Nabaltec : Annual Report 2023 *

Cash flow from operating activities

Cash flow from investing activities

Assets, equity and liabilities

Total assets

Equity

Non-current assets

Current assets

Employees 1 (number of persons)

1 on the reporting date 31 December, including trainees

CONTENTS

TO OUR SHAREHOLDERS

04 Foreword of the CEO

1. Report of the Supervisory Board

1. Nabaltec share

CONSOLIDATED MANAGEMENT REPORT

1. Description of the Business Enterprise

1. Financial report

1. Report on Outlook, Opportunities and Risks

CONSOLIDATED FINANCIAL

STATEMENTS (IFRS)

1. Statement of comprehensive income

1. Balance sheet

1. Cash flow statement

1. Statement of changes in shareholders' equity

1. Statement of fixed assets

1. Notes

1. Independent auditor's report

ANNUAL FINANCIAL STATEMENTS NABALTEC AG (GERMAN COMMERCIAL CODE, SHORT VERSION)

110 Balance sheet

1. Income statement
2. Appropriation of distributable profit

FURTHER INFORMATION

1. Financial calendar 2024 and contact
2. Imprint

EMPLOYEES

Sustainable employee development is ­important to Nabaltec AG in order to be prepared for future personnel challenges and in order to position itself as an attractive employer. As a family-friendly company which has been recognized multiple times, Nabaltec is committed to promoting young talent and values work/life balance.

INNOVATIONS

Nabaltec's success is based largely on the company's high level of innovation. For this, Nabaltec is regularly honored with national and international prizes and awards. In 2023, for example, the company once again and already several times in a row, received the Best ­Managed Companies Award for excellently managed medium-sized companies. In addition, Nabaltec was also among "Bayerns Best 50" (Bavaria's best 50), the particularly fast-growingmedium-sized Bavarian companies, in 2023.

FUNCTIONAL FILLERS

EUR 142. 3 MILLION

REVENUES

EUR 26 .6 MILLION

EBITDA

EUR 16 .9 MILLION

EBIT

In the product segment "Functional Fillers," Nabaltec produces highly specialized ­aluminum hydroxide-based products for a wide variety of applications, and is among the leading manufacturers in the world in this area. In addition to current market trends, the

development­of eco-friendly flame retardant fillers and functional additives is driven above all by the specific requirements of its ­customers - an example is the relatively young market segment battery for applications in electromobility. Nabaltec assesses itself as one of the leading manufacturers of boehmite for coating materials for separator films and viscosity optimized aluminum hydroxides for composite materials and gap fillers.

SPECIALTY ALUMINA

EUR 57. 8 MILLION

REVENUES

EUR 4.4 MILLION

EBITDA

EUR 1.4 MILLION

EBIT

In the product segment "Specialty Alumina," Nabaltec manufactures innovative materials for a wide variety of industries and applications based on aluminum oxide. The company

is constantly­ investing in optimizing its

­production facilities, in innovative technologies and in improving production processes in order to enable the company to consistently supply tailor-made qualities which meet customers' needs.

Nabaltec achieved in 2023 the second-best annual revenues in the company's history. However, the original

revenue forecast for the year could not be met

Nabaltec considers the fundamental drivers in the target markets to be intact

The further outlook for 2024 and 2025 is cautious in the chemical industry

economy, industry trends and weak demand in some target markets. We were therefore unable to meet our expectations, which were entirely justified at the beginning of the year, and had to adjust our forecast downwards in the middle of the year. At EUR 200.1 million, we were able to generate the second-best annual revenues in Nabaltec AG's history, but did not meet the revised revenue forecast for the full year of 2023. On the other hand, we exceeded the forecast for the EBIT margin. With an operating profit (EBIT) of EUR 18.3 million, the EBIT margin was 9.1% (in relation to total performance).

As Nabaltec AG, we are well positioned for many applications and target markets thanks to our very broad product portfolio. Together with our excellent reputation on the mar- ket, we are very resilient and profitable even in a tough environment. We believe that the fundamental drivers in our markets are intact.

The global economy certainly paints a somewhat different picture at the moment. At 3.1%, global economic growth in 2023 was well below the long-term average. Even though it only accounts for a quarter of our revenues, our home market of Germany brought up the rear among the major industrialized nations with a decline of 0.3%. In Germany, revenues in the chemical industry fell by 12%, according to the industry association VCI. Some target sectors also suffered from difficult development, at least temporarily: The steel industry, especially in Europe, finds itself in a negative market environment. The construction industry is suffering from weak demand, not least due to interest rates. E-mobility is experiencing a dip in growth. In this environment, the results we achieved in 2023 can certainly be seen as a success.

The key question is what will happen in 2024 and 2025. The industry association remains skeptical about the chemical industry as a whole and expects a further decline, even if only in the amount of 3%. The economic outlook for Germany is also unlikely to improve significantly. As recently as February 2024, the OECD halved its forecast for Germany to growth of 0.3%. The global economy will continue to grow in 2024, but probably also below the long-term average. With growth of 4.7% forecasted by the IMF, China cannot fulfill its intended role as the locomotive of the global economy. With these forecasts, the upcoming 2024 Financial Year will once again be challenging. However, looking ahead

to 2025 and beyond, we continue to see great growth potential in our target markets. Not only is the high degree of quality consciousness among our customers important, but so are the continuing unbroken trends towards use of sustainable materials and the constantly growing efforts to use environmentally friendly products at all stages of the value chain and in end products. Constantly increasing safety requirements in the various application areas are driving demand for Nabaltec products. We therefore remain optimistic for the coming years and are focusing our company accordingly on the future fields that are opening up for us.

Nabaltec classifies the growth potential in its target markets as high from 2025 onwards

Despite the difficult market environment, we currently expect slight revenue growth compared to the previous year and an EBIT margin in the range of 7% to 9% in Financial Year 2024. We see positive impetus in volume growth across a broad product range. Above all, we expect growth in the United States due to the current improvement in economic­ conditions. However, we are also seeing a slight increase in demand for new applications such as thermal management and in the area of flame retardants in Europe due to the increased need for cables in the expansion of renewable energies. The "Specialty­ Alumina" product segment has bottomed out, while the German refractories industry is somewhat more confident. The German Refractories Industry Association (DFFI) has announced ­that it expects slight revenue growth of 3% in 2024.

If we look at our boehmite, which is primarily used in the field of e-mobility, we had to accept stagnation last year from the previous year, with a revenue share of around 9%. The centers for cell and separator film production are located in Asia. Due to the strong competition in boehmite, we were unable to participate in the growth here. With regard to the massive expansion of cell production, there is still a lack of impetus from the EU and the US, and the associated increase in the production of coated separator films has not yet materialized. In the coming years, we are confident that Nabaltec will use its expertise to become a leading supplier of coating materials for separators, as well as for the still very new field of cathode edge coating. This encourages us to double the annual capacity for boehmite to 20,000 tons when investing in the Schwandorf site.

For 2024, Nabaltec expects slight year- on-year revenue growth and an EBIT margin in the range of 7% to 9%

06

With two production sites in the USA, Nabaltec is very well positioned internationally

F o r e w o r d o f t h e C E O

The same applies to our activities in the field of gap fillers that support thermal

­management in lithium-ion batteries. Through intensive research and development, we­ sensitize customers and markets to the advantages of our solutions. Similar to boehmite, we see ourselves in an excellent position on the global market to offer an environmentally friendly and qualitatively leading solution that meets all technological challenges.

Another example of Nabaltec's strong future positioning is our regional focus. While many other medium-sized companies in Germany are currently considering whether they should expand into the US, we are already well represented there with two ­production sites. Favorable energy prices are one of several arguments for our long-term commitment in the US, as is our proximity to customers in a fast-growing market. As far as the energy supply in Schwandorf is concerned, we are also in a very sound position here thanks to our connection to the waste-to-energy plant. Thanks to comprehensive investments in the past, our sites and production facilities are state of the art. And we will continue to invest: not only in expanding our capacity for boehmites and viscosity optimized hydrates, but also in our calcination units in the "Specialty Alumina" product segment. This will strengthen our position as a reliable supplier of high-quality products in the long term.

My special thanks go to our entire team of employees, who once again proved that we can operate successfully worldwide even under these very difficult conditions. I am therefore very much looking forward to the future tasks and opportunities. I would like to thank our customers, business partners and shareholders for their trust. We look forward to continuing our journey together.

Schwandorf, March 2024

Yours,

CEO

REPORT

of the Supervisory Board

L ad ies and G entlemen,

Dear S h are hold ers,

In Financial Year 2023, Nabaltec AG was increasingly exposed to the noticeably weaker industrial momentum, which unfortunately did not spare the company's target markets. The overall situation in 2023, which was characterized by high energy costs, inflation, and concerns about recession, led to very volatile order behavior on the customer side, which cannot be predicted over the long term. In terms of revenues, the forecast for the year as a whole was therefore missed slightly. At the same time, however, the forecast for the EBIT margin was exceeded.

The Supervisory Board will continue to monitor Nabaltec's business performance closely, especially in light of current market and economic developments. Overall, the company's situation is currently very stable despite the downturn in the markets.

COLLABORATION BETWEEN THE SUPERVISORY AND MANAGEMENT BOARDS

The Supervisory Board duly performed its assigned tasks in Financial Year 2023 in

­accordance with the law, the Articles of Association and the Rules of Procedure and was routinely informed by the Management Board in detail as to the performance and position of the company. The Supervisory Board advised the Management Board in accordance with the underlying information and exercised utmost care in monitoring and supervising the Management Board. The Supervisory Board was involved at an early stage in all decisions of fundamental importance for the company and was kept directly and fully informed by the Management Board.

Major events, as well as questions relating to strategy, planning, business development, the risk position, risk management, compliance and sustainability were considered by the Supervisory Board both internally and in conjunction with the Management Board. The Supervisory Board voted on the reports and draft resolutions submitted by the ­Management Board after careful deliberation and review. All transactions requiring approval in Financial Year 2023 were decided positively.

In the Supervisory Board's estimation, all three of its current members should be considered independent. However, the Supervisory Board reserves the right to approve consulting and employment agreements between individual members of the body and the company if the Management Board and Supervisory Board concur that the conclusion of such an agreement is in the company's interest in that particular case.

Nabaltec was exposed to the noticeably weaker industry momentum in 2023; the revenue forecast for the year as a whole was therefore missed slightly

All transactions requiring approval in Financial Year 2023 were decided positively

The Supervisory Board held four meetings in 2023 in which all members were present

The Supervisory Board once again opted not to form committees in the past financial year. With three members, the Supervisory Board is of suitable size for all matters to be considered and decided by the full Supervisory Board. No conflicts of interest for individual Supervisory Board members arose in the course of deliberations or voting by the ­Supervisory Board, or in the Board's exercise of its supervisory mandate in the 2023 reporting year. The Board again refrained from forming an audit committee. These tasks are also performed by the full Board.

The Supervisory Board once again performed a self-assessment of its activities in the past year (efficiency check) and has reached a positive conclusion. The focuses of this self-assessment were above all on procedures and the timely and adequate provision of information.

CHANGES TO THE COMPOSITION OF THE MANAGEMENT BOARD AND SUPERVISORY BOARD

There were no changes to the composition of the Management Board and Supervisory Board in the Financial Year 2023.

MEETINGS OF THE SUPERVISORY BOARD AND FOCUS OF DELIBERATIONS

Four regular ordinary meetings of the Supervisory Board were held in the reporting period: on 20 April, on 28 June following the Annual General Meeting, on 28 September and on 12 December. All meetings in 2023 were held in person, with all members of the Supervisory Board present. No additional meetings took place in 2024 prior to the

Supervisory­Board meeting on 17 April 2024 (held as an in-person meeting), in which the Board votes on adoption of the financial statements. The members of the Supervisory Board also deliberated in writing and by telephone. Outside of Supervisory Board ­meetings, the Supervisory Board did not pass any resolutions in 2023.

The following issues were the subject of particularly intensive consideration in Financial Year 2023:

• the 2022 annual financial statements and consolidated financial statements including the proposal for the appropriation of distributable profit
• planning for 2024 and mid-term planning through 2026
• investment program 2024 and financial planning for the period from 2024 through 2026
• 2024 sales plan for the Nabaltec Group including the sales structure in North America
• measures in connection with the current macroeconomic situation, particularly the raw materials and energy price situations in Germany