Viscom : Sustainability Report 2023

Reporting information

General information

This section of the report relates to the 2023 financial year and, unless stated otherwise, to Viscom AG, the largest company of the Viscom Group in terms of revenue and number of employees. Additionally, Viscom's products are developed and manufactured exclusively at the Hanover site, which is Viscom AG's home base. When reading this non-financial statement, it is important to note in particular that the previous year's figures were not part of the audit and only the figures for the 2023 financial year were audited by the auditor. The previous year's figures were calculated using the same system as for the 2023 figures.

Use of a framework

The Company made a conscious decision not to use a single framework (e.g. Global Reporting Initiative (GRI) or German Sustainability Code) because this is not considered necessary given the fact that the definitions of materiality deviate from the definition pursuant to the German Commercial Code (HGB). These frameworks did, however, give us a guideline when preparing the report.

Presentation of business model and risks

Please refer to the detailed information in the 2023 Group Management Report section entitled "Basic information on the Group" for a description of the Viscom Group's business model. Viscom's materiality analysis did not identify any risks pursuant to section 289c(3) HGB relating to non-financial aspects.

Sustainability management

Responsibility

The Viscom Executive Board has overall responsibility for sustainability. Issues relating to sustainability that are not compliance or HR matters are the responsibility of the designated Integrated Management and Sustainability Officer, who reports

directly to the Executive Board. Responsibility for compliance matters lies with the Company's Compliance Officer, who also reports directly to the Executive Board. HR matters are assigned directly to the CFO responsible.

Although Viscom does not just fulfil its responsibility within the Group alone. Viscom's products help customers to make their production processes more efficient and sustainable as well. Viscom's state-of-the-art inspection systems are used wherever the inspection of electronic assemblies and mobile devices is essential. This makes Viscom's high-precision inspection solutions an important component of quality control and process optimisation in industrial electronics production. Its high-end products identify nonconformance in customers' production as early as possible in order to minimise rejects and the number of faulty end products. This prevents electronic waste, protects resources and lowers energy consumption on its customers' production lines. Viscom's products are also designed for minimum space requirements in order to reduce packaging and weight during transportation. The Company takes care to preferably use environmentally friendly materials and environmentally compatible processing when developing and producing its inspection systems. It attaches particular importance to high levels of energy efficiency, which it ensures through the use of efficient control and lighting technology as well as high-performance computers.

The topic of sustainability is playing an increasingly pivotal role not just for Viscom and its customers, but also for its other stakeholders - especially its suppliers, employees, shareholders, financial institutions and the general public. Viscom first decided to publish a dedicated report on environmental, labour and social aspects, the diversity concept, and the ways in which it acts in accordance with internal policies and the law in the 2022 annual report, and so this report contains the relevant information for the 2023 financial year. The report also includes the consolidated non-financial report of Viscom AG pursuant to section 315b(3) HGB. Additionally, the report satisfies the

requirements of Regulation (EU) 2020/852 of 18 June 2020 on the establishment of a framework to facilitate sustainable investment, and amending Regulation (EU) 2019/2088 (hereinafter EU Taxonomy Regulation).

Viscom has been a member of the Blue Competence sustainability initiative of the German Mechanical Engineering Industry Association (VDMA) since 2014. Blue Competence partners undertake to uphold the twelve sustainability principles for mechanical and plant engineering as a means of expressing their commitment to sustainable activity in strategic, operational, cultural and communication contexts. Resource efficiency and cost efficiency have always been two sides of the same coin when it comes to mechanical engineering. By bringing together the participating companies, Blue Competence aims to demonstrate that acting sustainably is not only good but beneficial.

With all Viscom stakeholders increasingly focusing on sustainability, following extensive discussion in 2021 the Supervisory Board decided to expand the former remuneration system to include sustainability criteria. In addition to financial indicators, the performance criteria for the determination of variable remuneration for all Executive Board contracts will include sustainability criteria such as employee turnover and energy consumption. This decision was made by the Supervisory Board to place an even greater emphasis on sustainability. Further information can be found in the remuneration report for the 2023 financial year in accordance with section 162 of the German Stock Corporation Act (AktG), and the report can be found on the Company's website www.viscom.com/en under Company/Investor Relations/Corporate Governance/ Compensation of the Executive Board and Supervisory Board.

The next section of the non-financial report will present the materiality analysis, which aims to provide greater detail around Viscom's understanding of sustainability. It will be followed by a description of the material topics identified. In the final section, the Company will present EU Taxonomy data for the first time.

Viscom's continued goals are to continuously enhance and expand its reporting and to define specific sustainability targets for the future.

Materiality analysis

In the 2023 financial year, the Company carried out its first materiality analysis on sustainability topics to hone in specifically on topics of relevance for Viscom and its stakeholders. The results have been transferred to the table below. It presents the sustainability-related topics of particular relevance for Viscom and its stakeholders. A double materiality analysis was performed to ascertain which sustainability-related topics are particularly relevant for Viscom. One of the two double materiality perspectives is the outside-in perspective, which analyses the impact that sustainability topics have on Viscom. The other perspective is the inside-out perspective, which examines the impact of Viscom's business activities on sustainability topics. The analysis was based on a longlist of sustainability-related topics, which was derived taking into account the GRI standards and the European Sustainability Reporting Standards (ESRS). In addition, Viscom's risk management process already examined a number of sustainability-related topics and the relevant topics were also included in the longlist.

Following a consultation with the Executive Board, employees, suppliers, customers, shareholders, financial institutions and the general public were all identified as principal stakeholders. A representative from within the Company was elected for each stakeholder group and surveyed on the relevance of the longlist topics on a representative basis. This process used a rating system that was converted into a score ranging from zero ("no relevance") to three ("high relevance") in order to identify topics of particularly high stakeholder relevance.

The inside-out analysis used the same scoring system of zero to three to assess the probability of occurrence of these topics as well as Viscom's possible influence and Viscom's impact on these topics.

The same scoring system was used in the outside-in analysis to assess their probability of occurrence and their impact on Viscom's assets, liabilities, financial position and financial performance, its reputation, its strategy and its governance.

The compiled shortlist not only provides greater detail on the impact of business activities on the aspects of environmental

matters, employee matters, social matters, corruption and bribery and human rights specified in section 289c(2) HGB and on the diversity concept (section 289f(2) no. 6 HGB), but also identifies sustainability-related topics of material importance for the development and performance of Viscom's business and Viscom's position.

Environmental aspects

ENVIRONMENT AND CLIMATE

Viscom is aware of its responsibility to protect the environment and the climate and would like to do its bit in this regard.

Concept

The management concept outlined below is still being developed, and so only the elements that have been defined so far will be presented. The current target wording will eventually be replaced by a more specific target definition.

The international standard ISO 14001 defines requirements for an environmental management system that enables an organisation to improve its environmental performance, fulfil statutory and other obligations and achieve environmental targets. Central elements are planning, execution, control and improvement with a view to the organisation's environmental targets and environmental guidelines. Viscom continues to pursue the medium-term objective of implementing an environmental management system on the basis of ISO 14001 with an even more pronounced focus on ambitious and measurable targets by 2025. This has entailed taking organisational steps to lay the groundwork for successful implementation. These steps include aiming at an integrated management system that leverages synergies to implement related management systems on a common basis, and the definition of the required roles and responsibilities.

One important aspect in connection with the environment is the quantity of CO2 emissions originating from Viscom's economic activities. As a first step, the Company is focusing on CO2 emissions that it can influence directly, i.e. Scope 1 and 2 emissions according to the Greenhouse Gas Protocol. Scope 1 encompasses all direct CO2 emissions caused by the Company, including as a result of fuel consumption, while

Scope 2 encompasses indirect CO2 emissions in connection with energy purchased from a utility company and supplied via the grid. The relevant aspects for Viscom in this respect are gas and fuel requirements (Scope 1) and purchased electricity (Scope 2). No data on Scope 3 emissions has been collected to date. At present, Viscom's vehicle fleet mainly comprises petrol and diesel vehicles. Although some of the vehicles in the fleet are already hybrid or electric, the Company intends to gradually replace leasing returns with generally lower-consumption vehicles and additional hybrid and electric vehicles in order to reduce its Scope 1 emissions going forward.

A substantial proportion of the Company's Scope 2 emissions results from procuring electricity required for its operations. Although some of the Company's electricity requirements are covered by its own photovoltaic system at the Hanover site, purchased electricity is not yet procured from renewable sources. A significant expansion of the photovoltaic system to just over twice its current generation capacity was resolved in the 2022 financial year, and from mid-2024 onwards; this should put Viscom in a position to generate a large proportion of the electricity required for its operations on its own. In addition to this ongoing project, the Company is currently analysing the possibilities for switching to 100 % renewable electricity and the potential timeframe for doing so.

The term "conflict minerals" describes materials such as tin, tantalum, gold and tungsten and their derivatives whose mining in territories such as the Democratic Republic of Congo and neighbouring crisis regions can give rise to social and ecological harms. Viscom is aware of the harms typically involved in the mining of conflict minerals. It recognises its responsibility and expressly supports all legal steps preventing the illegal trade of conflict minerals. Viscom expects its suppliers to comply with all the provisions on "conflict minerals" and will invoke this in its general purchasing terms in the future.

Water consumption as an additional topic with no relation to materiality

Water consumption was classed as immaterial as no water is consumed in the production of inspection systems, and so the topic is of little relevance for most stakeholders. However, water consumption is an important issue when it comes to protecting the environment and the climate and is a topic of relevance for a small group of stakeholders. In order to help minimise the Company's impact on the water cycle, rainwater is used in some of its sanitation facilities and it takes care to ensure that water is generally used sparingly.

Results

In 2023, Viscom recorded Scope 1 and 2 CO2 emissions totalling 1,281 t, which was on a par with the previous year (previous year: 1,281 t). Although by contrast, the Group's revenue and production volume increased substantially by 12.6 % in the 2023 financial year.

At Scope 1 level, 972 t (previous year: 984 t) or around 81 % of emissions related to petrol and diesel consumption for the Company's vehicle fleet, while the remainder of around 19 % related to natural gas consumption. Viscom uses natural gas almost exclusively for heating company buildings. A total of 932,208 kWh of natural gas was consumed in 2023 (previous year: 974,040 kWh), meaning that natural gas consumption was reduced by 4.3 % thanks to various savings measures.

Scope 2 emissions of 309 t (previous year: 297 t) resulted from the purchase of electricity. Total electricity consumption in 2023 amounted to 953,478 kWh (previous year: 923,220 kWh), of which 108,169 kWh (previous year: 110,604 kWh) or 11.3 % was covered by the proprietary photovoltaic system on the roofs of the headquarters in Hanover.

The effectiveness of measures intended to prevent the trade of conflict minerals cannot currently be verified by the recording of metrics.

CIRCULAR ECONOMY

Waste is produced in the course of business activities at Viscom AG, particularly as a result of production processes. Such waste includes metal residues generated during production and plastic, card or paper packaging material. In addition, the system itself - as an output of the production process - must also be disposed of at the end of its life cycle.

Concept

The management concept outlined below is still being developed, and so only the elements that have been defined so far will be presented. The current qualitative ambitions will eventually be replaced by an explicit target definition.

Viscom AG's ambition is to continue to largely prevent, recycle or at least professionally dispose of all production waste generated, dependent on the size of the organisation, in order to minimise negative environmental impacts. Additionally, efforts will continue to be made to reduce the amount of paper waste, for example, generated in the administrative buildings by raising employee awareness. Another initiative involves the use of shuttle containers, which are reusable containers used for shipping parts that help to cut down the amount of packaging materials used.

Viscom systems can have a useful life of up to 25 years. After this period, all customers have the option of having an installed system disposed of by Viscom AG. Doing this, Viscom AG meets the requirements of the German Electrical Devices Act (ElektroG) and ensures that the systems and their components are broken down in line with the relevant provisions and professionally disposed of by a certified waste disposal company. The majority of the components, such as sheet metal and the body of the systems, can be recycled, allowing the materials to be returned to the resource cycle for other uses.

Results

Because the concept is still being developed and there are no targets that can quantitatively be measured, it is not yet possible to present any results for resource conservation and waste reduction.

Labour and social aspects and diversity concept

EMPLOYEES AS AN ESSENTIAL PART OF

BUSINESS SUCCESS

Motivated and healthy employees with outstanding personal and professional qualities are essential to Viscom's long-term success. The prevailing labour shortage makes it even more important to retain good employees as well as encourage prospective new employees to join Viscom.

Concept

The sub-concept, containing the targets and ambitions partly supported by KPIs, as well as the initial package of measures for implementation, is outlined below. The Company is currently working on fleshing out the targets and measures.

One important factor for employees is safety/security. There are two aspects to this: protecting health and safety in the workplace and also ensuring job security itself; in other words, confidence in the Company's long-term positive development.

Viscom aims to prevent workplace accidents and health risks in the workplace and to further reduce the average amount of sick days taken. The obligations under the German statutory accident insurance scheme are met through measures such as offering occupational health care to employees and appointing a safety officer, who carries out annual occupational safety training sessions. Viscom also has an occupational health management system and offers its employees exercise classes, fitness cards, health days, and weekly fruit and vegetable boxes to help them look after their health.

The training and development of employees is becoming even more important in light of the growing labour shortage. Accordingly, Viscom intends to step up its activities in the area of training in future and offer employees a wide range of opportunities for developing their existing skills or learning new things. Needs-based training is provided to equip employees with the necessary skills to cope with changed requirements or work processes and new technologies, thereby investing in their continued employability over the long term. To this end, Viscom has introduced the learning management system (LMS) in the form of the Viscom Academy. Employees and customers have been able to use the Viscom Academy since August 2023. Participants receive an invitation to take part in training via the WEB application. The first e-learning modules have been created, and these are replacing in-person training sessions for these topics. Going forward, a blended learning concept offering a mix of live online training, e-learning and in-person training sessions will reduce the number of in-person-only events. Viscom is also continuously investing in the skills and internal and external training of its employees.

As well as benefiting its own employees, Viscom wishes to take early steps to recruit prospective future workers and retain them for the Company. The successful transfer of scientific findings into practical applications has been an important building block of Viscom's research and development work for several years now. Together with the University of Hanover, Viscom is promoting such a transfer process within the scope of research and development projects, in which scientific knowledge is applied in developing solutions to specific issues relevant to the market. By offering a number of internships and bachelor's and master's theses, the Company gives students an insight into the practical world of work and an opportunity to discover more about Viscom.

Job security is ensured through a corporate policy that takes a long-term view where possible. Flexible working-time models, remote work and a company child care centre help employees to achieve a healthy work-life balance.

Viscom has been running its own child care centre, Vikis, since 2009. The aim is to help Viscom employees to return to work quickly following their parental leave and hence improve their work-life balance. The centre is located very close to Viscom AG's headquarters and provides care for as many as 15 children up to three years of age. The team consists of four dedicated child care practitioners. A favourable staff-to-child ratio enables the team to address the needs of each child and encourage their development in a targeted way.

Results

The health management offerings and general employee satisfaction, along with other factors, have a positive effect on the average sick days (paid days of absence due to illness / target working days) taken per year, producing a figure of 3.9 % in 2023 (previous year: 3.6 %). This was well below the comparable figure of 7.2 % (previous year: 7.0 %) for the German mechanical engineering industry.

The average length of service for Viscom employees of 11 years reflects the effectiveness of the measures taken to help employees achieve a healthy work-life balance and shows that Viscom attaches considerable importance to secure employment. Employee turnover (leavers / average headcount) in 2023 is still rather low at 4.0 %, but has gone up compared with the previous year's figure of 2.0 %.

The Company invested a total of EUR 232 thousand in employee training in the past year (previous year: EUR 168 thousand). The investment is higher than the year before, even in relation to the increased number of employees. In addition to training its existing employees, in 2023 the Company continued to intensify its investment in prospective future employees in cooperation with universities by offering a number of internships and bachelor's and master's theses. The Company offered five internships, some of which were in connection with bachelor's and master's theses, carried out other internships for school children and employed three working students.

DIVERSITY CONCEPT

Concept

The following section will outline the diversity concept and the targets derived from it. The continued refinement of the overall concept for labour and social aspects and diversity may mean that additional targets and measures will be added in future.

With the expert guidance of the Chairwoman of the Supervisory Board, Prof. Morner, an overarching concept was established to further promote employees' management skills and opportunities for advancement. This concept is subject to ongoing development. It includes a diversity concept that is intended to strengthen the principle of equal opportunity. All employees should have equal opportunities for advancement at Viscom AG and within the Group as a whole. This is encouraged by set quotas, for example.

Viscom aspires to become even more attractive to female employees. As a first step towards achieving this, the Executive Board of Viscom AG passed a resolution on 30 June 2020 setting targets for the share of women in the two management levels below the Executive Board. The Executive Board set a target of a share of women of 25 % in both the top national management level and the management level below that. These targets are to be achieved by 30 June 2025.

In accordance with section 111(5) AktG, Viscom AG's Supervisory Board is required to set targets for the share of women on the Executive Board. Following extensive discussion, the Supervisory Board of Viscom AG resolved on 5 May 2023 to set a target for the share of women on the Executive Board of one woman, equivalent to around 33 % on a three-person Executive Board. This target must be achieved by 4 May 2028.

Results

At the end of the 2023 financial year, the Viscom Group had a total of 600 employees, 98 of whom were women (previous year: 89). This represents a ratio of around 16 % (previous year: 16 %). The Viscom Group currently has 25 apprentice positions in various commercial and technical professions (previous year: 20). Viscom AG, as the largest company of the Viscom Group, had 406 employees at the end of the 2023 financial year (previous year: 388), thereby accounting for 68 % of the Group's total workforce (previous year: 68 %).

In the interests of equal opportunity and the role model function this entails, the Executive Board and Supervisory Board welcome the fact that, in Prof. Dr. Michèle Morner, 33 % of the positions on the Supervisory Board are now held by women and the set target has been achieved. Efforts are being stepped up to meet the ratio of a 25 % share of women in the two management levels below the Executive Board by 30 June 2025.

SOCIAL ENGAGEMENT

As an internationally active company, Viscom takes its responsibility to society extremely seriously and believes that its commitment in this area represents an important factor in its long-term business success.

Concept

In cooperation with its shareholder, the Viscom Foundation established by the Company founders, Mr. Volker Pape and Dr. Martin Heuser, Viscom AG pursues scientific, cultural and regional non-profit aims. It seeks to promote scientific activities in industrial image processing and artificial intelligence. It also supports technical training initiatives, for example by awarding scholarships. Another material purpose of the foundation is to support social welfare institutions and associations in Lower Saxony and the state capital Hanover. Musical training, performances and concerts are also promoted. The foundation generates its income from dividends paid by Viscom AG, which are used to finance the purposes of the foundation.

Viscom is involved in a number of projects as a donor and sponsor. A strategic focal point is placed on initiatives relating to the Company's business activities and priority is given to projects and initiatives in the area of education and science.

Viscom offers apprenticeship opportunities to people in cooperation with SINA, Diakonisches Werk Hannover's programme for social integration. A church welfare institution for youth employment assistance, SINA provides unemployed young women who are making the transition from school to work, with individual support, social stabilisation and a wide range of qualification, employment and training opportunities in cooperation with companies.

Results

Viscom currently has one apprentice employed through the SINA programme.

Viscom AG is also a member of Wissensfabrik, which aims to better prepare Germany for the future and prepare the next generation for global competition by pooling the resources of over 130 companies and foundations set up by companies. Wissensfabrik is involved in educational projects around Germany and supports business start-ups and young entrepreneurs. In Hanover, Viscom works with the Kind Wissen Zukunft association (KiWiZ e. V.) to deliver Wissensfabrik's educational projects. One key element of the initiative involves specially designed construction kits that allow children at primary schools and kindergartens to have fun developing and realising technical projects with the assistance of teaching staff. By providing practical, hands-on projects like these free of charge, Viscom helps children and young people to gain their first experience of technical applications through play, giving them access to science, technology, engineering and mathematics (STEM) and helping them to develop a love for these subjects.

Corruption and bribery and human rights

SUSTAINABILITY OF THE SUPPLY CHAIN

The majority of parts are procured from Germany and specifically from the local Hanover area, and Viscom considers this to be an important aspect of sustainability when it comes to environmental impact and supply chain resilience alike.

Concept

The concept, containing the targets and ambitions partly supported by KPIs, and the initial package of measures for implementation, is outlined below. The Company is currently working on fleshing out the targets and measures.

A regional procurement policy in Germany ensures high-quality parts, safeguards jobs and conserves resources by ensuring short transportation routes. However, Viscom is not able to apply this policy for all specialist parts and applications, meaning that it is also reliant on international supply chains.