUR x 1 mln)*
ABB Ltd Electrical components Switzerland 55,833
VAT Group AG
Electronic equipment: control and filter Switzerland
7,681
Addtech AB Electrical components Sweden 3,475
Incap Oyj Electrical components Finland 501
Katek SE Electrical components Germany 204
Freni Brembo SpA
Auto parts Italy
3,489
Vitesco Technologies
Group AG
Auto parts Germany 2,185
JOST Werke AG Auto parts Germany 788
hGears AG Auto parts Germany 75
*
Per reporting date 31 December 2022.
The position of Kendrion in the TSR performance peer group, upon expiry of the three-year
performance period, determines the score for the relative TSR measure in accordance with the
following performance incentive zone:
Ranking 1-3 4 5 6 7 8 9 10 11-21
Vesting 150% 137.5% 125% 112.5% 100% 83% 67% 50% 0%
The position of Kendrion in the ranking defines the vesting for this part of the conditional grant of
shares. The calculation to determine Kendrion’s ranking shall be conducted by an external
independent and reputable specialized firm.
*
Per reporting date 31 December 2022.
Identified possible replacements in case of delisting or other corporate events in respect
of any of the above selected TSR peer companies.
117
Integrated Annual Report 2025
REMUNERATION REPORT
118
Integrated Annual Report 2025
REMUNERATION REPORT
EPS
EPS is disclosed in Kendrion’s consolidated financial statements
and is calculated by dividing the profit or loss attributable to
shareholders of Kendrion by the weighted average number of
shares outstanding during the relevant period, excluding ordinary
shares purchased by Kendrion and held as treasury shares.
Earnings are adjusted for changes in accounting principles
during the performance period.
The Supervisory Board sets the performance incentive zone
(threshold, target and maximum) annually by reference to the
mid-term plan as approved by the Supervisory Board in the year
of the grant date. Given that these targets are considered
commercially sensitive, EPS targets and the achieved
performance are disclosed in the Integrated Annual Report after
the relevant performance period.
The following performance incentive zone will be used to define
the vesting for this part of the conditional grant of shares:
< Threshold Target Maximum
EPS 0 100% 150%
Vesting is linear between threshold performance and on target
performance and between on-target performance and
maximum performance.
Sustainability/ESG
The Supervisory Board sets annually a sustainability target that
is aligned with Kendrion’s sustainability ambitions. The
Supervisory Board also sets the performance incentive zone
(threshold, target and maximum) annually. The achieved
performance will be disclosed in the Integrated Annual Report
after expiry of the relevant three-year performance period.
The following performance incentive zone will be used to define
the vesting for this part of the conditional grant of shares:
< Threshold Target Maximum
Sustainability/
ESG
0 100% 150%
Vesting is linear between threshold performance and on-target
performance and between on-target performance and
maximum performance.
119
Integrated Annual Report 2025
2025 long-term variable remuneration
Consistent with the applicable Remuneration Policy as adopted
by the General Meeting of Shareholders on 16 April 2024, the
members of the Executive Board were granted conditional
performance shares as described in the table below.
2025 annual
gross base salary (actual) Target amount
Average share
price Q4 2024
Conditional
performance shares Performance period Expiry holding period
CEO (J.A.J. van Beurden) EUR 601,800 EUR 361,080 EUR 10.87 33,218 Performance period 2025-2027 End of 2029
(i.e. 60% of EUR 601,800)
CFO (J.H. Hemmen) EUR 357,000 EUR 178,500 EUR 10.87 16,421 Performance period 2025-2027 End of 2029
(i.e. 50% of EUR 357,000)
In accordance with the applicable Remuneration Policy, the
vesting percentage of the performance shares is conditional to
the realization of the performance criteria Relative TSR, EPS
and a non-financial measure relating to sustainability/ESG. The
sustainability/ESG performance criteria for the 2025 long-term
incentive are related to the development of a data-driven Scope
3 emissions reduction framework and strategy as well as the
achievement of targeted Scope 1 and Scope 2 emission
REMUNERATION REPORT
reduction on a pro rata basis ensuring consistency towards the
company’s ESG plan.
Based on the contents and quality of the actions taken and
strategies developed, the Supervisory Board shall determine
the actual performance at the end of the performance period
along the lines as described above.
2023 long-term variable remuneration
Pursuant to the 2023 long-term incentive scheme, 22,030
conditional performance shares have been granted to Mr. Van
Beurden and 11,363 conditional performance shares have
been granted to Mr. Hemmen. The number of conditional
performance shares has been calculated as follows:
2023 annual
gross base salary Target amount Target amount
Average share
price Q4 2022
Conditional
performance shares
CEO
(J.A.J. van Beurden)
EUR 550,000 (1 January to 30 November 2023, until reappointment for 3rd term
as of 1 December 2023)
EUR 330,000
(i.e. 60% of EUR 550,000)
EUR 302,500
(i.e. 11/12 of EUR 330,000)
EUR 15.07 22,030
EUR 590,000 (as of reappointment for 3rd term as per 1 December 2023) EUR 354,000
(i.e. 60% of EUR 590,000)
EUR 29,500
(i.e. 1/12 of EUR 354,000)
Total EUR 332,000
CFO (J.H. Hemmen) EUR 335,000 (1 January to 30 June 2023, until reappointment for 2nd term as of
1 July 2023)
EUR 167,500
(i.e. 50% of 335,000)
EUR 83,750
(i.e. 6/12 of EUR 167,500)
EUR 15.07 11,363
EUR 350,000 (as of reappointment for 2nd term as per 1 July 2023) EUR 175,000
(i.e. 50% of EUR 350,000)
EUR 87,500
(i.e. 6/12 of EUR 175,000)
Total EUR 171,250
120
Integrated Annual Report 2025
Consistent with the Remuneration Policy governing the 2023 long-term variable remuneration, the vesting percentage of the
performance shares is conditional upon the achievement (during the performance period 2023-2025) of performance measured as:
Weight Performance measure
40% Relative total shareholder return (relative TSR)
40% Basic earnings per share (EPS)
20% Sustainability (i.e. environmental, social and/or governance)
A summary description of the performance measure in the area of sustainability for the performance period 2023-2025 has been
included in the table below.
Summary description sustainability performance measure 2023-2025
Creation of a supplier database, standardize the
collection of supplier data, and expand the scope/
area of supplier data (where required) in support of
sustainable sourcing objectives.
■ On target performance (i.e. 100% vesting)
■ Max. performance (i.e. 150% vesting)
■ Min. threshold performance (i.e. 0% vesting)
REMUNERATION REPORT
This achievement results in a maximum performance under the
2023 long-term incentive scheme for the sustainability/ESG
performance measure and thereby results in 150% vesting of
the 20% of the target-value. As a result, 6,609 performance
shares have vested for Mr. Van Beurden, and 3,409
performance shares have vested for Mr. Hemmen for this
performance measure.
Summary 2023 long-term variable remuneration
This means that under the 2023 long-term incentive plan, a
total number of 6,609 shares have vested for Mr. Van Beurden
and a total number of 3,409 shares have vested for Mr.
Hemmen. The vested shares remain subject to a holding period
until the end of 2027.
In accordance with the long-term incentive plan, Mr. Van
Beurden and Mr. Hemmen will be entitled to accrued dividends
for each of the 6,609 and 3,409, respectively, vested shares.
Accrued dividends will be paid in cash.
Vesting is linear between min. threshold performance and
on-target performance and between on-target performance
and max. performance.
TSR and EPS
When measuring the relative TSR, the position of Kendrion
within the predefined TSR performance peer group, as
stipulated in the Remuneration Policy for the 2023 long-term
incentive plan, is 16. As per the Remuneration Policy governing
the 2023 long-term variable remuneration, the 16
th
position
leads to a 0% vesting.
Based on the EPS performance incentive zones determined by
the Supervisory Board by reference to the 2023 mid-term plan,
the actual 2025 EPS falls below the predetermined minimum
threshold performance level and therefore leads to a 0%
vesting.
Sustainability/ ESG
The sustainability / ESG performance measure entailed the
creation of a supplier database, the standardization of supplier
data collection, and the expansion of data scope where
needed, supported by supply-chain mapping and evaluation of
existing supplier data and processes.
As per the end of 2025, our approach with respect to supplier
data collection has been enhanced significantly. We moved
from obtaining high-level CSR information through on-site visits
only to operating a structured and comprehensive supplier-data
collection approach. A formal framework has been developed
over the past two years, defining the information to be collected
and the process for supplier engagement. This enables access
to significantly more detailed data, including but not limited to
data regarding greenhouse gas emissions and renewable
energy, social elements (including information on supplier’s
employees and subcontractors), materials and recyclability, and
the quality of supplier disclosures.
121
Integrated Annual Report 2025
Development long-term incentive
The table below provides an overview of the development of
the conditional share awards under the long-term incentive plan
for the Executive Board members during previous financial
years. The table also specifies the expiry of vesting periods and
holding periods for conditional shares awarded.
Long-term
incentive
2024
number
of shares
Expiry
vesting
period
holding
period
2023
number
of shares
Expiry
vesting
period
holding
period
2022
number
of shares
Expiry
vesting
period
holding
period
2021
number
of shares
Expiry
vesting
period
holding
period
2020
number
of shares
Expiry
vesting
period
holding
period
2019
number
of shares
Expiry
vesting
period
holding
period
2018*
number
of shares
Expiry
vesting
period
holding
period
CEO (J.A.J.
van Beurden)
30,596 End of
2026
End of
2028
22,030 End of
2025
End of
2027
16,144 End of
2024
End of
2026
20,245 End of
2023
End of
2025
16,533 End of
2022
End of
2024
11,559 End of
2021
End of
2023
6,960 End of
2020
End of
2022
CFO (J.H.
Hemmen)
15,125 End of
2026
End of
2028
11,363 End of
2025
End of
2027
8,194 End of
2024
End of
2026
9,533 End of
2023
End of
2025
6,769 End of
2022
End of
2024
2,409 End of
2021
End of
2023
*
2018: not applicable for the CFO, as his effective date of
appointment to the Executive Board was 1 July 2019.
Pension arrangement and other benefits
Members of the Executive Board participate in the defined
contribution pension scheme. Kendrion N.V. will pay: (i) the cost
of contributions for participation in the defined contribution
scheme; (ii) the risk premium for the surviving dependents’
pension (nabestaandenpensioen) and (iii) the cost of
contributions for participation in the occupational disability
insurance (including WIA excedentverzekering) (collectively
the “Pension and Disability Insurance Contribution”). In addition,
members of the Executive Board are entitled to an annual gross
allowance to compensate for the loss of accrual of pension
benefits because of the Dutch Wage Tax Act, provided that the
sum of the Pension and Disability Insurance Contribution and
such annual allowance shall annually not exceed an amount of
EUR 75,000. This amount may be adjusted based on market
developments.
REMUNERATION REPORT
No schemes have been agreed for the voluntary early
retirement of members of the Executive Board.
Kendrion maintains a car lease policy for members of the
Executive Board. The lease budget (including fuel) is EUR 2,000
per month. Alternatively, members of the Executive Board are
entitled to a monthly gross car allowance of EUR 2,000.
In addition, Kendrion pays a monthly expense allowance to
Executive Board members of up to EUR 450, to cover costs
that are not suitable for individual reimbursement.
The amount of the car allowance and the expense allowance
are not included as a basis for calculation of the Pension and
Disability Insurance Contribution, or any other (variable)
remuneration or allowance, severance amount or benefit.
Kendrion has arranged for a directors’ and officers’ liability
insurance. The costs for this insurance are for the account of
Kendrion.
The Executive Board participates in the defined contribution
plan of Kendrion. The pension contribution in 2025 was EUR
71,885 (2024: EUR 78,115) for the CEO and EUR 69,242
(2024: EUR 80,758) for the CFO. These pension contribution
amounts include the correction of overpayments from 2024.
In 2025, a monthly car allowance of EUR 2,000 gross was
provided to the CFO.
122
Integrated Annual Report 2025
Share ownership guideline
An objective of the Remuneration Policy is to appropriately align
the interests of the members of the Executive Board with the
interests of shareholders by encouraging share ownership. As
per the Remuneration Policy adopted by the General Meeting
of Shareholders on 15 April 2024, Kendrion applies a share
ownership guideline for Executive Board members of 200% of
the annual fixed gross base salary for the CEO and 100% of the
annual fixed gross base salary for the CFO. This shareholding
must be gradually built up with performance shares earned
under the long-term incentive plan, although it is permitted to
sell shares to finance taxes due at the date of vesting of the
performance shares, and by purchasing shares with at least
50% of the net amount of the pay-out of the short-term
incentive.
Policy in case of change of control
Unvested performance shares awarded shall be deemed
vested as per the date of the change of control assuming on
target performance, subject to: (i) pro rating to reflect the
proportion of the normal performance period that has elapsed
as per the date of the change of control, and (ii) the
discretionary authority of the Supervisory Board to determine
otherwise, should such deemed vesting of performance shares
result in unreasonable or unequitable remuneration.
Adjustment and claw back
The Supervisory Board is authorized to adjust the amount of
the short-term and long-term variable remuneration to an
appropriate level should payment thereof result in unreasonable
or unequitable remuneration. In addition, a so-called claw-back
provision applies pursuant to which the Supervisory Board has
the authority to recover in whole or in part short-term and long-
term variable remuneration awarded to members of the
Executive Board should it transpire that such variable
remuneration was unjustifiably awarded based on incorrect
information.
Other key elements
Term and termination
Management agreements with Executive Board members are
entered for a definite period of four years. The management
agreement may be terminated with due observance of a notice
period of six months. Kendrion is entitled to terminate the
management agreement with immediate effect for cause (i.e.
seriously culpable or negligent behavior on the part of the
Executive Board member).
Termination fee
In the event of termination of the management agreement on
Kendrion’s initiative, the termination fee for members of the
Executive Board shall not exceed 100% of the annual fixed
gross base salary (i.e. excluding short-term and long-term
incentive and other elements such as pension contributions).
The members of the Executive Board are not entitled to a
termination fee if the contract is terminated for cause on the
part of the Executive Board member or if the contract is
terminated at the initiative of the Executive Board member.
Pay ratio
The Executive Board to employee pay-ratio is approximately 19
(2024: 21). This pay ratio is based on the remuneration of the
CEO including pensions and other expenses and the average
wage costs per FTE in 2025 as disclosed on page 62 of this
Integrated Annual Report.
Remuneration Policy Supervisory Board
Objectives
The remuneration policy of the Supervisory Board serves to
recruit and retain diverse, qualified, and experienced members
to supervise the manner in which the Executive Board
implements Kendrion’s long-term value creation strategy.
Considering the nature of the supervisory responsibilities of the
Supervisory Board, the remuneration is not linked to Kendrion’s
performance, and therefore includes a fixed component only. In
line with good corporate governance, Supervisory Board
members will not receive a share-based incentive.
The annual remuneration levels of the Supervisory Board are
described in the table below. The base fee and committee fee
levels in the table below are the same as determined by the
General Meeting of Shareholders on 11 April 2022.
Base fee
Chairman Supervisory Board EUR 59,000
Member Supervisory Board EUR 41,800
Committee fee
Chair Audit Committee EUR 7,200
Member Audit Committee EUR 6,000
Chair HR Committee EUR 7,200
Member HR Committee EUR 6,000
REMUNERATION REPORT
123
Integrated Annual Report 2025
Expenses
All reasonable and documented expenses incurred by the
Supervisory Board members in the course of performing their
duties are reimbursed.
Benefits and loans
Members of the Supervisory Board are not eligible to participate
in any benefits scheme offered by Kendrion to its employees,
nor shall Kendrion provide loans.
The aggregate amount of the remuneration of the Supervisory
Board members in 2025 was EUR 210,800 (2024: EUR
212,850). The table below gives a breakdown of the
remuneration per Supervisory Board member.
Supervisory Board member 2025
F.J. van Hout (Chairman) EUR 65,000
M.H.C. Baijens EUR 49,000
E.M. Doll EUR 47,800
E.H. Slijkhuis EUR 49,000
Total EUR 210,800
Advisory vote remuneration report 2024
The remuneration report 2024 has been discussed with the
shareholders and put to the General Meeting of Shareholders
for an advisory vote during the Annual General Meeting of
Shareholders held on 14 April 2025. Of the votes cast, 99.93%
voted in favor of the 2024 remuneration report. Supported by
this advisory vote, the Executive Board and the Supervisory
Board considered that no substantive changes are needed
relevant to the application of the Remuneration Policy.
The voting results of the General Meeting of Shareholders held
on 14 April 2025 can be found on the corporate website at
www.kendrion.com.
Taking account of the content of this Remuneration Report
pertaining to financial year 2025, it is determined that the
aggregate amount of remuneration awarded is in line with the
Remuneration Policy and contributes to the performance of
Kendrion and the execution of its long-term value creation
strategy.
This 2025 Remuneration Report will be discussed with
shareholders and put to the General Meeting of Shareholders
for an advisory vote during the upcoming Annual General
Meeting of Shareholders to be held on 13 April 2026.
REMUNERATION REPORT
Remuneration components 2025
(in EUR) CEO % CFO %
Base salary 601,800 48.49 % 357,000 50.21 %
Short term incentive 469,404 37.82% 209,380.50 29.45 %
Long term incentive 92,526 7.46 % 47,726 6.71 %
Pension contribution 71,885* 5.79 % 69.242* 9.74 %
Other 5,400 0.44 % 27,600 3.88 %
Total compensation 1,241,015 100% 710,948.50 100%
*
These amounts include the correction of overpayments from 2024.
124
Integrated Annual Report 2025
Executive Board remuneration comparative
EUR Thousand 2025 2024 2023 2022 2021
J.A.J. van Beurden, CEO 1,241.0 998.8 951.4 1,153.0 1,118.0
J.H. Hemmen, CFO 710.9 605.2 555.0 632.0 565.8
Pay ratio 19 17 18 19 20
Company performance
Revenue (EUR million) 245.5 301.5 518.6 519.3 464.0
Normalized EBITDA (EUR million)
1
38.1 37.0 53.1 57.4 55.8
Normalized EBITDA margin 15.5% 12.3% 10.2% 11.1% 12.0%
1
Non-IFRS financial measure. For the definition and reconciliation of the most directly comparable IFRS measures, refer to reconciliation of
non-IFRS information, starting on page 219.
Supervisory Board remuneration comparative
2025 2024 2023 2022 2021
Base fee
Chairman Supervisory Board EUR 59,000 EUR 59,000 EUR 59,000 EUR 59,000 EUR 45,000
Member Supervisory Board EUR 41,800 EUR 41,800 EUR 41,800 EUR 41,800 EUR 35,000
Committee fee
Chair Committee EUR 7,200 EUR 7,200 EUR 7,200 EUR 7,200 EUR 6,000
Member Committee EUR 6,000 EUR 6,000 EUR 6,000 EUR 6,000 EUR 5,000
Total Supervisory Board remuneration EUR 210,800 EUR 210,800 EUR 210,800 EUR 210,800 EUR 172,000
REMUNERATION REPORT
SHARE AND SHAREHOLDER INFORMATION
Movements in the number of outstanding shares
Shares entitled
to dividend
Shares owned
by Kendrion
Total number of
issued shares
At 1 January 2025 15,500,057 - 15,500,057
Issued shares (share dividend) 300,467 - 300,467
Issued registered shares (share plan) 6,903 - 6,903
Repurchased shares (185,333) 185,333 -
At 31 December 2025 15,622,094 185,333 15,807,427
Other information
EUR, unless otherwise stated 2025 2024 2023
Number of shares x 1,000 at 31 December 15.807 15.500 15.276
Market capitalization at 31 December (EUR million) 221.3 161.2 184.5
Highest share price in the financial year 14.96 14.50 19.60
Lowest share price in the financial year 9.51 10.08 10.82
Share price on 31 December 14.00 10.40 12.08
Average daily ordinary share volume 29,163 22,730 15,260
Result per share 1.24 (0.29) 0.65
Normalized net profit before amortization per share
1
1.13 0.76 1.00
Major shareholders as at 31 December 2024
2
Interest in % Date of report
Teslin Participaties Coöperatief U.A. 20.07 At 5 June 2025
Van Lanschot Kempen Investment Management N.V. 15.33 At 11 April 2023
Cross Options Beheer B.V. 5.33 At 20 December 2023
Add Value Fund N.V. 3.22 At 13 July 2022
T.L. Kuo 3.17 At 21 June 2024
Midlin N.V. 3.08 At 11 December 2020
Total 50.2
1
Non-IFRS financial measure. For the definition and reconciliation of
the most directly comparable IFRS measures, refer to reconciliation
of non-IFRS information, starting on page 219.
2
On the basis of the information in the register of the AFM and listed
on the website at www.afm.nl.
Share capital
The authorized share capital of Kendrion N.V. as at 31
December 2025 amounts to EUR 80,000,000 and is divided
into 40,000,000 ordinary shares with a nominal value of EUR
2.00 each. At year-end 2025, the total number of ordinary
shares issued was 15,807,427. There is one class of ordinary
shares and no depositary receipts for shares have been issued.
Kendrion’s ordinary shares are listed on NYSE Euronext
Amsterdam Small Cap Index (AScX).
from 2 January 2025 to 31 December 2025
Kendrion N.V. share
AEX
ASCX
AMX
Treasury shares
As at 31 December 2025, Kendrion N.V. holds 185,333 shares
in its own capital, representing 1.17% of the total issued share
capital. The ordinary shares held by Kendrion N.V. in its own
capital are non-voting and do not have any dividend
entitlement. This means that, as per year-end 2025,
15,622,094 ordinary shares hold voting rights and dividend
entitlement.
Movements in the share price
125
Integrated Annual Report 2025
Dividend policy
Kendrion endeavours to realize an attractive return for
shareholders supported by a suitable dividend policy. In view of
safeguarding a healthy financial position, consideration is also
given to the amount of profit to be retained to support the
company’s medium and long-term strategic plans and to
maintaining a solvency ratio of at least 35%. Kendrion strives to
distribute dividends representing at least 50% of its normalized
net profit before amortization.
Kendrion will propose a dividend of EUR 0.70 per share,
representing a payment of dividend of 61% of normalized net
profit before amortization for 2025 at the Annual General
SHARE AND SHAREHOLDER INFORMATION
Participation
Kendrion maintains a share-based incentive plan for its senior
management and certain key employees.
Effective as of 2019, members of the Management Team
became eligible for a grant of conditional performance shares.
The conditional performance shares granted will vest upon
achievement of performance measured over a three-year
period. The actual number of shares that will be allocated upon
expiry of the three-year vesting period is subject to the
realization of predefined performance criteria. Under the 2022
long-term incentive plan for the Management Team (i.e.
performance period 2022 through 2024), 25,918 conditional
performance shares were granted. Of these conditional
performance shares granted to the Management Team and the
Leadership team, a total of 2,035 shares have vested in 2025.
In 2025, conditional performance shares have been granted to
the members of the Executive Board pursuant to the Executive
Board long-term incentive plan. More information about
(conditional performance) shares granted to the members of
the Executive Board is set out on page 119. A comprehensive
description of the long-term incentive plan is included in the
‘Remuneration Report’ section on page 109 and further of this
report.
Meeting of Shareholders on 13 April 2026. The total amount of
dividend is EUR 11 million. Payment of the dividend will be
made in cash.
Major shareholders
Any person holding or acquiring an interest of 3% or more in a
Dutch publicly listed company is bound, based on the Financial
Supervision Act (Wet op het Financieel Toezicht), to disclose
such a holding to the Dutch Authority for the Financial Markets
(AFM). The disclosure is recorded in the register of the AFM and
listed on the website at www.afm.nl/en.
126
Integrated Annual Report 2025
SHARE AND SHAREHOLDER INFORMATION
Investor relations
Kendrion attaches great importance to appropriate
communications with financial stakeholders such as investors,
debt capital providers and analysts, providing them with good
insights into recent developments. Transparency is intended to
lead to healthy pricing, and to support liquidity.
Regulations to prevent insider trading
Kendrion has regulations covering securities transactions by
members of the Executive Board, members of the Supervisory
Board, members of the Management Team and other
designated employees. The Insider Trading Code is published
on the corporate website at www.kendrion.com.
The Insider Trading Code is intended to ensure the avoidance
of insider trading or the appearance thereof, and any mixing of
business and private interests.
Analysts
The following stock exchange analysts actively monitor the Kendrion share:
ABN AMRO Oddo BHF Bank Martijn den Drijver
Degroof Petercam Frank Claassen
ING Bank Tijs Hollestelle
The Idea-Driven Equities Analyses Company Maarten Verbeek
Financial calendar
Friday, 27 February 2026 Publication annual results 2025
Monday, 16 March 2026 Record date General Meeting of Shareholders
Monday,13 April 2026 General Meeting of Shareholders
Wednesday, 15 April 2026 Ex-dividend date
Thursday, 16 April 2026 Dividend record date
Wednesday, 22 April 2026 Cash dividend made payable
Tuesday, 12 May 2026 Publication first quarter results 2026
Wednesday, 26 August 2026 Publication half-year results 2026
Tuesday, 10 November 2026 Publication third quarter results 2026
127
Integrated Annual Report 2025
Integrated Annual Report 2025
128
FINANCIAL STATEMENTS - CONTENTS
128
129 Consolidated statement of financial position
as at 31 December
130 Consolidated statement of profit and loss and
other comprehensive income
131 Consolidated statement of changes in equity
133 Consolidated statement of cash flows
134 Notes to the consolidated financial statements
157 Property, plant and equipment
161 Intangible assets
164 Other investments and non-current assets
165 Deferred tax assets and liabilities
167 Inventories
168 Trade and other receivables
168 Cash and cash equivalents
168 Assets classified as held for sale and discontinued
operations
170 Capital and reserves
172 Earnings per share
173 Loans and borrowings
176 Employee benefits
180 Provisions
180 Trade and other payables
181 Financial instruments
187 Leases
187 Capital commitments
187 Contingent assets and liabilities
188 Operating segments
190 Staff costs
190 Other operating expenses
191 Net finance costs
191 Income tax
191 Reconciliation of effective tax rate
192
194
Related parties
Fees to the auditor
194 Other notes
194 Post-balance sheet events
195 Company balance sheet at 31 December
196 Company income statement
197 Notes to the company financial statements
197 General
197 Principles of valuation of assets and liabilities
and determination of results
197 Financial fixed assets
197 Receivables
198 Equity
199 Current liabilities
199 Financial instruments
200 Other income
200 Staff costs
200 Profit appropriation
200 Commitments not appearing on the balance sheet
201 Post-balance sheet events
201 Remuneration of and share ownership
by the Executive Board and Supervisory Board
FINANCIAL STATEMENTS
Integrated Annual Report 2025
129
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER

Note | EUR million | 2025 | 2024 | Note | EUR million | 2025 | 2024
| Assets |  |  |  | Equity and liabilities |  |
| Non-current assets |  |  | 9,10 | Equity |  |
1 | Property, plant and equipment | 52.4 | 96.0 |  | Share capital | 31.6 | 31.0
2 | Intangible assets | 104.3 | 112.8 |  | Share premium | 36.5 | 37.1
3 | Other investments and non-current |  |  |  | Reserves | 65.8 | 94.9
| assets | 4.3 | 3.9 |  | Retained earnings | 19.5 | (4.5)
4 | Deferred tax assets | 12.3 | 21.4 |  | Total equity A | 153.4 | 158.5
| Total non-current assets | 173.3 | 234.1 |  |  |  |
|  |  |  |  | Liabilities |  |
| Current assets |  |  | 11 | Loans and borrowings | 57.3 | 97.8
5 | Inventories | 44.5 | 58.5 | 12 | Employee benefits | 6.8 | 7.1
| Current tax assets | 1.4 | 3.2 | 4 | Deferred tax liabilities | 11.3 | 14.7
6 | Trade and other receivables | 23.6 | 58.6 | 13 | Provisions | 2.6 | 0.9
7 | Cash and cash equivalents | 29.4 | 8.5 |  | Total non-current liabilities | 78.0 | 120.5
8 | Assets classified as held for sale | − | 1.9 |  |  |  |
| Total current assets | 98.9 | 130.7 | 7 | Bank overdraft | 0.0 | 1.7
|  |  |  | 11 | Loans and borrowings | 2.4 | 12.4
|  |  |  | 13 | Provisions | 0.0 | 5.2
|  |  |  |  | Current tax liabilities | 4.7 | 7.6
|  |  |  | 14 | Trade and other payables | 33.7 | 58.9
|  |  |  |  | Total current liabilities | 40.8 | 85.8
|  |  |  |  | Total liabilities | 118.8 | 206.3
| Total assets | 272.2 | 364.8 |  | Total equity and liabilities | 272.2 | 364.8

A
Equity is attributable to owners of the company as non-controlling interests are not applicable.
FINANCIAL STATEMENTS
Integrated Annual Report 2025
130
A
This item will never be reclassified to profit or loss.
B
These items may be reclassified to profit or loss.
C
All profits are attributable to owners of the company as non-controlling interests are not applicable.
D
2024 numbers were re-presented to present the continuing operations only in accordance with IFRS 5. Reference is made to note 8 for more details on results from discontinued operations.
CONSOLIDATED STATEMENT OF PROFIT AND LOSS AND OTHER COMPREHENSIVE INCOME

|  |  | D
Note | EUR million | 2025 | 2024
| Other comprehensive income |  |
12 | Remeasurements of defined benefit plans A | 0.0 | (0.8)
9 | Foreign currency translation differences for | (2.7) | (3.4)
| foreign operations B |  |
9 | Net change in fair value of cash flow hedges, | 0.1 | (0.5)
| net of income tax B |  |
| Other comprehensive income for the period, |  |
| net of income tax | (2.6) | (4.7)
| Total comprehensive income for the period C | 16.9 | (9.2)

10 | Basic earnings per share (EUR), |  |
| based on weighted average | 1.24 | (0.29)
10 | Basic earnings per share (EUR), |  |
| based on weighted average (diluted) | 1.24 | (0.29)
| Earnings per share for continuing operations |  |
| Basic earnings per share (EUR) from continuing |  |
| operations, based on weighted average | 0.87 | 0.55
| Basic earnings per share (EUR) from continuing |  |
| operations, based on weighted average (diluted) | 0.86 | 0.54

|  |  | D
Note | EUR million | 2025 | 2024
19 | Revenue | 245.5 | 247.5
| Other income | 4.4 | 1.7
| Total revenue and other income | 249.9 | 249.2
| Changes in inventories of finished goods and work |  |
| in progress | 0.4 | (0.9)
| Raw materials and subcontracted work | 106.6 | 114.3
20 | Staff costs | 87.6 | 86.3
1, 2 | Depreciation and amortization | 15.0 | 16.0
1, 2 | Impairments of fixed assets | 0.0 | 1.0
21 | Other operating expenses | 19.0 | 17.9
| Result before net finance costs | 21.3 | 14.6
22 | Finance income | 0.1 | 0.1
22 | Finance expense | (3.8) | (4.0)
| Share profit or loss of an associate | (0.3) | (0.1)
| Profit before income tax | 17.3 | 10.6
23, 24 | Income tax expense | (3.7) | (2.2)
| Profit for the period continuing operations | 13.6 | 8.4
8 | Profit/ (Loss) after tax from discontinued operations | 5.9 | (12.9)
| Profit/ (Loss) for the period | 19.5 | (4.5)

FINANCIAL STATEMENTS
Integrated Annual Report 2025
131

|  | Share | Share | Translation | Hedge | Reserve for | Other | Retained | Total
Note | EUR million | capital | premium | reserve | reserve | own shares | reserves | earnings | equity
| Balance as at 1 January 2024 | 30.6 | 37.3 | 4.6 | 0.3 | – | 89.3 | 9.9 | 172.0
| Total comprehensive income for the period |  |  |  |  |  |  |  |
| Loss for the period | – | – | – | – | – | – | (4.5) | (4.5)
| Other comprehensive income |  |  |  |  |  |  |  |
12 | Remeasurements of defined benefit plans | – | – | – | – | – | (0.8) | – | (0.8)
9 | Foreign currency translation differences | – | – | (3.4) | – | – | – | – | (3.4)
| for foreign operations |  |  |  |  |  |  |  |
9 | Net change in fair value of cash flow hedges, |  |  |  |  |  |  |  |
| net of income tax | – | – | – | (0.5) | – | – | – | (0.5)
| Other comprehensive income for the period, | – | – | (3.4) | (0.5) | – | (0.8) | – | (4.7)
| net of income tax |  |  |  |  |  |  |  |
| Total comprehensive income for the period | – | – | (3.4) | (0.5) | – | (0.8) | (4.5) | (9.2)
| Transactions with owners, recorded |  |  |  |  |  |  |  |
| directly in equity |  |  |  |  |  |  |  |
9 | Issue of ordinary shares | 0.4 | 2.5 | – | – | – | (0.2) | – | 2.7
| Share-based payment transactions | – | – | – | – | – | (0.2) | – | (0.2)
9 | Dividends to equity holders | – | (2.7) | – | – | – | (4.1) | – | (6.8)
9 | Appropriation of retained earnings | – | – | – | – | – | 9.9 | (9.9) | –
| Balance as at 31 December 2024 | 31.0 | 37.1 | 1.2 | (0.2) | – | 93.9 | (4.5) | 158.5

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FINANCIAL STATEMENTS
Integrated Annual Report 2025
132

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (CONTINUED) |  |  |  |  |  |  |  |  |
|  | Share | Share | Translation | Hedge | Reserve for | Other | Retained | Total
Note | EUR million | capital | premium | reserve | reserve | own shares | reserves | earnings | equity
| Balance as at 1 January 2025 | 31.0 | 37.1 | 1.2 | (0.2) | – | 93.9 | (4.5) | 158.5
| Total comprehensive income for the period |  |  |  |  |  |  |  |
| Profit for the period | – | – | – | – | – | – | 19.5 | 19.5
| Other comprehensive income |  |  |  |  |  |  |  |
12 | Remeasurements of defined benefit plans | – | – | – | – | – | 0.0 | – | 0.0
9 | Foreign currency translation differences |  |  |  |  |  |  |  |
| for foreign operations | – | – | (2.7) | – | – | – | – | (2.7)
9 | Net change in fair value of cash flow hedges, |  |  |  |  |  |  |  |
| net of income tax | – | – | – | 0.1 | – | – | – | 0.1
| Other comprehensive income for the period, | – | − | (2.7) | 0.1 | − | 0.0 | − | (2.6)
| net of income tax |  |  |  |  |  |  |  |
| Total comprehensive income for the period | – | – | (2.7) | 0.1 | – | 0.0 | 19.5 | 16.9
| Transactions with owners, recorded |  |  |  |  |  |  |  |
| directly in equity |  |  |  |  |  |  |  |
9 | Issue of ordinary shares | 0.6 | 2.5 | – | – | – | (0.1) | – | 3.0
9 | Own shares repurchased | – | – | – | – | (2.5) | – | – | (2.5)
| Share-based payment transactions | – | – | – | – | – | 0.3 | – | 0.3
9 | Dividends to equity holders | – | (3.1) | – | – | – | (19.7) | – | (22.8)
9 | Appropriation of retained earnings | – | – | – | – | – | (4.5) | 4.5 | -
| Balance as at 31 December 2025 | 31.6 | 36.5 | (1.5) | (0.1) | (2.5) | 69.9 | 19.5 | 153.4

FINANCIAL STATEMENTS
Integrated Annual Report 2025
133

| FLOWS A |  |  |  |  |  |
Note | EUR million | 2025 | 2024 | Note | EUR million | 2025 | 2024
| Cash flows from operating activities |  |  |  | Cash flows from investing activities |  |
| Profit/ (Loss) for the period | 19.5 | (4.5) | 8 | Sale of subsidiaries, net of cash | 64.5 | 52.5
| Adjustments for: |  |  | 1 | Purchase of property, plant and equipment | (6.2) | (17.6)
22 | Net finance costs | 5.3 | 8.9 | 1 | Disposal of property, plant and equipment | 1.0 | 0.2
| Share profit or loss of an associate | 0.3 | 0.1 | 2 | Purchase of intangible fixed assets | (4.1) | (6.0)
8 | Result on sale of subsidiaries before tax, non cash | (4.0) | (1.7) | 2 | Disposal of intangible fixed assets | − | 0.2
23 | Income tax expense | 4.7 | 0.8 | 3 | Investments in other investments | (1.7) | (3.5)
1, 2 | Depreciation of property, plant and equipment and |  |  |  | Net cash from investing activities | 53.5 | 25.8
| software | 15.3 | 18.2 |  |  |  |
2 | Amortization of other intangible assets | 2.3 | 3.2 |  | Cash flows from financing activities |  |
1, 2 | Impairments of fixed assets | 0.2 | 6.2 | 11 | Payments of lease liabilities | (2.4) | (3.0)
| Share-based payments | 0.1 | (0.0) | 11 | Repayments of borrowings | (56.4) | (51.7)
| Cash flows used in operations before changes |  |  | 11 | Proceeds from borrowings | 20.0 | 7.7
| in working capital | 43.7 | 31.2 | 9 | Own shares repurchased | (2.5) | −
|  |  |  | 9 | Dividends paid | (19.7) | (4.2)
| Change in trade and other receivables | (2.5) | (20.9) |  | Net cash from financing activities | (61.0) | (51.2)
| Change in inventories | 3.7 | 3.2 |  |  |  |
| Change in trade and other payables | (0.0) | 11.3 |  | Change in cash and cash equivalents | 22.9 | (6.9)
| Change in provisions | (5.1) | 5.0 |  |  |  |
| Cash flows used in operations | 39.8 | 29.8 | 7 | Cash and cash equivalents as at 1 January | 6.8 | 13.5
|  |  |  |  | Effect of exchange rate fluctuations on cash held | (0.3) | 0.2
| Interest paid | (4.8) | (8.4) | 7 | Cash and cash equivalents as at 31 December | 29.4 | 6.8
| Interest received | 0.1 | 0.3 |  |  |  |
| Tax paid | (4.7) | (3.2) |  |  |  |
| Net cash flows from operating activities | 30.4 | 18.5 |  |  |  |

A
The statement of cash flows includes the cash flows of discontinued operations. The notes of the
Consolidated financial statements referred to include information excluding discontinued operations.
The total net cash flows from discontinued operations have been disclosed in note 8.
FINANCIAL STATEMENTS
Integrated Annual Report 2025
134
Reporting entity
Kendrion N.V. (the ‘Company’) is domiciled in the Netherlands. The Company’s registered office is at Herikerbergweg 213, 1101 CN Amsterdam.
The consolidated financial statements of the Company as at and for the year ended 31 December 2025 comprise the Company and its subsidiaries
(together also referred to as the ‘Group’). The Group is involved in the design and manufacture of advanced actuators and control systems for a wide
range of industrial applications, including wind energy, robotics, medical devices, factory automation, energy distribution and industrial heating
processes. These solutions enhance efficiency, precision and performance in complex industrial environments.
Basis of preparation
Statement of compliance
The consolidated financial statements as of 31 December 2025 have been prepared in accordance with International Financial Reporting Standards
(IFRS Accounting Standards) and IFRS IC interpretations (IFRIC), published by the International Accounting Standards Board (IASB) as adopted by
the European Union (hereinafter referred to as EU-IFRS) and in accordance with the legal requirements of Part 9, Book 2 of the Dutch Civil Code.
The Company financial statements are integrated part of the 2025 financial statements of Kendrion N.V.
The financial statements were authorized for issue by the Executive Board on 27 February 2026.
Basis of measurement
The financial statements are presented in millions of euros, the euro also being the Company’s functional currency.
The financial statements have been prepared on a historical cost basis except that:
■ derivative financial instruments are stated at fair value;
■ the defined benefit liability is recognized as net total of plan assets and present value of the defined benefit obligations.
The Executive Board had, at the time of approving the financial statements, a reasonable expectation that the Group have adequate resources to
continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the financial
statements.
The methods used to measure the fair values are disclosed in note r. In preparing these consolidated financial statements, the Executive Board has
made judgements and estimates that affect the application of the Group’s accounting policies and the reported amounts of assets, liabilities, income
and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to
estimates are recognized prospectively.
Executive Board made critical judgements in the process of applying Group’s accounting policies and have the most significant effect on the amounts
recognized in the consolidated financial statements, see notes:
■ note 2 – determination of groups of CGUs for goodwill impairment testing;
■ note 5 – selection of valuation method for inventories.
(a)
(b)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
Integrated Annual Report 2025
135
In preparing these consolidated financial statements, the Executive Board has made judgements and estimates that affect the application of the Group’s
accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and
underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognized prospectively.
■ note 8 – Assets classified as held for sale and discontinued operations.
Executive Board made estimations concerning the future, and other key sources of estimation uncertainty at the end of the reporting period,
that may have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.
■ note 2 – management forecast and growth rate of each cash-generating unit to determine whether goodwill is impaired;
■ note 2 – management forecast of cashflows to determine whether customer relations are impaired;
■ note 4 – management forecast of profit before tax for utilisation of tax losses;
■ note 4 – outcome of tax audits;
■ note 5 – valuation of inventories;
■ note 6 – valuation of customer claims and other receivables;
■ note 12 – valuation of defined benefit obligations;
■ note 13 – provisions;
■ note 16 – leases.
Due to the impact on climate change supported by various legislative initiatives, the automotive industry is transitioning from combustion engine vehicles
to electric and hybrid vehicles, which impacts the Groups Automotive business. The imminent phase out of existing technologies has impacted the
accounting estimates around the valuation of goodwill. The economic life and valuation of the tangible fixed assets is not impacted by this changed
outlook. On the other hand the transition towards electrification in automotive and the broader energy transition poses opportunities for the Group to
develop new strategically relevant products and secure profitable growth for the future.
Significant accounting policies
The accounting policies set out below have been applied consistently to all periods presented in these consolidated financial statements
and by the entities within the Group.
Basis of consolidation
Business combinations
No business combination occurred in 2025.
Business combinations are accounted for using the acquisition method at the acquisition date, which is the date on which control is transferred
to the Group. Control refers to the authority to govern the financial and operating policies of an entity to obtain benefits from its activities.
When assessing control, the Group takes into consideration potential voting rights that are currently exercisable.
(a)
(i)
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The Group measures goodwill at the acquisition date as:
■ the fair value of the consideration transferred; plus
■ the recognized amount of any non-controlling interests in the acquiree; plus
■ if the business combination is realized in stages, the fair value of the pre-existing equity interest in the acquiree; less
■ the net recognized amount (generally fair value) of the identifiable assets acquired and liabilities assumed.
If the excess is negative, a bargain purchase gain is recognized immediately in comprehensive income (hereafter also referred to as ‘profit
or loss’). The consideration transferred does not include amounts relating to the settlement of pre-existing relationships. Such amounts
are generally recognized in profit or loss.
Transactions costs, other than those associated with the issue of debt or equity securities that the Group incurs in connection with a business
combination are expensed as incurred.
Any contingent consideration payable is measured at fair value at the acquisition date. If the contingent consideration is classified as equity, then
it is not remeasured and settlement is accounted for within equity. Otherwise, subsequent changes in the fair value of the contingent consideration
are recognized in profit or loss.
When share-based payment awards (replacement awards) are required to be exchanged for awards held by the acquirees employees (acquirees
awards) and relate to past services, then all or part of the amount of the acquirer’s replacement awards is included when measuring the consideration
transferred in the business combination. This determination is based on the market-based value of the replacement awards as compared to the market-
based value of the acquirees awards and the extent to which the replacement awards relate to past and/or future service .
Subsidiaries
Subsidiaries are entities controlled by the Company. The Company controls an entity if it is exposed to, or has rights to, variable returns from
its involvement with the entity and has the ability to affect those returns through its power over the entity. The financial statements of subsidiaries are
included in the consolidated financial statements from the date that control commences, until the date that control ceases. The shares of third parties
in shareholders’ equity and results are stated separately. The accounting policies of subsidiaries are changed, where necessary, to align them with the
policies adopted by the Company.
Transactions eliminated on consolidation
Intragroup balances and transactions, as well as any unrealized gains and losses or income and expenses arising from intragroup transactions,
are eliminated when preparing the consolidated financial statements .
(ii)
(iii)
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Foreign currency
Foreign currency transactions
Transactions expressed in non-euro zone currencies are translated into euros at exchange rates at the date of the transaction. Monetary assets
and liabilities denominated in non-euro zone currencies at the reporting date are translated into euros at the exchange rate at that date.
Non-monetary assets and liabilities denominated in non-euro zone currencies that are measured at historical cost are translated at the exchange rate
at the date of the transaction. Non-monetary assets and liabilities denominated in non-euro zone currencies that are measured at fair value are
translated in euros at the exchange rates when the fair value was determined. Currency differences on foreign currency transactions are recognized
in profit or loss, except loans considered to be part of the net investment, or qualifying cash flow hedges to the extent the hedges are effective.
Translation of foreign currency financial statements
Translation of foreign currency financial statements depends on the functional currency of the company concerned. The closing rate method is applied
if the functional currency of the company is other than the euro. With this method, assets and liabilities of non-euro zone operations, including goodwill
and fair value adjustments arising at the time of acquisition, are translated into euros at exchange rates at the reporting date. The income and expenses
of non-euro zone operations are translated into euros at rates approximating the exchange rates at the date of the transaction. Foreign currency
translation differences are recognized in other comprehensive income and accumulated in the translation reserve, which is a component of equity.
On the partial or complete sale of a foreign operation, the related amount is transferred from the translation reserve to profit or loss.
Foreign exchange gains and losses arising from a monetary item receivable from or payable to a non-euro zone operation, of which the settlement
is neither planned nor likely in the foreseeable future, are considered to form part of a net investment in a non-euro zone operation and are recognized
directly in equity, in the translation reserve.
Property, plant and equipment
Owned assets
Items of property, plant and equipment are measured at cost or assumed cost less accumulated depreciation and accumulated impairment losses
(see accounting policy g). The cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of self-constructed assets
includes the cost of materials, direct labour, the initial estimate, where relevant, of the costs of dismantling and removing the items and reinstating
the site on which they are located, a reasonable proportion of production overheads, and capitalized borrowing costs.
Where parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items of property, plant
and equipment.
Lease
The Group assesses whether a contract is, or contains, a lease, at inception of the contract. The group recognizes a right-of-use asset and a
corresponding lease liability with respect to all lease arrangements in which it is the lessee, except for short-term leases (defined as leases with a lease
term of 12 months or less) and leases of low value assets (such as tablets and personal computers, small items of office furniture and telephones.
(b)
(i)
(ii)
(c)
(i)
(ii)
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For these leases, the group recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease unless another
systematic basis is more representative of the time pattern in which economic benefits from the leased assets are consumed.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the
interest rate implicit in the lease or, if that rate cannot be readily determined, the Group’s incremental borrowing rate. Generally, the Group uses its
incremental borrowing rate as the discount rate. The Group determines its incremental borrowing rate by obtaining interest rates from various external
financing sources and makes certain adjustments to reflect the terms of the lease and type of the asset leased.
Lease liability included in the measurement of the lease liability comprise:
■ Fixed lease payments (include in-substance fixed payments), less any lease incentive receivable;
■ Amounts expected to be payable under a residual value guarantee;
■ Exercise price under a purchase option that the Group is reasonably certain to exercise, lease payments in an optional renewal period if the Group
is reasonably certain to exercise an extension option;
■ Payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to terminate the lease.
The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method)
and by reducing the carrying amount to reflect the lease payments made. The Group remeasures the lease liability (and makes a corresponding
adjustment to the related right-of-use asset) whenever:
■ The lease term has changed or there is a significant event or change in circumstances resulting in a change in the assessment of exercise of
a purchase option, in which cases the lease liability is remeasured by discounting the revised lease payment using a revised discount rate;
■ The lease payments change due to changes in an index or rate or a change in expected payment under a guaranteed residual value, in which cases
the lease liability is remeasured by discounting the revised lease payments using an unchanged discount rate;
■ A lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease liability is remeasured
based on the lease term of the modified lease by discounting the revised lease payments using a revised discount rate at the effective date of
the modification.
The right-of-use asset comprise the initial measurement of the corresponding lease liability, lease payments made at or before the commencement date,
less any lease incentives received and any initial direct costs. They are subsequently measured at costs less accumulated depreciation and impairment
losses.
Whenever the group incurs an obligation for costs to dismantle and remove a leased asset, restore the site on which it is located or restore the
underlying asset to the condition required by the terms and conditions of the lease, a provision is recognized and measured under IAS 37. To the extent
that the costs relate to a right-of-use asset, the costs are included in the related right-of-use asset, unless those costs are incurred to produce
inventories.
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Right-of-use assets are depreciated over the shorter period of lease term and useful life of the right-of-use asset. If a lease transfers ownership of the
underlying asset or the cost of the right-of-use asset reflects that the group expects to exercise a purchase option, the related right-of-use asset is
depreciated over the useful life of the underlying asset. The depreciation starts at the commencement date of the lease.
The group applies IAS 36 to determine whether a right-of-use asset is impaired and accounts for any identified impairment loss as described in the
‘Property, Plant and Equipment’ policy.
Subsequent costs
The cost of replacing part of an item of property, plant and equipment is recognized in the carrying amount of the item if it is probable that the future
economic benefits embodied within the part will flow to the Group, and its cost can be reliably measured. The carrying amount of the replaced part
is derecognized. The costs of the day-to-day servicing of property, plant and equipment are recognized as an incurred charge in profit or loss.
Depreciation
Depreciation is charged to profit or loss on a straight-line basis over the estimated useful life of each component of property, plant and equipment.
Land is not depreciated.
Leased assets are depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life or the end
of the lease term.
Depreciation methods, useful lives and residual values are reviewed annually.
Recognition of transaction results
Gains and losses on the disposal of property, plant and equipment are accounted for in other operating income/other expenses in the statement
of comprehensive income.
Intangible assets
Goodwill
Goodwill that arises upon acquisition of a subsidiary is included in intangible assets. For the measurement of goodwill at initial recognition, see note a.
Goodwill is carried at cost less any accumulated impairment losses. Goodwill is allocated to cash-generating units and is not amortized but is tested
annually for impairment (see note g).
Negative goodwill arising on an acquisition is recognized directly in profit or loss.
(iii)
(iv)
(v)
(d)
(i)
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Research and development
Research and development expenses comprise expenditure on research and development and expenses for customer-specific applications, prototypes
and testing.
Expenditure on research activities undertaken with the prospect of gaining new scientific or technical knowledge and understanding is recognized
in profit or loss as incurred. Development activities involve a plan or design for the production of new or substantially improved products and processes.
Development expenditure is capitalized only if the development costs can be measured reliably, the product or process is technically and commercially
feasible, future economic benefits are probable, and the Group intends to and has sufficient resources to complete the development and to use or sell
the asset. The expenditure capitalized includes the cost of materials, direct labour, overhead costs that are directly attributable to preparing the asset for
its intended use, and capitalized borrowing costs. Other development expenditure is recognized in profit or loss when incurred.
Capitalized development expenditure is measured at cost less accumulated amortization and accumulated impairment losses.
Other intangible assets
Other intangible assets that are acquired by the Group and have finite useful lives are stated at cost less accumulated amortization and accumulated
impairment losses (see note g). Based on the purchase price allocation of acquisitions, intangible assets that are part of the other intangible assets
and relate to, for example, valued customer relations, trade names and technologies are also recognized.
Subsequent expenditure
Subsequent expenditure on capitalized intangible assets is capitalized only if it increases the future economic benefits embodied in the specific
asset to which it relates. All other expenditure is expensed when incurred.
Amortization
Amortization is recognized in profit or loss on a straight-line basis over the estimated useful lives of the intangible assets unless such lives are indefinite.
Goodwill and other intangible assets with an indefinite useful life are systematically tested for impairment at each reporting date. Other intangible assets
are amortized from the date they are available for use. Amortization methods, useful lives and residual values are reviewed at each reporting date and
adjusted if appropriate.
Financial instruments and other investments
Financial instruments
Non-derivative financial instruments
Recognition and initial measurement
Trade receivables are initially recognized when they are originated. All other financial assets and financial liabilities are initially recognized when the Group
becomes a party to the contractual provisions of the instrument. A financial asset (unless it is a trade receivable without a significant financing
component) or financial liability is initially measured at fair value plus, for an item not at Fair value through P&L (‘FVTPL’), transaction costs that are
directly attributable to its acquisition or issue. A trade receivable without a significant financing component is initially measured at the transaction price.
(ii)
(iii)
(iv)
(v)
(e)
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Classification and subsequent measurement
Financial assets are not reclassified subsequent to their initial recognition unless the Group changes its business model for managing financial assets,
in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in the business model.
A financial asset is measured at amortized cost if it meets both of the following conditions and is not designated as at FVTPL:
■ it is held within a business model whose objective is to hold assets to collect contractual cash flows; and
■ its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount
outstanding.
A debt investment is measured at Fair value through OCI (‘FVOCI’) if it meets both of the following conditions and is not designated as at FVTPL:
■ it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and
■ its contractual terms give rise on specified dates to cash flows.
On initial recognition of an equity investment that is not held for trading, the Group may irrevocably elect to present subsequent changes in the
investment’s fair value in OCI. This election is made on an investment-by-investment basis.
All financial assets not classified as measured at amortized cost as described above are measured at FVTPL. This includes all derivative financial assets.
On initial recognition, the Group may irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortized cost or
at FVOCI as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.
The Group makes an assessment of the objective of the business model in which a financial asset is held at a portfolio level because this best reflects
the way the business is managed, and information is provided to management. Financial assets that are held for trading or are managed and whose
performance is evaluated on a fair value basis are measured at FVTPL.
Assessment whether contractual cash flows are solely payments of principal and interest
For the purposes of this assessment, ‘principal’ is defined as the fair value of the financial asset on initial recognition. ‘Interest’ is defined as
consideration for the time value of money and for the credit risk associated with the principal amount outstanding during a particular period
of time and for other basic lending risks and costs (e.g. liquidity risk and administrative costs), as well as a profit margin.
In assessing whether the contractual cash flows are solely payments of principal and interest, the Group considers the contractual terms of the
instrument. This includes assessing whether the financial asset contains a contractual term that could change the timing or amount of contractual
cash flows such that it would not meet this condition. In making this assessment, the Group considers:
■ contingent events that would change the amount or timing of cash flows;
■ terms that may adjust the contractual coupon rate, including variable-rate features;
■ prepayment and extension features; and
■ terms that limit the Group’s claim to cash flows from specified assets (e.g. non-recourse features).
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Financial liabilities
Financial liabilities are classified as measured at amortized cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held-for-trading,
it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses,
including any interest expense, are recognized in profit or loss. Other financial liabilities are subsequently measured at amortized cost using the effective
interest method. Interest expense and foreign exchange gains and losses are recognized in profit or loss. Any gain or loss on derecognition is also
recognized in profit or loss.
Derecognition
The Group derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive
the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in
which the Group neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset.
The Group derecognizes a financial liability when its contractual obligations are discharged or cancelled, or expire. The Group also derecognizes a
financial liability when its terms are modified, and the cash flows of the modified liability are substantially different, in which case a new financial liability
based on the modified terms is recognized at fair value. On derecognition of a financial liability, the difference between the carrying amount extinguished
and the consideration paid (including any non-cash assets transferred or liabilities assumed) is recognized in profit or loss .
Offsetting
Financial assets and financial liabilities are offset and the net amount presented in the statement of financial position when, and only when, the Group
currently has a legally enforceable right to set off the amounts, it intends either to settle them on a net basis or to realize the asset and settle the liability
simultaneously and the financial assets and financial liabilities are with the same party.
Other investments
Associates are those entities in which the Group has significant influence, but not control or joint control, over the financial and operating policies.
Interests in associates and the joint venture are accounted for using the equity method. They are initially recognized at cost, which includes transaction
costs. Subsequent to initial recognition, the consolidated financial statements include the Group’s share of the profit or loss and OCI of equity-
accounted investees, until the date on which significant influence or joint control ceases.
Trade and other receivables
Trade and other receivables represent the Group’s right to an amount of consideration that is unconditional. Trade and other receivables are carried
at amortized cost, less impairment losses (see note g). An exception is made for trade receivables of designated customers of a limited number of
subsidiaries of the Group, which are sold to a factoring company, with limited recourse. These trade debtors are measured at fair value through profit
and loss, until they are derecognized at the moment that the invoices are sold to the factoring company.
Recognized interest-bearing loans and borrowings
After initial recognition, interest-bearing loans and borrowings are carried at amortized cost with any difference between the initial carrying amount
and the redemption amount, based on the effective interest method, taken to profit or loss over the respective terms of the loans .
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Trade and other payables
Trade and other payables are carried at amortized cost.
Cash and cash equivalents
Cash and cash equivalents comprise cash and bank balances and other call deposits payable on demand. Bank overdrafts that are repayable on
demand and form an integral part of the Group’s cash management, are included as a component of cash and cash equivalents in the statement
of cash flows. Cash and cash equivalents are measured at amortized cost.
Other non-derivative financial instruments
Other non-derivative financial instruments are measured at amortized cost using the effective interest method, less any impairment losses.
Derivative financial instruments, including hedge accounting
The Group holds derivative financial instruments to hedge its foreign currency and interest rate exposures. Embedded derivatives are separated from
the host contract and accounted for separately if the host contract is not a financial asset and certain criteria are met. As at 31 December 2025,
no embedded derivatives existed.
Derivatives are initially measured at fair value, with attributable transaction costs recognized in the statement of comprehensive income when they
are incurred. Subsequent to initial recognition, derivatives are carried at fair value. Any changes are taken to profit or loss.
The Group designates certain derivatives as hedging instruments to hedge the variability in cash flows associated with highly probable forecast
transactions arising from changes in foreign exchange rates and interest rates and certain derivatives and non-derivative financial liabilities as hedges
of foreign exchange risk on a net investment in a foreign operation. At inception of designated hedging relationships, the Group documents the risk
management objective and strategy for undertaking the hedge. The Group also documents the economic relationship between the hedged item and
the hedging instrument, including whether the changes in cash flows of the hedged item and hedging instrument are expected to offset each other.
Changes in the fair value of a derivative hedging instrument designated as a cash flow hedge are recognized in other comprehensive income and
presented in the hedging reserve.
The effective portion of changes in the fair value of the derivative that is recognized in OCI is limited to the cumulative change in fair value of the hedged
item, determined on a present value basis, from inception of the hedge. Any ineffective portion of changes in the fair value of the derivative is recognized
immediately in profit or loss. The Group designates only the change in fair value of the spot element of forward exchange contracts as the hedging
instrument in cash flow hedging relationships. The change in fair value of the forward element of forward exchange contracts (‘forward points’) is
separately accounted for as a cost of hedging.
When the hedged forecast transaction subsequently results in the recognition of a non-financial item such as inventory, the amount accumulated in
the hedging reserve and the cost of hedging reserve is included directly in the initial cost of the non-financial item when it is recognized.
For all other hedged forecast transactions, the amount accumulated in the hedging reserve and the cost of hedging reserve is reclassified to profit or
loss in the same period or periods during which the hedged expected future cash flows affect profit or loss.
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If the hedge no longer meets the criteria for hedge accounting or the hedging instrument is sold, expires, is terminated or is exercised, then hedge
accounting is discontinued prospectively. When hedge accounting for cash flow hedges is discontinued, the amount that has been accumulated in the
hedging reserve remains in equity until, for a hedge of a transaction resulting in the recognition of a non-financial item, it is included in the non-financial
item’s cost on its initial recognition or, for other cash flow hedges, it is reclassified to profit or loss in the same period or periods as the hedged expected
future cash flows affect profit or loss.
If the hedged future cash flows are no longer expected to occur, then the amounts that have been accumulated in the hedging reserve and the cost
of hedging reserve are immediately reclassified to profit or loss.
Inventories
Inventories are measured at the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of
business, less the estimated costs of completion and the estimated costs to sell. The cost of inventories of the Group is based on the weighted
average cost, and includes expenditure incurred in acquiring the inventories, production or conversion costs, and other costs incurred in bringing
them to their current location and condition. The cost of inventories includes an appropriate share of overheads based on normal operating capacity.
Impairment
Financial assets
The Group recognizes impairments for financial assets based on the ‘expected credit loss’ model. The Group measures loss allowances at an amount
equal to the lifetime expected credit losses.
Expected credit losses are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls,
being the difference between the cash flows due to the entity in accordance to the contract and the cash flows that the Group expects to receive.
The Group makes use of the simplified method for trade receivables and contracts assets as set out in IFRS 9.
The expected credit losses for significant financial assets are determined on an individual basis. The remaining financial assets are assessed collectively
in groups of assets that have similar credit risk characteristics.
All impairment losses are recognized in the consolidated statement of comprehensive income.
An impairment loss is reversed if the reversal can be related objectively to an event occurring after the impairment loss was recognized.
For financial assets measured at amortized cost, the reversal is recognized in profit or loss.
Non-financial assets
The carrying amounts of the Group’s non-financial assets, other than inventories and deferred tax assets, are reviewed at each reporting date
to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated.
For goodwill and intangible assets that have indefinite lives or that are not yet available for use, the recoverable amount is estimated at each
reporting date.
(f)
(g)
(i)
(ii)
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The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use,
the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time
value of money and the risks specific to the asset. For the purpose of impairment testing, assets are grouped together into the smallest group of assets
that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the ‘cash-
generating unit’). For the purpose of impairment testing, the goodwill acquired in a business combination is allocated to cash-generating units that are
expected to benefit from the synergies of the combination.
An impairment loss is recognized if the carrying amount of an asset or its cash-generating unit exceeds its estimated recoverable amount. Impairment
losses are recognized in profit or loss. Impairment losses recognized in respect of cash-generating units are first allocated to reduce the carrying amount
of any goodwill allocated to the units and then to reduce the carrying amount of the other assets in the unit (group of units) on a pro rata basis.
Reversal of impairment losses
Impairment losses in respect of goodwill are not reversed. Impairment losses in respect of other assets are reversed if there has been a change in
the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not
exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.
Reversals of impairment losses are recognized in profit or loss .
Calculation of recoverable amount
The recoverable amount of the Group’s receivables carried at amortized cost is calculated as the present value of estimated future cash flows,
discounted at the original effective interest rate (i.e. the effective interest rate computed on initial recognition of these financial assets). Receivables
with a short remaining term are not discounted . The recoverable amount of other assets is the greater of their net selling price and value in use .
In determining value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current
market assessments of the time value of money and the risks specific to the asset. For an asset that does not generate largely independent cash
inflows, the recoverable amount is determined for the cash-generating unit to which the asset belongs.
Share capital
Ordinary shares
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares are recognized as a deduction
from equity, net of any tax effect.
Repurchase, disposal and reissue of share capital (treasury shares)
When own shares recognized as equity are repurchased, the amount of the consideration paid, including directly attributable costs and net of any tax
effects, is recognized as a deduction from equity. Repurchased shares are presented in the reserve for own shares as a deduction from total equity. If
treasury shares are sold or reissued subsequently, the amount received is recognized as an increase in equity, and the resulting surplus or deficit on the
transaction is transferred respectively to or from other reserves.
(iii)
(iv)
(h)
(i)
(ii)
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Dividends
The holders of ordinary shares are entitled to receive dividends as determined from time to time by the General Meeting of Shareholders.
The Executive Board has the authority to decide, with the approval of the Supervisory Board, what portion of the profit will be allocated to the reserves.
If applicable, the declared but unpaid dividends are recognized as a liability.
Employee benefits
Defined contribution plans
A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and will have
no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution pension plans are recognized
as an employee benefit expense in profit or loss when incurred. Prepaid contributions are recognized as an asset to the extent that a cash refund
or reduction in future payments will occur.
Defined benefit plans
A defined benefit plan is a post-employment benefit plan other than a defined contribution plan. The Group’s net obligation in respect of defined benefit
plans is calculated separately for each plan by estimating the amount of future benefit that employees have earned in return for their service in the
current and prior periods; that benefit is discounted to determine its present value. The fair value of any plan assets is deducted. The Group determines
the net interest expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate used to measure the defined
benefit obligation at the beginning of the annual period to the net defined benefit liability (asset). The discount rate is the yield at the reporting date
on Corporate bonds that have maturity dates approximating the terms of the Group’s obligations and that are denominated in the same currency
in which the benefits are expected to be paid.
The calculation is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a benefit to the
Group, the recognized asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions
in future contributions to the plan. In order to calculate the present value of economic benefits, consideration is given to any minimum funding
requirements that apply to any plan in the Group. An economic benefit is available to the Group if it is realisable during the life of the plan, or on
settlement of the plan liabilities.
Remeasurements arising from defined benefit plans comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect
of the asset ceiling (if any, excluding interest). The Group recognizes them immediately in other comprehensive income, and all other expenses related
to defined benefit plans as employee benefit expenses in profit or loss. When the benefits of a plan are changed, or when a plan is curtailed, the portion
of the changed benefit relating to past service by employees, or the gain or loss on curtailment, is recognized immediately in profit or loss when the plan
amendment or curtailment occurs. The Group recognizes gains and losses on the settlement of a defined benefit plan when the settlement occurs.
The gain or loss on a settlement is the difference between the present value of the defined benefit obligation being settled as determined on the
date of settlement and the settlement price, including any plan assets transferred and any payments made directly by the Group in connection with
the settlement.
(iii)
(i)
(i)
(ii)
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147
Other long-term service benefits
The Group’s net obligation in respect of long-term service benefits other than pension plans is the amount of future benefit that employees have earned
in return for their service in the current and prior periods. The obligation is calculated using the projected unit credit method, discounted to its present
value and net of the fair value of any related assets. The discount rate is the yield at the financial position date on corporate bonds that have maturity
dates approximating the terms of the Group’s obligations. Any actuarial gains and losses are recognized in profit or loss in the period in which they arise.
Share-based payment transactions
As only equity settled share-based payments are applicable only the accounting policy for these transactions has been included.
The fair value on the grant date of share-based payment awards made to employees and the Executive Board is recognized as an employee expense,
with a corresponding increase in equity, over the period that the employees unconditionally become entitled to the awards. The amount recognized
as an expense is adjusted to reflect the number of awards for which the related service and non-market vesting conditions are expected to be met,
so that the amount ultimately recognized as an expense is based on the number of awards that meet the related service and non-market performance
conditions at the vesting date. For share-based payment awards with non-vesting conditions, the fair value on the grant date of the share-based
payment is measured to reflect such conditions, with no true-up for differences between expected and actual outcomes.
Short-term employee benefits
A liability is recognized for the amount expected to be paid if the Group has a present legal or constructive obligation to pay this amount as a result
of past service provided by the employee and the obligation can be estimated reliably. Short-term employee benefits are expensed as the related
service is provided.
Termination benefits
Termination benefits are expensed at the earlier of when the Group can no longer withdraw the offer of those benefits and when the Group recognized
costs for a restructuring. If benefits are not expected to be settled wholly within 12 months of the reporting date, then they are discounted.
Provisions
A provision is recognized in the statement of financial position if the Group has a present legal or constructive obligation as a result of a past event,
that can be estimated reliably and it is probable that settlement of the obligation will involve an outflow of funds. If the effect is material, provisions are
determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and,
where appropriate, the risks specific to the liability. The unwinding of the discount is recognized as finance cost.
Restructuring provisions
A provision for restructuring is recognized when the Group has approved a detailed and formal restructuring plan, and the restructuring either has
commenced or has been announced publicly. Future operating losses are not provided for.
(iii)
(iv)
(v)
(vi)
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Assets classified as held for sale and discontinued operations
Assets classified as held for sale are measured at the lower of carrying amount and fair value less costs to sell.
Assets are classified as held for sale if their carrying amount will be recovered through a sale transaction rather than through continuing use.
This condition is regarded as met only when the sale is highly probable and the asset (or disposal group) is available for immediate sale in its present
condition. Management must be committed to the sale which should be expected to qualify for recognition as a completed sale within one year from
the date of classification.
Discontinued operations, which are described in note 8, are excluded from the results of continuing operations and are presented as a single amount
as profit or loss after tax from discontinued operations in the statement of profit or loss. Additional disclosures are provided in note 8. All other notes to
the Consolidated statement of profit and loss and other comprehensive income include amounts for continuing operations, unless indicated otherwise .
Revenue
Revenue from contracts with customers
Revenue from contracts with customers is recognized when control of the goods or services are transferred to the customer at an amount that reflects
the consideration (net of discounts, rebates, returns and excluding VAT) to which the Group expects to be entitled in exchange for those goods or
services. The Group has generally concluded that it is the principal in its revenue arrangements because it typically controls the goods or services before
transferring them to the customer.
Sale of goods
Revenue from sale of goods is recognized at the point in time when control of the asset is transferred to the customer, generally on delivery
of the goods. The normal credit term is 15 up to 90 days upon delivery.
The Group considers whether there are other promises in the contract that are separate performance obligations to which a portion of the
transaction price needs to be allocated (e.g. warranties). In determining the transaction price for the sale of equipment, the Group considers
the effects of variable consideration (e.g. early payment discount, volume rebates), the existence of significant financing components, noncash
consideration, and consideration payable to the customer (if any).
If the consideration in a contract includes a variable amount, the Group estimates the amount of consideration to which it will be entitled in exchange
for transferring the goods to the customer. The variable consideration is estimated at contract inception and constrained until it is highly probable
that a significant revenue reversal in the amount of cumulative revenue recognized will not occur when the associated uncertainty with the variable
consideration is subsequently resolved. Some contracts for the sale of goods provide customers with a right of return and or volume rebates and
or early payment discount. These conditions might give rise to variable consideration.
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Certain contracts provide a customer the right to apply an early payment discount when the consideration to which the Group is entitled is transferred
to the Group before the contractual agreed credit terms. Those rebates are offset against amounts payable by the customer. To estimate the variable
consideration for the expected future early payment rebates, the Group applies the most likely amount method for contracts with a single-volume
threshold and the expected value method for contracts with more than one volume threshold. The selected method that best predicts the amount
of variable consideration is primarily driven by the payment behavior in the past and or any agreement with the customer when the consideration
will be transferred.
The related costs are recognized in profit or loss when they are incurred. Advances received are included in contract liabilities.
Services
Apart from sales of goods the Group provides limited services such as repairs and engineering/development services. Revenues from services
are recognized in proportion to the services rendered, based on the cost incurred in respect of the services performed up to balance sheet date,
in proportion to the estimated costs of the aggregate services to be performed. The cost price of these services is allocated to the same period.
Contract assets
The Group recognizes incremental costs of obtaining a contract and certain costs to fulfil a contract as an asset if the Group expects to recover those
costs. Any capitalized contract costs assets will be amortized on a systematic basis that is consistent with the entity’s transfer of the related goods
or services to the customer.
Contract liabilities
A contract liability is the obligation to transfer goods or services to a customer for which the Group has received consideration (or an amount of
consideration is due) from the customer. If a customer pays consideration before the Group transfers goods or services to the customer, a contract
liability is recognized when the payment is made, or the payment is due (whichever is earlier). Contract liabilities are recognized as revenue when
the Group performs under the contract.
Expenses
Lease expenses – short-term leases and leases of low-value assets
The Group has elected not to recognize right-of-use assets and lease liabilities for short-term leases of machinery that have a lease terms of
12 months or less and lease of low-value assets. Individual lease assets with a new value of EUR 5,000 or less (or any other foreign currency equivalent)
are considered to be low value assets. The Group recognizes the lease payments associated with these leases as an expense on straight-line basis
over the lease term.
(m)
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Net finance costs
Finance income comprises interest income on funds invested, and financial assets held to maturity. Interest income is recognized in profit or loss
as it accrues, using the effective interest method.
Finance expense comprises interest expense on borrowings, commitment fees, accrued interest on provisions, interest on pension liabilities, impairment
losses recognized on financial assets and losses on interest rate hedge instruments to the extent they are recognized in profit or loss. All borrowing
costs are recognized in profit or loss using the effective interest method.
Realized and unrealized foreign currency gains and losses on monetary assets and liabilities, including changes in fair value of currency hedge
instruments that are not qualified as cash flow hedges, are reported on a net basis .
Income tax
Income tax for the year comprises current and deferred tax. Income tax is recognized in profit or loss unless it relates to items recognized directly in
equity, in which case it is recognized in equity. The Group has determined that interest and penalties related to income taxes, including uncertain tax
treatments, do not meet the definition of income taxes, and therefore accounted for them under IAS 37 Provisions, Contingent Liabilities and Contingent
Assets.
Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or
receivable in respect of previous years. The amount of current tax payable or receivable is the best estimate of the tax amount expected to be paid or
received that reflects uncertainty related to income taxes, if any. It is measured using tax rates enacted or substantively enacted at the reporting date.
Current tax also includes any tax arising from dividends.
Current tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when
they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.
Deferred tax is recognized using the balance sheet method, providing for temporary differences between the carrying amounts of assets and liabilities
for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognized for the following temporary differences:
■ a transaction that is not a business combination, at the time of the transaction, affects neither accounting nor taxable profit and, at the time of the
transaction, does not give rise to equal taxable and deductible temporary differences;
■ relating to investments in subsidiaries and jointly controlled entities to the extent that it is probable that they will not be reversed in the foreseeable
future;
■ arising on the initial recognition of goodwill.
Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, using tax rates enacted
or substantively enacted at the reporting date, and reflects uncertainty related to income taxes, if any.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax assets and liabilities, and they relate to income taxes
levied by the same tax authority on the same taxable entity; or on different tax entities, but the intention is to settle current tax liabilities and assets on
a net basis or their tax assets and liabilities will be realized simultaneously.
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A deferred tax asset is recognized to the extent that it is probable that future taxable profits will be available against which the asset can be applied.
Deferred tax assets are reduced if it is no longer probable that the related tax benefit will be realized.
Additional income taxes that arise from the distribution of a dividend are recognized at the same time as the liability to pay the related dividend
is recognized.
Uncertain tax items for which a provision is made relate principally to the interpretation of tax legislation regarding arrangements entered into by the
Group. Due to the uncertainty associated with such tax items, there is a possibility that, on conclusion of open tax matters at a future date, the final
outcome may differ significantly.
Earnings per share
The Company presents basic and diluted earnings per share data for its ordinary shares. Basic earnings per share is calculated by dividing the profit or
loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the reporting period.
Diluted earnings per share is determined by adjusting profit or loss attributable to ordinary shareholders and the weighted average number of ordinary
shares outstanding, for the effects of all dilutive potential ordinary shares.
Segment reporting
The Group defines and presents operating segments based on the information that is provided internally to the Executive Board, the Group’s chief
operating decision-maker. This is in conformity with IFRS 8 – Operating segments.
On the basis of the criteria of IFRS 8, Kendrion has three operating segments, the business groups Industrial Brakes and Industrial Actuators and
Controls, and Mobility. An operating segment is a part of the Group engaging in business activities that may result in revenue and expenses, including
the revenue and expenses relating to transactions with any of the Group’s other segments. The Executive Board conducts regular reviews of the
operating segment’s results to reach decisions on the resources to be allocated to the segment and to assess its performance, whereby separate
financial information for each operating segment is available.
In accordance with IFRS 8, the Company also discloses general and entity-wide information, including information about geographical areas and major
customers of the Group as a whole. More information on the reportable segments is provided in note 19.
New standards and interpretations
The following amendment to standards became effective, and have been endorsed by the European Union, for annual periods beginning on or after 1
January 2025 and therefore apply to the year ended 31 December 2025:
■ Amendments to IAS 21 - Lack of exchangeability
This amendment does not have a significant impact on the Group’s consolidated financial statements.
The following standards or interpretations published by the International Accounting Standards Board (IASB) and the International Financial Reporting
Interpretations Committee (IFRIC) are not effective at 31 December 2025:
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■ IFRS 18 - Presentation and disclosure in financial statements;
■ IFRS 19 - Subsidiaries without Public Accountability;
■ Amendments to IFRS 9 and IFRS 7- Classification and Measurement of Financial Instruments;
■ Amendments to IFRS 10 and IAS 28 - Sale or Contribution of Assets between an Investor and its Associate or Joint Venture.
■ Amendments to IAS 21 - Translation to a Hyperinflationary Presentation Currency
The new standards and amendments to standards that are not yet effective are expected to have no significant impact on the Group’s consolidated
financial statements, except for IFRS 18. This standard provides additional requirements for the classification of the income statement as well as
additional disclosure requirements for management-defined performance measures. The classification of the income statement will be amended in
2027. The Company is currently in the process of assessing the impact.
Fair values
Measurement of fair value
Several of the Group’s accounting policies, as well as the information supplied by the Group, require the fair value of both financial and non-financial
assets and liabilities to be determined. For valuation and information supplied, the fair value is measured using the methods below. Where applicable,
more detailed information on the basis of the fair value measurement is disclosed in the specific notes on the asset or liability in question. The principal
methods and assumptions used in estimating the fair value of financial instruments included in the summary are given below.
Property, plant and equipment
The fair value of property, plant and equipment recognized as a result of a business combination is based on market value in use. The market value of
property is the estimated amount for which the property in question could be exchanged on the valuation date between a buyer and seller in an arm’s
length transaction, in which both parties have acted knowledgeably, prudently and without compulsion. The market value of other items of property,
plant and equipment is based on the quoted market prices of comparable assets and goods.
Intangible assets
The fair value of patents and trademarks acquired as part of a business combination is measured on the basis of the discounted estimated royalties that
have been avoided through ownership of the patent or trademark. The fair value of customer relationships acquired in a business combination is based
on the excess earnings method over multiple periods, valuing the asset in question by deducting a real return on all other assets which in total create
the related cash flows. The fair value of other intangible assets is based on the expected discounted value of the cash flows from the use and ultimate
sale of these assets.
Lease liabilities
The fair value is estimated on the basis of the present value of future cash flows, discounted at the interest rate for lease contracts of a similar nature.
The estimated fair value reflects movements in interest rates.
(r)
(i)
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Inventories
The fair value of inventories acquired as part of a business combination is determined on the basis of the estimated selling price as part of normal
business operations, less the estimated costs of completion and the selling costs, plus a reasonable profit margin that reflects the completion and sales
effort.
Trade and other receivables/trade and other payables
The face value of receivables and liabilities falling due within one year is regarded as a reflection of their fair value. The fair value of all other receivables
and liabilities is measured on the basis of present value. The discount factor is based on the risk-free interest rate of the same duration as the receivable
and/or payable, plus a credit mark-up reflecting the credit worthiness of the Group.
Interest-bearing loans
The fair value is calculated on the basis of the present value of future repayments of principal and interest at the prevailing market rate of interest,
supplemented by a credit mark-up reflecting the credit worthiness of the Group.
Derivatives
The fair value of derivatives is based on the present value of the contractual cash flows for the remaining term based on a risk-free interest rate.
Non-derivative financial liabilities
The fair value of non-derivative financial liabilities is determined from information supplied and is based on the present value of future repayments
of principal and interest, discounted at a risk-free rate, and a margin based on the credit worthiness of the Group on the reporting date.
Contingent consideration
The fair value of contingent considerations arising in a business combination is calculated using the income approach based on the expected payment
amounts and their associated probabilities. If appropriate, it is discounted to present value.
Financial risk management
The Group has exposure to the following risks from its use of financial instruments:
■ credit risk;
■ liquidity risk;
■ market risk.
This section provides general information about the Group’s exposure to each of the above risks in the course of its normal business operations,
the Group’s objectives, policies and processes for measuring and managing risk, and the Group’s management of capital. Further quantitative
disclosures are included in the financial instrument section in these consolidated financial statements.
The Executive Board bears the ultimate responsibility for the organization and control of the Group’s risk management framework. The Group’s risk
policy is designed to identify and analyse the risks confronting the Group, implement appropriate risk limits and control measures, and monitor the risks
and compliance with the limits. The risk management policy and systems are evaluated at regular intervals and, if necessary, adapted to accommodate
changes in market conditions and the Group’s operations.
(v)
(vi)
(vii)
(viii)
(ix)
(x)
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The Company’s Supervisory Board supervises compliance with the Group’s risk management policy and procedures.
For a more detailed description of risk management and the position of financial risk management in the Group’s framework, see the ‘‘Risk
Management’’ section on page 31.
Credit risk
Credit risk is the risk of financial loss to the Group in the event that a customer or counterparty to a financial instrument fails to meet its contractual
obligations. Credit risks arise primarily from accounts receivable, derivative transactions concluded with banks, and cash positions and deposits held
with banks. The Group continually monitors the credit risk within the Group. The Group does not normally require collateral for trade and other
receivables or financial assets.
The credit policy includes an assessment of the creditworthiness of every new major customer before offering payment and delivery terms.
This assessment includes external credit ratings or reports if they are available. The creditworthiness of major customers is actively monitored
on an ongoing basis.
The Group recognizes impairment provisions of an amount equal to the estimated losses on trade and other receivables and other investments.
The main component of this provision comprises specific provisions for losses on individual accounts of material significance.
Credit concentration risk
The geographical credit risk from the Group’s direct customers is largely concentrated in Germany. However, as the Group’s most important customers
in the various segments of the German market are multinational or global players, this reduces the Group’s dependency on the German market.
More details on credit concentration risk can be found in note 15.
Investments and financial instruments
The Group currently does not invest in debt securities. Cash positions and exposure to the financial instruments of financial counterparties are
monitored actively. The Group’s main financial counterparties are well-established banks with good creditworthiness. The cash in bank accounts
at other than the core-relationship banks is maintained at the minimum level required for the operations of the Group’s companies.
Liquidity risk
The liquidity risk is the risk that the Group is unable to meet its financial obligations at the required time. Liquidity risk management is based on the
maintenance of sufficient liquidity in the form of unused (committed) credit facilities or cash to meet present and future financial obligations in normal
and adverse circumstances.
A summary of the credit lines available to the Group is disclosed in note 11 of these consolidated financial statements. The majority of the available
facilities are provided by a syndicate of lenders consisting of HSBC and ING Bank on an equal basis. The Group had approximately EUR 109 million
available in cash and undrawn facilities on the financial position date.
(i)
(ii)
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Market risk
The market risk is the risk of the deterioration of the Group’s income due to movements in market prices, such as those relating to exchange rates
and interest rates. The management of market risk exposure is intended to keep the market risk position within acceptable limits.
Derivatives are used to manage specific market risks. These transactions are carried out within the treasury framework adopted by the Executive Board.
If necessary, the Group uses hedge accounting to manage volatility in the statement of comprehensive income.
Interest rate risk
Pursuant to the Group’s policy more than 50% of the exposure to changes in interest rates on borrowings is maintained on a fixed rate basis, taking into
account any assets with exposure to changes in interest rates and expected short-term free cash flows. The policy is implemented by making use of
derivative financial instruments such as interest rate swaps and interest rate options.
The Group has currently outstanding interest swap contracts with a total underlying notional value of EUR 50 million in order to reduce interest rate risk
exposure to increasing market rates. EUR 25 million matures in 2026 and EUR 25 million in 2027.
Currency risk
The Group is exposed to exchange rate risks on sales, purchases, equity positions and loans expressed in currencies other than the euro. The Group
companies are primarily financed in their own currency. The majority of the revenues and costs of the Group companies are realized in the euro zone.
Sales outside the euro zone are partly generated locally and partly through exports from the euro zone. Most of these exports are realized in euros.
Other currencies are actively monitored and where needed exposure is hedged, however less structural exposure is identified.
The Group also actively hedges intercompany loans in foreign currencies with currency forwards, swaps or back-to-back loans in the same foreign
currency.
Pursuant to the Group’s policy for other monetary assets and liabilities denominated in a foreign currency, net exposure is maintained at an acceptable
level by buying or selling foreign currencies at spot rates as required to correct short-term imbalances.
The Group’s policy stipulates that, in principle, equity investments and other translation exposures are not hedged.
Other price risks
Steel, copper and rare earth metals used in permanent magnets are the most important commodities for the Group.
Copper constitutes the Group’s main direct exposure to raw material price risks, since copper wire is an important component of electromagnets.
Pursuant to the Group’s policy, the sensitivity to copper prices is actively reduced both by concluding fixed-price purchase contracts in the normal
course of business with copper wire suppliers and by including raw material clauses in sales contracts. As the need arises the Group can also conclude
derivative financial instrument contracts with financial counterparties to hedge the copper risk. No financial derivative contracts for raw materials were
outstanding at the balance sheet date.
(v)
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The Group is also exposed to risks associated with rare earth metals such as neodymium, a component of permanent magnets, which are used
in some of the Group’s products. Prices of these commodities have shown significant volatility in the past. The Group closely monitors developments
in this market and has increased stock levels and the number of supply sources for these permanent magnets.
Furthermore, agreements have been made with customers representing the majority of the sales volume in this context, to link sales prices
to movements in permanent magnet prices.
The Group is mainly indirectly exposed to raw material price risks relating to oil and steel, primarily as part of the purchase prices of machined
components. This exposure is monitored and, if feasible, reduced by means of raw material clauses with customers and by concluding fixed-price
agreements with suppliers for periods of between six and twelve months. The Kendrion steel contracts also partly govern the purchasing from
component suppliers.
Raw materials are purchased separately by each business unit, but in accordance with the group policy reviewed periodically with the objective
of further increasing and sharing knowledge on commodities and commodity markets between business units, reducing risks and/or prices.
Capital management
The Executive Board’s policy is designed to maintain a strong capital gearing to retain the confidence of investors, creditors and the markets,
and to safeguard the future development of the business activities. The Executive Board monitors the return on equity, which the Group defines
as the net operating result divided by shareholders’ equity, excluding minority interests. The Executive Board also monitors the level of dividend
distributed to ordinary shareholders.
The Executive Board seeks to strike a balance between a higher return that would be achievable with a higher level of borrowed capital and
the benefits and security of sound capital gearing.
Kendrion intends to distribute an annual dividend of at least 50% of normalized net profit before amortization, taking into consideration the amount of
net profit to be retained to support the medium and long-term strategic plans of the company and to maintain a minimum solvency of 35%.
Neither the Company nor its subsidiaries are subject to any externally imposed capital requirements beyond those stipulated by law.
Government Grants
Grants that compensate the Group for expenses incurred are recognized in profit or loss as deduction on the related expense on a systematic basis
in the periods in which the expenses are recognized, unless the conditions for receiving the grant are met after the related expenses have been
recognized. In this case, the grant is recognized when it becomes receivable.
(ix)
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Property, plant and equipment

EUR million | 2025 | 2024
Property plant and equipment owned | 46.6 | 89.0
Property plant and equipment right-of-use assets | 5.8 | 7.0
Total | 52.4 | 96.0

Property, plant and equipment owned | Land and | Plant and | Other fixed | Under |
EUR million | buildings | equipment | assets | construction | Total
Balance as at 1 January 2024 |  |  |  |  |
Costs | 95.7 | 181.6 | 74.6 | 15.9 | 367.8
Accumulated depreciation and impairment losses | (39.9) | (141.7) | (59.8) | (4.4) | (245.8)
Carrying amount as at 1 January 2024 | 55.8 | 39.9 | 14.8 | 11.5 | 122.0
Purchases | 0.3 | 2.0 | 2.6 | 4.8 | 9.7
Disposals | (0.0) | (0.0) | (0.0) | (0.0) | (0.0)
Transfers | 0.0 | 6.0 | 0.7 | (6.7) | –
Currency translation differences | 0.9 | 0.2 | 0.1 | 0.2 | 1.4
Divestments cost value A | (8.7) | (129.9) | (20.5) | (0.9) | (160.0)
Depreciation for the year | (3.1) | (6.6) | (3.6) | (0.1) | (13.4)
Impairments | – | – | (0.0) | (0.1) | (0.1)
Divestments accumulated amortization and impairment losses A | 0.7 | 110.4 | 18.3 | 0.0 | 129.4
Carrying amount as at 31 December 2024 | 45.9 | 22.0 | 12.4 | 8.7 | 89.0
Costs | 88.2 | 59.9 | 57.5 | 13.3 | 218.9
Accumulated depreciation and impairment losses | (42.3) | (37.9) | (45.1) | (4.6) | (129.9)
Carrying amount as at 31 December 2024 | 45.9 | 22.0 | 12.4 | 8.7 | 89.0

1
A
Refer to note 8 Assets held for sale and discontinued operations for more information on the divestment .
FINANCIAL STATEMENTS
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158

Property, plant and equipment owned | Land and | Plant and | Other fixed | Under |
EUR million | buildings | equipment | assets | construction | Total
Balance as at 1 January 2025 |  |  |  |  |
Costs | 88.2 | 59.9 | 57.5 | 13.3 | 218.9
Accumulated depreciation and impairment losses | (42.3) | (37.9) | (45.1) | (4.6) | (129.9)
Carrying amount as at 1 January 2025 | 45.9 | 22.0 | 12.4 | 8.7 | 89.0
Purchases | 0.8 | 1.9 | 1.8 | 1.7 | 6.2
Disposals | (0.0) | (0.8) | (0.1) | (0.1) | (1.0)
Transfers A | 1.6 | 0.9 | 1.3 | (1.9) | 1.9
Currency translation differences | (2.2) | (0.8) | (0.2) | (0.4) | (3.6)
Divestments cost value A | (26.8) | (12.3) | (5.6) | (7.4) | (52.1)
Depreciation for the year | (1.8) | (5.3) | (3.7) | (0.0) | (10.8)
Impairments | (0.0) | (0.0) | (0.0) | - | (0.0)
Divestments accumulated amortization and impairment losses A | 3.6 | 6.3 | 3.1 | 4.0 | 17.0
Carrying amount as at 31 December 2025 | 21.1 | 11.9 | 9.0 | 4.6 | 46.6
Costs | 56.4 | 50.3 | 50.9 | 6.1 | 163.7
Accumulated depreciation and impairment losses | (35.3) | (38.4) | (41.9) | (1.5) | (117.1)
Carrying amount as at 31 December 2025 | 21.1 | 11.9 | 9.0 | 4.6 | 46.6

A
Refer to note 8 Assets held for sale and discontinued operations for more information on the divestment and the transfer of assets from held for sale to property. plant
and equipment.
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Right-of-use assets | Land and | Plant and | Other fixed | Under |
EUR million | buildings | equipment | assets | construction | Total
Balance as at 1 January 2024 |  |  |  |  |
Costs | 24.7 | 0.2 | 5.1 | – | 30.0
Accumulated depreciation and impairment losses | (13.2) | (0.2) | (4.1) | – | (17.5)
Carrying amount as at 1 January 2024 | 11.5 | 0.0 | 1.0 | – | 12.5
Purchases | 0.1 | – | 0.3 | – | 0.4
Disposals | (0.5) | – | (0.0) | – | (0.5)
Currency translation differences | 0.0 | – | 0.0 | – | 0.0
Divestments cost value A | (15.2) | (0.2) | (4.6) | – | (20.0)
Depreciation for the year | (1.7) | – | (0.3) | – | (2.0)
Divestments accumulated amortization and impairment losses A | 12.3 | 0.2 | 4.1 | – | 16.6
Carrying amount as at 31 December 2024 | 6.5 | – | 0.5 | – | 7.0
Costs | 9.1 | – | 0.8 | – | 9.9
Accumulated depreciation and impairment losses | (2.6) | – | (0.3) | – | (2.9)
Carrying amount as at 31 December 2024 | 6.5 | – | 0.5 | – | 7.0
Balance as at 1 January 2025 |  |  |  |  |
Costs | 9.1 | - | 0.8 | - | 9.9
Accumulated depreciation and impairment losses | (2.6) | - | (0.3) | - | (2.9)
Carrying amount as at 1 January 2025 | 6.5 | - | 0.5 | - | 7.0
Purchases | 0.5 | - | 1.0 | - | 1.5
Disposals | (0.2) | - | (0.0) | - | (0.2)
Currency translation differences | (0.1) | - | (0.0) | - | (0.1)
Depreciation for the year | (1.6) | - | (0.8) | - | (2.4)
Carrying amount as at 31 December 2025 | 5.1 | - | 0.7 | - | 5.8
Costs | 9.3 | - | 1.8 | - | 11.1
Accumulated depreciation and impairment losses | (4.2) | - | (1.1) | - | (5.3)
Carrying amount as at 31 December 2025 | 5.1 | - | 0.7 | - | 5.8

A
Refer to note 8 Assets held for sale and discontinued operations for more information on the divestment .
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160
The estimated useful lives of the property. plant and equipment are as follows:
Buildings 10 – 30 years
Plant and equipment 5 – 10 years
Other fixed assets 3 – 7 years
The Executive Board reviews at each reporting period the estimated useful lives of each asset with a definite useful life. Depreciation of EUR 10.9 million
(2024: EUR 10.0 million) is recognized in Depreciation and amortization and EUR 2.3 million (2024: EUR 5.4 million) is included in Profit/ Loss after tax
from discontinued operations in the consolidated statement of profit and loss and other comprehensive income. Impairments of EUR 0.0 million
(2024: EUR 0.1 million) are recorded in Impairments of fixed assets in the consolidated statement of profit and loss and other comprehensive income .
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Intangible assets

|  | Development |  |  |  |
EUR million | Goodwill | costs | Software | Concessions | Other | Total
Balance as at 1 January 2024 |  |  |  |  |  |
Costs | 135.2 | 16.3 | 36.0 | 1.0 | 75.4 | 263.9
Accumulated amortization and impairment losses | (54.7) | (7.0) | (28.2) | (0.1) | (48.1) | (138.1)
Carrying amount as at 1 January 2024 | 80.5 | 9.3 | 7.8 | 0.9 | 27.3 | 125.8
Purchases | – | 0.7 | 3.4 | – | – | 4.1
Disposals | – | – | (0.2) | – | – | (0.2)
Currency translation differences | 0.4 | 0.0 | 0.0 | 0.0 | – | 0.4
Divestments cost value A | (59.1) | (5.7) | (2.4) | – | (28.9) | (96.1)
Amortization for the year | – | (1.1) | (1.7) | (0.0) | (3.2) | (6.0)
Impairment | – | (3.4) | (2.6) | – | – | (6.0)
Divestments accumulated amortization and impairment losses A | 54.7 | 4.9 | 2.3 | – | 28.9 | 90.8
Carrying amount as at 31 December 2024 | 76.5 | 4.7 | 6.6 | 0.9 | 24.1 | 112.8
Costs | 76.5 | 11.3 | 36.8 | 1.0 | 46.5 | 172.1
Accumulated amortization and impairment losses | – | (6.6) | (30.2) | (0.1) | (22.4) | (59.3)
Carrying amount as at 31 December 2024 | 76.5 | 4.7 | 6.6 | 0.9 | 24.1 | 112.8
Balance as at 1 January 2025 |  |  |  |  |  |
Costs | 76.5 | 11.3 | 36.8 | 1.0 | 46.5 | 172.1
Accumulated amortization and impairment losses | – | (6.6) | (30.2) | (0.1) | (22.4) | (59.3)
Carrying amount as at 1 January 2025 | 76.5 | 4.7 | 6.6 | 0.9 | 24.1 | 112.8
Purchases | – | 0.5 | 3.6 | – | – | 4.0
Disposals | – | – | – | – | – | –
Currency translation differences | (0.9) | (0.1) | (0.0) | (0.1) | – | (1.1)
Divestments cost value A | (4.5) | (6.0) | (0.3) | (0.9) | – | (11.7)
Amortization for the year | – | (0.5) | (1.5) | (0.0) | (2.3) | (4.3)
Impairment | – | – | – | – | – | –
Divestments accumulated amortization and impairment losses A | – | 4.2 | 0.2 | 0.1 | – | 4.5
Carrying amount as at 31 December 2025 | 71.1 | 2.8 | 8.6 | – | 21.8 | 104.3
Costs | 71.1 | 4.0 | 36.9 | – | 34.7 | 146.7
Accumulated amortization and impairment losses | – | (1.2) | (28.3) | – | (12.9) | (42.4)
Carrying amount as at 31 December 2025 | 71.1 | 2.8 | 8.6 | – | 21.8 | 104.3

A
Refer to note 8 Assets held for sale and discontinued operations for more information on the divestment .
2
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162
Goodwill has an indefinite estimated useful life. The estimated useful life of software is between three and eight years. The estimated useful life of other
intangible assets is between eight and nineteen years. The Executive Board reviews at each reporting period the estimated useful lives
of each intangible asset with a definite useful life.
The investments in software during 2025 of EUR 3.6 million (2024: EUR 3.4 million) mainly relate to investments related to the implementation
of a new ERP system and various software upgrades. The other intangible assets mainly comprise the carrying amount of customer relationships
of EUR 21.5 million (2024: EUR 23.6 million). These customer relationships were acquired through business combinations.
Amortization of EUR 4.1 million (2024: EUR 6.0 million) is recognized in Depreciation and amortization and EUR 0.2 million is included in Profit/ Loss
after tax from discontinued operations in the consolidated statement of profit and loss and other comprehensive income (2024: EUR 0.5 million). Note
that for Cash Flow Statement purposes the amortization of software, capitalized development costs and concessions is added to the line ‘Depreciation
of property, plant and equipment and software’.
Impairment testing for groups of cash-generating units containing goodwill
For the purposes of impairment testing, goodwill has been allocated to groups of CGUs, which reflect the level on which goodwill is monitored.

Goodwill EUR million | 2025 | 2024
Industrial Actuators and Controls (IAC) | 37.7 | 39.8
Industrial Brakes (IB) | 32.4 | 33.8
Mobility | 1.0 | 2.9
| 71.1 | 76.5

Goodwill was allocated to the divested business using the relative value approach, whereby goodwill is apportioned on a pro rata basis on fair value.
Accordingly, goodwill of EUR 4.5 million was allocated to the divested business. Refer to Note 8 for further details on the divestment of the Chinese
business.
Key assumptions and method of quantification
Pursuant to IAS 36, the Group has performed an impairment test with reference to the goodwill allocated to each group of cash-generating units.
This test was carried out by discounting future cash flows (‘value in use’) to be generated from the continuing use of the cash-generating unit to
which the goodwill applies and on the assumption of an indefinite life. Impairment tests were performed as of 30 September this year, consistent with
the prior year.
For all groups of CGUs, the cash flows for the first five years were based on budgets and mid-term plans drawn up by the local management and
approved by the Executive Board and Supervisory Board. For the subsequent years, the residual value was calculated on the basis of the results
in the last year of relevant forecasts, with a terminal growth rate of 1.5% for IAC and IB and negative growth rate for Mobility taken into account.
The forecasts were based on pre-tax cash flow. The weighted average cost of capital (WACC) based on the Capital Asset Pricing Model was also
FINANCIAL STATEMENTS
Integrated Annual Report 2025
163
pre-tax. Expansion investments were excluded from the calculations in the residual value. The expected growth in cash flows as a result of expansion
investments was also excluded. This is particularly relevant for the goodwill CGUs where significant growth is expected and strategic investments are
planned.
Key assumptions used in the calculation of recoverable amounts concern discount rates, terminal value growth rates, EBITDA margin growth and
revenue growth. Key assumptions are based on past experience, management assessment of revenue and external sources.

Key assumptions |  | Pre-tax discount rate |  | Terminal value growth rate
| 2025 | 2024 | 2025 | 2024
Industrial Actuators and Controls (IAC) | 12.9% | 12.3% | 1.5% | 1.5%
Industrial Brakes (IB) | 12.9% | 12.3% | 1.5% | 1.5%
Mobility | 17.5% | 11.0% | n/a | 1.0%

Discount rate
In determining the pre-tax discount rate, first the post-tax average costs of capital were calculated of all cash generating units containing goodwill.
The post-tax rate is based on debt leveraging compared to the market value of equity of 25%. The post-tax weighted average cost of capital rates
of cash generating units amount to 10.0% to 10.1% and these rates was used for calculating the post-tax cash flows.
Terminal value growth rate
All cash-generating units are valued using discounted cash flow models based on five-year cash flow projections. A terminal value is calculated using a
long-term growth rate in perpetuity of 1.5% for IAC and IB. The negative growth rate in Mobility relates to the gradual phase out of the existing Mobility
programs that run in the Romanian electronics plant following the group’s exit out of the automotive market .
FINANCIAL STATEMENTS
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164
Revenue and EBITDA margin
Revenue and EBITDA margin
A
development for the cash generating units is based on the strategic business plans for the coming 5 years. The growth
rates are based on the expectation of market developments and management’s assessment of the project pipeline of the cash generating units.
The average annual growth rates for revenue in the first 5 years for IB and IAC range between 5% and 6%, the total development of the EBITDA margin
is in line with the long-term group target of at least 15%.
Sensitivity to changes in assumptions
The recoverable amounts of all cash-generating units with goodwill exceed their carrying amounts. Management has carried out an analysis of sensitivity
to changes in the key assumptions. Sensitivity analyses are performed based on a change in an assumption while holding other assumptions constant.
The following changes in assumptions are assessed:
■ Increase of the discount rate (post-tax) by 1.0%;
■ Decrease of terminal value growth rate by 1.5% for IAC and IB;
■ Decrease of average revenues growth by 3.0%.
Based on the sensitivity analyses performed it is concluded that any reasonable changes in the key assumptions would not require an impairment for
IAC, IB and Mobility.
Other investments and non-current assets
In July 2024 Kendrion Holding USA Inc. acquired a 30% interest in CFV Innovations, Inc. for an amount of EUR 3.7 million. The movement of this
investment in 2025 is due to EUR -0.3 million share of Kendrion in the loss for the year 2025 and EUR -0.3 million currency translation adjustment.
CFV Innovations, Inc. is a USA based company that develops precise fluid control and dosing systems for fertigation, industrial cleaning and medical
applications. All acquired shares are preferred shares whereas Kendrion Holding USA Inc. is entitled to receive dividend in preference to holders of
ordinary shares. The proportion voting rights held by Kendrion Holding USA Inc. is 30%. Kendrion Holding USA Inc. is entitled to convert the preferred
shares into ordinary shares at an agreed upon conversion rate .

EUR million | 2025 | 2024
Equity-accounted investee | 3.1 | 3.7
Other | 1.2 | 0.2
| 4.3 | 3.9

3
A
Non-IFRS financial measure. For the definition and reconciliation of the most directly comparable IFRS measure, refer to reconciliation of non-IFRS information,
starting on page 219.
FINANCIAL STATEMENTS
Integrated Annual Report 2025
165
Deferred tax assets and liabilities
The Group has recognized deferred tax assets for tax loss carry-forwards in the following jurisdictions:
Germany
As at 31 December 2025, the tax loss carry forwards amounted to EUR 23.1 million (2024: EUR 29.1 million) (Trade Tax) and EUR 21.0 million
(Corporate Income Tax) (2024: EUR 25.6 million).The losses are recognized in full, resulting in deferred tax assets of EUR 6.1 million
(2024: EUR 7.6 million).
United States of America
As at 31 December 2025, the tax loss carry forwards amounted to EUR 15.2 million (2024: EUR 17.6 million) (Federal Tax) and EUR 4.8 million
(2024: EUR 5.6 million) (State Tax). EUR 10.6 million of Federal Tax carry-forward losses are not recognized, these losses can be carried forward
indefinitely. A deferred tax asset is recorded for EUR 4.8 million of Federal and all of the State Tax carry-forward losses resulting in a deferred tax assets
of EUR 1.3 million (2024: EUR 1.4 million).
China
As at 31 December 2024, the deferred tax asset for loss carry-forwards amounted to EUR 5.9 million. Following the divestment
of the Chinese business, no deferred tax asset relating to loss carry-forwards in China remains.
The Netherlands
As at 31 December 2025, the tax loss carry-forwards amounted to EUR 0.5 million (2024: EUR 0.6 million). These are recognized in full, resulting
in a deferred tax asset of EUR 0.1 million (2024: EUR 0.2 million).
Deferred tax assets and liabilities included in the financial position
The deferred tax assets and liabilities can be specified as follows:

|  | Assets |  | Liabilities |  | Net
EUR million | 2025 | 2024 | 2025 | 2024 | 2025 | 2024
Property, plant and equipment | 0.7 | 1.0 | 2.2 | 2.4 | (1.5) | (1.4)
Intangible assets | 1.3 | 1.3 | 8.4 | 11.3 | (7.1) | (10.0)
Inventories | 0.6 | 1.2 | 0.3 | 0.4 | 0.3 | 0.8
Employee benefits | 0.5 | 0.4 | 0.1 | 0.0 | 0.4 | 0.4
Provisions | 0.4 | 0.0 | 0.0 | 0.0 | 0.4 | (0.0)
Other items | 1.3 | 2.5 | 0.3 | 0.6 | 1.0 | 1.9
Tax value of recognized loss carry-forwards | 7.5 | 15.0 | – | 0.0 | 7.5 | 15.0
Deferred tax assets/liabilities | 12.3 | 21.4 | 11.3 | 14.7 | 1.0 | 6.7

4
FINANCIAL STATEMENTS
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166
The deferred tax liabilities relate largely to temporary differences between the carrying amount and tax base of property, plant and equipment and
intangible assets. These are of a relatively long-term nature, mostly longer than five years. Other deferred tax assets relate mainly to deferred revenues
and accruals.
During the financial year, legislation was enacted in Germany providing for a reduction in corporate income tax rates applicable in future periods.
As deferred tax assets and liabilities are measured using the tax rates expected to apply when the related temporary differences reverse, the
remeasurement of deferred taxes reflects this change in tax legislation resulting in an increse in the net deferred tax position of EUR 0.5 million.
Deferred tax assets are recognized for unused tax losses to the extent that it is probable that future taxable profits will be available against which they
can be set off. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax
benefit will be realized; such reductions are reversed if the probability of future taxable profits improves. Whether Kendrion is able to realize its deferred
tax assets is an estimate that has an element of inherent uncertainty to it. Both the budget 2026 and mid-term plan, which include the projections for
the upcoming years, are based upon expectations of the market, contracts that have been signed and negotiations currently ongoing for new contracts.
Tax loss carry forward limitation rules apply in certain jurisdictions in which Kendrion has carry forward tax losses. These rules might under certain
circumstances lead to a (proportional) forfeiture of recognized and unrecognized carry forward tax losses in case of a direct or indirect change in
ownership.
The tax losses carry forward for which no deferred tax assets are recognized in the statement of financial position are reviewed each reporting date.
These tax losses carry forward for which no deferred tax assets are recognized in the statement of financial position amount to EUR 10.6 million
(2024: EUR 16.1 million).
Movement in temporary differences during the financial year

|  |  |  |  | 2024
|  |  | Recognized |  |
|  |  | in other |  |
|  | Recognized | comprehensive |  | At 31
|  |  |  | A |
Net, EUR million | At 1 January | in profit and loss | income | Divested | December
Property, plant and equipment | (2.4) | (0.4) | – | 1.4 | (1,4)
Intangible assets | (10.0) | (0.4) | – | 0.4 | (10.0)
Inventories | 1.0 | (0.1) | – | (0.1) | 0.8
Employee benefits | 0.2 | 0.1 | 0.1 | 0.0 | 0.4
Provisions | (0.0) | (0.0) | – | 0.0 | (0.0)
Other items | 2.7 | 1.0 | (0.3) | (1.5) | 1.9
Tax value of loss carry-forwards | 9.6 | 5.4 | – | – | 15.0
| 1.1 | 5.6 | (0.2) | 0.2 | 6.7

A
Refer to note 8 Assets held for sale and discontinued operations for more information on the divestment.
FINANCIAL STATEMENTS
Integrated Annual Report 2025
167

|  |  |  |  | 2025
|  |  | Recognized |  |
|  |  | in other |  |
|  | Recognized | comprehensive |  | At 31
|  |  |  | A |
Net, EUR million | At 1 January | in profit and loss | income | Divested | December
Property, plant and equipment | (1.4) | (0.2) | 0.0 | – | (1.6)
Intangible assets | (10.0) | 2.5 | 0.3 | – | (7.2)
Inventories | 0.8 | (0.3) | (0.0) | (0.2) | 0.3
Employee benefits | 0.4 | 0.0 | – | – | 0.4
Provisions | (0.0) | 0.4 | – | – | 0.4
Other items | 1.9 | (0.2) | (0.1) | (0.4) | 1.2
Tax value of loss carry-forwards | 15.0 | (2.6) | (0.7) | (4.2) | 7.5
| 6.7 | (0.4) | (0.5) | (4.8) | 1.0

Inventories

EUR million | 2025 | 2024
Raw materials, consumables, technical materials and packing materials | 28.8 | 37.0
Work in progress | 7.9 | 9.2
Finished goods | 7.3 | 10.6
Goods for resale | 0.5 | 1.7
| 44.5 | 58.5

The value of inventory recorded as an expense in 2025 amounts to EUR 103.3 million (2024: EUR 116.8 million). The inventories are presented after
accounting for a provision of EUR 6.6 million (2024: EUR 6.2 million) for obsolescence. In 2025, the release of the write-down to net realisable value
of the inventories in earlier years was EUR 0.4 million (2024: EUR 0.8 million release). The write-down and reversals are included in Raw material and
subcontracted work. The decrease is mainly attributable to the sale of the China business, refer to note 8.
5
A
Refer to note 8 Assets held for sale and discontinued operations for more information on the divestment.
FINANCIAL STATEMENTS
Integrated Annual Report 2025
168
Trade and other receivables

EUR million | 2025 | 2024
Trade receivables | 19.0 | 40.3
Other taxes and social security | 1.2 | 1.9
Other receivables | 2.9 | 15.0
Derivatives used for hedging | − | 0.2
Prepayments | 0.5 | 1.2
| 23.6 | 58.6

The decrease in trade receivables and other receivables is largely attributable to the divestment of the Chinese business. In 2024, other receivables
included a receivable from Solero Technologies LLC, which was settled in 2025.
The credit and currency risks associated with trade and other receivables are disclosed in note 15, and in the financial risk management paragraph of
note s. The provision for doubtful debts amounts to EUR 0.5 million (2024: EUR 0.3 million). The r eceivables are mainly held according to the ‘held-to-
collect’ business model. At the end of 2025, an amount of EUR 3.2 million (2024: nil) was sold to a factoring company and was derecognized.
6
Cash and cash equivalents

EUR million | 2025 | 2024
Cash and cash equivalents | 29.4 | 8.5
Bank overdrafts | 0.0 | (1.7)
Cash and cash equivalents in the statement of cash flows | 29.4 | 6.8

The cash and cash equivalents include EUR 1.1 million (2024: EUR 0.2 million) of cash that is held in countries where the Group faces cross-border
foreign exchange controls and/or other legal restrictions that inhibit the Groups ability to make these balances available for general use by the Group.
The other bank balances are freely available. The interest rate risk for the Group and a sensitivity analysis for financial assets and liabilities are disclosed
in notes 15 and accounting policies.
7
Assets classified as held for sale and discontinued operations
In October 2025, the sale of our China-based business to local management, was finalized. With growth opportunities in China primarily linked to the
automotive sector, the divestment enables Kendrion to fully focus on its industrial business groups and marks the completion of Kendrion’s strategic
transformation into a pure-play industrial company.
In October 2024, the sale of automotive activities in Europe and USA to Solero Technologies LLC was finalized, supporting the same strategic
transformation into a pure play industrial company .
8
FINANCIAL STATEMENTS
Integrated Annual Report 2025
169
The results from discontinued operations include the divested China-based business, the divested European and USA automotive business and the
outcome from discontinuing the R&D activities of the automotive sound business. These R&D activities were not sold but were part of a single,
coordinated strategic plan to focus on industrial activities. The results from the discontinued operations are presented below:

|  | A
EUR million | 2025 | 2024
Revenues | 55.3 | 210.8
Expenses | 52.0 | 213.2
Result before remeasurements, finance costs and tax | 3.3 | (2.4)
Remeasurement of assets to fair value less cost to sell | (0.2) | (5.1)
Financial income and expenses | (1.5) | (4.3)
Income tax | (1.0) | 2.9
Profit/ (loss) before result on sale | 0.6 | (8.9)
Result on sale after tax | 5.3 | (4.0)
Profit/ (loss) after tax from discontinued operations | 5.9 | (12.9)

I n total an amount of EUR -4.0 million was recycled from the translation reserve to consolidated statement of profit and loss upon disposals of the
subsidiaries outside the euro zone and is included in the result on sale after tax.
Net cash flows incurred by the discontinued businesses are as follows:

|  | A
EUR million | 2025 | 2024
Cash flows from operating activities | 1.1 | (11.6)
Cash flows from investing activities | (0.9) | (13.3)
Cash flows from financing activities | (2.4) | 13.9
Net cash flows from discontinued operations | (2.2) | (11.0)

The net cashflow from the sale of our China-based business amounted to EUR 57.0 million in 2025 (net of cash amounting to EUR 55.9 million). The net
cashflow from the sale of the automotive business in Europe and USA amounted to EUR 8.6 million in 2025 (2024: EUR 52.5 million, net of cash
amounting to EUR 9.8 million).
The assets classified as held for sale in 2024 of EUR 1.9 million relate to a building where Kendrion OG GmbH conducted its business. These assets are
presented in fixed assets in 2025 pending the cleaning of the soil contamination. Reference is made to note 13.
Earnings per share from discontinued operations are as follows:

|  | A
EUR million | 2025 | 2024
Basic earnings per share from discontinued operations (in euro) | 0.38 | (0.84)
Diluted earnings per share from discontinued operations (in euro) | 0.37 | (0.84)

A
2024 numbers were re-presented to present the continuing operations only in accordance with IFRS 5. Reference is made to note 8 for more details on results from
FINANCIAL STATEMENTS
Integrated Annual Report 2025
170
Capital and reserves

Capital and share premium |  |  |  |  |  |
|  | Shares entitled to dividend |  | Shares owned by Kendrion |  | Total number of issued shares
| 2025 | 2024 | 2025 | 2024 | 2025 | 2024
As at 1 January | 15,500,057 | 15,276,014 | − | − | 15,500,057 | 15,276,014
Issued shares (share dividend) | 300,467 | 211,787 | − | − | 300,467 | 211,787
Issued shares (share plan) | 6,903 | 12,256 | − | − | 6,903 | 12,256
Repurchased shares | (185,333) | − | 185,333 | − | − | −
As at 31 December | 15,622,094 | 15,500,057 | 185,333 | − | 15,807,427 | 15,500,057

Issuance of ordinary shares
In 2025, in total 307,370 new shares were issued (2024: 224,043).
Ordinary shares
The authorized share capital consists of:

EUR million | 2025 | 2024
40,000,000 ordinary shares of EUR 2.00 | 80.0 | 80.0
Issued share capital |  |
Balance at 1 January 2025: 15,500,057 ordinary shares (2024: 15,276,014) | 31.0 | 30.6
Balance at 31 December 2025: 15,807,427 ordinary shares (2024: 15,500,057) | 31.6 | 31.0

Share premium |  |
EUR million | 2025 | 2024
Balance as at 1 January | 37.1 | 37.3
Dividend payment | (3.1) | (2.7)
Share premium on issued shares | 2.5 | 2.5
Balance as at 31 December | 36.5 | 37.1

Translation reserve
The translation reserve comprises all foreign currency differences arising from the translation of the financial statements of subsidiaries outside the euro
zone. Gains and losses relating to the translation risk are recognized in equity. The build-up of the cumulative figure commenced on 1 January 2004.
In 2025, the translation reserve pertaining to the divested Chinese business was recycled to the consolidated statement of profit and loss. In total an
amount of EUR -4.0 million was recycled from the translation reserve to consolidated statement of profit and loss upon disposals of the subsidiaries
outside the euro zone and is included in the profit after tax from discontinued operations. Refer to note 8 .
9
FINANCIAL STATEMENTS
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171
Hedge reserve
The hedge reserve comprises the effective portion of the cumulative net movement in the fair value of cash flow hedging instruments relating to hedged
transactions that have not yet occurred, net of tax.
The hedge reserve increased by EUR 0.1 million due to the realisation of hedged transactions (2024: EUR 0.7 million decrease). The hedge reserve
increased by EUR 0.0 million due to valuation effects (2024: EUR 0.2 million increase). There was no hedge ineffectiveness in 2025 (2024: no hedge
ineffectiveness).
Reserve for own shares (treasury shares)
On 11 November 2025, the Company announced a EUR 10 million share buyback program, which commenced on 26 November 2025. In total
185,333 shares were repurchased under the program until 31 December 2025 at a total cost of EUR 2.5 million. The reserve for the Company’s own
shares comprises the shares held by the Company that were repurchased under the share buyback program. The Company intends to use a portion of
these shares for the Executive Board remuneration packages, while it is intended to propose to the company’s shareholders to cancel the remainder of
the repurchased shares. At 31 December 2025, the Company held 185,333 of its own shares (2024: nil).
Other reserves
Other reserves are all the reserves other than those shown separately and primarily represent the accumulated, undistributed profits from previous
financial years.
Retained earnings
In 2025, the result for 2024 was fully transferred to other reserves. Retained earnings in the 2025 financial statements consequently consist solely of the
result for 2025.
Dividends
The following dividends were paid by the Company for the year:

EUR million | 2025 | 2024
1.45 euro per qualifying ordinary share (2024: 0.45 euro) | 22.8 | 6.8

After the reporting date, the following dividends were proposed by the Executive Board. The dividends have not been recognized as liabilities and there
are no tax consequences in 2025.

EUR million | 2025 | 2024
0.70 euro per qualifying ordinary share (2024: 0.45 euro) | 11.0 | 7.0

FINANCIAL STATEMENTS
Integrated Annual Report 2025
172
Earnings per share
Basic earnings per share
The calculation of the basic earnings per share as at 31 December 2025 is based on the profit for the period of EUR 19.5 million (2024: EUR -4.5
million) attributable to the holders of ordinary shares and the weighted average number of shares outstanding during the year 2025: 15,690,000 (2024:
15,425,000).

EUR million | 2025 | 2024
Net result attributable to ordinary shareholders | 19.5 | (4.5)

Weighted average number of ordinary shares

In thousands of shares | 2025 | 2024
Issued ordinary shares at 1 January | 15.500 | 15,276
Effect of shares issued as share dividend | 300 | 212
Effect of shares issued as share plan | 7 | 12
Ordinary shares outstanding at 31 December | 15.807 | 15,500
Weighted average number of ordinary shares entitled to dividend | 15.690 | 15,425
Basic earnings per share (EUR), based on ordinary shares outstanding at 31 December | 1.24 | (0.29)
Basic earnings per share (EUR), based on weighted average | 1.24 | (0.29)

Diluted earnings per share
The calculation of the diluted earnings per share at 31 December 2025 is based on the profit of EUR 19.5 million (2024: EUR -4.5 million) attributable
to the holders of ordinary shares and the weighted average numbers of shares during the year after adjustment for the effects of all dilutive potential
ordinary shares of 15,787,000 (2024: 15,631,000)

EUR million | 2025 | 2024
Net profit attributable to ordinary shareholders | 19.5 | (4.5)
Effect of dilution | (0.0) | (0.0)
Net profit attributable to ordinary shareholders (diluted) | 19.5 | (4.5)

Weighted average number of ordinary shares (diluted)

In thousands of shares | 2025 | 2024
Weighted average number of ordinary shares entitled to dividend | 15,690 | 15,425
Weighted average numbers of ordinary shares (diluted) | 15,787 | 15,631
Basic earnings per share (EUR), based on weighted average (diluted) | 1.24 | (0.29)

10
FINANCIAL STATEMENTS
Integrated Annual Report 2025
173
Loans and borrowings
This note contains information on the contractual provisions of the Group’s interest-bearing loans and borrowings, which are carried at amortized cost.
For further information on the interest rates, and the currency and liquidity risks borne by the Group, see note 15 and accounting policies.

EUR million | 2025 | 2024
Non-current liabilities |  |
Bank syndicate loans | − | 13.1
Schuldschein loans | 52.4 | 72.2
Lease liabilities | 4.9 | 5.7
Other loans | − | 6.8
| 57.3 | 97.8

EUR million | 2025 | 2024
Current liabilities |  |
Current portion lease liabilities | 1.8 | 2.2
Current portion loans | 0.6 | 10.2
| 2.4 | 12.4

| Bank syndicate | Schuldschein | Lease |  |
EUR million | loans | loans | liabilities | Other loans | Total 2024
Carrying amount as at 1 January 2024 | 62.0 | 72.2 | 13.5 | 10.8 | 158.5
New liabilities | – | – | 1.3 | 8.4 | 9.7
Repayments | (49.0) | – | (3.0) | (2.7) | (54.7)
Foreign currency translation differences for foreign operations | – | – | 0.0 | 0.5 | 0.5
Divestments A | – | – | (3.8) | – | (3.8)
Other movements | 0.1 | – | (0.1) | – | (0.0)
Carrying amount as at 31 December 2024 | 13.1 | 72.2 | 7.9 | 17.0 | 110.2

A
Refer to note 8 Assets held for sale and discontinued operations for more information on the divestment .
11
FINANCIAL STATEMENTS
Integrated Annual Report 2025
174

| Bank syndicate | Schuldschein | Lease |  |
EUR million | loans | loans | liabilities | Other loans | Total 2025
Carrying amount as at 1 January 2025 | 13.1 | 72.2 | 7.9 | 17.0 | 110.2
New liabilities | 20.0 | − | 1.5 | − | 21.5
Repayments | (33.1) | (20.0) | (2.4) | (3.3) | (58.8)
Foreign currency translation differences for foreign operations | − | − | (0.1) | (1.2) | (1.3)
Divestments A | − | − | − | (11.9) | (11.9)
Other movements | − | 0.2 | (0.2) | − | 0.0
Carrying amount as at 31 December 2025 | − | 52.4 | 6.7 | 0.6 | 59.7

Schuldschein loans
In April 2025, a Schuldschein loan with a nominal value of EUR 20.0 million was repaid upon maturity. As at 31 December 2025, a Schuldschein loan
with a nominal value of EUR 52.5 million was outstanding. This loan matures in April 2027. The interest rate on this loan is based on 6-month Euribor
plus a 1.2% margin. The margin is linked to the ESG score of the Kendrion Group as rated by Ecovadis. An increase in ESG rating of 10 percent points
or more results in a 5 basis point decrease of the margin. Vice versa, a 5 percent point decrease in ESG score, results in a 5 basis points margin
increase. In 2025, the ESG rating of the Group improved to 71 out of 100. The initial ESG score of the Group was 58 out of 100 at the inception of
the loans in 2022. As a consequence of the 13 percent point improvement of ESG rating, the margin on the loans decreased by 5 basis points. With
this continuous improvement in ESG rating, the group is in the top 15% of ESG rated general manufacturing companies. The loans include a financial
covenant relating to the leverage ratio. The leverage ratio (calculated as interest bearing debt / normalized EBITDA) should remain below 3.25, which
under certain circumstances can be temporarily increased to a maximum of 3.75. This covenant is tested quarterly on a 12-month rolling basis.
The actual leverage ratio at year-end was 0.8 (2024: 2.7). A reconciliation of normalized EBITDA can be found on page 222.
Revolving credit facility agreement
Kendrion has a revolving credit facility agreement with ING Bank and HSBC of EUR 75 million. As of 31 December 2025, no amount was drawn from
the facility. In February 2026, the facility was reduced from EUR 75 million to EUR 50 million. The agreement matures in April 2027.
The interest rates on the loans are based on Euribor plus a margin (between 1.2% and 2.35%). The margin is based on the leverage ratio of the Group.
In addition, the interest rates are linked to the ESG score of the Kendrion Group, via the same mechanism as the Schuldschein loans.
The facility agreement includes an option for Kendrion to request to increase the facility of maximum EUR 50 million (incremental facility). In case
Kendrion requests an incremental facility, the terms and conditions of this facility are agreed upon separately between Kendrion and the lenders.
In addition, the facility agreement allows the Group to attract designated additional alternative sources of debt funding. The leverage ratio covenant
is the same as for the Schuldschein loans .
A
Refer to note 8 Assets held for sale and discontinued operations for more information on the divestment .
FINANCIAL STATEMENTS
Integrated Annual Report 2025
175
Credit lines
As at 31 December 2025, the Group had the following credit lines available:
■ EUR 75 million revolving credit facility with a syndicate of two banks consisting of HSBC and ING Bank. The credit facility is committed until April
2027 and includes an option (accordion option) to increase the facility by a maximum of EUR 50 million;
■ EUR 52.5 million Schuldschein private placement loan;
■ EUR 6.7 million in leases for buildings, various equipment and vehicles;
■ EUR 6.1 million other loans and overdraft facilities.
As at 31 December 2025, the total unutilised amount of the revolving credit facility and overdraft facilities combined was approximately EUR 79 million,
excluding accordion option.
Security provided
A positive pledge is in place for the EUR 75 million Revolving Credit Facility.
Interest-rate sensitivity
Interest amounts payable on the revolving credit facility and Schuldschein loans are based on short-term interest rate (three and six months).
The other loans of EUR 0.6 million and leases of EUR 6.7 million both have fixed interest rates. The interest sensitivity is disclosed on page 184.
Lease liabilities
The lease liabilities are payable as follows:

EUR million | 2025 | 2024
< 1 year | 1.8 | 2.2
1 - 5 years | 4.9 | 5.6
> 5 years | − | 0.1
| 6.7 | 7.9

The lease liabilities mostly relate to leases for various buildings & vehicles.
Buildings
The Group leases properties for its offices and manufacturing facilities. Some lease arrangements contain conditions to revise the rentals based on
changes of indices. The leases have an initial term between 3 and 15 years. Majority of the leases include an option to renew the lease for an additional
period after the contract term. Key assumption as applied by the Group is that all renewal options, which can be exercised within the mid-term plan
period of five years and reasonably certain to be exercised, are taken into consideration on top of the non-cancellable period of the lease.
Vehicles and equipment
The Group leases equipment with terms of two to five years. Based on experience the likelihood that these lease arrangements are extended for
a substantial period (> three months) is remote. Due to this no periods after the non-cancellable period of the lease are taken into consideration.
FINANCIAL STATEMENTS
Integrated Annual Report 2025
176
Employee benefits

EUR million | 2025 | 2024
Present value of unfunded obligations | 4.7 | 5.0
Present value of funded obligations | 0.7 | 0.8
Fair value of plan assets | (0.2) | (0.2)
Recognized net liability for defined benefit obligations | 5.2 | 5.6
Liability for long-service leave and anniversaries | 2.3 | 2.3
Total employee benefits | 7.5 | 7.9
Non current portion | 6.8 | 7.1
Current portion A | 0.7 | 0.8

A
The total employee benefit provision as of 31 December 2025 amounts to EUR 7.5 million (2024: EUR 7.9 million). An amount of EUR 6.8 million is presented as non-
current employee benefits in the statement of financial position. The remainder of EUR 0.7 million is presented under trade and other payables.
12
FINANCIAL STATEMENTS
Integrated Annual Report 2025
177
The table shows a reconciliation from the opening to the closing balances for the net defined benefit liability and its components:

| Defined benefit obligation |  | Fair value of plan assets |  |  | Net defined benefit liability
EUR million | 2025 | 2024 | 2025 | 2024 | 2025 | 2024
Balance as at 1 January | 5.8 | 8.2 | 0.2 | 0.8 | 5.6 | 7.4
Included in statement |  |  |  |  |  |
of comprehensive income |  |  |  |  |  |
Current service cost | − | – | − | – | − | –
Past service cost | − | – | − | – | − | –
Interest cost (income) | 0.2 | 0.2 | 0.0 | 0.0 | 0.2 | 0.2
| 0.2 | 0.2 | 0.0 | 0.0 | 0.2 | 0.2
Included in OCI |  |  |  |  |  |
Remeasurement loss (gain): |  |  |  |  |  |
- Actuarial loss (gain) arising from: |  |  |  |  |  |
- Demographic assumptions | 0.0 | 0.0 | − | 0.0 | 0.0 | 0
- Financial assumptions | (0.1) | 0.3 | − | – | (0.1) | 0.3
- Experience adjustment | 0.0 | 0.1 | − | – | 0.0 | 0.1
- Return on plan assets excluding |  |  |  |  |  |
interest income | − | – | 0.0 | – | 0.0 | –
Effect of movements in exchange rates | − | – | 0.0 | – | 0.0 | –
| (0.1) | 0.4 | 0.0 | 0.0 | (0.1) | 0.4
Other Contributions paid by the employer | − | – | − | – | − | –
Divestments A | − | (2.6) | − | (0.6) | − | (2.0)
Benefits paid | (0.5) | (0.4) | − | 0.0 | (0.5) | (0.4)
| (0.5) | (3.0) | − | (0.6) | (0.5) | (2.4)
Balance as at 31 December | 5.4 | 5.8 | 0.2 | 0.2 | 5.2 | 5.6

Actuarial calculations of employee benefits have not been materially influenced by amendments based on historical experience or by variable
assumptions.
A
Refer to note 8 Assets held for sale and discontinued operations for more information on the divestment.
FINANCIAL STATEMENTS
Integrated Annual Report 2025
178
The Group contributes to the following post-employment defined benefits plans in several countries, mainly in Germany. Below the characteristics
of the major plans are included.
■ A direct commitment in the form of capital has been agreed upon with the employees, who directly receive this commitment as an one-off payment
upon retirement. An alternative version is a plan where the employees receive monthly payments instead of an one-off payment. The plans are
reviewed on periodic basis;
■ The Defined-Benefit plan entitles a retired employee to receive a monthly pension payment. The amount of these payments is based on individual
contracts with the respective employee. The person has to be employed for a certain time. Each further year of employment the employee receives
an amount in addition to the contractual fixed amount.
The defined benefit plans are administered by multiple pension funds which are legally separated from the Group. The board of the pension fund is
required to act in the best interest of the plan participants and is responsible for setting certain policies (e.g. investment, contribution and indexation
policies) of the fund. The defined benefit plans expose the Group to actuarial risks, such as longevity risk, interest rate risk and market (investment) risk.
The expenses relating to the defined benefit pension arrangements are included in the following line items of the statement of comprehensive income:
Expense recognized in the consolidated statement of comprehensive income regarding defined benefit arrangements

EUR million | 2025 | 2024
Staff costs | 0.0 | 0.0
Net finance costs | 0.2 | 0.2
| 0.2 | 0.2

Principal actuarial assumptions (expressed as weighted averages)

| 2025 | 2024
Discount rate as at 31 December | 3.0% | 3.3%
Future pension increases | 1.9% | 2.2%

Composition plan assets

EUR million | 2025 | 2024
Bonds | 0.2 | 0.2
Equity | 0.0 | 0.0
Real estate | 0.0 | 0.0
Government loans | 0.0 | 0.0
Total | 0.2 | 0.2

FINANCIAL STATEMENTS
Integrated Annual Report 2025
179
Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, would have
affected the defined benefit obligation by the amounts shown below.

Sensitivity analysis |  | Defined benefit obligation
EUR million | Increase | Decrease
Discount rate (0.5 percent) | (0.2) | 0.2
Future salary growth (1.0 percent) | 0.0 | 0.0
Future pension (1.0 percent) | 0.3 | (0.2)
Future mortality (1.0 percent) | (0.0) | 0.0

Although the analysis does not take account of the full distribution of cash flows expected under the plans, it does provide an approximation of the
sensitivity of the assumptions shown. The method for preparing the sensitivity analyses did not changed from prior year.
Assumptions regarding future longevity have been based on published statistics and mortality tables.
As at 31 December 2025, the weighted-average duration of the defined benefit obligation was 4.4 years (2024: 5.7 years). The expected payment for
2026 amounts to EUR 0.7 million (prior year: EUR 0.8 million).
Liabilities arising from employee benefits
The pension plans included defined contribution plans as well as defined benefit plans. In the case of defined contribution plans, the contribution is
charged to the year to which it relates. With defined benefit plans, benefit obligations are calculated using the projected unit credit method. Calculations
are made by qualified actuaries. The pension liability shown in the statement of financial position represents the present value of the defined benefit
obligation at the financial position date minus the fair value of the plan assets at this date. The discount rate methodology for accounting long-term
employee benefits in accordance with IAS 19 is determined by the Executive Board. Significant judgement is required when setting the criteria for bonds
to be included in the population from which the yield curve is derived. The most significant criteria considered for the selection of bonds include the
issue size of the corporate bonds, quality of the bonds and the identification of outliers which are excluded. The discount rate used to calculate the
defined benefit obligation is based on the yield on corporate bonds issued in euros.
Since the pension arrangements involve long-term obligations and uncertainties, it is necessary to make assumptions in order to estimate the amount
that the Group needs to invest to fund its pension obligations. External actuaries calculate the obligation for defined benefit plans partly on the basis
of information provided by the Executive Board, such as future pay rises, the return on plan assets, mortality tables and the probable extent to which
pension scheme members will leave the scheme because they have reached retirement age, become incapacitated or left the Group.
FINANCIAL STATEMENTS
Integrated Annual Report 2025
180
The greater part of the defined benefit obligation at year-end 2025 relates to post employment arrangements in Germany. The group companies
account individually for the pension schemes. The individual group company is fully liable for its benefit obligation. A portion for the German group
companies is reinsured. All pension arrangements accounted for as defined benefit obligations are not open for new participants (< 15% active
participants).
Liabilities arising from employee benefits also include liabilities relating to long-service, early retirement and service anniversaries of EUR 2.3 million
(2024: EUR 2.3 million) mainly in Germany.
Provisions

EUR million | 2025 | 2024
Balance as at 1 January | 6.1 | 0.7
Provisions made during the period | 1.8 | 5.5
Provisions transferred/used during the period | (4.7) | (0.1)
Provisions released during the period | (0.6) | (0.0)
Balance as at 31 December | 2.6 | 6.1
Non-current portion | 2.6 | 0.9

13

The addition to the provision in 2025 includes an amount recognized for the remediation of soil contamination by Kendrion OG GmbH . The total costs

of the remediation measures are expected to amount to EUR 1.5 million. Kendrion OG GmbH is eligible for a subsidy equal to 80% of the remediation
costs, which is presented separately as other non-current asset. The net cost of EUR 0.3 million are included in the profit after tax from discontinued
operations in the consolidated statement of profit and loss.
Trade and other payables

EUR million | 2025 | 2024
Trade payables | 14.3 | 35.4
Other taxes and social security contributions | 2.0 | 2.8
Derivatives used for hedging | 0.2 | 0.5
Non-trade payables | 7.5 | 8.5
Contract liabilities | 0.2 | 0.2
Accrued expenses | 9.5 | 11.5
| 33.7 | 58.9

The decrease of trade payables and accrued expenses is mainly attributable to the sale of the China and automotive business, refer to note 8. Non-
trade payables relate to various other liabilities such as personnel-related liabilities (social charges, holiday allowance, bonus accruals, vacation days)
while accrued expenses relate to other invoices that are expected but not yet received.
14
FINANCIAL STATEMENTS
Integrated Annual Report 2025
181
Financial instruments
Credit risk
The carrying amount of the financial assets represents the maximum credit risk. The maximum credit risk on the reporting date was as follows:

EUR million | 2025 | 2024
Cash and cash equivalents | 29.4 | 8.5
Other long-term investments | 1.2 | 0.2
Trade and other receivables | 23.6 | 58.6
Total | 54.2 | 67.3

Impairment losses
Aging analysis of the trade receivables

|  | 2025 |  | 2024
EUR million | Gross | Provision | Gross | Provision
Within the term of payment | 15.8 | − | 33.9 | –
0 – 30 days due | 2.9 | − | 4.1 | –
31 – 60 days due | 0.2 | − | 0.8 | –
> 60 days due | 0.6 | (0.5) | 1.8 | (0.3)
Total trade receivables | 19.5 | (0.5) | 40.6 | (0.3)

The provision for trade receivables is used to absorb impairment losses, unless the Group is certain that collection of the amount owed is impossible,
in which case the amount is treated as a bad debt and written off against the financial asset in question.
At 31 December 2025, the provision for impairment losses on trade receivables relates to several customer invoices that the Group
believes to be non-collectible, in whole or in part. Based on historic payment behavior and financial information currently known all receivables that
are not impaired as at 31 December 2025 are collectible. This system gives the same outcome as the cash shortfall model as described in IFRS 9.
EUR 0.8 million of trade receivables are more than 30 days overdue (2024: EUR 2.6 million), of which EUR 0.5 million is provided for (2024:
EUR 0.3 million). The Group has written off EUR 0.3 million receivables in 2025 (2024: EUR 0.7 million), which are recognized under other operating
expenses in the statement of comprehensive income.
The customer with the largest trade receivables outstanding accounted for 9% of the trade and other receivables as at 31 December 2025 (2024: 8%).
The geographical credit risk from the Group’s direct customers is largely concentrated in Germany. However, as the Group’s most important customers
in the various segments of the German market are multinational or global players this reduces the Group’s dependency on the German market.
15
FINANCIAL STATEMENTS
Integrated Annual Report 2025
182
Credit risk rating grades
The credit quality of the Group’s financial assets, as well as the Group’s maximum exposure to credit risk by credit risk rating grades on the reporting
date was as follows:

31 December 2025 |  |  |  |  |  |  | 2025
|  | External | Internal | 12-month | Gross carrying | Loss | Net carrying
| Note | credit rating | credit rating | or lifetime ECL | amount | allowance | amount
Trade receivables | 6 | N/A | Low risk A | Lifetime ECL | 19.5 | (0.5) | 19.0
31 December 2024 |  |  |  |  |  |  | 2024
|  | External | Internal | 12-month | Gross carrying | Loss | Net carrying
| Note | credit rating | credit rating | or lifetime ECL | amount | allowance | amount
Trade receivables | 6 | N/A | Low risk A | Lifetime ECL | 40.6 | (0.3) | 40.3

Liquidity risk
The liquidity risk is the risk that the Group is unable to meet its financial obligations at the required time. Liquidity risk management is based on the
maintenance of sufficient liquidity in the form of unused (committed) credit facilities or cash to meet present and future financial obligations in normal and
adverse circumstances.
The contractual terms of the financial obligations, including the estimated interest payments and repayment obligations, are set out on the next page.

31 December 2025 | Carrying | Contractual |  |  |  |  |
EUR million | amount | cash flows | 0 – 6 months | 6 – 12 months | 1 – 2 years | 2 – 5 years | › 5 years
Non-derivative financial liabilities |  |  |  |  |  |  |
Bank syndicate loans | – | – | – | – | – | – | –
Schuldschein loans | (52.4) | (54.9) | (0.9) | (0.9) | (53.1) | – | –
Lease liabilities | (6.7) | (7.4) | (1.0) | (1.0) | (1.6) | (3.5) | (0.3)
Bank overdrafts | 0.0 | 0.0 | – | – | – | – | –
Other loans and borrowings | (0.6) | (0.6) | (0.3) | (0.3) | – | – | –
Trade and other payables | (33.7) | (33.7) | (33.7) | – | – | – | –
Derivative financial assets / liabilities |  |  |  |  |  |  |
Interest rate swap contracts | (0.2) | (0.3) | (0.3) | (0.0) | (0.0) | – | –
Forward exchange contracts | – | – | – | – | – | – | –
Total | (93.6) | (96.9) | (36.2) | (2.2) | (54.7) | (3.5) | (0.3)

FINANCIAL STATEMENTS
Integrated Annual Report 2025
183

31 December 2024 | Carrying | Contractual |  |  |  |  |
EUR million | amount | cash flows | 0 – 6 months | 6 – 12 months | 1 – 2 years | 2 – 5 years | › 5 years
Non-derivative financial liabilities |  |  |  |  |  |  |
Bank syndicate loans | (13.1) | (14.4) | (0.3) | (0.3) | (0.6) | (13.2) | –
Schuldschein loans | (72.2) | (80.2) | (21.3) | (1.0) | (2.0) | (55.9) | –
Lease liabilities | (7.9) | (9.1) | (1.1) | (1.1) | (2.0) | (4.2) | (0.7)
Bank overdrafts | (1.7) | (1.7) | (1.7) | – | – | – | –
Other loans and borrowings | (17.0) | (17.7) | (2.2) | (8.5) | (2.5) | (3.9) | (0.6)
Trade and other payables | (58.9) | (58.9) | (58.9) | – | – | – | –
Derivative financial assets / liabilities |  |  |  |  |  |  |
Interest rate swap contracts | 0.2 | (0.0) | 0.1 | (0.1) | (0.0) | 0.0 | –
Forward exchange contracts | 0.0 | 0.0 | 0.0 | – | – | – | –
Total | (170.6) | (182.0) | (85.4) | (11.0) | (7.1) | (77.2) | (1.3)

It is not expected that the cash flows included in the maturity analysis should occur significantly earlier, or at significantly different amounts.
Within the scope of the Group’s risk management the Group has hedged the currency and interest risks with derivatives. The interest rate swaps have
been designated as cash flow hedges.
Interest-rate risk
Part of the Group’s loans is governed by a floating interest rate (usually 6-month EURIBOR). In view of the Treasury Policy, the Group hedges at least
50% of the floating interest rate exposure for the coming year. To this extent the Group has outstanding interest rate swaps with a notional amount of in
total EUR 50 million (2024: EUR 50 million), of which EUR 25 million matures within one year. The aggregate fair value of the outstanding interest rate
swaps as at 31 December 2025 was EUR 0.2 million negative (2024: EUR 0.2 million negative).
The following table shows the interest rates prevailing at the financial position date for interest-bearing financial liabilities. The majority of all interest
expenses relate to senior bank loans. The effective interest rate of these loans equalises the nominal interest rate.

|  |  |  |  | 2025 |  | 2024
|  | Nominal | Year of |  | Carrying |  | Carrying
| Currency | interest | redemption | Fair value | amount | Fair value | amount
Bank syndicate loans | EUR | IBOR + 1.6% | 2027 | – | – | 13.1 | 13.1
Schuldschein | EUR | IBOR + 1.2% | 2027 | 52.4 | 52.4 | 72.2 | 72.2
Other loans | EUR | 1.40% | 2026 | 0.6 | 0.6 | 17.0 | 17.0
Bank overdrafts | EUR | IBOR + 1.6% | 2027 | 0.0 | 0.0 | 1.7 | 1.7
Lease liabilities | Various | 0.9% - 8.3% | Various | 6.7 | 6.7 | 7.9 | 7.9
Total interest-bearing debt |  |  |  | 59.7 | 59.7 | 111.9 | 111.9

FINANCIAL STATEMENTS
Integrated Annual Report 2025
184
Sensitivity analysis interest
Financial assets and liabilities with a fixed interest rate are not recognized at fair value by processing the value changes in profit or loss. For this reason,
a movement in interest rates across the yield curve at 1 January 2025 would not have had a material effect on the 2025 profit for the period.
The Group has hedged a considerable part of the floating interest rate exposure by means of interest rate swaps. When taking into account these
swaps and the loans with a fixed rate, in total EUR 25.6 million of the EUR 53.0 million long-term and short-term loans, excluding lease liabilities, at
financial year-end have an interest rate which is fixed for one year or longer. Based on the interest-bearing debt levels at year-end and expected cash
flow development, a 1%-point increase in the interest rate across the yield curve as from 1 January 2026, will have an increasing effect on interest
expenses in 2026 of maximum EUR 0.3 million.
Exchange rate risk
A 10%-point appreciation of the currencies listed hereafter against the euro would increase shareholders’ equity as at 31 December 2025 and the result
for 2025 by the amounts shown in the following table. A 10%-point depreciation of the listed currencies against the euro would have had the opposite
effect on the result and equity.

31 December 2025 | Equity | Result
US dollar | 1.6 | 0.1
Chinese yuan | (0.1) | (0.0)
Romanian lei | 1.5 | 0.3
Indian rupee | 0.3 | 0.1
31 December 2024 | Equity | Result
US dollar | 1.1 | (0.3)
Chinese yuan | 4.8 | 0.1
Romanian lei | 1.2 | (0.1)
Indian rupee | 0.2 | (0.1)

Principal exchange rates during the reporting period were as follows:
Applicable currency rates

Value of EUR | At 31 December 2025 | At 31 December 2024 | Average over 2025
Chinese yuan | 8.2262 | 7.5833 | 8.0576
US dollar | 1.1750 | 1.0389 | 1.1218
Romanian lei | 5.0968 | 4.9743 | 5.0399
Swedish krona | 10.8215 | 11.4590 | 11.0692
Indian rupee | 105.5966 | 88.9363 | 97.7422

FINANCIAL STATEMENTS
Integrated Annual Report 2025
185
Fair values of financial instruments
The following table shows the fair values and carrying amounts of the financial instruments:

|  | 2025 |  | 2024
EUR million | Carrying amount | Fair value | Carrying amount | Fair value
Assets carried at amortized costs |  |  |  |
Receivables | 23.0 | 23.0 | 61.8 | 61.8
Cash and cash equivalents | 29.4 | 29.4 | 8.5 | 8.5
Held to maturity investments | – | – | 0.2 | 0.2
| 52.4 | 52.4 | 70.5 | 70.5
Liabilities carried at amortized costs |  |  |  |
Bank syndicate loans | – | – | (13.1) | (13.1)
Schuldschein loans | (52.4) | (52.4) | (72.2) | (72.2)
Other loans | (0.6) | (0.6) | (17.0) | (17.0)
Lease liabilities | (6.7) | (6.7) | (7.9) | (7.9)
Bank overdraft | 0.0 | 0.0 | (1.7) | (1.7)
Trade and other payables (excluding current tax liabilities) | (33.7) | (33.7) | (58.9) | (58.9)
| (93.4) | (93.4) | (170.8) | (170.8)
Assets / (Liabilities) carried at fair value |  |  |  |
Interest derivatives | (0.2) | (0.2) | 0.2 | 0.2
Forward exchange contracts | – | – | 0.0 | 0.0
| (0.2) | (0.2) | 0.2 | 0.2

The Group has no available for sale financial assets and all liabilities at fair value were designated as such upon initial recognition.
The forward exchange contracts and interest derivatives are included in the trade and other payables in the statement of financial position.
FINANCIAL STATEMENTS
Integrated Annual Report 2025
186
Interest rate used in measuring fair value
The interest rate used for discounting estimated cash flows, where applicable, is based on the swap curve as at 31 December, augmented by the
prevailing credit mark-up, and is as follows:

| 2025 | 2024
Derivatives | 2.1% | 2.7%
Leases | 5.0% | 5.0%
Bank syndicate loans | 3.7% | 4.5%
Schulschein loans | 3.4% | 3.6%
Other loans | 1.4% | 3.1%

Fair value hierarchy
In estimating the fair value of an asset or a liability, the Group uses market-observable data to the extent it is available. The fair value calculation method
of all assets and liabilities carried at amortized costs is categorised in level 2 of the fair value hierarchy. The table below analyses financial instruments
carried at fair value, by valuation method. The different levels have been defined as follows:
level 1 quoted prices (unadjusted in active markets for identical assets or liabilities);
level 2 inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly
(i.e. derived from prices);
level 3 inputs for the asset or liability that are not based on observable market data (unobservable inputs).

| Level 1 | Level 2 | Level 3 | Total
31 December 2025 |  |  |  |
Derivative contracts used for hedging | – | (0.2) | – | (0.2)
Total | – | (0.2) | – | (0.2)
31 December 2024 |  |  |  |
Derivative contracts used for hedging | – | (0.2) | – | (0.2)
Total | – | (0.2) | – | (0.2)

Master netting
The Company has no master netting agreement in place. All derivative instruments are presented individually as either an asset or liability.
FINANCIAL STATEMENTS
Integrated Annual Report 2025
187
Leases
The Group leases buildings, cars, office equipment and forklifts. The lease term varies between 3 to 15 years. For buildings an option to renew the lease
after the lease period is customary. Information about leases for which the Group is a lessee is presented on several places throughout the financial
statements:
■ total cash outflow for leases is included in the consolidated statement of cash flows for repayments of lease liabilities EUR 2.4 million
(2024: EUR 3.0 million) for interest EUR 0.5 million (2024: EUR 0.5 million);
■ the carrying amount of right-of-use assets at the end of the reporting period by class of underlying assets, additions to these assets and
the depreciation charge for these assets are included in note 1;
■ lease liabilities are included in note 11 and interest expense on lease liabilities are included in note 23;
■ expenses relating to short-term leases or low-value assets amount to EUR 0.1 million (2024: EUR 0.2 million).
16
Capital commitments
As at 31 December 2025 the Group had capital commitments totaling to EUR 0.9 million (2024: EUR 1.3 million).
17
Contingent assets and liabilities
The Group had guarantees in particular with regard to rentals, financing facilities and post employee benefits totaling to EUR 1.5 million
(2024: EUR 1.8 million).
On 29 September 2025, Kendrion Automotive (Sibiu) SRL and Knorr-Bremse announced that they have entered into a long-term cooperation
agreement. The agreement secures phased capacity sharing and agreed future ownership transfer of the plant of Kendrion Automotive (Sibiu) SRL to
Knorr-Bremse by the end of 2028 latest. This transaction is part of Kendrion’s strategic repositioning to a pure-play Industrial company focusing entirely
on industrial growth opportunities. As part of the agreement, Knorr-Bremse will make phased financial contributions to Kendrion for capacity sharing
and assumes a portion of the fixed costs associated with Sibiu’s electronics operations. In addition, Kendrion will receive a cash consideration of
EUR 4 million. This amount is dependent on certain predefined milestones. In 2025, an amount of EUR 0.9 million is recognized in the consolidated
statement of profit and loss. The remaining EUR 3.1 million will be recognized in the upcoming years, based on achievements of future milestones, and
is therefore presented as a contingent asset.
The Group has divested itself of a number of companies in the past. The customary representations and warranties for transactions of this nature are
included in the relevant share or asset purchase agreements. The Group, as is customary for transactions of this nature, also issued representations
and warranties for potential (tax) claims relating to periods prior to the various divestment dates.
The agreement relating to the divestment of Automotive activities in Europe and USA includes guarantees from Kendrion. The buyer is obliged to
undertake a warranty and indemnity insurance under an insurance policy (the “W&I Insurance”) covering the majority of Kendrion’s guarantees.
Except for cases of willful misconduct or fraud, any liability of Kendrion arising from unsecured claims not covered by the W&I Insurance shall be limited
to EUR 1.00.
18
FINANCIAL STATEMENTS
Integrated Annual Report 2025
188
Operating segments
The Group, in accordance with IFRS 8, has included general and entity-wide disclosures in these consolidated financial statements.
Geographical segments based on physical location of the Group operating companies
The revenue and non-current assets per geographic area are specified below.

|  | The Netherlands |  | Germany | Other | European countries
EUR million | 2025 | 2024 | 2025 | 2024 | 2025 | 2024
Revenue from transactions with third parties | 14.2 | 15.5 | 164.3 | 175.4 | 49.2 | 39.3
Other non-current assets | 21.6 | 22.5 | 115.3 | 125.9 | 11.2 | 7.8
Deferred tax assets | 0.6 | 1.0 | 9.1 | 11.3 | 0.8 | 0.2
Net liability for defined benefit obligations | − | − | 4.3 | 4.6 | 0.2 | 0.2
|  | Asia |  | The Americas |  | Consolidated
|  | A |  |  |  | A
EUR million | 2025 | 2024 | 2025 | 2024 | 2025 | 2024
Revenue from transactions with third parties | 3.0 | 2.7 | 14.8 | 14.6 | 245.5 | 247.5
Other non-current assets | 1.5 | 43.2 | 11.4 | 13.3 | 161.0 | 212.7
Deferred tax assets | − | 6.5 | 1.8 | 2.4 | 12.3 | 21.4
Net liability for defined benefit obligations | − | − | − | − | 4.5 | 4.8

Revenue segmented by customer location

|  | A
EUR million | 2025 | 2024
Germany | 120.6 | 116.0
Other European countries | 87.6 | 91.6
Asia | 16.6 | 18.9
The Americas | 18.7 | 19.1
Other countries | 2.0 | 1.9
Total | 245.5 | 247.5
A |  |

The 2024 revenue from transactions with third parties were re-presented to present the continuing operations only in accordance with IFRS 5.
Reference is made to note 8 for more details on results from discontinued operations .
19
FINANCIAL STATEMENTS
Integrated Annual Report 2025
189
Information about reportable segments
In 2024 and 2025, Kendrion sold its Automotive business in Europe, China and the USA. Through these transactions, Kendrion completed its strategic
repositioning by focusing entirely on industrial growth opportunities in Europe and the USA. The European Automotive Sound and Electronics business
(Mobility) remains with Kendrion, and has been organizationally integrated into IAC, but are reported on separately.
After the transactions, these activities have been considered a separate operating segment, Mobility (previously named Other business). The business
groups Industrial brakes (IB) and Industrial Actuators and Controls (IAC) remain unchanged. As part of the strategic repositioning, Kendrion will focus
its product development resources entirely on the industrial segments. With the Knorr-Bremse phased capacity sharing and future owenrship transfer,
Mobility activities will be phased-out in the future, refer to note 18 for more details.
Thus based on the structure of the Group and the criteria of IFRS 8, Kendrion has concluded it has three operating segments, the business groups
“Industrial Brakes’ and ‘Industrial Actuators and Controls’, and ‘Mobility’.
Based on the aggregation criteria of IFRS 8, Industrial Brakes and Industrial Actuators and Controls have been aggregated into one reportable
segment. The industrial activities of the business units Industrial Brakes and Industrial Actuators and Controls focus on developing and manufacturing
electromagnetic systems and components for industrial applications. These business units also have similar economic characteristics and display a
number of similarities with respect to their technology, production processes, equipment and customers.

|  | Industrial |  | Mobility |  | Consolidated
|  | B |  | B |  | B
EUR million | 2025 | 2024 | 2025 | 2024 | 2025 | 2024
Revenue from transactions with third parties | 204.1 | 207.6 | 41.4 | 39.9 | 245.5 | 247.5
Inter-segment revenue | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0
EBITDA A | 29.9 | 29.6 | 6.4 | 1.0 | 36.3 | 30.6
EBITDA as a % of revenue A | 14.6% | 14.3% | 15.4% | 2.5% | 14.8% | 12.4%
Normalized EBITDA A | 31.6 | 30.3 | 6.5 | 2.9 | 38.1 | 33.2
Normalized EBITDA as a % of revenue A | 15.5% | 14.6% | 15.7% | 7.3% | 15.5% | 13.4%
Reportable segment assets | 214.1 | 261.7 | 58.1 | 103.1 | 272.2 | 364.8
Reportable segment employees (FTE) | 1,068 | 1,101 | 201 | 258 | 1,269 | 1,359

Disaggregation revenue

|  | B
EUR million | 2025 | 2024
Revenue from serial produced goods | 243.3 | 245.2
Revenue from engineering and samples | 2.2 | 2.3
Total | 245.5 | 247.5

A
Non-IFRS financial measure. For the definition and reconciliation of the most directly comparable IFRS measure, refer to reconciliation of non-IFRS information, starting on page 219.
B
2024 numbers were re-presented to present the continuing operations only in accordance with IFRS 5.
Reference is made to note 8 for more details on results from discontinued operations.
FINANCIAL STATEMENTS
Integrated Annual Report 2025
190
Staff costs

|  | A
EUR million | 2025 | 2024
Wages and salaries | 69.9 | 68.0
Social security charges | 12.0 | 11.9
Temporary personnel | 2.3 | 2.8
Contributions to defined contribution plans | 1.0 | 1.2
Expenses related to defined benefit plans | 0.0 | 0.0
Increase in liability for long-service leave | 0.0 | (0.1)
Other costs of personnel | 2.4 | 2.5
| 87.6 | 86.3

Total number of employees and temporary workers at 31 December (FTE) 1,269 1,359
The number of employees and temporary workers as at 31 December 2025 (FTE) working in the Netherlands is 104 (2024: 111). The staff costs 2025
include EUR 1.9 million costs related to restructuring measures (2024: EUR 0.6 million). The staff costs 2025 include a EUR 0.4 million government
grant for R&D activities (2024: EUR 0.4 million).
20
Other operating expenses

|  | A
EUR million | 2025 | 2024
Increase/(Decrease) in provision for doubtful debts | 0.2 | 0.5
Premises costs | 5.1 | 4.9
Maintenance expenses | 4.6 | 4.1
Transport expenses | 1.4 | 1.3
Consultancy expenses | 3.2 | 2.8
Sales and promotion expenses | 0.8 | 0.7
Car, travel and representation costs | 1.4 | 1.3
Insurance | 1.3 | 1.7
Other | 1.0 | 0.6
| 19.0 | 17.9

Research & Development expenses (including staff and other operating expenses) for 2025 totaled EUR 11.1 million (2024: EUR 11.3 million).
A
2024 numbers were re-presented to present the continuing operations only in accordance with IFRS 5. Reference is made to note 8 for more details on results from
discontinued operations.
21
FINANCIAL STATEMENTS
Integrated Annual Report 2025
191
Net finance costs

|  | A
EUR million | 2025 | 2024
Interest income | 0.1 | 0.1
Net exchange gain | 0.0 | –
Finance income | 0.1 | 0.1
Interest expenses | (3.1) | (2.8)
Interest expenses related to lease liabilities | (0.5) | (0.5)
Interest expenses related to employee benefits | (0.2) | (0.2)
Net exchange loss | − | (0.5)
Finance expense | (3.8) | (4.0)
Net financing costs | (3.7) | (3.9)

22
Income tax

|  | A
EUR million | 2025 | 2024
Current tax charge | 4.3 | 4.6
Deferred tax charge | (0.6) | (2.4)
Total corporation tax expenses in the income statement | 3.7 | 2.2

23
Reconciliation of effective tax rate

| Reconciliation effective tax rate |  |  |  | Reconciliation in EUR million
| A |  |  |  | A
|  | 2025 | 2024 | 2025 | 2024
Profit before income tax |  |  |  | 17.3 | 10.6
Income tax expense at local corporation tax rate | 25.8% | 25.8% |  | 4.5 | 2.7
Effect of tax rates in foreign jurisdictions | (3.8)% | (2.9)% |  | (0.5) | (0.4)
Non-deductible expenses | 2.7% | 2.3% |  | 0.3 | 0.3
Tax exempt income | (0.1)% | 0.0% |  | 0.0 | 0.0
Changes in tax rate | – | (4.6)% |  | (0.8) | –
Changes in estimates related to prior years | (5.2)% | 0.3% |  | 0.1 | (0.5)
Current-year losses for which no deferred tax asset is recognized | (1.0)% | – |  | – | (0.1)
Other movements | 1.8% | 0.5% |  | 0.1 | 0.2
| 20.4% | 21.4% |  | 3.7 | 2.2

Non-deductible expenses include the effect of partially deductible interest cost. During the financial year, legislation was enacted in Germany providing
for a reduction in corporate income tax rates applicable in future periods. As deferred tax assets and liabilities are measured using the tax rates expected
to apply when the related temporary differences reverse, the remeasurement of deferred taxes results in a tax benefit of EUR 0.8 million.
A
2024 numbers were re-presented to present the continuing operations only in accordance with IFRS 5. Reference is made to note 8 for more details on results from discontinued operations.
24
FINANCIAL STATEMENTS
Integrated Annual Report 2025
192
Related parties
Identity of related parties
A related-party relationship exists between the Company and its subsidiaries, the Executive Board, the Supervisory Board and shareholders of the
Company with an interest of more than 20%. The Company has a number of agreements with its subsidiaries relating to the charging of central costs to
and from the business units, including management, development, information technology and marketing costs, as well as agreements in respect of
Group financing and use of intellectual property. Internal supplies are also obtained within the business units. Intercompany transactions are effectuated
at arm’s length market prices. As all subsidiaries are fully consolidated and reflected in these financial statements, the amounts of these transactions are
not further specified. For a list of the subsidiaries, see page 217.
Compensations of key management personnel
The remuneration of the Executive Board and Supervisory Board is as follows:

EUR thousand | 2025 | 2024
Short-term benefits | 1,881.4 | 1,607.4
Post-employment benefits | 141.1 | 158.9
Other long-term benefits | − | −
Share-based payments | 140.3 | 50.6
Termination benefits | − | −
| 2,162.8 | 1,816.9

The total remuneration is included in staff costs (see note 20). For a description of the remuneration policy of the members of the Executive Board,
see pages 109-124.
The CEO will, based on this performance, receive a variable remuneration of 78.00% of his gross fixed remuneration. The CEO’s gross variable
remuneration amounts to EUR 469,404 (2024: EUR 291,696) which will be paid in cash.
The CFO will, based on this performance, receive a variable remuneration of 58,65% of his gross fixed remuneration. The CFO’s gross variable
remuneration amounts to EUR 209,381 (2024: EUR 129,815) which will be paid in cash.
Kendrion applies a share ownership guideline for members of the Executive Board of 100% of the annual fixed gross base salary for the CEO and 50%
of the annual fixed gross salary of the CFO. This shareholding has to be gradually built up with performance shares earned under the long-term share
incentive, subject to the sell-to-cover concept as prescribed by the ‘Share ownership guideline’.
The amount charged to the profit or loss regarding the long-term variable remuneration policy, for Executive Board and Management Team, was EUR
0.3 million (2024: EUR 0.1 million).
25
FINANCIAL STATEMENTS
Integrated Annual Report 2025
193
The vesting and holding periods for (conditional) shares awarded to the CEO are specified as follows:

CEO (J.A.J. van Beurden) | Number of shares | Expiry vesting period | Expiry holding period
2025 | 33,218 | Expiry performance period 2025-2027 | End of 2029
2024 | 30,596 | Expiry performance period 2024-2026 | End of 2028
2023 | 4,406 | Expiry performance period 2023-2025 | End of 2027
2022 | 3,229 | Expiry performance period 2022-2024 | End of 2026
2021 | 4,049 | Expiry performance period 2021-2023 | End of 2025
CFO (J.H. Hemmen) | Number of shares | Expiry vesting period | Expiry holding period
2025 | 16,421 | Expiry performance period 2025-2027 | End of 2029
2024 | 15,126 | Expiry performance period 2024-2026 | End of 2028
2023 | 2,273 | Expiry performance period 2023-2025 | End of 2027
2022 | 1,639 | Expiry performance period 2022-2024 | End of 2026
2021 | 1,906 | Expiry performance period 2021-2023 | End of 2025

Pensions
The Executive Board participates in the defined contribution plan of the Company. For 2025, the contribution to the pension insurer was EUR 53,072
(2024: EUR 44,508) for the CEO and EUR 40,218 (2024: EUR 35,559) for the CFO.
Transactions with shareholders
There were no transactions with shareholders, except for the dividend payments, which is disclosed under note 9.
Other related party transactions
There were no transactions with other related parties.
FINANCIAL STATEMENTS
Integrated Annual Report 2025
194
Other notes
The following German legal entities are consolidated in these consolidated financial statements: Kendrion Holding Germany GmbH, Kendrion (Villingen)
GmbH, Kendrion (Donaueschingen/Engelswies) GmbH, Kendrion Kuhnke GmbH, Kendrion Kuhnke Automation GmbH, Kendrion Kuhnke Automotive
GmbH, Kendrion INTORQ GmbH, INTORQ Beteiligungs-GmbH and Kendrion IP Management GmbH. All of the above entities make use of the
exemption under § 264(3) of the German Commercial Code (HGB). In accordance with this provision, separate annual financial statements of these
entities as at 31 December 2025 have not been and will not be published. A list of the subsidiaries benefiting from this disclosure exemption is available
from the Commercial Register at the Local Court (Amtsgericht) in Freiburg im Breisgau under registration number HRB 704749.
27
Post-balance sheet events
There were no post-balance sheet events that have to be taken into account in the consolidated financial statements for the year ended
31 December 2025.
28
Fees to the auditor
With reference to Section 2:382a of the Netherlands Civil Code, the following fees have been charged by Forvis Mazars Accountants N.V. and its
member firms and affiliates to the Company, its subsidiaries and other consolidated entities:

|  |  | 2025 |  |  |  | 2024
|  | Other Forvis |  |  | Other Forvis |  |
| Forvis Mazars | Mazars member |  | Forvis Mazars | Mazars member | Deloitte |
EUR thousand | Accountants N.V. | firms and affiliates | Total | Accountants N.V. | firms and affiliates | Accountants B.V. | Total
Audit of financial statements | 618.7 | 250.5 | 869.2 | 389.5 | 406.3 | 72.2 | 868.0
Other assurance services | 65.0 | − | 65.0 | 100.0 | – | – | 100.0
Tax advisory services | − | − | − | – | – | – | –
Other non-audit services | − | − | − | – | – | – | –
Total | 683.7 | 250.5 | 934.2 | 489.5 | 406.3 | 72.2 | 968.0

26
FINANCIAL STATEMENTS
Integrated Annual Report 2025
195
Note EUR million 2025 2024
Fixed assets
Property. plant and equipment 0.7 0.7
Other investments. including derivatives 0.0 0.2
1.3 Financial fixed assets 120.9 180.1
Total non-current assets 121.6 181.0
Current assets
1.4 Receivables 34.2 3.0
Cash and cash equivalents 0.5 0.0
Total current assets 34.7 3.0
Total assets 156.3 184.0
1.5 Equity
Share capital 31.6 31.0
Share premium 36.5 37.1
Legal reserves 1.2 5.7
Other reserves 64.6 89.2
Net profit/ (loss) for the period 19.5 (4.5)
Total equity 153.4 158.5
1.6 Current liabilities
Loans and borrowings 0.9 23.2
Payables 2.0 2.3
Total current liabilities 2.9 25.5
Total equity and liabilities 156.3 184.0
COMPANY BALANCE SHEET AT 31 DECEMBER
(before profit appropriation)
FINANCIAL STATEMENTS
Integrated Annual Report 2025
196
COMPANY INCOME STATEMENT
Note EUR million 2025 2024
Revenue – –
1.8 Other income 4.1 4.5
Total revenue and other income 4.1 4.5
1.9 Staff costs 4.8 5.0
Depreciation and amortization 0.2 0.1
Other operating expenses 1.0 1.2
Result before net finance costs (1.9) (1.8)
Finance income – –
Finance expense (0.5) (0.8)
Profit/(loss) before income tax (2.4) (2.6)
Income tax expense (0.2) (0.8)
Profit/(loss) for the period (2.6) (3.4)
Share in results of Group companies after tax 22.1 (1.1)
1.10 Net profit/(loss) for the period 19.5 (4.5)
FINANCIAL STATEMENTS
Integrated Annual Report 2025
197
Notes to the company financial statements
General
The Company financial statements are part of the 2025 financial statements of Kendrion N.V. (the ‘Company’). The Company is registered
at the Chamber of Commerce in the Netherlands under number: 30113646.
Principles of valuation of assets and liabilities and determination of results
In selecting the principles employed in the company financial statements for the valuation of assets and liabilities and determination of results,
Kendrion N.V. has made use of the option provided by Section 362, subsection 8, of Book 2 of the Netherlands Civil Code. Consequently, the principles
employed in the Company financial statements of Kendrion N.V. for the valuation of assets and liabilities and determination of results (the ‘accounting
policies’) are identical to those employed in the consolidated EU-IFRS financial statements. Interests in entities in which Kendrion N.V. has significant
influence are measured using the equity method. The consolidated EU-IFRS financial statements have been prepared in accordance with the standards
adopted by the International Accounting Standards Board as endorsed for use in the European Union (hereinafter referred to as ‘EU-IFRS’).
These policies are discussed in notes a – t.
Financial fixed assets
EUR million
Interest in Group
companies Deferred tax Total 2025 Total 2024
Carrying amount at 1 January 179.9 0.2 180.1 228.4
Results of Group companies 22.1 − 22.1 (1.1)
Movements in deferred tax assets − (0.0) (0.0) (0.4)
Foreign currency translation differences for foreign operations (2.7) − (2.7) (3.4)
Dividends received (3.0) − (3.0) (42.0)
Capital distribution (75.8) − (75.8) −
Other movements 0.2 − 0.2 (1.4)
Carrying amount at 31 December 120.7 0.2 120.9 180.1
The capital distribution reflects a return of capital and reserves, effected through the transfer and settlement of receivables from Group companies.
Receivables
EUR million 2025 2024
Receivables from Group companies 33.7 2.4
Prepayments and accrued income 0.5 0.6
34.2 3.0
Receivables from Group companies include receivables from Kendrion Finance B.V. of EUR 32.6 million.
1
1.1
1.2
1.3
1.4
NOTES TO THE COMPANY FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
Integrated Annual Report 2025
198
Equity
EUR million
Share
capital
Share
premium
Translation
reserve
Hedge
reserve
Reserve for
participations
Reserve for
own shares
Other
reserves
Result for the
year Total 2025 Total 2024
Balance as at 1 January 31.0 37.1 1.2 (0.2) 4.7 – 89.2 (4.5) 158.5 172.0
Appropriation of retained earnings – – – – – – (4.5) 4.5 – –
Foreign currency translation differences
for foreign operations – – (2.7) – – – – – (2.7) (3.4)
Net change in fair value of cash flow hedges,
net of income tax – – – 0.1 – – – – 0.1 (0.5)
Issue of ordinary shares 0.6 2.5 – – – – (0.1) – 3.0 2.7
Own shares repurchased – – – – – (2.5) - – (2.5) –
Share-based payment transactions – – – – – – 0.3 – 0.3 (0.2)
Dividends to equity holders – (3.1) – – – – (19.7) – (22.8) (6.8)
Other – – – – (1.9) – 1.9 – – (0.8)
Net profit/(loss) for the period – – – – - – - 19.5 19.5 (4.5)
Balance as at 31 December 31.6 36.5 (1.5) (0.1) 2.8 (2.5) 67.1 19.5 153.4 158.5
Share capital
The authorized capital of the Company amounts to EUR 80 million, divided into 40 million ordinary shares of EUR 2.00 each, of which 15,807,427
ordinary shares have been issued (2024: 15,500,057).
Share premium
The share premium represents revenue from shares issued at more than their nominal value (issued above par). The issued and paid share capital,
including share premium, is fiscally recognized capital.
Translation reserve (Legal reserve)
The translation reserve comprises all foreign currency differences arising from the translation of the financial statements of subsidiaries outside the euro
zone. Gains and losses relating to the translation risk are recognized in equity. The build-up of the cumulative figure commenced on 1 January 2004.
1.5
1.5.1
1.5.2
1.5.3
FINANCIAL STATEMENTS
Integrated Annual Report 2025
199
Hedge reserve
The hedge reserve comprises the effective share of the cumulative net movement in the fair value of cash-flow hedging instruments relating to hedged
transactions that have not yet been executed.
Statutory reserve for participations (Legal reserve)
This reserve pertains to participating interests that are accounted for according to the equity accounting method. The reserve represents the difference
between the participating interests’ retained profit and direct changes in equity, as determined on the basis of the Company’s accounting policies, and
the share thereof that the Company may distribute. It is shown as the share in the undistributed results of the subsidiaries since they were first valued
using the equity method. The amount of any dividend – from these subsidiaries – to which there is an entitlement on adoption of the financial statements
is deducted from this reserve.
Reserve for own shares
The reserve for the Company’s own shares comprises the cost of the Company shares that are held by the Company for the remuneration package for
the Executive Board. As at 31 December 2025, the Company held 185,333 of it’s own shares, see note 9 in the consolidated financial statements for
details
Other reserves
Other reserves are all the reserves other than those shown separately and comprise primarily the cumulative, undistributed profits from previous financial
years.
Current liabilities
EUR million 2025 2024
Debts to Group companies 0.4 22.8
Lease liability 0.5 0.4
Trade payables 0.2 1.1
Other payables and accrued expenses 1.8 1.2
2.9 25.5
An amount of EUR 0.4 million is included on the line lease liability that is due after 2026 (2024: EUR 0.3 million).
Financial instruments
See note 15 to the consolidated financial statements for details on financial instruments.
1.5.4
1.5.5
1.5.6
1.5.7
1.6
1.7
FINANCIAL STATEMENTS
Integrated Annual Report 2025
200
Other income
EUR million 2025 2024
Management fee 4.1 4.5
4.1 4.5
Staff costs
EUR million 2025 2024
Wages and salaries 4.0 3.9
Social security charge 0.2 0.2
Pension costs 0.4 0.6
Other costs of personnel 0.2 0.3
4.8 5.0
Total average number of FTE 17 20
All employees were posted in the Netherlands. The Company has only defined contribution plans for its employees.
Profit appropriation
Appropriation of net result
EUR million 2025 2024
Net profit / (loss) 19.5 (4.5)
The Executive Board has decided, with the approval of the Supervisory Board, with the approval of the Supervisory Board, that the net profit
of EUR 19.5 million will be added to the other reserves.
Commitments not appearing on the balance sheet
Joint and several liability and guarantees
The Company and its Group companies have issued guarantees mainly in the context of the financing by financial institutions.
The Company has issued declarations of joint and several liability, as referred to in Section 403 of Book 2 of the Netherlands Civil Code, for:
■ Combattant Holding B.V., De Bilt;
■ Kendrion Finance B.V., Zeist;
■ 3T B.V., Enschede;
■ Kendrion Marketing B.V., Zeist.
1.8
1.9
1.10
1.11
1.11.1
FINANCIAL STATEMENTS
Integrated Annual Report 2025
201
Fiscal unity
The Company and its Dutch subsidiaries excluding 3T B.V. form a tax group for corporation tax purposes.
According to the standard terms, each of the companies is jointly and severally liable for corporation tax payable by all the members of the fiscal unity.
Post-balance sheet events
There were no post-balance sheet events that have to be taken into account in the consolidated financial statements for the year ended
31 December 2025.
Remuneration of and share ownership by the Executive Board and Supervisory Board
Remuneration of the Executive Board
The remuneration of current Executive Board members charged to the Company and Group companies, including pension expenses as referred to
in Section 383, subsection 1, of Book 2 of the Netherlands Civil Code, amounted to EUR 1,952,000 (2024: EUR 1,604,000). This remuneration is as
follows:
2025 2024
EUR thousand
J.A.J. van
Beurden J.H. Hemmen Total
J.A.J. van
Beurden J.H. Hemmen Total
Short-term fixed remuneration 601.8 357.0 958.8 590.0 350.0 940.0
Short-term variable remuneration 469.4 209.4 678.8 291.7 129.8 421.5
Long-term variable remuneration 92.5 47.8 140.3 33.6 17.0 50.6
Post-employment benefits and other expenses 77.3 96.8 174.1 83.5 108.4 191.9
Total 1,241.0 711.0 1.952.0 998.8 605.2 1,604.0
The 2025 short-term variable remuneration will be paid in cash after income tax.
For more information on the long-term variable remuneration see page 116.
1.11.2
1.12
1.13
FINANCIAL STATEMENTS
Integrated Annual Report 2025
202
Remuneration of the Supervisory Board
The total remuneration of current and former Supervisory Board members in 2025 amounts to EUR 211 thousand (2024: EUR 213 thousand).
This remuneration is as follows:
EUR thousand 2025 2024
Supervisory Board Members:
F.J. van Hout 65 65
E.H. Slijkhuis 49 49
M.H.C. Baijens 49 37
E.M. Doll 48 48
M.J.G. Mestrom (stepped down as from 15 April 2024) − 14
211 213
No loans, advances or related guarantees have been given to the Executive Board or Supervisory Board members.
Share ownership by the Executive Board and the Supervisory Board
31 December 2025 31 December 2024
Executive Board J.A.J. van Beurden 76,148 66,990
J.H. Hemmen 24,955 18,283
Supervisory Board F.J. van Hout 26,500 26,500
E.H. Slijkhuis 3,500 3,500
Amsterdam, 27 February, 2026
Executive Board Supervisory Board
J.A.J. van Beurden F.J. van Hout
J.H. Hemmen M.H.C. Baijens
E.H. Slijkhuis
E.M. Doll
Integrated Annual Report 2025
203
Provisions in the Articles of Association governing the appropriation of profit
Under article 35.1 and 35.2 of the Articles of Association of the Company, the Executive Board shall, with the approval of the Supervisory Board,
determine which part of the profit is added to the reserves. The profit remaining after transfer to the reserves is available to the General Meeting
of Shareholders. The Company can only make payments to the shareholders and other parties entitled to the distributable result insofar as
the shareholders’ equity exceeds the paid-up and called-up part of the capital plus the statutory reserves and exceeds the amounts resulting from
the distribution test, performed by the Executive Board at the date of each dividend payment.
OTHER INFORMATION
Integrated Annual Report 2025
204
INDEPENDENT AUDITOR’S REPORT FINANCIAL STATEMENTS
To the shareholders and Supervisory Board of Kendrion N.V.
Report on the audit of the financial statements 2025 included in the Integrated Annual Report
Our opinion
We have audited the accompanying financial statements for the year ended 31 December 2025 (hereafter “financial statements”) of Kendrion N.V.
(hereafter “Company”) refers to the legal entity, and “Group” refers to the company and its subsidiaries, based in Amsterdam, the Netherlands. The
Company is the head of a group of entities (“components”). The financial information of this group is included in the 2025 consolidated financial
statements of the Group. The financial statements include the 2025 consolidated financial statements and the 2025 company financial statements.
In our opinion:
■ the accompanying consolidated financial statements give a true and fair view of the financial position of the Group as at 31 December 2025 and of
its result and its cash flows for 2025 in accordance with IFRS Accounting Standards as adopted by the European Union (‘EU’) and with Part 9 of
Book 2 of the Dutch Civil Code;
■ the accompanying company financial statements give a true and fair view of the financial position of the Company as at 31 December 2025 and of
its result for 2025 in accordance with IFRS Accounting Standards as adopted by the European Union (‘EU’) and with Part 9 of Book 2 of the Dutch
Civil Code.
The consolidated financial statements comprise:
1. the consolidated statement of financial position as at 31 December 2025;
2. the following statements for 2025: the consolidated statement of profit and loss and other comprehensive income, the consolidated statement of
changes in equity and the consolidated statement of cash flows; and
3. the notes comprising a summary of the material accounting policies and other explanatory information.
The company financial statements comprise:
1. the company balance sheet as at 31 December 2025;
2. the company income statement for 2025; and
3. the notes comprising a summary of the accounting policies and other explanatory information.
Basis for our opinion
We conducted our audit in accordance with Dutch law, including the Dutch Standards on Auditing. Our responsibilities under those standards are
further described in the ‘Our responsibilities for the audit of the financial statements’ section of our report.
Integrated Annual Report 2025
205
INDEPENDENT AUDITOR’S REPORT FINANCIAL STATEMENTS
We are independent of the Group and the Company in accordance with the EU Regulation on specific requirements regarding statutory audit of public-
interest entities, the Wet toezicht accountantsorganisaties (Wta, Audit firms supervision act), the Verordening inzake de onafhankelijkheid van
accountants bij assurance-opdrachten (ViO, Code of Ethics for Professional Accountants, a regulation with respect to independence) and other relevant
independence regulations in the Netherlands. Furthermore, we have complied with the Verordening gedrags- en beroepsregels accountants (VGBA,
Dutch Code of Ethics).
We believe the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Information in support of our opinion
We designed our audit procedures in the context of our audit of the financial statements as a whole and in forming our opinion thereon. The following
information in support of our opinion was addressed in this context, and we do not provide a separate opinion or conclusion on these matters.
Materiality
Based on our professional judgement we determined the materiality for the financial statements as a whole at € 2.9 million. The materiality is based on
1.2% of revenues from continuing operations. We have also taken into account misstatements and/or possible misstatements that in our opinion are
material for the users of the financial statements for qualitative reasons..
Audits of group entities (components) were performed using materiality levels determined by the judgement of the group audit team.
We communicated with the Audit Committee that misstatements in excess of € 88,000, which are identified during the audit, would be reported to
them, as well as smaller misstatements that in our view must be reported on qualitative grounds.
Scope of the group audit
The Company is at the head of a group of entities (“components”). The financial information of this group is included in the 2025 consolidated financial
statements of the Group.
We tailored the scope of our audit to ensure that we performed sufficient work to be able to give an opinion on the financial statements as a whole. We
used the outputs of our risk assessment, our understanding of the Group, its environment, controls and critical process, to consider qualitative factors in
order to ensure that we obtained sufficient audit evidence.
As part of designing our audit, we assessed the risk of material misstatement in the financial statements whether due to fraud or error and then
designed and performed audit procedures responsive to those risks. In particular, we looked at where management made subjective judgement such as
making assumptions on significant accounting estimates.
Because we are ultimately responsible for the opinion, we are also responsible for directing, supervising and performing the group audit. In this respect
we have determined the nature and extent of the audit procedures to be carried out on the components. Our group audit is focusing on components in
terms of audit risk and or where significant risks or complex activities were present, leading to full scope audits and specific scope audits having been
performed on the components in Germany, Austria, China, Romania, USA and the Netherlands.
Integrated Annual Report 2025
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INDEPENDENT AUDITOR’S REPORT FINANCIAL STATEMENTS
We performed audit procedures at group level on areas such as consolidation, financial statement disclosures and impairment testing for intangible
assets (including goodwill). Specialists were involved amongst others in the areas of information technology and forensic. We have used experts for
valuation purposes.
We also involved component auditors from the Forvis Mazars Network and other audit firms, who are familiar with local laws and regulations. For these
component auditors, the group audit team provided detailed written instructions, which include the requirements for component audit teams, the audit
approach for significant audit areas, other information obtained centrally and the need for awareness for fraud risks. Our oversight procedures also
included a combination of remote and on-site reviews of working papers of the auditors of the material components, (virtual) meetings with component
auditors and management of the components, and reviewing deliverables supplied by the component auditors to gain sufficient understanding of the
work performed. We varied the nature, timing and extent of these procedures based on both quantitative and qualitative considerations. For smaller
components, we performed substantive audit procedures on material but non-significant financial statement line items, along with analytical procedures,
to corroborate our assessment that there are no remaining risks of material misstatements.
By performing the procedures mentioned above we have been able to obtain sufficient and appropriate audit evidence about the consolidated and
company financial information and to provide an opinion on the financial statements as a whole.
Audit approach fraud risks
We refer to section ‘Risk management’ of the Executive Board Report for management’s fraud risk assessment. We note that management regularly
updates its risk assessment including fraud and updates its risk and control framework.
Integrated Annual Report 2025
207
INDEPENDENT AUDITOR’S REPORT FINANCIAL STATEMENTS
As part of our procedures of identifying fraud risks, we evaluated fraud risks factors with respect to financial reporting fraud, misappropriation of assets
and corruption. We identified the following fraud risks and performed the following specific procedures:
Fraud risk 1 Our audit work performed
Risk of fraud in revenue recognition
The accounting principles in relation to revenue recognition are
included in the basis of accounting paragraph (l) of the
consolidated financial statements
The risk of fraud in revenue recognition is a presumed audit risk.
For the Company this has been assessed as a risk for
overstatement of revenue through the occurrence of inappropriate
manual transactions (non-standard transactions).
Amongst others we have performed the following audit procedures:
■ an update of our understanding of the Group’s revenue recognition policies where relevant to our audit;
■ we assessed the internal control framework and evaluated the design and implementation of the relevant controls in the
financial closing process, revenue reporting process and in the processes for generating and processing manual journal
entries related to the revenue;
■ we assessed the IT environment and relevant systems;
■ we performed audit procedures on non-standard journal entries made within the operational cycles of revenue (classified
as unexpected journals).
Integrated Annual Report 2025
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INDEPENDENT AUDITOR’S REPORT FINANCIAL STATEMENTS
Fraud risk 2 Our audit work performed
Management override of controls
Management is ordinarily in a unique position to adjust the
financial statements by overriding controls that otherwise appear
to be operating effectively.
In this context, we paid attention to:
■ the appropriateness of journal entries and other adjustments
made in the preparation of the financial statements, such as
manual journal entries related to revenue that are made during
the year; journal entries made close to the year-end date and
consolidation adjustments and reclassifications;
■ potential biases in estimates, such as impairment of intangible
assets (goodwill and other intangible assets);
■ significant transactions, if any, outside the normal course of
business.
Amongst others we have performed the following audit procedures:
■ an understanding of the internal control framework and evaluated the design and implementation of the relevant controls
in the financial closing process;
■ with regard to the Executive Board’s key accounting estimates, we have evaluated judgements and decisions for bias of
the Executive Board. This is mainly related to the key accounting estimates in the management forecast used for the
impairment analysis of the cash-generating units, the management forecast of lows to determine whether customer
relations are impaired and the management forecast to determine the future utilisation of tax losses;
■ we made enquiries of individuals with various levels of responsibility involved in the financial reporting process about
inappropriate or unusual activity relating to the processing of journal entries and other adjustments;
■ we performed analyses of high-risk journals within the consolidation with a pre assessed risk of material misstatements,
as part of our audit approach to address fraud risks which could have a risk of material misstatement on the financial
statements;
■ we performed audit procedures on journal entries in the various processes, amongst other the closing and consolidation
process, based on fraud selection criteria in which at least the following criteria have been applied:
■ material adjustments made during the course of preparing the financial statements;
■ manual journal entries on the operational related revenue ledgers;
■ adjustments on group level which relate to regular activities on component level.
For these journal entries we have tested the appropriateness by obtained supporting documentation:
■ for significant and risk-related transactions we evaluated whether the business rationale of the transactions suggested
that they may have been entered into to engage in fraudulent financial reporting or to conceal misappropriation of assets.
In addition, we also performed the following more general procedures:
■ we assessed the speak-up and compliance matters followed up by management;
■ we have incorporated an element of unpredictability in the selection of the nature, timing and extent of our audit procedures;
■ we evaluated whether the selection and application of accounting policies by the entity, particularly those related to subjective measurements and
complex transactions, may be indicative of fraudulent financial reporting.
In performing these procedures, we used the support of our component auditors and IT-specialists. Our forensic specialists participated in the planning
of the audit and aided to identify areas where the Group’s financial statements may be susceptible to material misstatement due to fraud and reviewed
our fraud risk assessment.
Integrated Annual Report 2025
209
INDEPENDENT AUDITOR’S REPORT FINANCIAL STATEMENTS
Our response to the risk of non-compliance of laws and regulations
We have obtained an understanding of the relevant laws and regulations. We have identified the following laws and regulations that have an indirect
effect on the financial statements: anti-bribery and corruption laws & regulations, competition and data privacy laws, and human rights laws and
regulations.
We held enquiries with management and the Audit Committee if the entity is compliant with laws and regulations which directly or indirectly have a
material impact on the financial statements. We also inspected lawyers’ letters and remained alert to indications of identified and suspected non-
compliance throughout the audit, held enquiries with legal counsel, and obtained a written representation from management that all known instances of
identified and suspected non-compliance with laws and regulations were disclosed to us.
Observations
The aforementioned audit procedures have been performed in the context of the audit of the financial statements. Consequently, they are not planned
and performed as a specific investigation regarding fraud and non-compliance with laws and regulations. Our audit procedures have not led to any
findings.
Audit approach going concern
Our responsibilities, as well as the responsibilities of the Executive Board, related to going concern under the prevailing accounting standards are
outlined in the “Description of responsibilities regarding the financial statements” section below. The Executive Board has performed its going concern
assessment and has not identified any going concern risks. Our main procedures to assess the Executive Board assessment were:
■ We considered whether the Executive Board assessment of the going concern risks includes all relevant information of which we are aware as a
result of our audit.
■ We evaluated the consistency of information used in the Executive Board going concern assessment (including cash flow projection, the budget for
the coming year and the mid-term plan) and information obtained through auditing other areas such as impairment assessments.
■ We read through the terms of debt covenants and determined whether any have been breached.
■ We inquired the entity’s Legal Counsel regarding the existence of litigation and claims and the reasonableness of management’s assessments of
their outcome and the estimate of their financial implications.
■ We performed audit procedures regarding subsequent events to identify those that either mitigate or otherwise affect the entity’s ability to continue
as a going concern.
■ We analysed the Company’s financial position as at year-end and compared it to the previous financial year in terms of indicators that could identify
going concern risks.
■ We read minutes of the Executive Board, Supervisory Board and relevant committees for reference to financing difficulties.
■ We discussed with component auditors about facts and circumstances which might be relevant for the going concern assessment at group level.
■ We analysed the Company’s assessment on the impact of the current market developments (i.e. demand volatility and increasing raw material
prices.
■ We inquired with the Executive Board on the key assumptions and principles underlying the Executive Board assessment of the going concern risks.
■ We inspected agreements in terms of conditions that could lead to going concern risks.
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INDEPENDENT AUDITOR’S REPORT FINANCIAL STATEMENTS
Observations
Based on these procedures, we did not identify any reportable findings related to the Company’s ability to continue as going concern.
Our key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements. We have
communicated the key audit matter to the Executive Board. The key audit matter is not a comprehensive reflection of all matters discussed.
This matter was addressed in the context of the audit of the financial statements as a whole and in forming our opinion thereon, and we do not provide
a separate opinion on this matter.
Key Audit Matter How our scope addressed this matter
Impairment testing of goodwill
The group accounting policies in respect of goodwill and
impairment are set out in the accounting policy notes of the
consolidat-ed financial statements. For further finan-cial
information on the goodwill and related impairment test, we refer
to Note 2 of the consolidated financial statements.
For purposes of impairment testing, good-will is allocated and
monitored on a (group of) Cash Generating Unit (‘CGU’) level.
Other intangibles and property, plant, and equipment are grouped
to CGUs.
For goodwill, management is required to assess the recoverable
amount of the re-spective CGUs.
In view of the inherent uncertainties, in-cluding those related to the
current macro-economic environment, the projection of sales
volumes, revenues, margins, and discount rates in management’s
impairment tests, involved an increased level of judgement for
CGUs. As a result of impair-ment testing for the current year, no
im-pairment loss has been identified.
Given the high level of judgement made by management to
estimate the recoverable amounts used in management’s impair-
ment tests for intangible assets (including goodwill) and property,
plant and equip-ment, the impairment testing was a key audit
matter.
We involved our valuation specialists during our audit procedures.
Our audit procedures included the following:
■ we evaluated the design effectiveness of controls related to the impairment assessment including the appropriateness of
management’s assessment of the CGUs, indicators of impairment, discount rates and forecasts;
■ we assessed and evaluated the reasonableness of key assumptions in the fair value less cost of disposal and value in use
calculations supporting the fair value less cost of disposal and the projected revenue growth, operating margin, discount
rates and growth rates used in the value in use model;
■ we assessed and evaluated the key assumptions of the calculation related to the allocation of goodwill regarding the
disposal of the business in China supporting the projected revenue growth, operating margin, discount rates and growth
rates used;
■ we benchmarked key assumptions against external data and challenged management by comparing the assumptions to
historic performance of the company and local economic developments, considering the sensitivity test of the goodwill
balances for any changes in the respective assumptions;
■ we engaged with our internal valuation experts to assist us in evaluating the appropriateness of the fair value less cost of
disposal and value in use impairment models, including the key assumptions and supporting documentation, and
conclude on the overall reasonableness;
■ we audited management‘s sensitivity analysis to assess the impact of potential changes in assumptions;
■ we verified the mathematical accuracy of the models and agreed these models with relevant data;
■ we evaluated the reasonableness of the disclosures made in the financial statements in relation to the carrying value of
goodwill.
Our observation
Applying the materiality, we did not identify any reportable findings in management’s assessment of the recoverability of
intangible assets (including goodwill) and property, plant and equipment.
Integrated Annual Report 2025
211
INDEPENDENT AUDITOR’S REPORT FINANCIAL STATEMENTS
Report on the other information included in the Integrated Annual Report 2025
In addition to the financial statements and our auditor’s report thereon, the Integrated Annual Report 2025 contains other information that consist of:
■ report of the Executive Board;
■ report of the Supervisory Board;
■ remuneration report;
■ other information as included in the report;
■ other information as required by Part 9 of Book 2 of the Dutch Civil Code.
The Integrated Annual Report contains other information, in addition to the financial statements and our auditor’s report thereon.
Based on the following procedures performed, we conclude that the other information:
■ is consistent with the financial statements and does not contain material misstatements; and
■ contains all the information regarding the management report and the other information as required by Part 9 of Book 2 of the Dutch Civil Code.
We have read the other information. Based on our knowledge and understanding obtained through our audit of the financial statements or otherwise,
we have considered whether the other information contains material misstatements.
By performing these procedures, we comply with the requirements of Part 9 of Book 2 of the Dutch Civil Code and the Dutch Standard 720. The scope
of the procedures performed is substantially less than the scope of those performed in our audit of the financial statements.
Management is responsible for the preparation of the other information, including the management report in accordance with Part 9 of Book 2 of the
Dutch Civil Code and other information as required by Part 9 of Book 2 of the Dutch Civil Code.
Report on other legal and regulatory requirements and ESEF
Engagement
We were engaged by the general meeting as auditor of Kendrion N.V. on 15 April 2023, as of the audit for the year 2024 and have operated as statutory
auditor since that date.
No prohibited non-audit services
We have not provided prohibited non-audit services as referred to in Article 5(1) of the EU Regulation on specific requirements regarding statutory audit
of public-interest entities.
Integrated Annual Report 2025
212
INDEPENDENT AUDITOR’S REPORT FINANCIAL STATEMENTS
European Single Electronic Format (ESEF)
The Company has prepared its Integrated Annual Report in ESEF. The requirements for this are set out in the Delegated Regulation (EU) 2019/815 with
regard to regulatory technical standards on the specification of a single electronic reporting format (hereinafter: the RTS on ESEF).
In our opinion the Integrated Annual Report prepared in XHTML format, including the (partly) marked-up consolidated financial statements as included in
the reporting package by the Group, complies in all material respects with the RTS on ESEF.
The Executive Board is responsible for preparing the Integrated Annual Report including the financial statements in accordance with the RTS on ESEF,
whereby management combines the various components into one single reporting package.
Our responsibility is to obtain reasonable assurance for our opinion whether the Integrated Annual Report in this reporting package complies with the
RTS on ESEF.
We performed our examination in accordance with Dutch law, including Dutch Standard 3950N ‘Assurance-opdrachten inzake het voldoen aan de
criteria voor het opstellen van een digitaal verantwoordingsdocument’ (assurance engagements relating to compliance with criteria for digital reporting).
Our examination included among others:
■ obtaining an understanding of the Group’s financial reporting process, including the preparation of the reporting package;
■ identifying and assessing the risks that the Integrated Annual Report does not comply in all material respects with the RTS on ESEF and
designing and performing further assurance procedures responsive to those risks to provide a basis for our opinion, including:
■ obtaining the reporting package and performing validations to determine whether the reporting package containing the Inline XBRL instance
document and the XBRL extension taxonomy files have been prepared in accordance with the technical specifications as included in the
RTS on ESEF;
■ examining the information related to the 2025 consolidated financial statements in the reporting package to determine whether all required
mark-ups have been applied and whether these are in accordance with the RTS on ESEF.
Description of responsibilities regarding the financial statements
The Executive Board is responsible for the preparation and fair presentation of the financial statements in accordance with IFRS Accounting Standards
as adopted by the European Union (‘EU’) and with Part 9 of Book 2 of the Dutch Civil Code. Furthermore, the Executive Board is responsible for
such internal control as the Executive Board determine is necessary to enable the preparation of the financial statements that are free from material
misstatement, whether due to fraud or error.
As part of the preparation of the financial statements, the Executive Board is responsible for assessing the Group’s and the Company’s ability to
continue as a going concern. Based on the financial reporting frameworks mentioned, the Executive Board should prepare the financial statements
using the going concern basis of accounting, unless the Executive Board either intends to liquidate the Company or to cease operations or has no
realistic alternative but to do so.
Integrated Annual Report 2025
213
INDEPENDENT AUDITOR’S REPORT FINANCIAL STATEMENTS
The Executive Board should disclose events and circumstances that may cast significant doubt on the Company’s ability to continue as a going
concern in the financial statements.
The Supervisory Board is responsible for overseeing the Company’s financial reporting process.
Our responsibilities for the audit of the financial statements
Our objective is to plan and perform the audit engagement in a manner that allows us to obtain sufficient and appropriate audit evidence for our opinion.
Our audit has been performed with a high, but not absolute, level of assurance, which means we may not detect all material errors and fraud during our
audit.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of these financial statements. The materiality affects the nature, timing and extent of our
audit procedures and the evaluation of the effect of identified misstatements on our opinion.
We have exercised professional judgement and have maintained professional scepticism throughout the audit, in accordance with Dutch Standards on
Auditing, ethical requirements and independence requirements. Our audit included among others:
■ identifying and assessing the risks of material misstatement of the financial statements, whether due to fraud or error, designing and performing
audit procedures responsive to those risks, and obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk
of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of internal control;
■ obtaining an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the Group’s and the Company’s internal control;
■ evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the
Executive Board;
■ ● concluding on the appropriateness of the Executive Board use of the going concern basis of accounting, and based on the audit evidence
obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s and the Company’s
ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to
the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the
audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause a company to cease to continue as a
going concern.
■ evaluating the overall presentation, structure and content of the financial statements, including the disclosures; and
■ evaluating whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
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214
INDEPENDENT AUDITOR’S REPORT FINANCIAL STATEMENTS
We communicate with the Audit Committee regarding, among other matters, the planned scope and timing of the audit and significant audit findings,
including any significant findings in internal control that we identify during our audit. In this respect we also submit an additional report to the Audit
Committee in accordance with Article 11 of the EU Regulation on specific requirements regarding statutory audit of public-interest entities. The
information included in this additional report is consistent with our audit opinion in this auditor’s report.
We provide the Audit Committee with a statement that we have complied with relevant ethical requirements regarding independence, and to
communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
From the matters communicated with the Audit Committee, we determine the key audit matters: those matters that were of most significance in the
audit of the financial statements. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter
or when, in extremely rare circumstances, not communicating the matter is in the public interest.
Rotterdam, 27 February 2026
Forvis Mazars Accountants N.V.
M. Vazel RA
Integrated Annual Report 2025
215
LIMITED ASSURANCE REPORT OF THE INDEPENDENT AUDITOR ON THE SUSTAINABILITY STATEMENTS
To: the shareholders and Supervisory Board of Kendrion N.V.
Our conclusion
We have examined the 2025 sustainability indicators of the continued business, as included in the 2025 sustainability statement in the tables and
reporting criteria marked with a symbol (hereinafter: sustainability indicators), of Kendrion N.V. based in Amsterdam, The Netherlands (hereafter
Kendrion).
Based on the procedures performed and assurance evidence obtained nothing has come to our attention that causes us to believe that the 2025
sustainability indicators included in the 2025 sustainability statements of Kendrion N.V. are not prepared, in all material respects, in accordance with
Kendrion’s own reporting criteria.
Basis for our conclusion
We performed our examination in accordance with Dutch law, including Dutch Standard 3000A, “Assurance-opdrachten anders dan opdrachten tot
controle of beoordeling van historische financiële informatie (attest-opdrachten) (assurance engagements other than audits or reviews of historical
financial information (attestation engagements)). This engagement is aimed to obtain limited assurance. Our responsibilities in this regard are further
described in the ‘Our responsibilities for the examination of the 2025 sustainability indicators of Kendrions continued business’ section of our assurance
report.
We are independent of Kendrion in accordance with, the Verordening inzake de onafhankelijkheid van accountants bij assurance-opdrachten (ViO, Code
of Ethics for Professional Accountants, a regulation with respect to independence) and other relevant independence regulations in the Netherlands.
Furthermore, we have complied with the Verordening gedrags- en beroepsregels accountants (VGBA, Dutch Code of Ethics for Professional
Accountants).
We believe that the assurance evidence we have obtained is sufficient and appropriate to provide a basis for our conclusion.
Applicable criteria
The sustainability indicators of Kendrion, as included in the 2025 sustainability statement in the tables marked with a symbol , need to be read and
understood together with the reporting criteria.
The reporting criteria used for the preparation of the sustainability indicators of the continued business are Kendrion N.V.’s own reporting criteria, as
included in the relevant sections of the report of the sustainability report 2025.
Responsibilities of the Executive Board and the Supervisory Board for the 2025 sustainability indicators of Kendrion
The Executive Board is responsible for the preparation of the 2025 sustainability indicators of the continued business in accordance with the applicable
criteria. In this context, the Executive Board is responsible for such internal control as it determines is necessary to enable the preparation,
measurement or evaluation of the 2025 sustainability indicators of continued business that are free from material misstatement, whether due to fraud or
error.
The Supervisory Board is responsible for overseeing the sustainability reporting process carried out by Kendrion.
Integrated Annual Report 2025
216
LIMITED ASSURANCE REPORT OF THE INDEPENDENT AUDITOR ON THE SUSTAINABILITY STATEMENTS
Our responsibilities for the examination of the 2025 sustainability indicators of Kendrion’s continued business
Our responsibility is to plan and perform our examination in a manner that allows us to obtain sufficient appropriate assurance evidence for our
conclusion.
Our assurance engagement is aimed to obtain a limited level of assurance that the selected sustainability indicators are free from material
misstatements.
The procedures performed in this context differ in nature and timing and are less in extent as compared to reasonable assurance engagements. The
level of assurance obtained in a limited assurance engagement is therefore substantially lower than the assurance that would have been obtained had a
reasonable assurance engagement been performed.
We apply the ‘Nadere voorschriften kwaliteitsmanagement’ (NVKM, Regulations for quality management systems) and accordingly maintain a
comprehensive system of quality management including documented policies and procedures regarding compliance with ethical requirements,
professional standards and applicable legal and regulatory requirements.
Our limited assurance engagement included among others:
■ identifying areas where a material misstatement of sustainability indicators of the continued business is likely to arise, designing and performing
procedures to address the areas identified and to obtain limited assurance to support our conclusion;
■ considering internal control relevant to the examination on order to design assurance procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of Kendrion’s internal control;
■ obtaining inquiries from management and other relevant personnel within the entity;
■ performing an analysis on the external environment and gaining an understanding of the industry, relevant societal trends and issues, applicable
laws and regulations, and the characteristics of the entity;
■ evaluating the suitability of the reporting criteria and their consistent application, including evaluating the reasonableness of estimates made by
management;
■ evaluating the process for collecting the selected sustainability indicators and the aggregation of this data as presented in the tables marked with a
symbol in the sustainability report;
■ performing analytical review procedures and reviewing the internal consistency of the data; ancorroborating the collected data with substantive
documentation and if needed, selective sampling.
Rotterdam, 27 February 2026
Forvis Mazars N.V.
M. Vazel RA
Integrated Annual Report 2025
217
Industrial
Industrial Actuators and Controls (Robert Lewin) Managing Director
Kendrion (Donaueschingen/Engelswies) GmbH, Donaueschingen, Germany Robert Lewin
Kendrion (Mishawaka) LLC, Mishawaka, USA Corey Hurcomb
Kendrion Industrial (Sibiu) S.R.L., Sibiu, Romania Mihai Petculescu
Kendrion (Linz) GmbH, Linz, Austria Christian Edelmaier
Kendrion Kuhnke Automation GmbH, Malente, Germany Robert Lewin
Kendrion Kuhnke (Sweden) AB, Kristianstad, Sweden Niklas Sjöström
3 T B.V., Enschede, the Netherlands Michiel Bloemen
Industrial Brakes (Olaf Detlef) Managing Director
Kendrion (Villingen) GmbH, Villingen-Schwenningen, Germany Olaf Detlef
Kendrion (Mishawaka) LLC, Mishawaka, USA Corey Hurcomb
Kendrion INTORQ GmbH, Aerzen, Germany Lars Knoke
INTORQ (Shanghai) Co. Ltd, Shanghai, P.R. China Telly Kuo
Kendrion (Atlanta) Inc., Atlanta, USA Olaf Detlef
INTORQ India Private Limited, Pune, India Aniket Gujrathi
Mobility (Robert Lewin) Managing Director
Kendrion Automotive (Sibiu) S.R.L, Sibiu, Romania Christian Fritz
Kendrion Kuhnke Automotive GmbH, Malente, Germany Robert Lewin
Kendrion N.V. has, directly or indirectly, a 100% interest in all subsidiaries.
PRINCIPAL SUBSIDIARIES
As at 31 December 2025
Integrated Annual Report 2025
218
Combattant Holding B.V., De Bilt, the Netherlands
Kendrion OG GmbH, Linz, Austria
INTORQ Beteiligungs GmbH, Aerzen, Germany
Kendrion Finance B.V., Zeist, the Netherlands
Kendrion Holding Germany GmbH, Markdorf, Germany
Kendrion Holding USA Inc., Indianapolis, USA
Kendrion IP Management GmbH, Malente, Germany
Kendrion Kuhnke GmbH, Malente, Germany
Kendrion Marketing B.V., Zeist, the Netherlands
Kendrion Toluca, SA de CV, Mexicaltzingo, Mexico
Kendrion (UK) Ltd., Bradford, United Kingdom
Landfort I B.V., Zeist, the Netherlands
Kendrion N.V. has, directly or indirectly, a 100% interest in all subsidiaries.
Other Holding and dormant entities
As at 31 December 2025
PRINCIPAL SUBSIDIARIES
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219
GLOSSARY – DEFINITIONS OF NON-IFRS FINANCIAL MEASURES
Added value is a non-IFRS financial measure, which is defined
as total revenue and other income plus changes in inventory
of finished goods and work in progress and subtracted by raw
materials and subcontracted work. Added value is a measure
of the group’s ability to generate a variable profit contribution
on its revenue that is sufficient to absorb the total staff and
other operating expenses. It is an important factor is assessing
to what extent increasing or decreasing revenue volumes will
contribute to the group’s profit.
EBITA is a non IFRS financial measure, which is defined
as profit for the period before income tax expense, finance
income, finance expense, share of profit or loss of an associate
and amortization of other intangible fixed assets. EBITA is a
measure of the group’s ability to realize a positive return on the
group’s operations and continue to provide shareholder returns.
EBITDA is a non IFRS financial measure which is defined
as profit for the period before income tax expense, finance
income, finance expense, share of profit or loss of an associate,
depreciation and amortization. EBITDA is a measure of the
group’s ability to continue to invest in the group’s operations
and provide shareholder returns.
Free cash flow is a non IFRS financial measure that is defined
as cash from operating activities less cash from investing
activities. Free cash flow is a measure of cash flow which is
available for repayment of outstanding interest-bearing debt or
dividend to the shareholders.
Invested capital is a non IFRS financial measure that is defined
as the sum of property plant and equipment, intangible assets,
other fixed assets and net working capital. Invested capital is
a measure to assess the amount of equity and interest-bearing
debt the company has invested in assets and is an important
measure for investors to assess how well a company is using
its financial resources to generate shareholder returns. Invested
capital is a measure widely used by investors and security
analysts to evaluate a group’s profitability relative to other
investment opportunities.
Leverage ratio is a non IFRS financial measure that is defined
as net debt divided by EBITDA. The leverage ratio is a measure
to evaluate the credit worthiness of the group and the ability
of the group to continue to fund its operations with debt.
The leverage ratio is widely used by investors, analysts,
lenders and others to assess the groups credit worthiness in
comparison to other industrial and automotive manufacturing
companies and in relation to the financial covenant agreed in
the group’s financing arrangement which its main lenders.
Net debt is a non IFRS financial measure that is defined as
bank overdraft, current and non-current loans and borrowings
subtracted by cash and cash equivalents. Net debt is a
measure in determining the group’s financial position.
In comparison to the available credit facilities, the total net debt
is an important factor in assessing the group’s liquidity and
in combination which the group’s EBITDA, the net debt is an
important factor in determining the group’s credit worthiness
and ability to fund future investments.
Normalized EBITA is non IFRS financial measures, which is
defined as EBITA before restructuring expense and other
adjustments not related to the group’s normal course of
business including but not limited to gains or losses on
divestitures, transaction costs related to business combinations
and impairments. Normalized EBITA is a measure of the group’s
ability to realize a positive return on the core operations and
continue to provide shareholder returns. We use normalized
EBITA in assessing the effectiveness of business strategies.
In addition to its use by management, we also believe
normalized EBITA is a measure widely used by securities
analysts, investors and others to evaluate financial performance
of the group relative to other industrial and automotive suppliers.
Normalized EBITDA is a non IFRS financial measure which
is defined as EBITDA before restructuring expense and
other adjustments not related to the group’s normal course
of business including but not limited to gains or losses on
divestitures, transaction costs related to business combinations
and impairments. Normalized EBITDA is a measure of the
group’s ability to continue to invest in the operations and provide
shareholder returns based on the core operations. We use
normalized EBITDA in assessing the effectiveness of business
strategies, evaluating and pricing potential acquisitions and as
a factor in management incentive decisions. In addition to its
use by management, we also believe normalized EBITDA is
a measure widely used by securities analysts, investors and
others to evaluate financial performance of the group relative to
other industrial and automotive suppliers.
Normalized effective tax rate is a non IFRS measure that is
defined as reported income tax expenses before adjustments
not related to the group’s normal course of business, including
but not limited to income tax expense on restructuring costs
and impairments, divided by normalized profit before tax which
is defined as profit before tax before adjustments not related to
core operations, including but not limited to restructuring costs
and impairments. Normalized effective tax rate is used to assess
the group’s tax expense in relation to the profit before tax from
its core activities. The normalized effective tax rate is used to
evaluate the effective tax rate relative to previous periods and
other companies.
Normalized free cash flow is a non IFRS financial measure that
is defined as free cash flow before cash flow related to
restructuring expense and other adjustments that are not related
to the group’s core operations, including but not limited to
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220
acquisitions and divestitures. Normalized free cash flow is
a measure of cash flow from the group’s core activities which is
available for repayment of outstanding interest-bearing debt or
dividend to the shareholders. We use normalized free cash flow
as a factor in management incentive decisions. In addition to its
use by management, we also believe normalized free cash flow
is a measure widely used by securities analysts and investors
and others to evaluate the value of the group.
Normalized invested capital is a non IFRS measure that is
defined as invested capital adjusted for items in the statement
of financial position that are considered not to be part of the
group’s normal course of business, including but not limited
to provisions or liabilities related to restructurings. Normalized
invested capital is used to assess the return the company
generates on the amount the company has invested in assets
related to its core operations and is a measure for investors
to assess how well a company is using its financial resources
to generate shareholder returns.
Normalized interest charges is a non IFRS measure that is
defined as financing costs before adjustments not related to
the group’s normal course of business including but not limited
to gains or losses on the recycling of currency translation
results previously recorded in equity upon the liquidation of
a legal entity. Normalized interest charges is used to assess
the amount of net financing costs recognized related to the
core operations of the group. Normalized interest charges
is used to be able to compare interest charges to previous
reporting periods and other companies.
Normalized net profit before amortization is a non IFRS
measure that is defined as profit for the period before
amortization and restructuring expense and other adjustments
not related to the group’s core operations including but not
limited to gains or losses on divestitures, transaction costs
related to business combinations and impairments. Normalized
net profit before amortization is a measure of the group’s ability
to realize a positive return on core operations and continue to
provide shareholder returns when excluding any profit impact
from amortizing intangibles arising from business combinations.
The measure is used by management, investors and security
analysts in order to evaluate the shareholder return relative to
companies that do not include business combinations.
Normalized staff and other operating expense is a non
IFRS measure that is defined as operating expense before
restructuring expense and other adjustments not related to
the group’s normal course of business including but not limited
to gains or losses on divestitures, transaction costs related to
business combinations and impairments. Normalized operating
expense is used to assess the amount of operating expense
recognized related to the core operations of the group.
Normalized operating expense is used to be able to evaluate
expenses to previous reporting periods and other companies.
Normalized working capital is a non IFRS measure that is
defined as working capital adjusted for items in the statement
of financial position that are considered not to be part of the
group’s core operations, including but not limited to provisions
or liabilities related to restructurings. Normalized working
capital is used to assess the amount of cash the company has
invested in short term and non-interest-bearing assets and
liabilities in order to run its core operations.
Organic growth is a non IFRS financial measure that is defined
as revenue in the period under review divided by the revenue
in the previous period, excluding revenue that is attributable
to a business combination in one of both periods and/or
the revenue contribution that attributable to a divestiture in one
of both periods. Organic growth is a measure to which extent
the group has been able to increase its revenue compared
to the previous period on a comparable basis and therefore
excluding the impact from acquisitions. Organic growth is
one of the groups long term financial targets. We use organic
growth in assessing the effectiveness of business strategies.
In addition to its use by management, we also believe organic
growth is a measure widely used by securities analysts,
investors and others to evaluate the success of the company’s
commercial strategies and effectiveness relative to other
industrial and automotive suppliers.
ROI or Return On Invested Capital is a non IFRS financial
measure that is defined as EBITA dividend by the sum of
property plant and equipment, intangible assets, other fixed
assets and net working capital subtracted with the amount
of goodwill and other intangible assets arising from business
combinations. ROIC is a measure that assesses the result
from operations is generated per currency equivalent that the
group has invested in property plant and equipment and other
net assets that are part of the group’s operations. ROIC is an
important factor in assessing relative profitability and used as
a factor in management incentive decisions. Besides the use by
management, we believe ROIC is widely use by investors and
securities analysts to assess the performance of the group in
comparison to other manufacturing companies or alternative
investment propositions.
Solvency is a non IFRS financial measure that is defined as total
equity divided by the sum of total equity and total liabilities.
Solvency is a measure that assesses the portion of the total
assets that is funded by equity. We use solvency as a measure
of financial position and credit worthiness. In addition to its use
by management we believe solvency is a measure widely use
by lenders and analysts to evaluate the credit worthiness of
the group.
GLOSSARY – DEFINITIONS OF NON-IFRS FINANCIAL MEASURES
Integrated Annual Report 2025
221
RECONCILIATION OF NON-IFRS FINANCIAL MEASURES
Measures related to the statement of profit and loss
Organic growth (revenue)
EUR million - unless stated otherwise 2025 2024
A
Reported revenue 245.5 247.5
Exclude: currency effects on revenue 0.7 -
Normalized revenue (excl. currency effects) 246.2 247.5
Organic growth -0.5%
Added value
EUR million 2025 2024
A
Reported total revenue and other income 249.9 249.2
less: Reported changes in inventories of finished goods and
work in progress (0.4) 0.9
less: Reported raw materials and subcontracted work (106.6) (114.3)
Reported added value 142.9 135.8
Reported added value margin % 57.3% 54.3%
Normalization of restructuring charges − (0.1)
Normalization of other costs outside the normal course of business 0.1 (0.9)
Added value 142.8 136.8
Added value margin % 57.2% 54.7%
Normalized staff. impairments and other operating expenses
EUR million 2025 2024
A
Reported staff costs 87.6 86.3
Reported impairments of fixed assets 0.0 1.0
Reported other operating expenses 19.0 17.9
Reported staff. impairments and other operating expenses 106.6 105.2
Normalization of restructuring charges (1.9) (0.6)
Normalization of impairments PP&E. goodwill and other intangibles − (1.0)
Normalized staff. impairments and other operating expenses 104.7 103.6
Currency effects 0.4 0.1
Normalized staff. impairments and other operating expenses
(excl. currency effects)
105.1 103.7
A
2024 numbers were re-presented to present the continuing operations only in accordance with IFRS 5.
Reference is made to note 8 in the Financial Statements for more details on results from discontinued
operations.
Integrated Annual Report 2025
222
Bridge from EBITDA to normalized net profit before amortization
EUR million 2025 2024
A
Reported result before net finance costs 21.3 14.6
Reported depreciation and amortization 15.0 16.0
Reported operating result before depreciation and
amortization (EBITDA) 36.3 30.6
less: Depreciation on PP&E and amortization on non-PPA
related intangibles (12.8) (12.8)
Reported operating result before amortization (EBITA) 23.5 17.8
Normalization of costs and (benefits) related to:
Restructuring measures - Industrial 1.7 0.7
Restructuring measures - Other 0.2 −
Impairments other intangbles - Other − 1.0
Other costs / (benefits) outside the normal course of business
- Other (0.1) 0.9
Total Normalizations 1.8 2.6
Normalized EBITDA 38.1 33.2
Normalized EBITDA margin % 15.5% 13.4%
Normalized EBITA 25.3 20.4
Normalized EBITA margin % 10.3% 8.2%
Reported amortization on PPA related intangibles (2.2) (3.2)
Reported net finance costs (3.7) (3.9)
Reported share profit or loss of an associate (0.3) (0.1)
Normalized profit before income tax 19.1 13.2
EUR million 2025 2024
A
Reported income tax expense (3.7) (2.2)
Normalization related to tax audits − 0.7
Normalization related to deferred income tax adjustment (0.8) (1.1)
Impact costs / (benefits) outside the normal course
of business on income tax expense (0.5) (0.7)
Amortization after tax 1.6 2.4
Net profit before amortization from discontinued operations 2.2 (0.5)
Normalized net profit for the period before amortization 17.9 11.8
Measures related to the Statement of financial position
Invested capital at 31 December
EUR million 2025 2024
Property. plant and equipment 52.4 96.0
Intangible assets 104.3 112.8
Net working capital 31.1 50.5
Other fixed assets 4.3 3.9
Invested capital 192.1 263.2
Goodwill and other intangibles related to acquisitions (92.9) (100.6)
Operating invested capital 99.2 162.6
Impact costs / (benefits) outside the normal course
of business on invested capital 3.7 13.1
Normalized invested capital 102.9 175.7
A
2024 numbers were re-presented to present the continuing operations only in accordance with IFRS 5. Reference is made to note 8 in the Financial Statements for more details on results from
discontinued operations.
RECONCILIATION OF NON-IFRS FINANCIAL MEASURES
Integrated Annual Report 2025
223
Net Debt
EUR million 2025 2024
Total interest bearing loans 59.7 111.9
less: Cash and cash equivalents (29.4) (8.5)
Net Debt 30.3 103.4
Net working capital at 31 December
EUR million - unless stated otherwise 2025 2024
Inventories 44.5 58.5
Trade and other receivables. tax receivable and
assets clasified as held for sale 25.0 63.7
Less: Trade and other payables, tax payables,
current provision (38.4) (71.7)
Net working capital 31.1 50.5
Impact one-off costs and benefits on working capital 3.8 1.1
Normalized working capital 34.9 51.6
As % of revenue 14.2% 20.8%
A
Measures related to the Statement of cash flows
Free cash flow
EUR million 2025 2024
Net cash flow from operating activities 30.4 18.5
Net cash flow from investing activities 53.5 25.8
Free cash flow 83.9 44.3
Proceeds from the sale of subsidiaries (64.5) (52.5)
Normalizations 6.2 5.2
Normalized free cash flow 25.6 (3.0)
Ratios
Return on Investment % (ROI)
EUR million - unless stated otherwise 2025 2024
Normalized EBITA 25.3 21.1
B
Normalized Invested capital 102.9 175.7
Return on Investment % (ROI) 24.6% 12.0%
Solvency
EUR million - unless stated otherwise 2025 2024
Total equity 153.4 158.5
Total assets 272.2 364.8
Solvency % 56.4% 43.4%
Normalized effective tax rate
EUR million - unless stated otherwise 2025 2024
A
Reported income tax expense (3.7) (2.2)
Normalization related to tax audits - 0.7
Normalization related to deferred income tax adjustment (0.8) (1.1)
Impact costs / (benefits) outside the normal course
of business on income tax expense (0.5) (0.7)
Normalized income tax expense (5.0) (3.3)
Normalized profit before tax 19.1 13.2
Normalized effective tax rate % 26.1% 25.0%
A
2024 numbers were re-presented to present the continuing operations only in accordance with IFRS 5. Reference is made to
note 8 in the Financial Statements for more details on results from discontinued operations.
B
2024 numbers include the discontinued China based business
RECONCILIATION OF NON-IFRS FINANCIAL MEASURES
Contact information
Any questions or comments about this Integrated Annual Report
or Kendrion’s activities can be raised with:
Investor Relations
Vesta Building - 5
th
floor
Herikerbergweg 213
1101 CN Amsterdam, the Netherlands
Phone: + 31 85 073 15 00
Email: ir@kendrion.com
www.kendrion.com
Kendrion N.V.
Euronext code: NL0000852531
ISIN code: NL0000852531
Chamber of Commerce: 30113646