PROACTIVE FROM WITHIN
Corporate Governance Statement
2025 fiscal year
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CORPORATE GOVERNANCESTATEMENT
IN ACCORDANCE WITH SECTION 289FAND 315D HGB
Corporate Governance Statement 2025
2 Principles of corporate governance
2 Declaration of compliance in accordance with section 161 AktG
3 Information on corporate governance practices
14 Contact
CORPORATE GOVERNANCE STATEMENT
IN ACCORDANCE WITH SECTION 289F AND 315D HGB
The Corporate Governance statement pursuant to section 289f and section 315d of the Handelsgesetzbuch (HGB – German Commercial Code) is combined for PWO AG (hereinafter also referred to as the “Company”) and the PWO Group (hereinafter also referred to as the “Group” or the “PWO Group”) and is an integral part of the combined management report. Its contents are not subject to the statutory audit of the annual and consolidated financial statements by the auditor (see section 317 (2) sentence 6 HGB).
This statement, including the declaration of compliance in accordance with section 161 AktG, is permanently available to
the public on the PWO website at
www.pwo-group.com/ en/pwo-group/ under the heading “Corporate Governance.” In addition, information on the rules of procedure of the Supervi-
sory Board, the requirements profile for the Supervisory Board and the current Articles of Association are also available on
the PWO website at
www.pwo-group.com/en/pwo-group.
Principles of corporate governance
A strong sense of responsibility is at the heart of how the PWO Group sees itself. We thus believe we are accountable to all stakeholders. The wellbeing of current and future generations is what guides our actions. This includes long-term, sustainable value creation that ensures an environmentally conscious business.
We base our product range on sustainability throughout
the products’ life cycle, from the raw materials that are used, to ensuring they can be recycled in a way that conserves
resources. Our corporate governance is built on these principles.
To maintain and reinforce trust in the leadership of PWO AG and the Group among shareholders, employees, customers, suppliers and the public, everyone responsible for management
and supervision undertakes to comply with these principles. In implementing them, PWO AG follows the relevant legal framework and the generally accepted standards of good corporate governance in Germany. Moreover, the PWO Group has signed up to the Science Based Targets initiative (SBTi) to achieve the carbon reduction targets and joined the United Nations Global Compact. The Executive Board and the Supervisory Board cooperate closely and effectively on the basis of trust. Significant new information is communicated transparently and in good time and is conveyed internally and externally at the same time.
Declaration of compliance in accordance with section 161 AktG
The Executive Board and Supervisory Board of PWO AG declare in accordance with section 161 (1) AktG (German Stock Corporation Act) that the Company currently complies and will comply in the future with the recommendations of the Government Commission on the German Corporate Governance Code in the version dated April 28, 2022 (“2022 Code”), which were published by the Federal Ministry of Justice in the official section of the Federal Gazette on June 27, 2022, with the following exceptions:
] D.4 GCGC 2022 (Nomination Committee)
The Supervisory Board does not see the need to form a Nomination Committee as the existing practice of elaborating proposals for suitable candidates for election or re-election to the Supervisory Board by the Annual General Meeting has proven to be effective and efficient. As the Supervisory Board has a total
of 6 members, it also considers it to be appropriate for the entire Supervisory Board to be involved in the nomination of candidates for election to the Supervisory Board.
] G.10 sentence 1 and 2 of the GCGC 2022 (variable remuneration components for the Executive Board members: variable remuneration predominantly in shares or share-based; availability of long-term variable remuneration components)
The recommendations of G.10 sentence 1 and 2 of the GCGC 2022 state that, taking the respective tax burden into consideration,
Executive Board members’ variable remuneration shall be predominantly invested in company shares by the respective Executive Board member or shall be granted predominantly as share-based remuneration. Granted long-term variable remuneration components shall be available to Executive Board members only after a period of 4 years. The remuneration system for the Executive Board members that was resolved by the Supervisory Board on March 25, 2021, then updated and amended in some aspects by way of resolutions dated March 15, 2022 (“2022 remuneration system”) and March 13, 2024 (“2024 remuneration system”) and approved by the Annual General Meeting on June 6, 2024, with a majority of 99.08% of the votes cast deviates from these recommendations. The Supervisory Board does not consider the share price to be the relevant indicator for a remuneration system aimed at promoting the corporate strategy and the Company’s long-term development. Instead, the Supervisory Board considers the financial and non-financial performance criteria defined in the remuneration system for determining variable remuneration and the payment of all variable remuneration components in cash to be more suitable. As such, the Supervisory Board believes that the existing variable remuneration structure for
the members of the Company’s Executive Board, with its targets
lasting up to 3 years depending on the duration of the respective member’s appointment, has proven to be an extremely good basis of measurement and should be largely retained.
The remuneration system does not provide for predominantly share-based variable remuneration, but rather determines the level of this remuneration primarily on the basis of consolidated net profit. In the opinion of the Supervisory Board, this serves to ensure the competitiveness of the Group and the balanced financing of business operations and all necessary innovations and investments while also limiting indebtedness, safeguarding jobs and allowing the Company’s shareholders to be offered
an appropriate return on their capital. As such, consolidated net profit is an important prerequisite for the healthy long-term development of the PWO Group.
2
CORPORATE GOVERNANCESTATEMENT
IN ACCORDANCE WITH SECTION 289FAND 315D HGB
Corporate Governance Statement 2025
2 Principles of corporate governance
2 Declaration of compliance in accordance with section 161 AktG
3 Information on corporate governance practices
14 Contact
Additionally, each Executive Board member receives long-term variable remuneration components annually and on a prorated basis with reference to the basis of measurement, which lasts up to 3 years. The Supervisory Board considers these prorated payments to be suitable and appropriate.
Further details, particularly with regard to the variable remuneration components, can be found in the remuneration system, which is publicly accessible on the Company’s website.
For the reasons described above, the variable remuneration granted to current Executive Board members was not and
is not predominantly invested in company shares or granted predominantly as share-based remuneration, and it is not the case that the long-term variable remuneration granted is accessible to current Executive Board members only after a period of 4 years. The Executive Board employment contracts of Mr. Carlo Lazzarini and Mr. Jochen Lischer are subject to the current remuneration system.
Oberkirch, December 2025
PWO AG
The Executive Board
Carlo Lazzarini Jochen Lischer
Chairman / CEO CFO The Supervisory Board
Karl M. Schmidhuber Chairman
Current and former declarations of compliance under section 161 AktG are publicly and permanently available on the Company’s website on the PWO Group page
(
www.pwo-group.com/en/pwo-group/) under the heading “Corporate Governance”.
Information on corporate governance practices Business activity in the PWO Group is based on defined and standardized principles and values and on our definition of responsible corporate governance. PWO AG and the PWO Group are essentially treated equally in terms of business management. Accordingly, there are no material differences between their corporate governance structures.
COMPANY VALUES AND MANAGEMENT PRINCIPLES
The corporate and management culture of the PWO Group is based on values. Our 5 core values are what guide our daily actions.
] Integrity | Setting an example in line with our values system. Long-term relationships with all of our stakeholders are based on integrity. We of course comply with all laws and regulations in place in the countries in which we operate. We observe informal local rules and customs where possible. We always
act fairly, honestly and credibly.
] SUSTAINABILITY | We accept responsibility for future generations.
Thinking and acting responsibly and with a view to the long term has been at the heart of our success and decisions in our long company history. This is our internal motivation that we bring into the future. We take a holistic approach to sustainability, both in terms of environmental and social matters and in terms of good corporate governance. We want to set a good example and use our business as a force for good.
] TEAM SPIRIT | We achieve success together.
We seek out challenges and overcome them together. All efforts are first and foremost directed at the success of the PWO Group. We are tolerant, respectful and considerate when working with each other. In this working environment, employees can share their knowledge, experience and creativity and show their passion for trying out new ideas. We support them in this and encourage them to reach their full potential.
] PROGRESS | Progress is part of our fundamental DNA. Continuous change and innovation have shaped our business since we were founded more than 100 years ago. Thanks to unique innovative strength at the limits of technical feasibility we are not only a leader in shaping future mobility, but we
also want to contribute to more sustainable, zero-emission development on new markets. Because we are always open to change when looking at the present, we recognize future trends at an early stage.
] CUSTOMER FOCUS | Customer satisfaction is what drives us.
We often maintain relationships with customers for decades. We gain their trust by regularly exceeding their expectations. In everything that we do, we take at least one vital extra step, often more. Our focus here is on gaining a comprehensive understanding of each customer’s individual needs in order to find the best possible solution in each case. Zero-error quality is a particular requirement in our production process, and
we pursue it every step of the way.
2
CORPORATE GOVERNANCESTATEMENT
IN ACCORDANCE WITH SECTION 289FAND 315D HGB
Corporate Governance Statement 2025
2 Principles of corporate governance
2 Declaration of compliance in accordance with section 161 AktG
3 Information on corporate governance practices
14 Contact
Based on our core values, we have established 8 management principles. They represent our core beliefs and at the same time provide a guide for managers for how they interact with their employees on a daily basis.
We want to set the standard. This is why we have ambitious goals and make decisions quickly and with an eye to business. We firmly believe that having managers whose basic attitude is one of appreciation, who actively embrace their position as role models and self-reflect on this role is an essential building block of collaboration between managers and employees that is based on trust. It is on this basis that we can continue the PWO Group’s success into the future.
TRANSPARENCY
Alongside statutory requirements and stock market standards for prompt reporting, taking account of the principle of equal treatment of all shareholders (annual and half-year financial reports and quarterly statements, ad-hoc announcements, man-agers’ transactions and reportable changes in voting shares of which the Company becomes aware), the Executive Board
also believes it has an obligation to communicate extensively with the public.
The Executive Board regularly responds to questions from analysts, investors and media representatives. Important information and information that is relevant for evaluating the Group’s prospects is made public as soon as possible. All reports, announcements and key presentations given at conferences
are documented on the website at
www.pwo-group.com/ en/press-and-investors/. More information can also be found here, including all required disclosures concerning the Annual
General Meeting. The Company’s Articles of Association can
be viewed at
www.pwo-group.com/en/pwo-group/ under the heading “Corporate Governance”. The Supervisory Board’s requirements profile and the résumés, the professional activities
and other mandates held by members of the Supervisory Board can be found at
www.pwo-group.com/en/pwo-group/ under the heading “Supervisory Board”.
WHISTLEBLOWER SYSTEM
Violations of the law and unlawful and non-compliant behavior in relation to the corporate values system of the Group can have far-reaching consequences. Potential repercussions include fines, claims for damages or disgorgement of profits. In addition, massive damage to the Company’s image and reputational losses may occur.
The PWO Group has established a whistleblower system to avoid breaches of the law and violations of our internal codes of conduct and to prevent or, at the very least, quickly detect human rights and environmental risks and take appropriate
mitigating measures. Whistleblowers can use our whistleblower system around the clock to report suspicions – also anonymously – through a communication channel that is protected by special encryption and security technology.
The whistleblower system receives reports of breaches and risks both from employees and from external parties worldwide and complies with the requirements of whistleblower protection legislation applicable to PWO (including Germany and the Czech Republic) and those of the Lieferkettensorgfaltspflichtengesetz (LkSG – German Supply Chain Act).
RISK MANAGEMENT
Good corporate governance includes suitable mitigation of and a responsible approach to all risks associated with business decisions. The PWO Group operates a modern and effective risk management system. Its effectiveness is regularly checked and it is constantly being refined. This applies in particular to
changes to national legal requirements in Germany and abroad.
CODE OF CONDUCT AND BUSINESS PARTNER CODE
At PWO, complying with legal regulations and ethical standards and requirements is essential and integral to our corporate values and a fundamental requirement for successful and sustainable growth.
In order to ensure compliance with legal requirements and the ethical principles of the PWO Group, we have set out compliance guidelines in a Code of Conduct, which is available on our web-
site at
www.pwo-group.com/en/pwo-group/corporate-gover-nance/ and is regularly reviewed for any necessary adjustments.
We also place great value on compliance with minimum standards, particularly regarding human rights, working conditions, corruption prevention and environmental protection along the entire value chain. We also involve our business partners directly in our sustainability strategy.
To this end, we have a PWO Business Partner Code of Conduct that describes our expectations of our business partners in the area of ESG and also complies with the requirements of the LkSG, which has been in force since 2023, as well as some customer requirements that go beyond this. This code is available
on our website at
www.pwo-group.com/en/pwo-group/ corporate-governance/ and is continuously being developed.
Moreover, a process for sustainable procurement and business partner compliance has been defined and implemented throughout the Group. In order to monitor our supply chain, we use a digital platform that evaluates data from social media, local news and databases with the help of artificial intelligence and, where appropriate, issues warnings about a large number of risks at suppliers.
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CORPORATE GOVERNANCESTATEMENT
IN ACCORDANCE WITH SECTION 289FAND 315D HGB
Corporate Governance Statement 2025
2 Principles of corporate governance
-
Declaration of compliance in accordance with section 161 AktG
-
Information on corporate governance practices
14 Contact
The enhanced ESG requirements in particular are reflected in this process. This also involves the growing expectations of the public that companies take responsibility for their supply
chains. Furthermore, the process includes the requirements of the German Supply Chain Act.
DIVERSITY
When filling management positions and putting together teams, we focus on professional qualifications, integrity and leadership skills. At the same time, we pay attention – within the framework of legal requirements – to different professional profiles and experiences (e.g., education, professional experience, international activities) as well as gender diversity in order to strengthen the quality of decisions. In our view, mixed teams improve the quality of decisions because, for example, different perspectives give rise to new ways of thinking. People often interact more attentively with one another when different experiences come together. Last but not least, everyone benefits from an intergenerational exchange of knowledge.
Gender diversity and targets at management level
The Supervisory Board has set the legally required targets* for the representation of women on the Executive Board
and Supervisory Board with effect from April 1, 2022 (period until March 31, 2027). Depending on the size of the board, these targets correspond to the following proportions:
] Target figure for a 2-member Executive Board: 50%
] Target figure for a 3-member Executive Board: 33.33%
] Target figure for a 4-member Executive Board: 25%
] Target figure for a 6-member Supervisory Board: 16.67%
* Gender-specific information is collected as part of HR processes, but is accepted without further review, verification or validation.
In accordance with Section 76 (4) of the German Stock Corporation Act (AktG), the Executive Board has resolved, with effect from April 1, 2022, to achieve a target of 15.38% at the first level below the Executive Board and 17.14% at the second level below the Executive Board of PWO AG by March 31, 2027. At the end
of the reporting year, the corresponding share was 0% and 7.7%, respectively. The proportion of women at PWO AG is currently low; this is also reflected in the current structure of the management levels.
The target is based on the rationale that the primary criteria for filling management positions should be professional expertise and management qualifications and that these standards currently seriously limit increasing the share of women on
the Executive Board and Supervisory Board due to the nature of the sector. At the end of the reporting year and at present, the 2-member Executive Board was composed of 2 men, and the 6-member Supervisory Board was composed of 6 men.
Regardless of gender-specific targets, the criteria of qualification and suitability always apply when filling positions. Due to
low staff turnover, it is typically possible to adjust representation ratios gradually.
] Diversity on the Executive Board
When appointing members of the Executive Board, the Supervisory Board bases its decision on a requirements profile it has developed for this purpose, which also includes the statutory diversity criteria. The Supervisory Board has not drawn up a separate formal diversity concept for the Executive Board, as
it does not consider this appropriate given that there are only 2 members of the Executive Board. However, the appointment
of Carlo Lazzarini from Luxembourg to the Executive Board has increased the internationality of the Executive Board.
The Supervisory Board has set an age limit for members of the Executive Board. This stipulates that a member of the Executive Board may be appointed until the Annual General Meeting following the financial year in which the member of the Executive Board reaches the age of 65. Exceptions to this rule may be made in justified individual cases.
] Diversity on the Supervisory Board
The composition of the Supervisory Board is designed to ensure that it is qualified to supervise and advise the Executive Board. Together, its members must have the knowledge, skills and professional experience needed to properly perform the tasks of a supervisory board at an international publicly traded company in the automotive supply industry.
In accordance with the recommendations of the 2022 Code, the Supervisory Board has established the following specific requirements and objectives for its composition, which – taking the Company’s specific situation into account – give suitable consideration to the Group’s international activities, potential conflicts of interest, the number
of independent Supervisory Board members, a defined
age limit for Supervisory Board members and other diversity factors.
Requirements profile for the Board as a whole
] Supervisory Board objectives regarding its composition The composition of the Supervisory Board has to ensure that it is qualified to supervise and advise the Executive Board. Together, its members must have the knowledge, skills and professional experience needed to properly perform the tasks of a supervisory board at an international publicly traded company in the automotive supply industry.
The specific requirements of the Drittelbeteiligungsgesetz (DrittelbG – German One-Third Employee Representation Act) must be complied with regarding the employee representatives.
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