Energy Fuels Inc.: Exhibit 99.1 - Filed by newsfilecorp.com

We have audited the accompanying consolidated financial statements of Ara VAC IE Aggregator, LP and its subsidiaries (the "Company"), which comprise the consolidated statement of financial position as of December 31, 2025 and 2024 and January 1, 2024, and the related consolidated statement of profit or loss, of comprehensive income (loss), of changes in equity and of cash flows for the years ended December 31, 2025 and 2024, including the related notes (collectively referred to as the "consolidated financial statements").

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024 and January 1, 2024, and the results of its operations and its cash flows for the years ended December 31, 2025 and 2024 in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board.

We conducted our audit in accordance with auditing standards generally accepted in the United States of America (US GAAS). Our responsibilities under those standards are further described in the Auditors' Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are required to be independent of the Company and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, Management is responsible for assessing the Company's ability to continue as a going concern for at least, but not limited to, twelve months from the end of the reporting period, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless Management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Auditors' Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors' report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with US GAAS will always detect a material misstatement when it exists. 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. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the consolidated financial statements.

• Exercise professional judgment and maintain professional skepticism throughout the audit.

• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

• Obtain 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 Company's internal control. Accordingly, no such opinion is expressed.

• Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by Management, as well as evaluate the overall presentation of the consolidated financial statements.

• Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company's ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.

	Note	2025		2024
		kEUR		kEUR

Revenue	8	325,052		353,539
Cost of sales	9	(347,089	)	(392,757	)
Gross loss		(22,037	)	(39,218	)

Distribution expenses	10	(17,789	)	(17,130	)
Administrative expenses	11	(23,218	)	(24,170	)
Research and development expenses	12	(7,158	)	(8,483	)
Other income	13	11,633		3,930
Other expense	14	(7,315	)	(6,524	)
Operating loss		(65,884	)	(91,595	)

Finance income	15	3,009		8,434
Finance expenses	16	(58,545	)	(31,719	)
Loss before tax		(121,420	)	(114,880	)

Income taxes	17	33,566		18,122
Loss after tax		(87,854	)	(96,758	)

Attributable to:
Loss attributable to non-controlling interest	29	(9,170	)	(10,151	)
Loss attributable to equity holders of the parent	29	(78,684	)	(86,607	)
		(87,854	)	(96,758	)

Ara VAC IE Aggregator, LP ("IE Aggregator" or "Group") is a limited partnership governed by the laws of Ireland located at 32 Molesworth Street, Dublin 2, Ireland, registered with the Irish Companies Registration Office.

The Group consists of Ara VAC TopCo GmbH ("German TopCo") and its subsidiaries and Ara VAC TopCo US LLC ("US TopCo") and its subsidiaries, each directly and indirectly controlled by IE Aggregator. IE Aggregator owns 89.9% of the interests in German TopCo and 100% of the interest in US TopCo. The remaining 10.1% of German TopCo is held by Ara VAC Blocker, SLP and Ara VAC Holdings, Ltd, having respectively 1.6% and 8.5% interests and are presented as non-controlling interests. IE Aggregator constitutes the parent and therefore prepares the consolidated financial statements for the Group.

The Group is engaged in the manufacture of magnetic alloys, components and related product solutions for a range of technological and industrial applications. Its operations span Europe, Asia and North America, with key manufacturing and research and development sites across these regions. Its products serve industries including automotive, industrial automation, energy, defense and medical technology. The Group's ultimate parent is Ara Fund III GP, Ltd., Cayman Islands which exercises control through Ara VAC Holdings, Ltd. and Ara VAC Blocker, SLP. Neither the direct owners nor the ultimate controlling entity prepares consolidated financial statements available for public use. Accordingly, there is no higher-level parent that produces publicly available consolidated financial statements.

The consolidated financial statements of the Group have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB").

The consolidated financial statements have been prepared on a historical cost basis, except where otherwise stated in the accounting policies, and are presented in euros (EUR), rounded to the nearest thousand (kEUR), unless otherwise indicated.

These consolidated financial statements, for the year ended December 31, 2025, are the first consolidated financial statements the Group has prepared in accordance with IFRS Accounting Standards as issued by the IASB. Each legal entity prepared its financial statements in accordance with local generally accepted accounting principles ("Local GAAP"). Accordingly, the Group has prepared consolidated financial statements that comply with IFRS applicable as of December 31, 2025, together with the comparative period data for the year ended December 31, 2024, as described in the summary of significant accounting policies. In preparing the consolidated financial statements, the Group's consolidated opening statement of financial position was prepared as of January 1, 2024, the Group's date of transition to IFRS. Historically, consolidated financial statements were not prepared under local GAAP, consequently, these are the first consolidated financial statements prepared and a reconciliation from Local GAAP to IFRS is not presented. The Company has not elected to apply any of the optional exemptions available under IFRS 1. Accordingly, all applicable IFRS standards have been applied fully retrospectively.

The consolidated financial statements comprise the financial statements of the Group and its subsidiaries as of December 31, 2025. Subsidiaries are entities that are controlled by the Group. Control exists when the Group has power over the investee, is exposed or has rights to variable returns from its involvement with the investee and has the ability to use its power to affect those returns.

Subsidiaries are consolidated from the date on which control is obtained and continue to be consolidated until the date on which control ceases. Profit or loss and each component of other comprehensive income are attributed to the owners of the parent and to non-controlling interests, even if this results in the non-controlling interests having a deficit balance. All intra-group balances, transactions, income and expenses are eliminated in full upon consolidation.

Changes in the Group's ownership interests in subsidiaries that do not result in a loss of control are accounted for as equity transactions. If the Group loses control over a subsidiary, it derecognizes the related assets (including goodwill), liabilities, non-controlling interest and other components of equity, while any resultant gain or loss is recognized in profit or loss. Amounts recorded in OCI, a component of equity, include exchange differences on translation of foreign operations, net gain (loss) on cash flow hedges and remeasurement gain (loss) on defined benefit plans. Exchange differences on translation of foreign operations and net gain (loss) on cash flow hedge amounts are reclassified to profit or loss in future periods as applicable, while defined benefit remeasurements are not subsequently reclassified. Any investment retained is recognized at fair value.

The accompanying consolidated financial statements have been prepared on a going concern basis.

Subsequent to December 31, 2025, and prior to the issuance of these consolidated financial statements, e-VAC Magnetics LLC, a subsidiary of the Group, became involved in a dispute with a customer regarding a commercial supply agreement that represents a substantial component of e-VAC Magnetics LLC's expected future revenues and operating plans. The dispute primarily relates to the calculation of compensation for underutilized production capacity under different contractual frameworks. Given the early stage of the discussions, the outcome of the dispute, including whether the agreement will be terminated and the amount and timing of any compensation, remains uncertain and cannot currently be reliably estimated. For the purposes of its liquidity planning, management has considered scenarios that include a potential termination of the agreement; however, actual outcomes may differ materially from those assumptions.

At December 31, 2025, the Group held available liquidity of EUR 57.4 million, comprising cash and cash equivalents of EUR 15.6 million and undrawn committed credit facilities of EUR 41.8 million. The undrawn facilities consist of EUR 35.0 million under the German syndicated revolving credit facility (held at the level of Ara VAC BidCo GmbH) and approximately EUR 6.8 million representing the undrawn portion of the USD 18.0 million revolving credit facility under the US Credit Agreement (held at the level of e-VAC Magnetics LLC).

A sensitivity analysis of the Group's current liquidity planning through the end of 2027, including reasonably possible downside cases, indicates that the cash expected to be on hand exceeds the minimum liquidity requirements over the planning horizon, taking into account the mitigating actions described below as well as the letters of comfort and equity contributions provided by the Ara Funds. However, due to the continuing difficult market environment and the uncertainty surrounding the customer dispute with e-VAC Magnetics LLC, there remains a risk that actual results may fall below plan.

The financial covenants under the Group's external financing arrangements are not imposed at the level of Ara VAC IE Aggregator LP, but apply at the level of the respective borrowers within the Group:

As of December 31, 2025, both Ara VAC BidCo GmbH and e-VAC Magnetics LLC were in compliance with all financial covenants under their respective financing arrangements. No financial covenants are imposed at the level of Ara VAC TopCo GmbH, Ara VAC TopCo US LLC or Ara VAC IE Aggregator LP.

The Group's assessment included scenario analyses and considerations of reasonably possible downside cases for the Group, together with available mitigating actions, including the committed support under the letters of comfort, customer dispute resolution alternatives, working capital measures, liquidity management actions, and other actions available under the Group's financing arrangements. Prior to the issuance of these financial statements, the Ara Funds, as indirect shareholders of the Group, contributed an additional EUR 48.7 million in equity to the Group. Furthermore, in June 2026, Ara Fund III, LP, Ara Fund III-B, LP, Ara Fund III-AIV, LP, Ara Fund III-A, SCSp and Ara Fund III-C, SCSp (together the "Ara Funds") provided two letters of comfort, both covering the period until June 30, 2027:

Such financial support may be provided by way of equity contributions, shareholder loans, or contributions to the capital reserve. Taking into account the letters of comfort provided by the Ara Funds, the EUR 48.7 million in equity contributions received prior to issuance, the Group's available liquidity position, and the mitigating actions within management's control, management has concluded that the Group has adequate resources to continue its operations for a period of at least twelve months from the date of issuance of these financial statements. Accordingly, management has determined that no material uncertainties exist that may cast significant doubt on the Group's ability to continue as a going concern.

Management is evaluating strategic alternatives, including a potential disposal of the business as a whole. In this context, multiple scenarios have been analyzed. Management has assessed that a potential sale does not give rise to any impairment risk under IAS 36 for the existing assets; accordingly, no impairment losses are expected.

The significant accounting policies applied in the preparation of the Group's consolidated financial statements are set out below. These policies have been consistently applied to the period presented, unless otherwise stated.

The Group presents assets and liabilities in the statement of financial position as current and non-current.

Assets are classified as current when they are expected to be realized or consumed in the normal operating cycle, are held primarily for the purpose of trading, are expected to be realized within twelve months after the reporting date, or are cash or cash equivalents, unless they are restricted from being exchanged or used to settle liabilities for at least twelve months after the reporting period. All other assets are classified as non-current.

Liabilities are classified as current when they are expected to be settled in the normal operating cycle, are held primarily for the purpose of being traded, are due to be settled within twelve months after the reporting period, or when the Group does not have a right at the end of the reporting period to defer settlement of the liability for at least twelve months after the reporting period. All other liabilities are classified as non-current.

Deferred tax assets and liabilities are classified as non-current assets and liabilities.

Business combinations are accounted for using the acquisition method in accordance with IFRS 3. The consideration transferred is measured at the fair value on the acquisition date. Acquisition-related costs are expensed as incurred and presented within administrative expenses.

At the acquisition date, the Group recognizes and measures the identifiable assets acquired and liabilities assumed at fair value and assesses their classification and designation based on the contractual terms, economic conditions, and other relevant circumstances at that date.

If, after reassessment, the fair value of the identifiable net assets acquired is more than the aggregate consideration transferred, the resulting gain from a bargain purchase is recognized immediately in profit or loss.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement assumes that the transaction to sell the asset or transfer the liability takes place either in:

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their best economic interest. The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximize the use of relevant observable inputs and minimize the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

Valuation procedures are performed for significant assets and liabilities such as derivatives. At each reporting date, the Group analyzes the movements in the values of assets and liabilities that are required to be remeasured or reassessed as per the Group's accounting policies. For this analysis, the Group verifies the major inputs applied in the valuation by agreeing the information in the valuation computation to contracts and other relevant documents. The Group also compares the change in the fair value of each asset and liability with relevant external sources to determine whether the change is reasonable.

Revenue from contracts with customers is recognized when control of the goods or services is transferred to the customer at an amount that reflects the consideration to which the Group expects to be entitled in exchange for those goods or services. 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. In determining the transaction price for the sale of goods, the Group considers the effects of variable consideration, the existence of significant financing components, noncash consideration, and consideration payable to the customer (if any). Revenue is recognized when, or as, the Group satisfies a performance obligation by transferring control of a promised good or service to a customer, at an amount that reflects the consideration to which the Group expects to be entitled in exchange for those goods or services. The customer obtains control of the promised good or service when the customer has the present ability to direct the asset's use and obtain substantially all of its remaining economic benefits.

The Group manufactures the products itself and transfers control of those products directly to its customers. Accordingly, the Group provides its own goods to the customer and does not arrange for another party to supply the goods and therefore acts as a principal. The payment terms are generally agreed with 30 to 60 days. The Group typically provides warranties as required by law. These assurance-type warranties are accounted for as a provision at the time a claim is raised by the customer. Invoicing occurs in accordance with terms defined in individual purchase orders and project agreements. Payment terms are strictly linked to contractual triggers primarily on delivery of product, ensuring that the recognition of receivables corresponds to the completion of specific transaction stages as agreed with the customer. The Group does not incur incremental costs to obtain or fulfill contracts that require capitalization as assets. All such costs are recognized in the consolidated statement of profit or loss in the period in which they arise.

The Group operates in three business divisions, which include Rapid Solidification, Crystalline and Permanent Magnets (PM). The Group also operates in multiple markets, including automotive, energy conversion and distribution, installations, automation and drives, communication, aerospace and transportation, amongst others with a customer base that is spread across multiple geographies.

The Group generates revenue from the sale of products manufactured as part of its ordinary business activities. The products are subject to customer-specific modifications; however not all components are highly customized and such customization typically occurs at a late stage of the manufacturing process. Contracts are typically established through binding purchase orders that define quantities, pricing, and delivery terms. Framework agreements set general commercial terms but do not create enforceable rights on their own.

The Group's products are often designed and manufactured in development cycles with highly integrated customer-built processes. Mainly with large customers, the Group often signs framework agreements. In these cases, customers place orders based on these contracts. Revenue from the sale of goods is recognized generally at the point in time when control of the product is transferred to the customer - usually on the delivery of goods. For customer contracts which oblige the Group to deliver a series of goods, revenue is recognized over time. However, in this case, the Group applies the practical expedient IFRS 15.B16 and recognizes revenue in the amount to which it has the right to invoice, since the Group has the right to consideration from the customer in an amount that corresponds directly with the value to the customer of the Group's performance completed to date.

Contract assets are the rights to consideration in exchange for goods or services transferred to the customer. If the Group performs by transferring goods or services to a customer before the customer pays consideration or before payment is due, contract assets are recognized for the earned consideration that is conditional.

Trade receivables represent the Group's rights to an amount of consideration that is unconditional.

Contract liabilities represent the obligations to transfer goods or services to a customer for which the Group has received consideration (or an amount of consideration is due to) from the customer. If a customer pays consideration before the Group transfers goods or services to the customer, Contract liabilities are 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.

Grants from government bodies are recognized when there is reasonable assurance that the Group will comply with the conditions attached and that the grants will be received. The Group applies International Accounting Standard ("IAS") 20 by analogy to account for investment-type transferable tax credits received in connection with qualifying capital expenditures, which involves significant accounting judgment described in Note 4. In accordance with IAS 20, management has elected to measure such transferable tax credits at fair value at initial recognition, as non-monetary grants are generally measured at fair value, refer to 3f) Transferable Investment Tax Credits below.

The Group distinguishes between government grants accounted for in accordance with IAS 20 (or IAS 20 by analogy for investment-type incentives) and other forms of funding that do not meet the definition of government grants.

The Group also receives government assistance from government entities in connection with qualifying capital investment and infrastructure projects. Government grants related to the acquisition or construction of property, plant, and equipment are recognized when management concludes that it is probable that the conditions attached to the grants will be satisfied and that the grants will be received. Such grants are recorded using a net presentation method as a reduction of the carrying amount of the related qualifying property, plant, and equipment. Accordingly, the benefit of government grants recorded as reductions of property, plant, and equipment is recognized in earnings prospectively over the estimated useful lives of the related assets through reduced depreciation expense.

Grants related to income are recognized in profit or loss on a systematic basis over the periods in which the related costs are recognized.

The Group receives transferable investment tax credits related to qualifying capital investments under Section 48C of the Internal Revenue Code. These credits are transferable and not linked to the Group's taxable income and can be monetized by sale to third parties regardless of the Group's tax position. The Group has determined that they fall outside the scope of IAS 12 and are accounted for as government grants by analogy to IAS 20.

Recognition. A transferable tax credit is recognized when there is reasonable assurance that the Group will comply with the conditions attached to the credit and that the credit will be received. This typically occurs when the qualifying capital expenditure has been incurred and the credit has been allocated by the Internal Revenue Service.

Initial measurement. In accordance with IAS 20 applied by analogy, management has elected to measure such credits at fair value at initial recognition. Fair value is determined based on observable market pricing derived from executed arm's-length sale agreements. The fair value of the credit is recognized as a reduction of the carrying value of the related property, plant and equipment and as a transferable tax credit asset representing the right to monetize the credit by transfer to a third party. The credit asset is classified as current when the Group expects to complete the sale within twelve months of the reporting date. The reduction in the carrying value of property, plant and equipment is recognized in profit or loss over the useful life of the related asset through reduced depreciation expense.

Sale. A sale of transferable tax credits is recognized once the closing conditions specified in the relevant transfer agreement are met. Upon closing, the credit is derecognized in exchange for the cash consideration received. Transaction and structuring fees contingent on the closing of the sale are recognized in administrative expenses at the closing date.

Compliance. Transferable §48C credits are subject to ongoing compliance with applicable program requirements, including Prevailing Wage and Apprenticeship requirements. Any estimated cure payment obligations or recapture exposures arising from non-compliance are recognized as a liability in administrative expenses when probable and reasonably estimable.

Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted at the reporting date in the countries where the Group operates and generates taxable income.

Current income tax relating to items recognized directly in equity and not in the statement of profit or loss is recognized outside profit or loss. Management periodically evaluates positions taken in the tax returns in cases where applicable tax regulations are subject to interpretation and reflect the effects of such uncertainties in the measurement of current income tax assets and liabilities in accordance with IAS 12.

Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.

Deferred tax liabilities are recognized for all taxable temporary differences, except:

Deferred tax assets are recognized for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognized to the extent that it is probable that taxable profits will be available against those deductible temporary differences and the carried forward of unused tax, credits and unused tax losses can be utilized, except:

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be made to allow all or part of the deferred tax assets to be utilized. Unrecognized deferred tax assets are re-assessed at each reporting date and are recognized to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.

Deferred tax relating to items recognized outside profit or loss is recognized outside profit or loss. Deferred tax items are recognized in correlation to the underlying transaction either in OCI or directly in equity.

Tax benefits acquired as part of a business combination but not satisfying the criteria for separate recognition at that date, are recognized subsequently if current information about facts and circumstances change. The adjustment is either treated as a reduction in goodwill (if it does not exceed goodwill) if it was incurred during the measurement period or recognized in profit or loss.

Since January 1, 2024, the Pillar Two legislation has been in force. The analysis for the 2025 reporting period revealed no indications of any material impact under this legislation. The Group is therefore not materially affected by the scope of global minimum taxation according to the Organization for Economic Co-operation and Development ("OECD") Pillar Two model regulations. As a consequence, no provisions for Pillar Two income taxes were recognized. The Group applies the exemption from recognizing deferred taxes in connection with Pillar Two income taxes.

Uncertain tax positions are measured based on the most likely amount method in accordance with IFRIC 23 Uncertainty over Income Tax Treatments, as management believes this method provides the best prediction of the resolution of the uncertainty. The uncertain tax position relates to tax grants in the US. The grants proceeds were not recognized into taxable income in the 2024 and 2025 tax years.

The Group's consolidated financial statements are presented in thousands of euros ("kEUR"). Items in the financial statements of each Group entity are measured using that entity's functional currency. The functional currency of each Group entity is the local currency of the jurisdiction in which it operates, as revenues and costs are primarily denominated and settled in local currencies. The functional currency of each entity is included in Note 6.

Foreign currency transactions are initially recognized in the functional currency at the spot exchange rate at the transaction date. At the reporting date, monetary assets and liabilities are translated using the rates of exchange prevailing at the period-end closing rate, and exchange differences are recognized in the consolidated statement of operations as profit or loss. Non-monetary items measured at historical cost are translated using the exchange rates at the dates of the initial transactions and are not subsequently remeasured.

Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined, with the resulting foreign exchange differences recognized consistently with the recognition of the fair value changes.

For Group entities whose functional currency is not the reporting currency being euro ("EUR"), the results and financial position are translated into the Group's presentation currency as follows: assets and liabilities are translated into euro at period-end exchange rates, revenues and expenses are translated into euro using average exchange rates for the period and equity items are translated into euro using the historical exchange rates for the period, meaning the exchange rates in effect at the dates when the underlying equity transactions occurred. Retained earnings are translated using the historical exchange rates applicable to the underlying equity movements, while exchange differences arising on translation of foreign operations are recognized in accumulated other comprehensive income/(loss) in equity and reclassified to profit or loss on disposal of the foreign operations. Average exchange rates for a period are used only when they approximate the exchange rates at the dates of the transactions.

Cash flows arising from transactions in foreign currencies are translated into the functional currency using exchange rates at the dates of the cash flow. For the purpose of the consolidated statement of cash flows, cash flows of foreign operations are translated into euro using average exchange rates for the period where these approximate the exchange rates at the dates of the cash flows. Cash and cash equivalents denominated in foreign currencies are translated at period-end exchange rates, and the effect of exchange rate changes on cash and cash equivalents is presented separately in the consolidated statement of cash flows.

The Group recognizes a liability, measured at the amount of cash payable, to pay a dividend when the distribution is authorized, and the distribution is no longer at the discretion of the Group. As per the corporate laws of the respective countries, a distribution is authorized by the Board of Directors at subsidiary level or the general partner at the parent company level. A corresponding amount is recognized directly in equity as a reduction of retained earnings for dividends declared before the reporting period.

Property, plant and equipment ("PPE") is initially measured at cost and subsequently measured at cost less accumulated depreciation and impairment losses, if any. The cost of self-constructed assets comprises costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management, such as directly attributable materials and labor as well as directly attributable overheads. General administrative expenses and other costs that cannot be directly attributed to the construction of the assets are expensed as incurred. Purchased software that is integral to the functionality of the related item of plant and equipment is capitalized as part of that asset. Purchased software becomes integral when the related item of plant and equipment would not be able to function or would not deliver its intended output without the purchased software.

General and specific borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalized during the period that is required to complete and prepare the asset for its intended use or sale. Qualifying assets are assets that necessarily take a substantial period to get ready for their intended use or sale. Capitalization commences when expenditures for the asset and borrowing costs are incurred and activities necessary to prepare the asset for its intended use or sale are in progress. Capitalization is suspended during extended periods in which active development is interrupted but is not suspended during periods in which there are temporary delays in active development. Capitalization ceases when substantially all the activities necessary to prepare the qualifying asset for its intended use or sale are complete. Where parts of an item of PPE have costs that are significant in relation to the total cost of the item and have different useful lives or patterns of consumption of economic benefits, they are depreciated separately over their respective useful lives. This component approach is applied for purposes of determining depreciation and does not necessarily require separate presentation of each component as a separate asset. The gain or loss on disposal of an item of PPE is determined by comparing the proceeds from disposal with the carrying amount of the respective item of property, plant and equipment and is recognized net within other income or other expenses.

The Group recognizes in the carrying amount of an item of property, plant and equipment the cost of replacing parts only if it is probable that future economic benefits associated with the item will flow to the Group and that the cost of the item can be measured reliably. All other costs are expensed as incurred.

Depreciation is calculated on a straight-line method to allocate cost, net of residual values, over the estimated useful lives as follows:

The Group invests significant resources into the research and development of new and innovative alloy systems, technologies, and products. This enables the Group to develop products based on either specific needs or requirements of customers.

The Group distinguishes research activities from development activities based on the stage of the project. Research activities are performed to obtain new scientific or technical knowledge and are expensed as incurred. Development activities begin when research findings are applied to a plan or design for the production of new or substantially improved products or processes

Development costs that are directly attributable to design and testing of identifiable and unique products controlled by the Group are recognized as intangible assets when the following criteria are met:

• it is technically feasible to complete the product so that it will be available for use or sale

• it can be demonstrated how the product will generate probable future economic benefits

o probable future economic benefits are assessed based on the expected customer demand and whether expected revenues or cost savings are likely to exceed planned costs

• adequate technical, financial, and other resources to complete the development and to use or sell the product are available, and

• the expenditure attributable to the product during its development can be reliably measured.

The cost of internally generated intangible assets comprises directly attributable costs, such as materials, direct labor, and a systematic allocation of directly attributable production overheads.

Purchased software that is integral to the operation of an item of property, plant and equipment is included in the cost of that asset. Capitalized development costs are recorded as intangible assets and amortized from the point at which the asset is ready for use, or when substantially all development activities are complete and the asset is capable of operating in the manner intended by the Group.

Research expenditure and development expenditure that do not meet the criteria above are recognized as an expense as incurred. Development costs previously recognized as an expense are not recognized as an asset in a subsequent period. Significant judgments applied in determining whether development costs meet the capitalization criteria are described in Note 4.

The assets consisting of development costs, patents, trademarks, and other rights developed or acquired by the Group are stated at cost less accumulated amortization (see below) and impairment losses, if any. All of the Group's intangible assets have finite useful lives.

Subsequent expenditure on intangible assets is capitalized only if it results in an enhancement of the future economic benefits of the asset beyond its originally assessed standard of performance and the cost of the expenditure can be measured reliably. All other subsequent expenditure is recognized as an expense as incurred.

Amortization is calculated on a straight-line basis over the estimated useful lives of intangible assets. Intangible assets are amortized from the date they are available for use. The useful lives of intangible assets are based on the period over which the asset is expected to generate future economic benefits for the Group, taking into consideration expected usage, technological and commercial obsolescence, and product life cycles. The estimated useful lives are as follows:

Amortization is recorded in cost of sales. Capitalized development costs of 2.7% are amortized over 2 years, 40.9% are amortized between 5-8 years, 19.2% between 10-12 years, 23.3% between 14-15 years and 13.9% between 17-20 years.

Under the equity method of accounting, the investments are initially recognized at cost and adjusted thereafter to recognize the Group's share of the post-acquisition profits or losses of the investee in profit or loss, and the Group's share of movements in other comprehensive income of the investee in other comprehensive income. Dividends received or receivable from associates and joint ventures are recognized as a reduction in the carrying amount of the investment. Where the Group's share of losses in an equity-accounted investment equals or exceeds its interest in the entity, including any other unsecured long-term receivables, the Group does not recognize further losses, unless it has incurred obligations or made payments on behalf of the other entity. Unrealized gains on transactions between the Group and its associates and joint ventures are eliminated to the extent of the Group's interest in these entities. Unrealized losses are also eliminated, unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of equity-accounted investees have been changed where necessary to ensure consistency with the policies adopted by the Group.

The Group mainly leases buildings, office equipment (e.g. printers) and vehicles. Rental contracts are typically made for fixed periods but may have extension options.

The Group recognizes a liability for making lease payments (i.e., lease liability) and an asset representing the right to use the underlying asset during the lease term (i.e., the right-of-use asset). The Group recognizes an interest expense on the lease liability and depreciation expense on the right-of-use asset. The right-of-use assets are presented in the balance sheet in a separate line.

Contracts may contain both lease and non-lease components. In case of vehicles the Group elected not to separate lease and non-lease components and instead to account for these as a single lease component. The Group applied this practical expedient, permitted by IFRS 16.15, consistently to the entire vehicle asset class.

Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of the following lease payments:

• variable lease payments that are based on an index or a rate, initially measured using the index or rate as of the commencement date

• the exercise price of a purchase option if the Group is reasonably certain to exercise that option, and

• payments of penalties for terminating the lease, if the lease term reflects the Group exercising that option.

Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability.

The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, which is generally the case for leases in the Group, the lessee's incremental borrowing rate is used, being the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar terms, security and conditions. For the calculation of costs of debt, the Group used returns on bonds with a comparable rating.

The Group is exposed to potential future increases in variable lease payments based on an index or rate, which are not included in the lease liability until they take effect. When adjustments to lease payments based on an index or rate take effect, the lease liability is reassessed and adjusted against the right-of-use asset when lease terms change, including upon reassessment of extension, purchase or termination options.

Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease period to produce a constant periodic rate of interest on the remaining balance of the liability for each period.

• any lease payments made at or before the commencement date less any lease incentives received

• the estimated costs of dismantling and removing the underlying asset and restoring the site, as required under the lease terms.

Right-of-use assets are generally depreciated over the shorter of the asset's useful life and the lease term on a straight-line basis. The lease term may include periods covered by extension or termination options. Those options are included in the determination of the lease term when the Group is reasonably certain to exercise them. The assessment is made at the commencement date and is reassessed only upon the occurrence of a significant event or change in circumstances within the Group's control. A change in the lease term resulting from a reassessment of extension or termination options is accounted for as a remeasurement of the lease liability and corresponding right-of-use asset, as applicable, and not as a lease modification.

The exemption to recognize payments, which are associated with leases of low-value assets, on a straight-line basis as an expense in profit or loss, is applied by the Group on a lease-by-lease basis.

Short-term leases are leases with a lease term of 12 months or less and do not contain a purchase option. The Group does not apply the short-term lease exemption under IFRS 16 and therefore recognizes a right-of-use asset and a lease liability for all short-term leases.

The Group recognizes financial assets when it becomes a party to the contractual provisions of the instrument. Financial assets are classified, at initial recognition, either as subsequently measured at amortized cost, fair value through other comprehensive income (OCI), or fair value through profit or loss. Financial assets are classified on initial recognition based on (i) the Group's business model for managing the financial assets and (ii) the contractual cash flow characteristics of the financial asset. The Group's financial assets are primarily classified as:

The Group does not hold any financial assets classified as fair value through other comprehensive income (FVOCI) as of December 31, 2025 or December 31, 2024.

The Group measures financial assets at amortized cost if both of the following conditions are met:

• The financial asset is held within a business model with the objective of holding financial assets in order to collect contractual cash flows

• Its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding ("SPPI" test).

The Group classifies cash and cash equivalents, trade receivables not subject to factoring and other financial receivables as well as other financial assets as measured at amortized cost.

All other financial assets are classified as measured at fair value through profit or loss. These include not only derivative financial instruments but also trade receivables that are to be sold to the factor under a factoring agreement.

At initial recognition, financial assets are measured at fair value plus transaction costs that are directly attributable to the acquisition of the financial asset, except for financial assets measured at fair value through profit or loss, for which transaction costs are recognized in profit or loss as incurred. Trade receivables are initially measured at the transaction price determined in accordance with IFRS 15 unless they contain a significant financing component.

The measurement of financial assets depends on their classification, as described below:

After initial recognition, financial assets measured at amortized cost are measured using the effective interest rate ("EIR") method and are subject to expected credit loss ("ECL") impairment. The Group recognizes ECLs in accordance with IFRS 9 for financial assets measured at amortized cost.

Interest income calculated using the EIR method on loans, deposits and other financial assets measured at amortized cost (excluding short-term trade receivables without a significant financing component) is presented in finance income. Short-term trade receivables without a significant financing component are measured at the transaction price and do not accrue EIR interest. Gains and losses are recognized in profit or loss when the asset is derecognized, modified, or impaired. The carrying amount of trade receivables approximates their fair value due to their short maturities.

The Group assesses expected credit losses (ECLs) for all financial assets measured at amortized cost as well as contract assets. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at the original effective interest rate. The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms.

For trade receivables, the Group applies the simplified approach of IFRS 9 in calculating ECLs. In applying the simplified approach, the Group assesses expected credit losses based on historical loss experience. Based on this assessment, management concluded that expected credit losses were insignificant as of the reporting date

For all other financial assets measured at amortized cost, the Group applies the general expected credit loss model in accordance with IFRS 9. Under this approach, financial assets are initially classified as Stage 1 and are subject to 12 month expected credit losses, representing expected credit losses arising from default events that may occur within 12 months after the reporting date. If there has been a significant increase in credit risk since initial recognition, the asset is transferred to Stage 2, lifetime expected credit losses are recognized and interest revenue is calculated on the gross carrying amount. Financial assets that are credit impaired are classified as Stage 3 and continue to be measured using lifetime expected credit losses. At Stage 3, interest revenue is calculated on the carrying amount after deducting the loss allowance.

Financial assets at fair value through profit or loss include, among others, derivatives, that are not designated as effective hedging instruments. The Group may use derivative financial instruments, such as interest rate swaps, to hedge cash flow risks associated with floating interest rate debt. Where derivatives are designated in hedge accounting relationships, the Group applies IFRS 9 hedge accounting; otherwise, derivatives are accounted for at FVTPL. Financial assets at fair value through profit or loss are carried in the statement of financial position at fair value with net changes in fair value recognized in the statement of profit or loss.

Within the Group, financial assets and liabilities are generally not offset on the balance sheet because the necessary conditions are not met.

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognized (i.e., removed from the Group's consolidated statement of financial position) when:

• The Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third-party under a 'pass-through' arrangement; and either (a) the Group has transferred substantially all the risks and rewards of the asset, or (b) the Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

When the Group has transferred its rights to receive cash flows from an asset or has entered a pass-through arrangement, it evaluates if, and to what extent, it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Group continues to recognize the transferred asset to the extent of its continuing involvement. In that case, the Group also recognizes an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Group has retained.

Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Group could be required to repay.

For factoring transactions, the Group assesses whether trade receivables can be derecognized in full in accordance with IFRS 9. If the conditions for derecognition are not met and the Group has neither fully transferred nor substantially retained the risks and rewards, the Group recognizes these financial assets to the extent of its continuing involvement. At the same time, the Group also recognizes an associated liability.

Financial liabilities are recognized when the Group becomes a party to the contractual provisions of the instrument. At initial recognition, financial liabilities are classified in accordance with IFRS 9 as either:

• financial liabilities measured at fair value through profit or loss ("FVTPL").

Financial liabilities measured at amortized cost comprise trade payables, other financial liabilities due to third parties and interest-bearing loans and borrowings. The Group's financial liabilities at FVTPL comprise derivative financial liabilities. All financial liabilities are initially measured at fair value and, for financial liabilities subsequently measured at amortized cost, net of directly attributable transaction costs. All trade payables and other financial liabilities due to third parties are due within one year.

The Group assesses hybrid financial liabilities and contracts with a non-financial host contract for the existence of embedded derivatives. Embedded derivatives are separated from the host contract and accounted for as stand-alone derivatives if (i) the economic characteristics and risks of the embedded derivative are not closely related to those of the host contract, (ii) the embedded feature meets the definition of a derivative, and (iii) the hybrid financial instrument is not measured at fair value through profit or loss in its entirety. The host debt instrument continues to be accounted for as a financial liability measured at amortized cost, whilst the separated embedded derivative is classified as measured at fair value through profit or loss. Depending on the fair value at inception and in subsequent periods, the separately accounted for embedded derivative may represent a financial asset or a financial liability.

The measurement of financial liabilities depends on their classification, as described below:

Financial liabilities measured at FVTPL are recognized in the balance sheet at fair value; net changes in fair value are recognized in the statement of profit or loss.

After initial recognition, financial liabilities measured at amortized cost are subsequently measured at amortized cost using the effective interest rate ("EIR") method. Gains and losses are recognized in profit or loss when the liabilities are derecognized as well as through the EIR amortization process.

Amortized cost is calculated by considering any discount or premium, fair value of bifurcated embedded derivatives at issuance and fees or costs that are an integral part of the EIR. The EIR amortization is included as finance expense in the statement of profit or loss.

A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in the statement of profit or loss. According to IFRS 9, the terms are substantially different if the discounted present value of the cash flows under the new terms (including any fees paid net of any fees received) differs at least by 10% from the discounted present value of the remaining cash flows of the original financial liability, both discounted by using the original effective interest rate. If the difference is less than 10%, this quantitative test points to a modification as opposed to an extinguishment, and the difference is recognized as a modification gain or loss.

The Group may use derivative financial instruments, including foreign exchange forward contracts, interest rate swaps and commodity derivatives to manage exposures to foreign exchange risks, interest rate risk and commodity price risks. The Group does not hold any derivatives for speculative purposes.

Derivatives may be in an asset or liability position depending on changes in market conditions. Derivative financial instruments are recognized as financial assets when their fair value is positive and as financial liabilities when their fair value is negative. On the balance sheet, derivative financial instruments are reported under other financial assets or other financial liabilities. The full fair value of a derivative is classified as a long-term asset or long-term liability if the remaining term of the derivative exceeds twelve months from the reporting date, and as a short-term asset or short-term liability if the remaining term of the derivative is less than twelve months of the reporting date. Fair value changes in derivatives that are not designated hedging instruments are recognized in the consolidated statement of profit or loss. Fair value changes of commodity derivatives are recognized in cost of goods sold, and fair value changes of foreign exchange forward contracts are recognized in other operating expenses or other operating income.

The Group assesses whether contracts contain embedded derivatives. For financial assets within the scope of IFRS 9, embedded derivatives are not separated; instead, the classification of the entire instrument reflects its contractual cash flow characteristics ("SPPI") and the business model. For hybrid financial liabilities and for non-financial host contracts, embedded derivatives are separated and accounted for at FVTPL if (i) the economic characteristics and risks are not closely related to those of the host, and (ii) the hybrid instrument is not measured at FVTPL in its entirety.

The Group has interest rate swaps in effect, which are designated as cash flow hedging instruments. The Group uses interest rate swaps to manage its exposure to variability in cash flows associated with changes in interest rates on variable-rate debt. Changes in fair value of interest rate swaps are recorded in profit or loss, except for the effective portion of changes in fair value, which is recognized in OCI and reclassified to profit or loss in the same period or periods during which the hedged transactions affect profit or loss. Cash settlements related to the Company's interest rate swaps are included in financing activities in the statement of cash flows. The Group documents the hedging relationship and the risk management objective at inception and assesses hedge effectiveness on an ongoing basis.

If cash flow hedge accounting is discontinued, the amount that has been accumulated in other comprehensive income must remain in accumulated other comprehensive income if the hedged future cash flows are still expected to occur. Otherwise, the amount will be immediately reclassified to profit or loss as a reclassification adjustment. After discontinuation, once the hedged cash flow occurs, any amount remaining in accumulated other comprehensive income must be accounted for depending on the nature of the underlying transaction.

Inventories are measured using the weighted average cost method, under which the cost of each item is determined as the average cost of all similar items available for sale during a period, weighted by the number of units purchased at each price. Raw materials, work in progress and finished goods are stated at the lower of cost and net realizable value. Cost comprises of direct materials, direct labor and a systematic allocation of variable and fixed overheads, based on normal operating capacity. Abnormal amounts of wasted materials, labor or other production costs are excluded from inventory cost, and administrative overheads that do not contribute to bringing inventories to their present location and condition are expensed as incurred. Net realizable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale. Inventories are measured at the lower of cost and net realizable value; write-downs to net realizable value are recognized as cost of sales in profit or loss in the period in which they occur. Where the reasons for a write-down no longer exist, the amount of the write-down is reversed in the period of the reversal, limited to the original write-down amount.

The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Group estimates the asset's recoverable amount. An asset's recoverable amount is the higher of an asset's or cash generating unit's (CGU) fair value, less costs of disposal and its value in use. The recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

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. In determining fair value, less costs of disposal, recent market transactions are considered. If no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded companies or other available fair value indicators.

The Group bases its impairment calculation on detailed budgets and forecast calculations, which are prepared separately for each of the Group's CGUs to which the individual assets are allocated. These budgets and forecast calculations generally cover a period of five years. A long-term growth rate is calculated and applied to project future cash flows after the fifth year.

Impairment losses of continuing operations are recognized in the statement of profit or loss in expense categories consistent with the function of the impaired asset.

For assets excluding goodwill, an assessment is made at each reporting date to determine whether there is an indication that previously recognized impairment losses no longer exist or have decreased. If such an indication exists, the Group estimates the assets or CGU's recoverable amount. A previously recognized impairment loss is reversed only if there has been a change in the assumptions used to determine the asset's recoverable amount since the last impairment loss was recognized. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognized for the asset in prior years. Such a reversal is recognized in the statement of profit or loss.

The Group tests acquired goodwill for impairment annually and whenever there is an indication of impairment.

Impairment is determined for goodwill by assessing the recoverable amount of each CGU (or group of CGUs) to which the goodwill relates. When the recoverable amount of the CGU is less than its carrying amount, an impairment loss is recognized. Impairment losses relating to goodwill cannot be reversed in future periods.

Cash and cash equivalents in the statement of financial position comprise cash on hand, cash at banks and cash equivalents. Cash equivalents are short-term, highly liquid financial assets that are readily convertible into known amounts of cash, are subject to an insignificant risk of changes in value and have a short maturity of generally within three months when acquired. Cash and cash equivalents are measured at amortized cost, which approximate fair value due to their short-term nature, and are available for use by the Group.

Cash deposits that have restrictions governing their use are classified as restricted cash, current or non-current, based on the remaining length of the restriction. See Note 18. The Company had a restricted cash balance of kEUR 2,951 and kEUR 14,783 as of December 31, 2025, and 2024, respectively. The cash is restricted due to a payment guarantee arrangement required under a construction contract with a vendor.

A provision is recognized when the Group has a present legal or constructive obligation as a result of a past obligating event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. There is a level of uncertainty related to provisions, primarily relating to the timing and amounts of future outflows, which include evolving factors such as investigations, contractual terms, and regulatory requirements. The Group manages this uncertainty by applying a best-estimate approach based on available evidence at the reporting date, including historical experience and probability assessments, while continuously reassessing and updating estimates as new information emerges. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects market assessments of the time value of money and, where appropriate, the risks specific to the liability. The Group determined that discounting is not applied to provisions, as the time value of money does not significantly affect the measurement given the amounts and short settlement periods of the underlying provision obligations.

The cost of providing benefits under the defined benefit plan is determined using the projected unit credit method.

Remeasurements, comprising of actuarial gains and losses excluding amounts included in net interest on the net defined benefit, are recognized immediately in the statement of financial position

with a corresponding debit or credit to OCI in the period in which they occur. Remeasurements are not reclassified to profit or loss in subsequent periods.

The Group's net obligations in respect of long-term service benefits other than pension plans are calculated by estimating the amounts of future benefits that employees have earned in return for their service in the current and prior periods.

These obligations consist of the anniversary payments provision and the provision for old age part-time. The provisions are calculated using the projected unit credit method. The discount rate is the yield at the date of the balance sheet date on high-quality corporate bonds that have maturity dates approximating the terms of the Group's obligations. The effects due to changes in actuarial assumptions for the valuation of anniversary benefits, old-age part-time provisions and early retirement obligations are recognized directly in statements of profit and loss. The fair value of any related financial asset is deducted in determining the net obligation recognized in the statement of financial position.

Equity settled share-based payments to employees and others providing similar services are measured at the fair value of the equity instruments at the grant date. The fair value excludes the effect of non-market vesting conditions. The fair value determined at the grant date of the equity settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Group's estimate of the number of equity instruments that will eventually vest. At each reporting date, the Group revises its estimate of the number of equity instruments expected to vest because of the satisfaction of non-market-based vesting conditions or service conditions. The impact of the revision of the original estimates, if any, is recognized in profit or loss such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to reserves.

For cash settled share-based payments, a liability is recognized for the goods or services acquired, measured initially at the fair value of the liability. At each reporting date until the liability is settled, and at the date of settlement, the fair value of the liability is re-measured, with any changes in fair value recognized in profit or loss for the year. Details regarding the share-based payments arrangements are further presented in Note 30.

Initial application of IFRS, interpretations, and amendments in the financial year:

The Group applied for the first time certain standards and amendments, which are effective for annual periods beginning on or after 1 January 2025. The Group has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective.

In August 2023, the IASB issued amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates to specify how an entity should assess whether a currency is exchangeable and how it should determine a spot exchange rate when exchangeability is lacking. The amendments also require disclosure of information that enables users of its financial statements to understand how the currency not being exchangeable into the other currency affects, or is expected to affect, the entity's financial performance, financial position, and cash flows. The amendments are effective for annual reporting periods beginning on or after 1 January 2024. Management has performed a specific assessment of currency exchangeability risks across the Group's operating jurisdictions, including China, and concluded-based on documented analysis-that the amendments do not have a material impact on the Group's financial performance, financial position, or cash flows.

IFRS Accounting Standards, interpretations, and amendments issued, but not yet to be applied:

In April 2024, the IASB issued IFRS 18, Presentation and Disclosure in Financial Statements, which is effective for annual reporting periods beginning on or after 1 January 2027; early adoption is permitted with disclosure. IFRS 18 replaces IAS 1 and primarily affects the presentation and disclosure of financial performance. The standard requires entities to classify all income and expenses in the statement of profit or loss into five categories (operating, investing, financing, income taxes, and discontinued operations) and to present defined subtotals, including operating profit or loss and profit or loss before financing and income taxes. IFRS 18 does not change the recognition or measurement of assets, liabilities, income, or expenses. Accordingly, adoption is expected to affect presentation (including format and subtotals) and disclosures, with no impact on net income, equity, or total cash flows. However, there will be an impact regarding management-defined performance measures (MPMs), for which the assessment is ongoing. Consequential amendments to IAS 7 will require updates to the presentation of the statement of cash flows, including the use of operating profit or loss as the starting point under the indirect method.

In May 2024, the IASB issued amendments to IFRS 9 and IFRS 7; which introduce an additional test in assessing the SPPI criteria for certain financial assets with contractual terms that change the contractual cash flows based on a contingent event that is not related directly to basic lending risks or costs, and clarify the characteristics of contractually linked instruments and how they differ from financial assets with non-recourse features. The amendments also introduce additional disclosures for investments in equity instruments designated at fair value through other comprehensive income ("FVOCI"), and financial instruments not measured at FVTPL with certain contingent features. In addition, the amendments clarify the timing of recognition and derecognition of financial assets and financial liabilities and introduce a derecognition exception for financial liabilities settled using an electronic payment system. The amendments are effective reporting periods beginning on or after January 01, 2026. Early adoption is permitted. The amendments are not expected to have a material impact on the Group's financial statements.

In general, the IASB announced annual improvements to IFRS Accounting Standards, such as for IFRS 1 First-time adoption of International Accounting Standards, addressing potential confusion arising from an inconsistency between the wording in IFRS 1 and the requirements for hedge accounting in IFRS 9. Further improvements have been announced for e.g. IFRS 7 Financial Instruments disclosures, IFRS 9 Financial Instruments as well as IFRS 10 Consolidated Financial Statements.

In December 2024, the IASB issued amendments to IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosures relating to contracts referencing nature-dependent electricity, such as power purchase agreements. The amendments clarify the application of the own-use requirements and introduce additional disclosure requirements. The amendments are effective for annual reporting periods beginning on or after 1 January 2026, with early adoption permitted. Based on management's current assessment, the adoption of these amendments is not expected to have a material impact on the Group's consolidated financial statements. There are no other new standards, amendments to existing standards or new IFRIC interpretations that are not yet effective that are expected to have a potential future impact on the Group.

The preparation of the Group's consolidated financial statements requires management to make judgments and to use estimates and assumptions that affect the application of accounting policies, thus influencing the financial statements of the Group, including the determination of the functional currency of foreign operations.

These estimates and underlying assumptions are based on historical experience and various other factors deemed reasonable under the circumstances, which inform judgments about the carrying values of assets and liabilities that may not be readily apparent from other sources. Actual results may differ from these estimates. The estimates and underlying assumptions are continuously reviewed by management.

In the process of applying the Group's accounting policies, management has made the following judgments, which have the most significant effect on the amounts recognized in the consolidated financial statements:

The Group applies judgment in identifying performance obligations in customer contracts and in determining whether revenue is recognized at a point in time or over time. This assessment includes evaluating the terms of framework agreements and purchase orders, the transfer of control of goods to the customer, and whether the Group has an enforceable right to payment for performance completed to date. Judgment is also applied in assessing whether arrangements contain distinct goods or services and in determining the appropriate presentation of related contract assets and contract liabilities.

Deferred tax assets are recognized to the extent that it is probable that future taxable profits will be available against those deferred tax assets, unused tax losses and unused tax credits can be utilized. The criteria for recognizing deferred tax assets arising from the carryforward of unused tax losses and tax credits are the same as the criteria for recognizing deferred tax assets arising from deductible temporary differences. The existence of unused tax losses is strong evidence that future taxable profit may not be available. Assessment of the realization of the deferred tax assets requires subjective judgment and estimate, including the future revenue growth and profitability, the amount of tax credits can be utilized and feasible tax planning strategies. Any changes in the global economic environment, industry trends and relevant laws and regulations could result in significant adjustments to the deferred tax assets. If the Group has recent losses, the Group recognizes a deferred tax asset arising from unused tax losses or tax credits only to the extent that sufficient taxable temporary differences exist or there is other evidence that sufficient taxable profit will be available. Further details on taxes are disclosed in Note 17.

The accounting for government grants involves judgment, particularly in determining whether amounts are within the scope of IAS 20 (including by analogy) , and in assessing whether the recognition criteria are met. Judgment is also applied in evaluating the conditions attached to grants, including compliance requirements and the risk of repayment, as well as in determining the timing of recognition. Estimation may be required where the amount of the grant depends on future qualifying expenditures or other variables. Changes in these judgments could affect the timing and amount of income recognized and the carrying value of related assets. In addition, management considers whether certain arrangements fall outside the scope of IAS 20 and may instead be accounted for under IFRS 9 or IAS 38, depending on the nature of the underlying rights.

The accounting for transferable investment tax credits involves judgment, particularly in determining the appropriate accounting framework. Management assesses whether such credits are accounted for under IAS 20 (by analogy), or whether they fall within the scope of IFRS 9 or IAS 38, depending on the nature and substance of the arrangement.

Based on this assessment, management has concluded that IAS 20 by analogy is the most appropriate basis of accounting, as the credits are linked to qualifying capital expenditures under a government program and represent a form of government assistance. This assessment requires consideration of the legal form, transferability and economic substance of the credits. (See also Notes 3(e), 3(f) and 32.

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Group based its assumptions and estimates on parameters available when the consolidated financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Group. Such changes are reflected in the assumptions when they occur.

Inventories are stated at the lower of cost or net realizable value, and the Group uses estimates to determine the net realizable value of inventory at the end of each reporting period. The Group estimates the net realizable value of inventory for normal waste, obsolescence and unmarketable items at the end of reporting period. The net realizable value of the inventory is determined based on assumptions of expected selling price less costs to complete, market conditions for forecast demand, and exposure to slow-moving inventory an obsolescence. Further details on inventory are disclosed in Note 20.

The Group capitalizes costs for development projects. Initial capitalization of costs is based on management's judgment that technological and economic feasibility is confirmed, usually when a product's development project has reached a defined milestone according to an established project management model (see Note 3 for the related accounting policy).

In determining the amounts to be capitalized, management makes assumptions regarding the expected future cash generation of the project, discount rates to be applied and the expected period of benefits.

Judgment is required in determining when development projects meet the capitalization criteria, including the assessment of technological feasibility and the probability of future economic benefits.

The assessment of whether a project will generate probable future economic benefits is based on the project's business case, including expected additional revenues or cost savings. This assessment is supported by business cases, which may include market analyses and financial projections. Further details on development costs are disclosed in Note 23.

Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value, less costs of disposal and its value in use. The value in use calculation is based on a discounted cash flow model. The cash flows are derived from the budget for the next five years. The recoverable amount is sensitive to the discount rate used for the discounted cash flow ("DCF") model as well as the expected future cash-inflows and the growth rate used for extrapolation purposes. These estimates are most relevant to property, plant and equipment, definite life intangible assets and right of use assets recognized by the Group. Further details on impairment of non-financial assets are disclosed in Note 23.

The Group reviews the estimated residual values and expected useful lives of property, plant and equipment at least annually. In particular, it considers the impact of health, safety and environmental legislation in its assessment of expected useful lives as well as its expectations on using the assets. Further details on property, plant and equipment are disclosed in Note 21.

The Group reviews lease extension options at lease commencement to determine if they have economic substance. Management assesses whether it is reasonably certain that the option will be exercised or not exercised. In making this assessment, management considers all relevant facts and circumstances, including, but not limited to:

• The contract terms and conditions for the optional periods compared with market rates, such as the amount of payments for the lease in any optional period or the terms and conditions of any options that are exercisable after initial optional periods

• Significant leasehold improvements or other improvements made to underlying assets that are expected to have a significant residual benefit to the Group when options become exercisable

• Conditionality associated with the exercise option (i.e. if an option can be exercised only if one or more conditions are met) and the likelihood that those conditions will exist.

The Group performs this assessment for each lease contract at inception by evaluating the non-cancellable period and identifying any extension options included in the contract. The Group then determines whether it is reasonably certain to exercise, or not to exercise, such options, as this directly impacts the lease term.

The Group cannot readily determine the interest rate implicit in its leases; therefore, it uses the incremental borrowing rate ("IBR") to measure lease liabilities. The IBR is the rate of interest that the Group would have to pay to borrow over a similar term, and with similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment. The IBR therefore reflects what the Group would have to pay, which requires estimation when no observable rates are available, such as for subsidiaries that do not enter into financing transactions, or when adjustments need to be made to reflect the terms and conditions of the lease, for example, when leases are not in the subsidiary's functional currency. The Group estimates the IBR using observable inputs such as market interest rates when available and is required to make certain entity-specific estimates such as the subsidiary's stand-alone credit rating.

Embedded derivatives arise from contractual features in certain financing arrangements that are not closely related to the host debt instrument. These features are separated from the host instrument where required by IFRS 9 and measured at fair value through profit or loss.

The fair value of embedded derivatives is determined using valuation techniques incorporating unobservable inputs such as expected volatility and is therefore classified within Level 3 of the fair value hierarchy. The valuation is sensitive to assumptions regarding the likelihood and timing of exercise of contractual terms, expected refinancing and repayment scenarios, and interest rates. Valuation techniques applied include a Monte-Carlo-simulation and incorporate market participant assumptions derived from observable data to the extent available.

The cost of the defined benefit pension plan and other post-employment medical benefits and the present value of the pension obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases, mortality rates and future pension increases. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date. Further details on employee benefit obligations are disclosed in Note 27.

The Group's equity-settled share-based payments are expensed on a straight-line basis over the vesting period, which is based on the Group's estimate of the number of equity instruments that will eventually vest. At each reporting date, the Group revises its estimate of the number of equity instruments expected to vest based on the satisfaction of non-market-based vesting conditions or service conditions. Estimating fair value for share-based payment transactions requires determination of the most appropriate valuation model, which depends on the terms and conditions of the arrangements. This estimate also requires determination of the most appropriate inputs to the valuation model including the expected life of the share option or appreciation right, volatility and dividend yield and making assumptions about them. The impact of the revision of the original estimates, if any, is recognized in profit or loss so that the cumulative expense reflects the revised estimate, with a corresponding adjustment to equity reserves. The Group initially measures the cost of cash-settled transactions with employees using a binomial model to determine the fair value of the liability incurred. For cash-settled share-based payment transactions, the liability needs to be remeasured at the end of each reporting period up to the date of settlement, with any changes in fair value recognized in profit or loss. This requires a reassessment of the estimates used at the end of each reporting period. Further details on share-based payments are disclosed in Note 30.

The estimates and underlying assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

Capital includes issued capital, and all other equity reserves attributable to the equity holders of the parent.

The Group's objective in managing capital is to maintain financial flexibility, support its ability to continue as a going concern, satisfy covenant requirements under its financing arrangements and fund its operating and strategic plans. The Group monitors the total net debt/net cash position, which includes all interest-bearing liabilities. The financial performance of the Group is measured with focus on earnings before interest, taxes, depreciation and amortization (EBITDA) and adjusted EBITDA, which is EBITDA adjusted for items that the Group considers not reflective of underlying operating performance.

Due to the terms of the loan agreement, the Group is obliged to submit a covenant calculation at the end of each quarter by certifying in a compliance certificate that the agreed leverage ratio, based on the last twelve months (LTM), is within the agreed range. The leverage ratio relates to the ratio of net debt to a pro-forma EBITDA, which is conceptually outlined in the senior facilities agreement. For purposes of the leverage ratio, net debt represents interest-bearing loans and borrowings, less cash and cash equivalents, as adjusted for any items required or excluded under the senior facilities agreement. The Group met the covenants set out in the loan agreement in each quarter of 2025.

These key figures are reviewed with the Group's management monthly and with the Board quarterly.

No changes were made in the objectives, policies, or processes for managing capital during the year ended December 31, 2025.

The consolidated financial statements include the IE Aggregator, and its subsidiaries controlled directly or indirectly at the reporting date. The Group's subsidiaries are presented in the table below, including their principal activities, place of incorporation, functional currency and ownership interests as of December 31, 2025 and 2024.

The Group holds a 49% interest in SANVAC Magnetics Co. Ltd., (SANVAC), a joint venture incorporated in China and engaged in manufacturing activities. The Group assessed the contractual arrangement with SANVAC and determined that the Group does not control the joint venture, as decisions about the relevant activities require the consent of each party owning shares. As such, the Group does not have the exclusive power to direct the relevant activities of the joint venture. The investment is accounted for using the equity method. Under this method, the investment is initially recognized at cost and subsequently adjusted for the Group's share of SANVAC's profit or loss and other comprehensive income.

The Group has no legal or constructive obligation to fund SANVAC or guarantee its obligations,

The summarized financial information of SANVAC as of and for the years ended December 31, 2025, and 2024 have been translated into the Group's presentation currency in accordance with IAS 21 - The Effects of Changes in Foreign Exchanges Rates and are presented below:

The joint venture had no material contingent liabilities or commitments, as of December 31, 2025, December 31, 2024 and as of January 1, 2024; SANVAC cannot distribute its profits without the consent from the two venture partners. As the equity value was already zero and no further losses were recognized as the Group has no legal or constructive obligations, the share of loss amounting for 2025 to kEUR 2,608 (2024: kEUR 7,077) and cumulatively to kEUR 11,258 was not recognized.

Revenue disaggregated by geographic market and by business division depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors.

Set out below is the disaggregation of the Group's revenue from contracts with customers, based on the location of the customers:

Contract liabilities include advances received by or billed to customers for revenue from contracts with customers. The expected timing of resulting outflows is expected to occur within financial year 2026. The decrease in contract liabilities during the reporting period primarily reflects revenue recognized from amounts included in the opening contract liability balance and from revenue recognized from advance payments received during the year. No other significant changes in the contract liability balance occurred during the reporting period.

The contract liabilities outstanding at December 31, 2025 are expected to be recognized as revenue predominantly within the next 12 months, as they relate to outstanding customer orders that are typically fulfilled shortly after order receipt.

The underlying performance obligations primarily relate to the manufacture and delivery of customer-specific products, with revenue recognized either over time for highly specialized items or at a point in time upon transfer of control to the customer.

Revenue recognized in the reporting period from performance obligations satisfied (or partially satisfied) in previous periods was not material for the years ended December 31, 2025 and December 31, 2024.

Cost of sales include kEUR 25,821 (2024: kEUR 32,047) of depreciation for property, plant and equipment and amortization for intangible assets, as well as kEUR 1,704 (2024: kEUR 1,753) of amortization of other capitalized development costs . The Group recognized kEUR nil in 2025 (2024: kEUR 34,474 related to inventories acquired in the 2023 acquisition that were measured at fair value at the acquisition date.

Research and development ("R&D") expenses are presented net of government grants recognized in accordance with IAS 20. Government grant income offsetting R&D expense amounted to kEUR 3,252 in 2025 and kEUR 218 in 2024 and relates to qualifying research expenditures incurred in the respective periods. The grants reimburse research expenses incurred in the period. At the reporting date, there were no unfulfilled conditions or other contingencies attached to the grants recognized.

The amount shown in the line item "Interest expense - third party" of kEUR 26,177 (2024: kEUR 25,395) primarily relates to interest expense associated with syndicated loan agreements in an amount of kEUR 165,000 and the kUSD 300,000 Term Loan of kEUR 37,423 (2024: kEUR 27,004), as well as fair value changes of interest rate swaps reclassified from other comprehensive income to profit or loss and is reduced by capitalized interest for constructions in progress of kEUR 11,246 (2024: kEUR 1,234). Further information on the Group's debt arrangements is provided in Note 24.2.

The Group's parent entity, Ara VAC IE Aggregator LP, is domiciled in Ireland and is a tax-transparent entity. The applicable tax rate used for the reconciliation is 29.358% in 2025 (29.042% in 2024), which is the weighted average of the statutory rates in Germany of 30.875% and the US of 25.925% in 2025 (23.580% in 2024) as the significant territories. The weighting is based on the profit or loss before tax.

Reconciliation of tax expense and the accounting profit / (loss) multiplied by the applicable domestic tax rate for the years ended December 31, 2025 and 2024:

Deferred tax liability on intangibles mainly refers to temporary differences from capitalized customer relationships, trademarks and patents and development costs recognized according to IAS 38.

Tax rates applicable for deferred tax calculation are as follows: German entities are measured at rates ranging from 25.6% to 30.875% (corporate income tax of 10%-15%, solidarity surcharge of 5.5% on corporate income tax, and trade tax of approximately 15.05%). US entities are measured at a combined federal and state rate of approximately 25.925% (federal rate of 21% plus applicable state rates).

The total sum of the tax loss carryforward of the German entities as of December 31, 2025, belongs to Ara VAC TopCo GmbH, Ara VAC MidCo GmbH and Ara VAC BidCo GmbH.

For Ara VAC BidCo GmbH, the tax loss carryforward for corporate income tax purposes amounts to kEUR 33,067 (2024: kEUR 13,272). Tax loss carryforward for trade tax purposes amounts to kEUR 32,519 (2024: kEUR 12,764). The entire amount of income tax losses was recognized due to higher deferred tax liabilities.

For the German tax group entities, all deferred tax liabilities and deferred tax assets on temporary differences were recognized.

No deferred tax asset was recognized for the tax loss of Ara VAC TopCo GmbH in the amount of kEUR 1,482 (2024: kEUR 963) and of Ara VAC MidCo GmbH in the amount of kEUR 29 (2024: kEUR 25). There will be no time limit on the utilization of these tax losses.

Management has determined that it is not probable that future taxable profits will be available against which these losses can be utilized. The entities in which these losses arose have a history of losses, and there are no other tax planning opportunities or evidence of recoverability in the near future.

No deferred tax asset was recognized for the interest carryforward of the German tax group in the amount of kEUR 57,889 in 2025 (2024: kEUR 37,305). There will be no time limit on the utilization of interest carryforward.

No deferred tax asset has been recognized in respect of the US subsidiary's net operating loss ("NOL") carryforwards. Tax loss for Federal Tax amounts to kEUR 4,639 (2024: kEUR 0). Tax loss for State Tax amounts to kEUR 4,075 (2024: kEUR 0). Management has assessed that it is not probable that sufficient future taxable profits will be available in the US subsidiary against which these NOL carryforwards can be utilized. This assessment is based on the subsidiary's history of taxable losses and the lack of other persuasive evidence of recoverability in the near future. There will be no time limit on the utilization of these tax losses.

For the US entities, the amount of temporary differences for which no deferred tax asset was recognized totals kEUR 44,776 (2024: kEUR 29,640).

Write-downs of previously recognized deferred tax assets as of December 31, 2025 amounted to kEUR 15 (December 31, 2024: kEUR 17 and January 1, 2024: kEUR nil). There were no reversals of previous write-downs of deferred tax assets.

If the Group were able to recognize all currently unrecognized deferred tax assets, profit would increase by kEUR 18,173 (2024: kEUR 13,446).

There are no taxable temporary differences associated with investments in subsidiaries, branches and associates and interests in joint ventures. Therefore, no deferred tax liabilities have been recognized for outside basis differences.

In 2025, the German legislature decided on a gradual reduction in German corporate income tax starting in 2028. Over a period of five years, the rate is to be reduced by one percentage point per year to 10%. The gradual reduction in corporate income tax rate was taken into account in the valuation of deferred taxes for the German companies. The revaluation resulted in deferred tax income of kEUR 12,171.

Since 1 January 2024, the Pillar Two legislation has been in force. The analysis for the 2025 reporting period revealed no indications of any material impact under this legislation. The Group is therefore not affected by the scope of global minimum taxation according to the OECD Pillar Two model regulations. As a consequence, no provisions for Pillar Two income taxes were recognized. The Group applies the exemption from recognizing deferred taxes in connection with Pillar Two income taxes.

Cash and cash equivalents primarily relate to cash at banks amounting to kEUR 15,583, kEUR 34,682, and kEUR 76,199 as of December 31, 2025, December 31, 2024, and January 1, 2024, respectively. Restricted cash primarily represents cash held in escrow for a contractor related to the construction of the manufacturing facility for e-VAC Magnetics LLC.

As of December 31, 2025, and December 31, 2024, the aging analysis of trade receivables for gross carrying amounts by credit risk rating grades is as follows:

Expected credit losses and write offs on Trade receivables third party are immaterial for the years 2025 and 2024. Trade receivables third party reflected no credit allowance balance as of all periods presented.

In 2025 the Group made an advance payment to a supplier of kEUR 5,285 that was subsequently written-off and was recognized in the statement of profit or loss.

The Group divides its receivables portfolio into two categories based on the underlying business models and cash flows. Trade receivables that are part of an existing factoring agreement and are therefore assigned to the "sell" business model are classified as measured at fair value through profit or loss (FVTPL). Trade receivables held primarily with the objective of collecting the nominal value of the receivable are assigned to the "Hold" business model and recognized at amortized cost (FAAC).

The Group is party to a non-recourse factoring arrangement under which a German entity of the Group sell eligible EUR and United States Dollar ("USD") denominated trade receivables on a recurring basis. Upon sale, legal title to the receivables is transferred to the Factor. The purchase price equals the nominal amount of the receivables (net of any customer discounts) and is settled in two components: (i) an advance payment of 90% of the purchase price remitted to the Group upon transfer ("Advance") and (ii) a 10% purchase price holdback retained by the Factor ("Holdback"). The Holdback is intended to cover potential customer disputes (e.g., short-payments arising from quality or other claims) and is released to the Group when the customer pays the invoice or upon the occurrence of a del credere event. A del credere event occurs if the customer does not pay within 120 days from the invoice due date or becomes insolvent. The factor charges interest on the outstanding principal of the Advance at a variable rate from the date the Advance is paid until the earlier of customer settlement or the del credere event. Factoring interest and other factoring costs are recognized in profit or loss within finance expenses. For the German factoring program, by a supplementary agreement dated December 17, 2024, the contract has been extended until October 31, 2027, with the maximum volume reduced from kEUR 60,000 to kEUR 55,000. Based on the Group's assessment of the extent to which risks and rewards of the sold receivables are transferred or retained, the Group concluded that it still has a continuing involvement in these receivables.

The Group has also entered into a non-recourse factoring arrangement with a Factor for one US entity under which certain trade receivables are assigned to the Factor. The arrangement is structured as a notification factoring facility, whereby the Factor may provide discretionary advances of up to 90% of eligible accounts receivable, subject to defined limits and eligibility criteria. The receivables, which are primarily denominated in United States Dollar ("USD"), are transferred to the Factor through an assignment, and the Group may obtain funding based on the outstanding receivables balance. Interest is charged on amounts advanced at a variable rate based on the greater of the JPMorgan prime rate or 4.0%. In addition, the Factor charges a factoring commission calculated as a percentage of the gross face amount of the receivables, together with applicable surcharges. Factoring interest and commissions are recognized in the statement of profit or loss within finance expenses. Based on the Group's assessment of the extent to which risks and rewards of the sold receivables are transferred or retained, the Group concluded that all sold receivables shall be derecognized in their entirety.

As of December 31, 2025, kEUR 24,027 of receivables were subject to factoring arrangements (December 31, 2024: kEUR 27,831; January 1, 2024: kEUR 33,684). These receivables have been derecognized, since the contractual rights to the cash flows were transferred to the factor and the Group retained only limited continuing involvement. Accordingly, the receivables were derecognized and a continuing involvement asset and the associated liability were recognized separately.

The fair value of the receivables sold was substantially the same as their carrying value. The cash receipt is treated as an operating cash flow within the consolidated statement of cash flows.

Inventories as of December 31, 2025, December 31, 2024, and January 1, 2024, respectively, are comprised of the following:

Cost of inventories recorded as expense in the cost of sales during the years ended December 31, 2025 and December 31, 2024, respectively, were kEUR 83,926 and kEUR 91,604.

The total allowance for obsolescence, slow-moving inventories and excess of cost over net realizable value as of December 31, 2025, December 31, 2024, and January 1, 2024, was kEUR 9,829, kEUR 6,453, and kEUR 7,797 respectively. During 2025, the Group recognized additional inventory reserves of kEUR 3,376 (2024: kEUR -1,345), which represent the profit or loss effect for the respective periods. The remaining movement in the inventory allowance was immaterial. The total amount of inventories written off in 2025 and 2024 were kEUR 1,056 and kEUR 1,170, respectively.

The amount of borrowing costs capitalized in the years ended December 31, 2025 and 2024 were kEUR 11,246 and kEUR 1,234, respectively, related to the Group's kUSD 300,000 loan which was entered into for the purpose of financing the construction of its manufacturing facility in Sumter, South Carolina. The interest rate applicable to that borrowing during the period was 3.3% (2024: 3.2%). Capitalized borrowing costs are included within property, plant and equipment and are reflected in the statement of cash flows as interest and financing fees paid within financing activities.

The Group assesses at each reporting date whether there is any indication that property, plant and equipment may be impaired in accordance with IAS 36.

As of December 31, 2025, the Group identified indicators of impairment in accordance with IAS 36.12, primarily arising from updated forecasts reflecting lower expected revenues and operating results. The impairment indicators included continued weak economic conditions in key markets and a still low, albeit increasing, level of order intake. These indicators were identified for the Crystalline, Rapid Solidification and Permanent Magnets CGUs. Accordingly, impairment tests were performed for these CGUs (see Note 23). Based on these impairment tests, the recoverable amounts of the CGUs exceeded their respective carrying amounts and, therefore, no impairment losses were recognized.

The cash outflow for leases in the years presented, including interest, amounted to kEUR 3,880 in 2025 and kEUR 2,500 in 2024.

Exchange differences relate to the translation of right-of-use assets of foreign subsidiaries whose functional currency is not EUR.

No significant future cash outflows exist to which the lessee is potentially exposed for variable lease payments or extension or termination options.

Development costs consist of capitalized development expenditures that meet the recognition criteria under IAS 38 and relate primarily to internally generated expenses. These amounts include directly attributable internal labor costs, external contractor costs, and testing and prototyping costs incurred after capitalization commences. Development and R&D projects under construction are not amortized until the related intangible assets are available for use.

Patents, trademarks and other rights include customer relationships and contract-related intangibles that consist of non-contractual customer relationships and contractual order backlog acquired as part of the 2023 acquisition of the Group. These assets have finite useful lives and are amortized over their respective amortization periods. Patents, trademarks and other rights also include patents and trademarks, which include purchased costs for software and consist of the Group's patent portfolio and trademarks acquired as part of the 2023 acquisition of the Group. These assets have finite useful lives and are amortized over their respective amortization periods.

Research expenditure recognized as an expense during the year ended December 31, 2025, and December 31, 2024, were kEUR 7,158 and kEUR 8,483, respectively.

As of December 31, 2025, the Group identified indicators of impairment within the meaning of IFRS 36.12, primarily due to updated budgets and forecasts reflecting lower expected revenues and operating results. These developments are mainly attributable to the continued weak economic conditions in key markets and a still relatively low, albeit increasing, level of order intake. These indicators were identified for the Crystalline, Rapid Solidification and Permanent Magnets CGUs of the Group. There was no triggering event identified for e-VAC Magnetics LLC CGU as of December 31, 2025. Subsequent to year-end, a customer dispute arose involving e-VAC Magnetics LLC, as described in Note 33. As this matter arose after the reporting date, it is considered a non-adjusting event under IAS 10 and has not been reflected in the impairment assessment as of December 31, 2025. The matter may represent an impairment indicator in the subsequent reporting period; however, management does not currently expect it to result in a material impairment of the e-VAC Magnetics LLC CGU.

For the purpose of impairment testing, the recoverable amount of a CGU represents the higher of its value in use and fair value less cost of disposal. For the CGUs tested, the recoverable amount was determined based on value in use. The calculations are based on cash flow projections derived from five-year financial plans approved by management. In the cash flow model, items affecting the cash-generating unit's operational cash flow - mainly income and expenses - are examined. Cash flows extending beyond the five-year forecast period have been extrapolated using a terminal growth rate of 1.5% based on management's estimate of a long-term growth rate. The income and expenses of each asset are estimated based on management's expectations of future revenues and costs, having considered internal and macroeconomic factors. The cash flows used to measure value in use are discounted to the present value using the discount rate that reflects assessments of the time value of money and the risks specific to the asset. Based on the impairment tests performed, the recoverable amounts of the CGUs exceeded their respective carrying amounts and, accordingly, no impairment losses were recognized.

The two business divisions, Crystalline and Rapid Solidification, generate cash inflows that are independent of the Permanent Magnets business division because they utilize geographically separate production facilities (assets) with different production processes, and their end products are fundamentally different. Furthermore, Crystalline and Rapid Solidification essentially have a separate customer base from the Permanent Magnets business division; only a few customers regularly purchase products from both Crystalline and Rapid Solidification as well as from Permanent Magnets.

e-VAC Magnetics, LLC, represents the Group's U.S.-based manufacturing facility which is currently engaged in pre-production activities and expected to begin commercial operations in calendar year 2026. Management has determined that the underlying assets constitute a separate CGU, as they are expected to generate independent cash inflows once commercial operations commence.

The recoverable amount of the Rapid Solidification CGU, as of December 31, 2025, was determined using an after-tax discount rate (weighted average cost of capital, WACC) applied to cash flow projections of 9.13%. The pre-tax WACC amounted to 11.15%.

The recoverable amount of the Crystalline CGU, as of December 31, 2025, was determined using an after-tax discount rate (WACC) applied to cash flow projections of 9.13%.The pre-tax WACC amounted to 11.01%.

The recoverable amount of the Permanent Magnets CGU ("PM"), as of December 31, 2025, was also determined using an after-tax discount rate (WACC) applied to cash flow projections of 9.13%. The pre-tax WACC amounted to 11.08%.

The carrying amounts of financial assets by class and IFRS 9 measurement category are as follows:

Factoring holdback receivables result from the deferred collection of a portion of the factored trade receivables in Euro and USD and cover 10% of the receivables sold.

The Group enters derivative financial instruments (foreign exchange forward contracts, commodity hedges and interest rate swaps) with financial institutions with investment grade credit ratings. Interest rate swaps and foreign currency forward contracts are valued using valuation techniques, which employ the use of market-observable inputs. The most frequently applied valuation techniques include forward pricing and swap models using present value calculations. The models incorporate various inputs including the credit quality of counterparties, foreign exchange ("fx") spot and forward rates, yield curves of the respective currencies, currency basis spreads between the respective currencies and interest rate curves. Credit valuation adjustments ("CVA") and debit valuation adjustments ("DVA") are included where relevant. Because the significant inputs are observable in the marketplace, the foreign exchange forward contracts, commodity hedges and interest rate swaps are classified as Level 2 within the fair value hierarchy.

Such derivative financial instruments are entered into in accordance with the ISDA (International Swaps and Derivatives Association). These do not meet the netting requirements under IAS 32 Financial Instruments, as netting is enforceable only in the event of insolvency. Since all derivatives in place as of the reporting dates are concluded with different financial institutions, the Group could not exercise its rights of set-off.

Embedded derivatives are classified as Level 3 within the fair value hierarchy and further details regarding this classification are presented below. There were no transfers between Levels 1, 2 and 3 during 2025 or 2024. Transfers between Levels would be deemed to have occurred at the end of the reporting period in which they occur.

The carrying amounts of financial assets measured at amortized cost approximate their fair values due to their short-term nature and / or immaterial credit risk.

The net gains or losses recognized in profit or loss on financial assets were as follows:

For financial assets measured at FVTPL, net gains and losses arise primarily from changes in the fair value of embedded derivatives. For financial assets measured at amortized cost, it is mainly foreign exchange effects on receivables.

The EUR 165.0 million term loan contains three embedded derivative features (call option, put option, interest rate floor) that are economically interrelated and require separation. In accordance with IFRS 9, the Group has determined that these features are accounted for as a single compound embedded derivative.

The USD 300.0 million term loan contains two embedded derivative features (put option and interest rate floor) that are economically interrelated and require separation. In accordance with IFRS 9, the Group has determined that these features are accounted for as a single compound embedded derivative.

The Group has engaged an external, independent adviser to determine the fair value of the compound embedded derivative. The independent adviser carried out this work using a third-party tool. The Group has internal processes in place to review the adviser's qualifications and understanding of the third-party tool as well as the results of the valuation.

The significant unobservable inputs used in the fair value measurements for the separated embedded derivative from the EUR 165.0 million categorized within Level 3 of the fair value hierarchy, together with a quantitative sensitivity analysis as at December 31, 2025 and 2024 are shown below:

The significant unobservable inputs used in the fair value measurements for the separated embedded derivative from the USD 300 million categorized within Level 3 of the fair value hierarchy, together with a quantitative sensitivity analysis as at December 31, 2025 and 2024 are shown below:

The fair value of embedded derivatives is sensitive to changes in significant unobservable inputs. Due to the interrelationship between unobservable inputs, the effect of changes in a single input may not be indicative of the total impact on fair value. Fair value measurements are reviewed at each reporting date.

The following table presents a reconciliation of the opening and closing balances of embedded derivatives classified within Level 3 of the fair value hierarchy for both the EUR 165 million and USD 300 million loans:

	2025		2024
	kEUR		kEUR
At January 1	17,388		7,057
Additions	8,419		4,754
Total gains or losses recognized in profit or loss for the period	(11,801	)	5,398
Foreign exchanges recognized in other comprehensive income	(987	)	179
Settlements	838		-
Transfers into or out of Level 3	-		-
At December 31	13,856		17,388

Changes in the fair value of embedded derivatives are recognized in profit or loss within finance income or finance expenses. Foreign exchanges are recognized in other comprehensive income within the foreign currency translation reserve.

In September 2024, e-VAC Magnetics LLC, a wholly owned subsidiary of the Group in the United States, entered into five interest rate swaps with different counterparties, all with the same terms. The interest rate swaps hedge exposure to variability in cash flows arising from changes in interest rates on variable-rate debt issued under the US Credit Agreement (defined below). The interest rate swaps are presented in the statement of financial position, under non-current assets, other financial assets.

The Group uses interest rate swap contracts to hedge exposure to variability in cash flows arising from changes in interest rates on long-term borrowings with variable rates (interest rate risk). These interest cash flows are considered highly probable.

The Group designates interest rate swaps whose critical terms (including reference rate, reset dates, payment dates, maturities and notional amounts) closely align with those of the hedged item. The Group does not hedge 100% of its loans, and therefore designates the hedged item as a proportion of the outstanding borrowings corresponding to the swap's notional amount. As the critical terms of the interest rate swap contracts and their corresponding hedged items are aligned, the Group expects their values to move in opposite directions in response to changes in the underlying interest rates demonstrating an economic relationship. The Group has established a hedge ratio of 1:1 for the hedging relationship, whereby the designated notional amount of the hedging instruments corresponds to an equal notional amount of the hedged variable-rate borrowings. The notional schedule of the interest rate swaps is designed to track the expected outstanding principal of the hedged borrowings, with a built-in buffer to avoid over-hedging. At December 31, 2024, the aggregate swap notional temporarily exceeded the outstanding loan balance due to a small timing gap of a scheduled notional step-up and a subsequent loan drawing in January 2025. The hedge ineffectiveness was immaterial.

Hedge effectiveness is determined using the dollar offset method, assessed at the inception and on an ongoing basis, to ensure that the economic relationship and hedge ratio between the hedged item and the hedging instrument remains appropriate.

The effective portion of changes in the fair value of the hedging instruments is recognized in other comprehensive income (OCI) and accumulated in equity. Any ineffective portion is recognized in finance income or finance expenses. Amounts accumulated in equity are reclassified to profit or loss in the period(s) when the hedged cash flows affect profit or loss.

The effects of the interest rate swaps on the Group's financial position and performance are

	December 31, 2025	December 31, 2024
	kEUR	kEUR
Carrying amount of interest rate swaps (included in 'Other financial assets', non-current)	1,212	6,465
Notional amount - USD	225,000	106,685
Notional amount - EUR	191,489	102,690
Maturity	June 30, 2033	June 30, 2033

	2025		2024
	kEUR		kEUR
Cash Flow Hedge Reserve at January 1	6,465		-
Change in fair value of hedging instruments recognized in OCI	(3,933	)	6,629
Settlements (reclassified to profit or loss)	(1,320	)	(164	)
Cash Flow Hedge Reserve at December 31	1,212		6,465

	2025		2024
	kEUR		kEUR
Change in fair value of hedging instruments (interest rate swaps)	(5,254	)	6,465
Change in fair value of hedged item	5,892		(7,150	)
Hedge ineffectiveness recognized in profit or loss	-		-

The change in fair value of the hedged item used for calculating hedge ineffectiveness is determined using a hypothetical derivative. The actual changes in fair value of the hypothetical derivative amounted to kEUR 5,892 and kEUR (7,150) for the years ended December 31, 2025 and 2024, respectively. No hedge ineffectiveness was recognized in profit or loss for the periods presented, as the cumulative gain or loss on the hedging instruments was lower than the cumulative change in fair value of the hedged item, in absolute terms.

Movements recognized in other comprehensive income (OCI) represent the effective portion of cash flow hedging instruments and do not represent a separate measurement category under IFRS 9. Any hedge ineffectiveness was insignificant for the periods of 2025, and 2024, therefore no hedge ineffectiveness was recognized for the periods presented. Settlements of the swap are reclassified to profit or loss through interest expense. The deferred tax impact from the cash flow hedge recognized in other comprehensive income (OCI) is nil for both the years.

The swaps require settlement every quarter and the settlement dates coincide with the dates on which interest is payable on the underlying debt. The interest payments on the swaps are a fixed rate at 3.281% and the underlying debt is based on a three-month daily simple secured overnight financing rate ("SOFR") plus a margin of 3% to 3.5%.

The Group's accumulated other comprehensive income (loss) includes the cumulative effective portion of gains and losses on interest rate swaps designated as cash flow hedges. Balances are presented net of amounts reclassified to profit or loss upon settlement or realization of the hedged cash flows and related income tax effects.

The carrying amounts of financial liabilities by class and IFRS 9 measurement category are as follows:

Trade payables and other short-term financial liabilities are recognized at the transaction price and measured at amortized cost. Due to their short-term nature, the carrying amounts approximate their fair values. Refer to Note 25 for additional disclosures on Trade and other payables.

For the current interest-bearing borrowings, the fair values are not materially different from their carrying amounts.

The fair values of Group's non-current interest bearing loans and borrowings are determined using the discounted cash flow method with term-specific discount rates that reflect the issuer's credit risk. The discount rate includes a credit spread taken from the valuation of the embedded derivatives. As it is not readily observable on the market, it constitutes a Level 3 input.

The carrying amounts of Interest-bearing loans and borrowings are comprised as follows:

Interest bearing loans and borrowings comprise bank loans, term loans, overdraft facilities and revolving credit facilities and are measured at amortized cost using the effective interest method. Transaction costs directly attributable to the acquisition of borrowings and the initial fair value of embedded derivatives that need to be bifurcated according to IFRS 9 are deducted from the carrying amount and amortized over the term of the instruments.

The Group entered a syndicated lending arrangement on October 5, 2023. The arrangement contains both a term loan and a revolving credit facility. The term loan principal of kEUR 165,000 does not include any installment payments and the full amount becomes due on October 5, 2028. The term loan has been drawn completely, while the revolving credit facility is unutilized as of December 31, 2024 and December 31, 2025. The term loan carries a variable interest rate of 3-month-EURIBOR (floor at 3%.) plus a margin of 8% p.a.; the revolving credit facility carries a variable interest rate of 3-month-EURIBOR plus a margin of 4% p.a. All German, Dutch, Finnish, Slovakian and Malaysian subsidiaries act as guarantors under the arrangement. With the credit agreement amended on August 8, 2025, the revolving credit facility in an amount of kEUR 50,000 has been reduced to kEUR 35,000 maturing on April 5, 2028. In addition, it was amended to capitalize PIK interest of 250bps p.a. on the loan amount until maturity. The amendment resulted in a modification according to IFRS 9 and the recognition of a modification loss of kEUR 11,538 in profit and loss.

In September 2024, e-VAC Magnetics LLC, a wholly owned subsidiary of the Group in the United States, entered into a syndicated credit agreement with a consortium of commercial lenders, with Bank of Montreal acting as administrative agent and Wilmington Trust, National Association acting as collateral agent (the "US Credit Agreement"). The US Credit Agreement provides for aggregate loan commitments of up to kEUR 299,214 (kUSD 335,000) and comprises a construction loan facility with commitments of up to kEUR 267,953 (kUSD 300,000) which can be converted into a term loan facility that becomes effective upon satisfaction of specified project completion and operational conditions, a revolving credit facility with commitments of up to kEUR 16,077 (kUSD 18,000), and a debt service reserve letter-of-credit facility with commitments of up to kEUR 15,184 (kUSD 17,000). The US Credit Agreement contains customary terms, including covenants and events of default which some relate to financial statement audit requirements, compliance with laws, bankruptcy events, and defaulting on payments.

Borrowings under the US Credit Agreement bear interest at variable rates based on daily simple secured overnight financing rate ("SOFR") plus a fixed margin of 3%. As of December 31, 2025, the Group's US term loan and revolving credit borrowings under this agreement mature on March 31, 2031. Amounts drawn under the construction facility are contractually converted into term loans upon satisfaction of the relevant conversion conditions. The contractual maturity of the term loans is five years from the conversion date of the construction loans to term loans.

As of December 31, 2024, the Group had kEUR 92,790 (kUSD 96,400) principal of construction loans drawn and outstanding. As of December 31, 2025, the Group had kEUR 255,289 (kUSD 300,000) principal of construction loans drawn and outstanding. The Group also had kEUR 8,540 (kUSD 10,000) recorded in current interest bearing loans and borrowings related to its revolving credit facility as of December 31, 2025 (2024: kEUR/kUSD: 0).

Borrowing costs incurred in connection with the Group's kUSD 335,000 loan commitment were deferred and recorded in Deferred financing costs. The portion of deferred financing costs related to the kUSD 300,000 term loan is deducted from the carrying value of the corresponding liability when draw down occurs, on a pro rata basis. The portion related to the credit facilities is amortized over the period of the facility. The current portion of the deferred financing fees reflects the portion of financing fees related to not yet drawn amounts the Group expects to draw over the twelve months. The current portion of deferred financing costs represent amounts associated with expected drawdowns within the next twelve months and is presented under other non-financial assets within Trade and other receivables, as disclosed in Note 19.

The Slovakian entity Vacuumschmelze s.r.o. has in total three active bank loans of kEUR 4,200, kEUR 3,950 and an overdraft facility of up to kEUR 2,200.

The net gains or losses recognized in profit or loss on financial liabilities were as follows.

The net loss on financial liabilities measured at amortized cost is primarily driven by interest costs on the Group's major loan facilities, particularly the EUR 165 million loan and the USD 300 million loan. The year-on-year movement was further impacted by debt modification losses on the EUR 165 million loan and amortization of financing fees and bifurcated embedded derivatives. Total interest expense for financial liabilities measured at amortized cost were kEUR 22,888 (2024: kEUR 20,258). The net loss on financial liabilities at fair value through profit or loss is driven by losses on commodity hedges primarily from changes in nickel commodity prices.

The risk management of the Group is a continuous process based on systematic identification, assessment, and monitoring of financial and non-financial risks. Financial instrument risks include market risk (foreign exchange, interest rate and commodity price risk), credit risk and liquidity risk.

To get a reasonable valuation of the respective risks, the Group developed a risk portfolio, which composes and weighs the likelihood of the risks and the potential consequences. The analysis takes place once a year and contains mainly risks that are related to the operating business. For critical risks, the Group sets up a risk action plan including tasks and responsibilities.

Certain long-term loans and borrowings of the Group are subject to financial covenants as defined in the respective loan agreements. The covenants are tested on a quarterly basis. As at the presented reporting dates, the Group complied with all covenant requirements. The carrying amount of loans and borrowings subject to covenant requirements amounted to kEUR 434,812 (2024: kEUR 260,948).

Under the terms of the Group's financing arrangements, the Group is required to deliver quarterly covenant compliance calculations, including a leverage ratio based on last twelve months ("LTM") results. The Group was in compliance with its covenants during 2025 and as of December 31, 2025. Under the current planning calculations, the Group expects to be compliant with the covenant in future periods, but due to the continuing difficult market environment, there is a latent risk that the Group may fail to meet the covenants set out in the loan agreement, if the actual figures are significantly below planning expectations. However, in case of a potential non-compliance with covenants the Group has considered different scenarios to meet the covenants. These include a covenant reset, a covenant holiday or an equity cure.

The Group is exposed to foreign exchange risk primarily from transactions denominated in currencies other than the functional currencies of Group entities, principally USD related to purchase and sale of goods and services in the normal course of business. The Group manages a portion of these exposures using foreign exchange forward contracts. The Group does not have significant foreign exchange contracts. The Group also does not apply hedge accounting for its foreign exchange forward contracts or commodity derivatives. See Note 24.2. The fair value of the outstanding foreign exchange contracts as at year end is kEUR 18 (2024: kEUR 26).

The sensitivity analysis below shows the effect of a reasonably possible change in the EUR strengthening/weakening by 5% compared to USD on profit before tax, assuming all other variables remain constant. The analysis reflects the net exposure arising from foreign currency denominated monetary items and related derivatives at the reporting date. Translation effects on the financial statements of foreign operations are excluded from this sensitivity analysis.

The impact on the Group's profit or loss before tax is due to changes in the carrying amount of monetary assets and liabilities:

Credit risk is the risk that a counterparty will not meet its contractual payment obligations, which would result in a financial loss to the Group. Credit risk arises primarily from trade receivables with customers and from cash and cash equivalents. To manage credit risk the Group has established a credit rating process. In this context, the Group uses information on reputable sources of information (e.g., Dun & Bradstreet, Credit reform). The credit risks are managed by setting up credit limits for the respective customers.

The Group's maximum exposure to credit risk at the reporting date is generally the carrying amount of its financial assets, including cash and cash equivalents (including restricted cash), and trade receivables. Credit risk associated with cash and cash equivalents is considered limited as the counterparties are leading national and international banks. The Group does not hold material collateral against trade receivables and has no significant concentration of credit risk.

Information about the credit quality of trade receivables, including aging and expected credit losses, is presented in Note 19. Information about concentration of revenue and trade accounts receivables is presented in Note 8.

An impairment analysis is performed at each reporting date for trade receivables and related party receivables. For trade receivables, the Group applies the simplified approach in calculating expected credit losses and therefore recognizes a loss allowance based on lifetime expected credit losses at each reporting date. However, no loss allowances have been created in previous years as they were not material to the Group. In regard of related parties receivables, the Group considers the related party's net assets and its expected cash flows (refer to Note 31). The calculation is based on actual historical data incurred. The maximum exposure to credit risk at the reporting date is the carrying amount of trade receivables and related party receivables. Accordingly, management does not consider the Group to be exposed to significant concentration risk with respect to trade receivable.

The Group monitors its risk of a shortage of funds using a liquidity-planning tool. The Group's treasury department, in accordance with the Group's policy, manages liquidity risk from balances with banks and financial institutions. In addition, financing required for unexpected events may result in a liquidity risk. The Group entities have credit lines at their disposal, which were partially utilized as at the balance sheet date. Refer to Note 2.2 for additional details on management's going concern assessment.

The Group has entered into senior secured financing arrangements with bank consortia in Germany and the United States. The Group has pledged the assets of its German, Dutch, Finnish, Slovakian and Malaysian subsidiaries to a bank consortium to secure a loan of kEUR 165,000 with a term of five years and revolving credit facility of kEUR 35,000 with a term of two and a half years as of December 31, 2025. The following assets are pledged: Intangible assets including patents (kEUR 317,587), property, plant and equipment (kEUR 178,819), receivables (kEUR 16,195) and inventories (kEUR 84,761). The Group also pledged substantially all e-VAC Magnetics, LLC's assets as collateral to secure a loan of kUSD 300,000 term loan, kUSD 17,000 debt service reserve facility and kUSD 18,000 revolving loan facility with a term of six years and seven months as of December 31, 2025.

The tables below summarize the maturity profile of the Group's financial liabilities based on contractual undiscounted cash flows:

Interest rate risk is the risk that the fair value or future cash flow of a financial instrument will fluctuate because of changes in market interest rates. The Group's risk of changes in market interest rates relates primarily to the variable-rate borrowings under the German credit facilities and the US Credit Agreement which are linked to benchmark interest rates such as EURIBOR and other applicable reference rates as well as to the interest rate swaps for which hedge accounting is applied. Hedge accounting can lead to ineffectiveness which is to be recorded in profit before tax. The kEUR 165,000 term loan bears interest at a variable three-month EURIBOR, that is floored at 3%. Borrowings under the US Credit Agreement bear interest at variable rates based on daily simple secured overnight financing rate ("SOFR") plus applicable fixed margins.

The following table demonstrates the sensitivity to a reasonably possible change in market interest rates. With all other variables held constant, Group's profit before tax and equity is affected through the impact on floating rate interest, as follows:

The Group is exposed to commodity price risk primarily through purchases of raw materials, mainly nickel and cobalt, used in its manufacturing processes. Increases in market prices for these raw materials could affect the Group's cost of sales and margins. However, this exposure is substantially mitigated by contractual pricing mechanisms.

For substantially all material framework agreements with the Group's largest customers, the sales arrangements include price escalation or pass-through provisions that allow changes in raw material costs to be passed on to customers. For customer arrangements that are not governed by framework agreements, quoted sales prices are generally established based on the raw material input costs applicable at the time the order is accepted. As a result, the Group's residual exposure to commodity price movements is limited.

The Group may also enter into commodity derivative contracts to hedge a portion of its forecast raw material purchases. Commodity derivatives were not significant in 2025 and 2024. Based on the Group's contractual pass-through arrangements and pricing mechanisms, commodity price risk is not significant at the reporting date and, accordingly, no separate commodity price sensitivity analysis has been presented.

Non-cash other changes primarily consist of the capitalized PIK interest of the kEUR 165,000 term loan, amortization of financing fees and the embedded derivatives that were bifurcated at loan disbursement, the modification loss of the term loan and interest expenses of interest-bearing loans and borrowings including accrued but not yet paid interest. In addition to the above presented cashflows from financing activities the "interest and financing fees paid" presented in the consolidated statement of cash flows include outflows amounting to kEUR 838 arising from the interest rate floor that is part of the bifurcated embedded derivative asset and kEUR 760 arising from the financing fees paid. The non-cash fx revaluation consists of periodic entries recorded to remeasure the kUSD 300,000 term loan balance from USD to EUR using applicable exchange rates and is recognized in OCI (foreign currency translation reserve). The movement is non-cash in nature, as it does not relate to new borrowings, repayments, or other cash settlements also includes capitalized interest expense for constructions in progress of kEUR 11,246 (2024: kEUR 1,234)

Non-cash other changes primarily consist of amortization of financing fees and the embedded derivatives that were bifurcated at loan disbursement, as well as interest expenses of interest-bearing loans and borrowings including accrued but not yet paid interest. In addition to the above presented cashflows from financing activities the "interest and financing fees paid" presented in the consolidated statement of cash flows include outflows amounting to kEUR 17,607 arising from the transaction cost for the kUSD 300,000 term loan and kEUR 346 arising from the financing fees paid. The non-cash fx revaluation consists of periodic entries recorded to remeasure the kUSD 300,000 term loan balance from USD to EUR using applicable exchange rates and is recorded in OCI (foreign currency translation reserve). The movement is non-cash in nature, as it does not relate to new borrowings, repayments, or other cash settlements also includes capitalized interest expense for constructions in progress of kEUR 1,234.

As of December 31, 2025, of the kEUR 6,330 in provisions, kEUR 6,265 are expected to convert to cash outflows within the next twelve months.

The provision relates primarily to customer complaints and claims arising in the ordinary course of business. Expected cash outflows are primarily within the next twelve months. The provision reflects management's best estimate based on historical settlement experience and technical assessments, as well as the status of open claims. The Group provides a warranty period where customers may return products or request reimbursement or rework if quality defects are identified. When a customer raises a quality complaint or claim, the Group assesses the expected outflow of resources and recognizes a provision or accrual, reflecting its established practice of settling such claims through. For complaints and claims, the provision involved uncertainty in both amount and timing as the final amount and timing of settlement depended on customer support, the outcome of quality investigations and the remediation actions required.

This provision primarily relates to annual statutory incident insurance premiums, to a lesser extent, termination and severance obligations, inventory compensation and a minor portion of sales performance bonuses. Expected outflows are primarily within the next twelve months.

The final amount and timing of the employee-related obligations include uncertainty due to dependencies on post-period inputs such as payroll assessments, performance validations, or individual negotiations, which are not fully finalized at the reporting date. The Group applied judgment in estimating these liabilities, and the provision reflects management's best estimate of the amounts required to settle these obligations, considering statutory requirements, prior-year financial data (used in determining insurance premiums), the economic value of inventions, contractual arrangements with employees, and historical experience. These amounts are presented as provisions due to uncertainty and estimation of the payment amount and are due within one year from the balance sheet date.

Environmental provisions relate to ongoing monitoring and remediation required under regulatory mandates for a legacy contaminated site. The timing of cash outflows depends on remediation plans, regulatory requirements and project timelines, however expected outflows are primarily within the next twelve months. The final amount and timing of environmental liabilities included uncertainty due to evolving technical requirements, updated site conditions, and variability in the scope of remediation activities during execution. The provision reflects management's best estimate of expenditures required to settle the obligation; actual outcomes may differ due to changes in remediation approaches, regulatory requirements or cost estimates. In 2025 an environmental liability provision is included in the amount of kEUR 129 (thereof kEUR 64 short-term and kEUR 65 long-term). The expected timing of resulting outflows of economic benefits is within the period 2026 to 2027.

Other provisions primarily relate to obligations arising from purchase commitments that became onerous, including kEUR 1,835 related to commitments from purchase contracts, which resulted in an onerous contract due to declining demand for a product. These arrangements originated predominantly during the COVID-19 period, when a significant number of customers cancelled orders due to market uncertainty. At that time, the Group had already placed binding, non-cancellable purchase orders with key suppliers and in some cases, suppliers had commenced production of highly customized components. As a result, the Group was exposed to unavoidable costs in excess of the expected economic benefits, giving rise to provision for potentially loss-making supply arrangements in prior years. The amount and timing of the provisions remained uncertain. For loss-making supply arrangements, the final settlement relied upon ongoing negotiations with suppliers regarding remaining contractual commitments.

To mitigate the exposure from customer cancellations, the Group negotiated revised terms with suppliers under which only 50% of the purchase value was paid upfront as a non-refundable deposit, with the remaining amounts payable only if the goods were successfully resold to another customer. This approach significantly reduced the financial risk associated with unused or excess inventory.

As market conditions have normalized, the Group's exposure under these arrangements has declined materially, and only occasional isolated cancellations now give rise to smaller potentially loss-making supply arrangements. The development of provisions decreased by kEUR 4,802 during financial year 2025, and decreased by kEUR 6,170 during financial year 2024. This change is due to new negotiations with the respective suppliers and a revaluation of existing provisions. The expected timing of resulting outflows of economic benefits is within financial year 2026.

The Group provides post-employment and other long-term employee benefits. The table below presents the carrying amounts of employee benefit obligations recognized in the statement of financial position:

The Group's principal defined benefit pension plan in Germany ("Kapitalkontenplan") provides old-age, disability and survivor benefits. Although classified as a defined benefit plan, the benefit formula is contribution-based (cash-balance type) with credited interest on accumulated notional accounts. Benefits are converted at retirement into either instalment payments, a lump sum or (subject to agreement) a lifetime annuity with annual increases.

The contribution amount is 1.5% of taxable gross salary plus 10.5% of gross salary exceeding the social security contribution ceiling. Contributions stop at year-end when the employee reaches the age of sixty. For purposes of the benefit calculation, there is currently a guaranteed annual interest of 4.5% on the accrued contribution amounts. Annual interest is 6% for certain beneficiaries transferred into the plan. Contributions are transformed into a benefit block by an age-depending factor. At retirement age, the employee can choose between:

The consent of the employer and employee is needed for this option. In addition, there is a death in service benefit of two monthly salaries. Employee contributions to this plan are possible based on individual agreements.

Several old defined benefit plans with fewer employees exist with minor differences in the parameters applicable. These old Defined Benefit plans provide lifetime annuity payments with an increase for in-payment benefits in line with consumer prices. There are 3,038 participants in the pension plans in 2025 (2024: 3,056 participants).

The plan was closed for new hires in 2019 by December 31, 2019. The contribution period was terminated in 2015 and ended as of December 31, 2025, and the compensation conversion period was terminated in 2019 and ended as per December 31, 2020.

In 2025, the Group incurred kEUR 7,480 (2024: kEUR 7,661) in expenses related to defined contribution plans.

Altersteilzeit ("ATZ") during a fixed period before retirement (typically not more than 6 years), the employee works full-time in the first half ("active period") and does not work at all in the second half ("inactive period"). The ATZ salary payable over both periods is 50% of the full-time salary and is increased by top-up payments. The employee-financed part (deferred salary) is required to be protected against insolvency. Corresponding asset amounts were contributed to contractual trust agreements with a third-party insurance company.

Employees at the age of fifty-eight or older can apply for an early retirement program. The employment is terminated, and an early retirement contract is agreed upon. This new contract grants 75% of the former full-time salary for a period at least until the first possible date to get reduced payments out of the German mandatory pension plan (normally at the age of 63). In case the employee is eligible to an unreduced pension later, the calculated early retirement payment for the period until age 63 could be divided by the total number of months to be covered until unreduced pension could start. Provisions cover the total amount of early retirement payments including employers' contribution to social security. The early retirement program was not offered to employees during 2025 and 2024.

This plan grants cash benefits and one additional paid holiday on each of the following service anniversaries: a benefit of EUR 900 after 25 years of service and EUR 1,400 after 40 years and 50 years of service.

The reconciliation of the defined benefit obligation ("DBO") for the pension plan is shown below.

The expense recognized in the consolidated statements of operations and other comprehensive income is made up as follows:

The principal assumptions used in determining employee benefit obligations for the Group's plans are shown below:

The pension increases for in payment benefits amounts to 1.00% or 2.00% for the "Kapitalkontenplan" depending on the employee's entry date with the company.

A sensitivity analysis for significant assumptions as of December 31, 2025, is shown below:

A sensitivity analysis for significant assumptions as of December 31, 2024, is shown below:

The determination of other post-employment benefit obligations and expenses for defined benefit plans is dependent on a number of estimates and assumptions, including the discount rate, future mortality rate, and annual rate of increase in future compensation levels. Changes in assumptions and actuarial estimates may materially affect the benefit obligation, future expense and future cash flows. The sensitivity analysis above has been determined based on a method that extrapolates the impact on the defined benefit obligation ("DBO") because of reasonable changes in key assumptions occurring at the end of the reporting period. The sensitivity analysis is based on a change in a significant assumption, keeping all other assumptions constant. The sensitivity analysis may not be representative of an actual change in the defined benefit obligation as it is unlikely that changes in assumptions would occur in isolation from one another.

The following payments are expected contributions to the pension plan in future years:

The weighted average duration of the pension plan obligation at the end of the reporting period is 9.87 years (2024: 10.75 years).

As of December 31, 2025, the Group has commitments of kEUR 1,254 (December 31, 2024: kEUR 737 and January 1, 2024: kEUR 3,724) for the acquisition of property, plant and equipment.

On January 30, 2023, a subsidiary of the Group entered into a binding supply agreement with a Customer relating to permanent magnet production in North America. In connection with the agreement, the Customer has provided customer prepayments totaling kEUR 19,828 to support construction of the manufacturing facility. One year after the production start date, the Customer is entitled to apply a 4% discount to sales invoices until the outstanding prepayment balance has been fully utilized. As of December 31, 2025, and 2024, customer prepayments totaled kEUR 17,732 and kEUR 19,828, respectively, and are presented as contract liabilities (Note 8). The contract liability is recognized as revenue as the Group satisfies performance obligations by delivering products to the customer.

On September 19, 2023, The Office of the Assistant Secretary of Defense for Industrial Base Policy, through its Manufacturing Capability Expansion and Investment Prioritization ("MCEIP") office, issued a grant to e-VAC Magnetics, LLC to establish a domestic rare earth permanent magnet manufacturing capability. Under the agreement the MCEIP will provide kEUR 88,824 (in equivalent to kUSD 94,100) to the Group to acquire and install manufacturing equipment, operationalize technical infrastructure, and engineer production lines, in order to establish high volume rare earth permanent magnet production. During the year ended December 31, 2025, and December 31, 2024, the Group received payments from this grant of kEUR 17,515 and kEUR 24,709, respectively. These amounts are recorded as a reduction to the cost of the applicable assets included in property, plant and equipment. The agreement includes certain requirements relating to the size of the investment, the number of jobs created, and the salaries for those jobs among other requirements. The Group was in compliance with all such requirements as of December 31, 2025, and 2024.

In June 2024 e-VAC Magnetics, LLC, a subsidiary of the Group, received a government grant for land and infrastructure development from Sumter County of kEUR 12,144 (equivalent to kUSD 13,000) to finance infrastructure measures for property development. These amounts were received in full during the year ended December 31, 2024, and were recorded as a reduction to the cost of the applicable assets included in property, plant and equipment. The arrangement includes certain requirements and restrictions relating to the investment in property, plant and equipment and new job development within the state of South Carolina. The Group was in compliance with all such requirements as of December 31, 2025 and as of December 31, 2024.

The Group is subject to claims and legal proceedings arising in the ordinary course of business. Based on information currently available, management does not expect the ultimate resolution of these matters to have a material adverse effect on the Group's financial position, results of operations or cash flows. Accordingly, no material contingent liabilities have been recognized or disclosed as of December 31, 2025. The Group has no material guarantees or indemnities outstanding as of December 31, 2025.

The Group is a limited partnership and accordingly, equity attributable to equity holders of the parent is presented as Partners' capital. The Group's equity comprises partner's capital, accumulated losses, other comprehensive losses / income and non-controlling interests ("NCI").

Partners' capital includes contributed capital related to ordinary tracking interests and preference tracking interests. Accumulated losses are separately presented on the balance sheet and non-controlling interests represent ownership interests in TopCo GmbH held by entities not consolidated by Ara VAC IE Aggregator LP. See Note 31.

The contributed capital attributable to non-controlling interests relate to the 10.1% ownership interest in German TopCo held by Ara VAC Blocker, SLP and Ara VAC Holding, Ltd and are presented within non-controlling interests in equity, separately from equity attributable to equity holders of the parent.

IE Aggregator held 89.9% of the equity interests in Ara VAC TopCo GmbH ("German TopCo") and 100% of the equity interests in Ara VAC US TopCo LLC ("US TopCo"). German TopCo and US TopCo are consolidated in these consolidated financial statements.

Ara VAC Blocker, SLP and Ara VAC Holding, Ltd held the remaining 10.1% equity interest in German TopCo. German TopCo is consolidated by the Group but is not wholly owned, the equity interests in German TopCo not attributable to Ara VAC IE Aggregator LP are presented as non-controlling interests within equity, separately from equity attributable to owners of the parent.

Equity attributable to equity holders of the parent is presented as partners' capital. Partners' capital includes contributed capital related to ordinary tracking interests and preference tracking interests. The ordinary tracking interests and preference tracking interests economically track ownership interests in German TopCo and US TopCo.

Preference tracking interests rank senior to ordinary tracking interests with respect to distributions. The preference tracking interests entitle holders to a cumulative preferred return of 9% per annum, calculated on the subscription amount paid for the preference tracking interests, together with any unpaid preferred return amounts from prior periods.

Capital Contributions, including the preferred return, are not repayable until liquidation of Ara VAC IE Aggregator, LP. If the assets, after payment of or provision for its liabilities, are insufficient to repay Capital Contributions in full, the General Partner is not required to fund any shortfall from its own resources. Distributions, including the amount and timing of payment, are determined in the sole discretion of the General Partner.

The Group does not have a present or unavoidable contractual obligation to deliver cash for the ordinary tracking interests, preference tracking interests, or unpaid preferred return amounts. Holders do not have a right to require redemption of the tracking interests, declare distributions, commence or force a sale, trigger a liquidity event, liquidate Holding LP, or otherwise settle accumulated preferred return amounts in cash.

Accordingly, no liability has been recognized for unpaid preferred returns as of December 31, 2025 or December 31, 2024. The ordinary tracking interests and preference tracking interests are classified as equity instruments and are presented within partners' capital. No dividends or distributions were declared or paid during the years ended December 31, 2025 or December 31, 2024.

During the historical periods presented, the Group received capital funding from its equity holders and related investor vehicles, including Ara VAC Blocker, SLP, Ara VAC Holding, Ltd. These funds were contributed through the ownership structure and were used to fund investments in German TopCo and US TopCo.

In May 2024 and July 2024, the Group received funding from related parties outside the consolidated group of kUSD 25,000 and kUSD 25,000, respectively, which was used to fund convertible loan transactions with US TopCo. Under the LPA, these amounts were contributed to Holding LP by means of Loan Contributions and are tracked as US Convertible Loan Interests in equity. The convertible loan between Holding LP and US TopCo is an intercompany arrangement and is eliminated in consolidation.

The group classifies the contribution within equity as the arrangements do not create a present obligation for Holding LP to deliver cash or another financial asset. Holders do not have a right to require payment and payment is made following a liquidity event. Accordingly, the contributions are presented within partners' capital as other limited partner capital contributions.

On September 5, 2024, a portion of the convertible loan was repaid in the amount of kUSD 8,880. The repayment reduced the equity tracking interests and the amount subject to potential future issuance of ordinary or preference tracking interests. No conversion into ordinary or preference tracking interests occurred during the years ended December 31, 2025 or December 31, 2024.

In December 2025, the Partnership admitted a number of new limited partners, including Ara Fund III, LP; Ara Fund III-A, SCSp; Ara Fund III-B, LP; Ara Fund III-C, SCSp; and Ara Fund III-A AIV, LP. These new limited partners contributed aggregate capital of kUSD 8,000 upon admission. The related amounts are presented within partners' capital as other limited partner capital contributions. These contributions do not represent ordinary tracking interests or preference tracking interests as of December 31, 2025.

As of December 31, 2025 and December 31, 2024, other limited partner capital contributions included in partners' capital were kEUR 38,418 and kEUR 45,247, respectively.

In 2023, certain employees of the VAC Group (the "Beneficiaries") acquired limited partnership interests in Ara VAC Management Co-Invest I GmbH & Co. KG ("Co-Invest I") and Ara VAC Management Co-Invest II GmbH & Co. KG ("Co-Invest II") from Ara Vac Warehouse GmbH. The co-invest partnerships serve as investment vehicles for certain managers, directors, key employees, non-executive board members and consultants of the VAC Group who are invited to become limited partners and who invest (directly or through investment vehicles) in the partnerships to participate in the growth and success of the Group.

Co-Invest I and Co-Invest II hold interests that economically track the Group's underlying investment in German TopCo and US TopCo (see Note 29). Co-Invest I holds both ordinary and preference interests, while Co-Invest II holds ordinary interests. The preference interests entitle their holders to a cumulative preferred return of 9% per annum based on the subscription amount paid (see Note 29). Each limited partner granted Ara Vac Warehouse GmbH a call option to acquire the partner's partnership interest upon the occurrence of specified default events (such as insolvency or similar proceedings are initiated against a limited partner and or manager, or breaches of the contractual provisions) and in case of Co-Invest II in addition, upon a leaver event (e.g. in case of termination/resignation of the service contract or the release from office and the duty to work for the remaining duration of the service contract following notice of termination). A leaver is classified as a "bad leaver" if he leaves because of termination or resignation from office without cause, is terminated for cause, is removed from office for cause or if he rejects an offer of prolongation. A "good leaver" is a leaver which is not a "bad leaver". The key management participation is less than 1% in both Co-Invest I and Co-Invest II.

The purchase price payable following the exercise of a call option for Co-Invest I and for Co-Invest II in case of a "bad leaver" is the lower of the limited partner's cost of investment and the fair market value as of the trigger date, but in no case less than zero. The "good leaver" purchase price in case of Co-Invest II is equal to the fair market value of the vested percentage of the leaver's partnership interest as of the trigger date plus the lower of the original acquisition costs of the leaver for the partnership interest (minus any amounts which the leaver received from his investment prior to exercise of the call option) and the fair market value for the unvested percentage of the leaver's partnership interest as of the trigger date.

For calculation of the good leaver purchase price, the manager's partnership interest shall "vest" over a period of five years from the effective investment date, with 20% of the partnership interest vesting after expiry of the first year and thereafter 5% vesting at the expiry of calendar quarter until the expiry of five years, when 100% vests. The vesting has no impact on the proceeds a manager receives through his holding of partnership interests following an exit.

The arrangement is accounted for as an equity-settled share-based payment transaction because the Group has no obligation to settle the awards in cash or other assets. Equity-settled awards are measured at grant date fair value and recognized as an expense over the vesting period, with a corresponding increase in equity.

Each limited partner granted the Group a call option permitting the Group to acquire the partner's partnership interest upon specified default events and, for Co-Invest II, specified leaver events.

The grant date fair value of the partnership interests granted to Beneficiaries was estimated using an option pricing methodology (Black-Scholes). Key assumptions included the risk-free interest rate, expected volatility and expected time to exit. Expected volatility was derived from a peer group. The allocation of the fair value to ordinary and preference shares at the purchase date of interests by the management was calculated using a Black Scholes calculation for European call options and the following input parameters:

Because the awards are equity-settled, the grant date fair value is not subsequently remeasured, except to the extent the award is modified.

The expected time to an exit event is based on management expectation and was determined in 2023 to five years, 2024 to four years and 2025 to six months to one year.

For the equity incentive plan, each of the Beneficiaries purchased shares of Co-Invest I and Co-Invest II. The existence of the "good leaver" call option described above requires the Beneficiaries to provide continued service to the VAC Group in order to retain the fair value of the purchased shares of Co-Invest II. Based on this requirement, IFRS 2 requires compensation cost to be recognized based on the grant date fair value of a European call option. The aggregate fair value of the share-based payments issued under the equity incentive plan was not material for the years ended December 31, 2025 and December 31, 2024. Therefore, no compensation cost was recognized in 2025 or 2024 through profit or loss.

Related parties include entities that control, are controlled by, or are under common control with the Group, the Group's joint ventures and associates, key management personnel and their close family members, and entities controlled or significantly influenced by key management personnel.

During the historical periods presented, Ara VAC Blocker, SLP and Ara VAC Holdings, Ltd are under common control with the Group (the "NCI Holders"), holding 10.1% equity interest in German TopCo. Accordingly, the NCI Holders are considered related parties in the periods presented.

The Group also has a 49% interest in SANVAC (Beijing) Magnetics Co. Ltd., which is accounted for as a joint venture and is a related party. Transactions and balances with the joint venture are disclosed in Note 7. The managing directors and vice presidents of the Group qualify as related parties. These individuals are individuals who have authority and responsibility for planning, directing and controlling the activities of the Group.

In the consolidated financial statements, transactions and balances between Group entities are eliminated and are not disclosed as related party transactions. Transactions with related parties are entered into in the ordinary course of business. Related party transactions primarily consist of management contributions, advisory services, and financing arrangements provided by affiliated entities. Balances recorded in trade and other receivable and trade and other payables with related parties are settled in cash, and any related outstanding balances at year-end are unsecured and interest free. Management has assessed the expected credit loss on related party receivables and determined that no allowance is required.

Related party transactions in the financial year 2025 and 2024 and outstanding balances as of December 31, 2025, and December 31, 2024, are included below:

Ara VAC Management is an indirect parent of the parent of the Group, and related party balances are related to advisory services. Ara Advisors PSG, LLC, a member of the Ara Group, has a supporting function for all Ara Group portfolio companies when it comes to support for construction work.

No guarantees have been provided or received for any related party receivables or payables.

Key management personnel include executives and senior vice presidents who have authority and responsibility for planning, directing and controlling the activities of the Company. The amounts disclosed in the table below are the amounts recognized during the reporting period related to key management personnel, which comprises:

Compensation consists of a fixed base salary, share-based payments and annual variable components that are dependent on the achievement of certain financial targets and individual targets. The share-based payments are described in Note 30. The DBO for key management personnel amounts to kEUR 2,545 as of December 31, 2025 (December 31, 2024: kEUR 2,677 and January 1, 2024: kEUR 2,528). The outstanding balances to key management personnel as of December 31, 2025 amount to kEUR 273 (December 31, 2024: kEUR 439 and January 1, 2024: kEUR 21), and relate to reward bonuses and termination benefits. No advances or loans have been granted to the key management personnel.

The table below summarizes government grants related to assets that have been recognized as reductions of property, plant and equipment and construction in progress:

The table below summarizes the transferable tax credit, recognized as a current asset, that has been recognized as a reduction of construction in progress ("CIP") within property, plant and equipment:

In June 2024 e-VAC Magnetics, LLC received a government grant for land and infrastructure development from Sumter County, South Carolina, of kUSD 13,000 to finance infrastructure measures for property development related to the Group's permanent magnet facility in Sumter, which is expected to begin commercial operations in 2026. These amounts were received in full during the year ended December 31, 2024, and were recorded as a reduction to the cost of the applicable assets included in property, plant and equipment. The arrangement includes certain requirements and restrictions relating to the investment in property, plant and equipment and new job development within the state of South Carolina.

In 2024 and 2025, e-VAC Magnetics, LLC received a grant from the U.S. Department of Defense ("DoD"), Office of the Assistant Secretary of Defense for Industrial Base Policy, through its Manufacturing Capability Expansion and Investment Prioritization ("MCEIP") program. The grant was issued on September 19, 2023, to support the establishment of domestic rare-earth permanent magnet manufacturing capacity. Under the agreement, MCEIP provides funding of kUSD 94,100 to acquire and install manufacturing equipment, operationalize technical infrastructure, and engineer production lines for high-volume rare-earth permanent magnet production. During fiscal year 2024, e-VAC received kEUR 24,709, and in fiscal year 2025, kEUR 17,515. These amounts were recorded as reductions to the cost of the applicable property, plant, and equipment.

In December 2025, the Group recognized a transferable IRC §48C credit related to the Group's Sumter, South Carolina facility. Management concluded that the recognition criteria were met in 2025 and measured the credit at fair value based on observable market pricing in executed transfer agreements. On December 19, 2025, the Group received IRS approval allocating a total §48C credit of kUSD 111,990 (equivalent to kEUR 95,311). The project description for these credits is for the production of NdFeB permanent magnets for electric vehicle motors, with a qualified investment of kUSD 373,300 (equivalent to kEUR 317,702) and estimated permanent jobs of 300 people. At December 31, 2025, the carrying amount of qualifying CIP assets was reduced by the fair value of the credit of kUSD 102,231 (equivalent to kEUR 87,005) and the same amount was recognized in Transferable tax credit. The effect of the grant on profit or loss will be recognized over the useful life of the qualifying assets through reduced depreciation expense. The §48C credit is subject to ongoing compliance with applicable program requirements and may be subject to examination by the IRS, including potential review of Prevailing Wage & Apprenticeship (PWA) compliance and other eligibility conditions on an annual basis at the end of each reporting period. As of December 31, 2025, the Company evaluated its PWA compliance and identified an estimated obligation for cure payments of kUSD 943 (equivalent to kEUR 803). This obligation is recorded in trade and other liabilities on the statement of financial position and in administrative expense on the statement of profit or loss.

Subsequent to December 31, 2025, on March 26, 2026, the Company sold the §48C credits to third parties pursuant to executed transfer agreements. The gross cash proceeds from the transfers were kUSD 102,231 (in equivalent to kEUR 87,005), net kUSD 95,816 (in equivalent to kEUR 81,546) after kUSD 2,750 (in equivalent to kEUR 2,340) of structuring fees and kUSD 3,665 (in equivalent to kEUR 3,119) of insurance payments. At closing in 2026, the transaction costs were recorded in administrative expenses in the statement of profit or loss. This event was non-adjusting to 2025 and therefore, no expense was recognized in 2025. The closing conditions have not been met for either of these agreements in 2025.

The Group also received grants within Germany TopCo related to project-specific research grants and tax-based research grants. The Group received project-specific research grants totaling kEUR 1,487 in 2025 and kEUR 218 in 2024 and received tax-based research grants of kEUR 1,765 in 2025 and kEUR nil in 2024. These grants were recorded as a reduction of research and development expenses. There are no unfulfilled conditions and other contingencies related to government assistance that have been recognized.

Management continues to monitor ongoing announcements and developments in global trade policy and geopolitical conditions to determine their impact on the financial statements and related disclosures, including the implementation of new and modified U.S. import tariffs, uncertainty regarding the scope and potential refundability of certain tariffs following recent U.S. Supreme Court rulings, ongoing trade conflicts, primarily between the United States of America and the People's Republic of China, and ongoing geopolitical conflicts, including the war in Ukraine and instability in the Middle East which result in uncertainties for the European Union, and the associated slowdown of the global economy are not expected to have any material impact on the Group's earnings and liquidity position or its financial reporting. The further effects of the ongoing conflict in Iran are not yet precisely quantifiable; however, increased transport and energy costs are expected due to the continued closure of the Strait of Hormuz. While the potential effects are not currently precisely quantifiable, the Group does not anticipate any material impact on its earnings and liquidity position or its financial reporting.

Tax credit sale: Subsequent to December 31, 2025, the Group closed the sale/transfer of §48C credits to third parties pursuant to executed transfer agreements on March 26 2026. Refer to Note 32 for additional information.

Debt repayment: Due to the terms of the amended loan agreement, and in connection with the monetization of the §48C tax credit at level of e-VAC Magnetics LLC, Delaware, USA, the Group is obliged to use those funds to repay debt on the kEUR 165,000 loan. As of March 30, 2026, an amount of kEUR 14,384 has been paid to lenders.

Equity Contributions from the Group's Shareholders: During the period from January 1, 2026 through the date of the issuance of these financial statements, the Partners of the Group contributed an aggregate of EUR 48.7 million in additional equity contributions to the Group to support the Group's ongoing operations.

In June 2026, the Ara Funds, as indirect shareholders of the Group, provided letters of comfort extending through June 2027 under which funding is committed to provide sufficient financial means to fulfil its payment obligations and to maintain compliance with the financial covenants. These contributions and the letters of comfort were considered by management in its assessment of the Group's ability to continue as a going concern (refer to Note 2.3). The letter of comfort in favor of Ara VAC TopCo GmbH is limited to an aggregate maximum amount of kEUR 43,500. The letter of comfort in favor of e-VAC Magnetics, LLC, is to provide sufficient financial means to enable e-VAC Magnetics, LLC to fulfil its payment obligations as they fall due, without any monetary limitation.

Customer Dispute: Subsequent to December 31, 2025, e-VAC Magnetics LLC, a subsidiary of the Group, became involved in a dispute with a customer regarding a commercial supply agreement. As both parties are engaging in good faith discussions toward a commercial resolution, the ultimate resolution of this matter may have an impact on the Group's future revenues, liquidity, and operating plans. Given the early stage of the discussions, the outcome of the dispute, including whether the agreement will be terminated and the amount and timing of any compensation, remains uncertain and cannot currently be reliably estimated. For the purposes of its liquidity planning, management has considered scenarios that include a potential termination of the agreement; however, actual outcomes may differ materially from those assumptions.

Management has taken this matter into account in its going concern assessment, including through liquidity scenario planning incorporating reasonably possible downside cases (refer to Note 2.3).

The Group has evaluated subsequent events through June 19, 2026, the date the financial statements were authorized for issuance by Management.

/s/ Daniel Spengemann	/s/ Larisa Geppert

Wirtschaftsprüfer	Wirtschaftsprüferin

(German Public Auditor)	(German Public Auditor)

		2025		2024
	Note	kEUR		kEUR

Profit (loss) for the year		(87,854	)	(96,758	)
Other comprehensive income (loss)
Other comprehensive income (loss) that may be reclassified to profit or loss in subsequent periods (net of tax):
Exchange differences on translation of foreign operations	3 h)	(10,024	)	7,418
Net gain (loss) on cash flow hedges	24.1	(5,253	)	6,465
Net other comprehensive income (loss) that may be reclassified to profit or loss in subsequent periods (net of tax)		(15,277	)	13,883
Other comprehensive income that will not be reclassified to profit or loss in subsequent periods (net of tax):
Remeasurement gain (loss) on defined benefit plans	27	7,596		3,763
Net comprehensive income (loss) that will not be reclassified to profit or loss in subsequent periods (net of tax)		7,596		3,763
Other comprehensive (loss) income for the year, net of tax		(7,681	)	17,646
Total comprehensive (loss) income for the year, net of tax		(95,535	)	(79,112	)

Attributable to:
Equity holders of the parent	29	(86,923	)	(69,593	)
Non-controlling interests	29	(8,612	)	(9,519	)

		December 31, 2025		December 31, 2024		January 1, 2024
Assets	Note	kEUR		kEUR		kEUR
Current assets
Cash and cash equivalents	18	15,586		34,687		76,204
Restricted cash	18	2,951		12,195		440
Trade and other receivables	19, 24.1, 31	30,404		42,028		33,869
Inventories	20	96,535		97,680		152,099
Prepaid income tax		1,035		4,298		676
Transferable tax credit	32	87,005		-		-
Other financial assets	24.1	111		26		-
		233,627		190,914		263,288
Non-current assets
Restricted cash	18	-		2,588		-
Property, plant and equipment	21	430,965		365,974		222,858
Right-of-use assets	22	4,866		4,544		3,951
Intangible assets	23	330,292		358,254		386,202
Other financial assets	24.1	15,068		23,853		7,057
Deferred financing costs	24.2	1,008		1,408		-
Deferred tax assets	17	13,618		11,365		3,490
		795,817		767,986		623,558
Total Assets		1,029,444		958,900		886,846
Liabilities and Equity
Current liabilities
Interest bearing loans and borrowings	24.2	36,828		8,278		7,128
Trade and other payables	24.2, 25, 31	60,479		55,207		45,550
Short-term lease liabilities	22	2,205		2,023		1,904
Contract liabilities	8	21,560		26,034		16,368
Current income tax liabilities	17	594		1,332		1,070
Employee benefit obligations	27	14,515		17,011		16,810
Current other financial liabilities	24.2	-		76		249
Provisions	26	6,265		9,264		15,573
		142,446		119,225		104,652
Non-current liabilities
Interest bearing loans and borrowings	24.2	413,605		256,012		162,525
Employee benefit obligations	27	127,941		140,265		149,516
Long-term lease liabilities	22	2,817		2,738		2,291
Provisions	26	65		130		200
Uncertain tax position	17	12,978		9,541		-
Deferred tax liabilities	17	89,395		122,150		141,275
		646,801		530,836		455,807
Equity
Partners' capital	29	432,847		407,980		346,416
Accumulated losses	29	(193,733	)	(115,049	)	(28,442	)
Other comprehensive losses / income	29	(5,650	)	2,589		(14,425	)
Equity attributable to equity holders of the parent		233,464		295,520		303,549
Non-controlling interests	29	6,733		13,319		22,838
Total Equity		240,197		308,839		326,387
Total Liabilities and Equity		1,029,444		958,900		886,846

		Partners' capital	Accumulated losses		Actuarial gains/losses		Cash flow hedge reserve		Foreign currency translation reserve		Total equity attributable to partners of the parent		Non-control ling interests		Total equity
	Note	kEUR	kEUR		kEUR		kEUR		kEUR		kEUR		kEUR		kEUR
At January 1, 2025		407,980	(115,049	)	(6,748	)	6,465		2,872		295,520		13,319		308,839
(Loss) for the period		-	(78,684	)	-		-		-		(78,684	)	(9,170	)	(87,854	)
Other comprehensive (loss)	24.1, 28, 29	-	-		6,829		(5,253	)	(9,815	)	(8,239	)	558		(7,681	)
Total comprehensive (loss)			(78,684	)	6,829		(5,253	)	(9,815	)	(86,923	)	(8,612	)	(95,535	)
Capital contributions	29	24,867	-		-		-		-		24,867		2,026		26,893
At December 31, 2025		432,847	(193,733	)	81		1,212		(6,943	)	233,464		6,733		240,197

At January 1, 2024		346,416	(28,442	)	(10,131	)	-		(4,294	)	303,549		22,838		326,387
(Loss) for the period		-	(86,607	)	-		-		-		(86,607	)	(10,151	)	(96,758	)
Other comprehensive income/ (loss)	24.1, 28, 29	-	-		3,383		6,465		7,166		17,014		632		17,646
Total comprehensive income/ (loss)		-	(86,607	)	3,383		6,465		7,166		(69,593	)	(9,519	)	(79,112	)
Capital contributions	29	61,564	-		-		-		-		61,564		-		61,564
At December 31, 2024		407,980	(115,049	)	(6,748	)	6,465		2,872		295,520		13,319		308,839

		2025		2024
	Note	kEUR		kEUR

Loss after tax		(87,854	)	(96,758	)
Adjustments to reconcile profit to cash generated from operations
Depreciation and amortization expense	21, 22, 23	54,792		58,860
Income taxes	17	(33,566	)	(18,122	)
Finance income/expenses, net	15, 16	55,536		23,283
Gains/losses on sales and disposals of non-current assets	21, 22, 23	3,230		408
Change in current assets and liabilities
Inventories	20	1,145		54,419
Trade receivables	19	1,261		2,078
Trade payables	25	10,386		12,343
Current provisions	26	(2,999	)	(6,308	)
Other current receivables	19, 24.1	(28	)	(414	)
Other current liabilities	24.2, 25	(12,159	)	7,008
Long-term provisions	26	(5,905	)	(8,959	)
Income taxes paid / (received)	17	1,157		(4,575	)
Other non-cash items		18,888		(3,578	)
Net cash provided by operating activities		3,884		19,685

Investing activities
Purchases of property, plant, and equipment and intangibles	21, 23	(214,110	)	(199,146	)
Proceeds from government grants	21, 32	16,352		38,351
Interest received	15, 24.2	2,258		1,014
Change in restricted cash	18	11,833		(14,343	)
Net cash used in investing activities		(183,667	)	(174,124	)

Financing activities
Proceeds from equity contributions	29, 24.2	26,893		61,564
Interest paid, other	16	(938	)	(1,506	)
Proceeds from borrowings	24.2	176,198		92,515
Interest and financing fees paid	16, 24.2	(35,414	)	(39,456	)
Cash payments for the principal portion of the lease liability	22	(3,638	)	(2,262	)
Interest related to lease liabilities	22	(242	)	(238	)
Net cash provided by financing activities		162,859		110,617

Cash and cash equivalents at the beginning of the period	18	34,687		76,204
Effect of exchange rate changes on cash and cash equivalents		(2,177	)	2,305
Net increase (decrease) in cash and cash equivalents		(16,924	)	(43,822	)
Cash and cash equivalents at the end of the period	18	15,586		34,687

Note 1: General information	9
Note 2: Basis of preparation	9
2.1 Financial reporting framework	9
2.2 Basis of consolidation	9
2.3 The Group's ability to continue as a going concern	10
Note 3: Summary of significant accounting policies	11
Note 4: Significant accounting judgments, estimates and assumptions	26
Note 5: Capital management	30
Note 6: Group information	30
Note 7: Interest in a joint venture	31
Note 8: Revenue	33
Note 9: Cost of Sales	34
Note 10: Distribution expenses	34
Note 11: Administrative expenses	35
Note 12: Research and Development expenses	35
Note 13: Other income	35
Note 14: Other expenses	36
Note 15: Finance income	36
Note 16: Finance expenses	36
Note 17: Income Tax	36
Note 18: Cash and cash equivalents and restricted cash	40
Note 19: Trade and other receivables	40
Note 20: Inventories	42
Note 21: Property, plant and equipment	43
Note 22: Right-of-use assets and lease liabilities	44
Note 23: Intangible assets and impairment	46
Note 24: Financial assets and liabilities	49
24.1: Financial assets	49
24.2: Financial liabilities	54
24.3: Financial instruments risk management objectives and policies	56
24.4: Changes in liabilities arising from financing activities	60
Note 25: Trade and other payables	61
Note 26: Provisions	61
Note 27: Employee benefit obligations	63

Note 28: Commitments and contingencies	66
Note 29: Equity	67
Note 30: Share based payments	68
Note 31: Related party disclosures	70
Note 32: Government grants	71
Note 33: Subsequent events	73

	Useful Life Range
Buildings	10 - 50 years
Machinery and equipment	3 - 20 years

	Useful lives
Customer relationships and contract intangibles	12-15 years
Patents, trademarks and other rights	4-17 years
Development costs	2-20 years

Name	Principal Activities	Establishment and Operating Location	Currency	% equity interest 2025	% equity interest 2024
Ara VAC TopCo GmbH	Holding	Germany	EUR	89.9	89.9
Subsidiaries of Ara VAC TopCo GmbH:
Ara VAC MidCo GmbH	Holding	Germany	EUR	100	100
Ara VAC BidCo GmbH	Holding	Germany	EUR	100	100
VAC Germany Holding GmbH	Holding	Germany	EUR	100	100
OMG France S.a.r.l.	Holding	France	EUR	100	100
VAC Magnetic India Private Limited	Distribution	India	INR	100	100
OMG Finland Oy	Holding	Finland	EUR	100	100
Neorem Magnets Oy	Manufacturing	Finland	EUR	100	100

OMG Germany Subsidiary Holding GmbH	Holding	Germany	EUR	100	100
VAC Beteiligungs-GmbH	Holding	Germany	EUR	100	100
Vacuumschmelze Singapore Pte Ltd	Distribution	Singapore	SGD	100	100
VAC Magnetic Korea K.K.	Distribution	Korea	KRW	100	100
VAC Magnetic Japan	Distribution	Japan	JPY	100	100
VAC Magnetic France S.a.r.l.	Distribution	France	EUR	100	100
Vacuumschmelze China Magnetics (Shenyang) Co. Ltd	Manufacturing	China	CNY	100	100
VAC Netherlands B.V.	Holding	Netherlands	EUR	100	100
VAC Germany GmbH	Holding	Germany	EUR	100	100
VAC Finanzierung GmbH	Holding	Germany	EUR	100	100
VAC Participation GmbH	Holding	Germany	EUR	100	100
Vacuumschmelze GmbH & Co. KG	Manufacturing	Germany	EUR	100	100
VAC International Holding GmbH	Holding	Germany	EUR	100	100
Vacuumschmelze (Malaysia) Sdn. Bhd.	Manufacturing	Malaysia	MYR	100	100
Vacuumschmelze s.r.o.	Manufacturing	Slovakia	EUR	100	100
VAC Grundstücksverwaltung KG	Holding	Germany	EUR	100	100
VAC Magnetics UK Limited	Manufacturing	Great Britain	GBP	100	100
Ara VAC TopCo US LLC	Holding	US	USD	100	100
Subsidiaries of Ara VAC TopCo US:
Ara VAC BidCo US LLC	Holding	US	USD	100	100
VAC Magnetics LLC	Distribution	US	USD	100	100
New VAC US LLC	Holding	US	USD	100	100
e-VAC Magnetics Holdings LLC	Holding	US	USD	100	100
e-VAC Magnetics LLC	Manufacturing	US	USD	100	100
Joint Ventures
SANVAC (Beijing) Magnetics Co. Ltd. (CN)	Joint Venture	China	CNY	49	49

Business divisions	Rapid Solidification	Crystalline	Permanent Magnets	Total
	kEUR	kEUR	kEUR	kEUR
For the year ended December 31, 2025
Germany	19,244	20,485	22,256	61,985
Europe excluding Germany	74,944	32,801	33,854	141,599
North America	17,982	18,673	17,055	53,710
Asia Pacific	43,401	17,298	5,058	65,757
Rest of World	323	1,631	47	2,001
Total revenue from contracts with customers	155,894	90,888	78,270	325,052

For the year ended December 31, 2024
Germany	27,695	22,702	24,664	75,061
Europe excluding Germany	80,998	40,452	30,384	151,834
North America	11,664	20,298	17,993	49,955
Asia Pacific	48,746	20,513	6,628	75,887
Rest of World	460	253	89	802
Total revenue from contracts with customers	169,563	104,218	79,758	353,539

Consolidated profit or loss	2025		2024
	kEUR		kEUR
Current income tax:
Current income tax charge	(5,979	)	(10,292	)
Current tax of prior periods	46		(375	)
Deferred tax:
Relating to origination and reversal of temporary differences	39,499		28,789
Income tax income / (expense) reported in the statement of profit or loss	33,566		18,122

Consolidated other comprehensive income / (loss)	2025		2024
	kEUR		kEUR
Deferred tax related to items recognized in OCI during the year:
Net (gain)/loss on actuarial gains and losses	(3,811	)	(1,692	)
Deferred tax (charged) / credited to OCI	(3,811	)	(1,692	)

	Consolidated statement of financial position				Consolidated statement
	Deferred tax asset		Deferred tax liability		of profit or loss
	2025		2025		2025
	kEUR		kEUR		kEUR
For the year ending December 31
Intangible assets	-		(90,938	)	17,434
Property, plant & equipment	25,183		(22,921	)	16,087
Financial assets	-		(3,545	)	3,657
Inventories	832		(1,783	)	977
Employee benefit obligation	8,465		-		(1,407	)
Other provisions and liabilities	1,108		-		(2,911	)
Derivatives and external financing	6,714		-		3,366
Tax loss/interest carry forwards	12,143		(433	)	6,517
Valuation allowance	-		(10,692	)	(4,188	)
Other	98		(8	)	(33	)
Gross deferred tax asset / (liability)	54,543		(130,320	)	39,499
Offsetting	(40,925	)	40,925
Net deferred tax assets / (liabilities)	13,618		(89,395	)

	2025	2024
	kEUR	kEUR
Cost of Sales
Salary and wages	99,715	102,950
Pension expenses	305	187
Social security expenses	24,636	24,146
Direct Material and Services	102,387	105,672
Royalties	1,715	3,656
Utilities, Consumables and Maintenance	36,645	69,577
Freight	19,597	13,808
Training and recruitment expenses	603	593
Professional Fees	6,713	16,820
Travel expenses	2,035	1,520
IT Service and Communications	6,855	4,206
Depreciation and Amortization	45,883	49,622
	347,089	392,757

	2025	2024
	kEUR	kEUR
Distribution expenses
Salary and wages	10,927	11,349
Pension expenses	94	213
Social security expenses	2,322	1,656
Professional Fees	1,094	822
Travel expenses	859	657
IT Service and Communications	832	647
Sales commissions and advertising expenses	1,239	1,355
Depreciation and Amortization	422	431
	17,789	17,130

	2025	2024
	kEUR	kEUR
Administrative expenses
Salary and wages	6,867	6,221
Pension expenses	42	78
Social security expenses	1,358	1,691
Training and recruitment expenses	466	602
Professional Fees	4,894	5,978
Travel expenses	367	400
IT Service and Communications	622	514
Depreciation and Amortization	5,588	5,952
Insurance expenses	2,656	1,437
Other administrative expenses	358	1,297
	23,218	24,170

	December 31, 2025	December 31, 2024	January 1, 2024
	kEUR	kEUR	kEUR

Raw materials	36,718	32,803	39,782
Work in progress	50,302	53,827	86,572
Finished goods	9,515	11,050	25,745
Total inventories	96,535	97,680	152,099

Reconciliation of deferred tax assets and liabilities, net	2025		2024
	kEUR		kEUR
At January 1	(110,785	)	(137,785	)
Tax income / (expense) during the period recognized in profit or loss	39,499		28,789
Tax income / (expense) during the period recognized in OCI	(3,811	)	(1,692	)
Currency translation related to deferred tax assets, net	(680	)	(97	)
At December 31	(75,777	)	(110,785	)

	German Factoring Program
	2025	2024	2023
	kEUR	kEUR	kEUR

End of contract term	October 31, 2027	March 7, 2025	March 7, 2025
Maximum contract volume	55,000	60,000	60,000
Volume of receivables sold as of the reporting date	20,250	25,085	30,725

CONTINUING INVOLVEMENT
Carrying amount of the continuing involvement asset	271	360	-
Carrying amount of the associated liability	284	360	-

	US Factoring Program
	2025	2024	2023
	kEUR	kEUR	kEUR

Volume of receivables sold as of the reporting date	3,776	2,747	2,959

	Freehold land and buildings		Machinery and equipment		Construction in progress		Total
	kEUR		kEUR		kEUR		kEUR

At January 1, 2025
Cost	98,640		101,337		184,822		384,799
Accumulated depreciation	(5,274	)	(13,551	)	-		(18,825	)
Net book amount at January 1, 2025	93,366		87,786		184,822		365,974

For the Financial Year from January 1, 2025 to December 31, 2025
Opening net book amount	93,366		87,786		184,822		365,974
Exchange differences	(143	)	(643	)	(27,796	)	(28,582	)
Additions	4,010		1,457		203,411		208,878
Capitalized interest	-		-		11,246		11,246
Disposals	(2	)	(1,820	)	(1,424	)	(3,246	)
Transfer	81		7,490		(7,571	)	-
Depreciation charge for the year	(3,979	)	(17,836	)	-		(21,815	)
Depreciation charge due to disposal	-		1,867		-		1,867
Asset-related government grants/tax credit deducted from cost (Note 32)	-		-		(103,357	)	(103,357	)
Net book amount at December 31, 2025	93,333		78,301		259,331		430,965

At December 31, 2025
Cost	102,481		106,617		259,331		468,429
Accumulated depreciation	(9,148	)	(28,316	)	-		(37,464	)
Net book amount at December 31, 2025	93,333		78,301		259,331		430,965

	Buildings		Other		Total
	kEUR		kEUR		kEUR

At January 1, 2025
Cost	3,305		4,069		7,374
Accumulated depreciation	(1,145	)	(1,685	)	(2,830	)
Net book amount at January 1, 2025	2,160		2,384		4,544

For the Financial Year from January 1, 2025 to December 31, 2025
Opening net book amount	2,160		2,384		4,544
Exchange differences	(133	)	(9	)	(142	)
Additions	1,999		1,899		3,898
Disposals	(1,233	)	(86	)	(1,319	)
Depreciation charge for the year	(1,696	)	(1,318	)	(3,014	)
Depreciation charge derecognized due to disposal	813		86		899
Net book amount at December 31, 2025	1,910		2,956		4,866

At December 31, 2025
Cost	3,097		5,070		8,167
Accumulated depreciation	(1,187	)	(2,114	)	(3,301	)
Net book amount at December 31, 2025	1,910		2,956		4,866

	Development costs		Patents, trademarks and other rights		R&D projects under development		Total
	kEUR		kEUR		kEUR		kEUR

At January 1, 2025
Cost	40,106		344,432		19,748		404,286
Accumulated amortization	(9,333	)	(36,699	)	-		(46,032	)
Net book amount at January 1, 2025	30,773		307,733		19,748		358,254

For the Financial Year from January 1, 2025 to December 31, 2025
Opening net book amount	30,773		307,733		19,748		358,254
Additions	142		98		4,993		5,233
Disposals	-		-		-		-
Transfer	7,924		-		(7,924	)	-
Amortization charge for the year	(6,577	)	(23,387	)	-		(29,964	)
Derecognition due to discontinued projects	-		-		(1,432	)	(1,432	)
Exchange differences	-		(1,799	)	-		(1,799	)
Net book amount at December 31, 2025	32,262		282,645		15,385		330,292

At December 31, 2025
Cost	48,172		342,207		15,385		405,764
Accumulated amortization	(15,910	)	(59,562	)	-		(75,472	)
Net book amount at December 31, 2025	32,262		282,645		15,385		330,292

				December 31, 2025		December 31, 2024		January 1, 2024
	Note	Fair Value Hierarchy	Category	Carrying Amount	Fair value	Carrying Amount	Fair value	Carrying Amount	Fair value
				kEUR	kEUR	kEUR	kEUR	kEUR	kEUR
Current
Trade and other receivables
Trade receivables third-party	19	n/a	FAAC	16,786	-	17,929	-	20,356	-
Trade receivables third-party - Continuing involvement asset (factoring)	19	n/a	n/a	271	-	360	-	-	-
Trade and other receivables from related parties	19, 31	n/a	FAAC	9	-	39	-	50	-
Factoring holdback receivables	19	n/a	FAAC	4,988	-	5,107	-	4,986	-
Cash and cash equivalents	18	n/a	FAAC	15,586	-	34,687	-	76,204	-
Restricted cash	18	n/a	FAAC	2,951	-	12,195	-	440	-
Other financial assets
Foreign exchange forward contracts		Level 2	FVTPL	18	18	26	26	-	-
Commodity hedges		Level 2	FVTPL	93	93	-	-	-	-

Non-current
Restricted cash	18	n/a	FAAC	-	-	2,588	-	-	-
Other financial assets
Embedded derivatives		Level 3	FVTPL	13,856	13,856	17,388	17,388	7,057	7,057
Interest rate swaps		Level 2	n/a	1,212	1,212	6,465	6,465	-	-

Total at amortized cost (FAAC)				40,320		72,545		102,036
Total at fair value through profit or loss (FVTPL)				13,967		17,414		7,057
Total other assets (non-FAAC/FVTPL)				1,483		6,825		-
Total financial assets				55,770		96,784		109,093

Significant unobservable inputs	Base	Sensitivity of changes in the input to fair value
Volatility	2025: 55% 2024: 55%	10% increase would result in a decrease in fair value by kEUR (404) (increase in 2024: kEUR 232) 10% decrease would result in an increase in fair value by kEUR 215 (decrease in 2024: kEUR (149))

Probability of exit events	2025: 70% 2024: 20%	10% increase would result in a decrease in fair value by kEUR (193) (2024: kEUR (45)) 10% decrease would result in an increase in fair value by kEUR 178 (2024: kEUR 48)

Credit Spread	2025: 4.63% 2024: 2.58%	1% increase would result in a decrease in fair value by kEUR (3,452) (2024: kEUR (3,935)) 1% decrease would result in an increase in fair value by kEUR 4,696 (2024: kEUR 4,974)

	Change in USD rate	Effect on profit
		before tax
	%	kEUR
2025 (EUR movement)	+5	(1,901)
2025 (EUR movement)	-5	2,069

	< 1 year	1 to 5 years	> 5 years	Total
	kEUR	kEUR	kEUR	kEUR
December 31, 2025
kEUR 165,000 term loan (including embedded derivatives)	33,679	197,004	-	230,683
kUSD 300,000 term loan	23,052	103,794	213,031	339,877
kUSD 18,000 revolving credit	8,652	-	-	8,652
kEUR 4,200 bank loan	380	734	-	1,114
kEUR 3,950 bank loan	385	2,022	2,290	4,697
kEUR 2,200 bank overdraft	2,207	-	-	2,207
Commodity Derivatives	-	-	-	-
Lease liabilities	2,716	2,978	65	5,759
Trade and other financial liabilities due to third parties	47,879	-	-	47,879
	118,950	306,532	215,386	640,868

	Interest rate increase				Interest rate decrease
	+ 100 bps				- 100 bps
	December 31, 2025		December 31, 2024		December 31, 2025		December 31, 2024
	kEUR		kEUR		kEUR		kEUR
Effect on profit before tax	(2,596	)	(2,106	)	1,020		(937	)
Effect on equity before tax	7,770		9,141		(6,484	)	(7,410	)

	January 1, 2025	Cash flows		Non-cash fx revaluation		Non-cash other	December 31, 2025
	kEUR	kEUR		kEUR		kEUR	kEUR
Interest bearing loans and borrowings (including accrued interest)	264,290	142,382		(3,421	)	47,181	450,433
Lease liabilities	4,761	(3,880	)	-		4,141	5,022
Total liabilities from financing activities	269,051	138,502		(3,421	)	51,322	455,455

			Employee
	Complaints/		Related		Environmental
	Claims		Provisions		Liability		Other		Total
	kEUR		kEUR		kEUR		kEUR		kEUR

January 1, 2025	605		1,780		204		6,805		9,394
Addition	2,005		1,918		-		767		4,690
Utilization	(337	)	(1,462	)	(40	)	(5,569	)	(7,408	)
Reversal	-		(311	)	(35	)	-		(346	)
December 31, 2025	2,273		1,925		129		2,003		6,330

January 1, 2024	927		1,571		300		12,975		15,773
Addition	652		1,891		5		500		3,048
Utilization	(949	)	(1,230	)	(94	)	(6,254	)	(8,527	)
Reversal	(25	)	(452	)	(7	)	(416	)	(900	)
December 31, 2024	605		1,780		204		6,805		9,394

	DBO 2025		DBO 2024
	kEUR		kEUR
Balance as at January 1	147,135		153,484
Current service cost	1,949		2,782
Interest expense	4,737		4,690
Benefits paid	(7,325	)	(8,366	)
Remeasurements	(11,407	)	(5,455	)
- arising from changes in financial assumptions	(8,584	)	(3,737	)
- arising from changes in demographic assumptions	-		(6,206	)
- arising from experience adjustments	(2,823	)	4,488
Contributions by employer	-		-
Contributions by employees	-		-
Balance as at December 31	135,089		147,135

Assumptions	December 31, 2025	December 31, 2024	January 1, 2024

Discount rate
Pension plan	3.96 %	3.36 %	3.16 %
Old age part time	3.00 %	2.75 %	3.25 %
Early retirement	3.00 %	2.75 %	3.25 %
Jubilee	3.75 %	3.00 %	3.75 %

Future salary increases
Pension plan	2.50 %	2.50 %	2.50 %
Old age part time	2.50 %	2.50 %	2.50 %
Early retirement	2.50 %	2.50 %	2.50 %
Jubilee	2.50 %	2.50 %	2.50 %

Pension increases for in-payment benefits
"Kapitalkontenplan"	2.00 % / 1.00 %	2.00 % / 1.00 %	2.00 % / 1.00 %
Mortality	Heubeck 2018G	Heubeck 2018G	Heubeck 2018G

Parameter	Original Value	Sensitivity Analysis	Effect on DBO
			kEUR

Discount rate	3.96%	0.50%	(6,120	)
Discount rate	3.96%	-0.50%	6,634

Rate of salary increase	2.50 %	0.50%	91
Rate of salary increase	2.50 %	-0.50%	(86	)

Pension increases for payment benefits	2.00 % / 1.00 %	0.50%	2,214
Pension increases for payment benefits	2.00 % / 1.00 %	-0.50%	(2,073	)

Mortality	Heubeck 2018G	1 year life expectancy increase	3,583
Mortality	Heubeck 2018G	1 year life expectancy decrease	(3,785	)

	Grant Date assumptions
	2023	2024	2025
Risk-free interest rate	2.92%	2.05%	2.14%
Volatility	21%	26%	20%
Preference interests	9.00%	9.00%	9.00%
Expected time to exit	5 years	4 years	6 months to 1 year

	Cumulative Capital	Trade and other	Trade and other
	contributions	receivables	payables
	kEUR	kEUR	kEUR
For the year ended December 31, 2025:
Ara VAC Management	432,847	9	-
Ara Advisor PSG, LLC	-	-	(521	)
	432,847	9	(521	)

For the year ended December 31, 2024:
Ara VAC Management	407,980	39	-
	407,980	39	-

For the year ended January 1, 2024:
Ara VAC Management	346,416	50	-
	346,416	50	-