Frequentis

The role of the administrative, management and supervisory bodies

In 2024, the Executive Board of Frequentis AG comprised the following members:

Norbert Haslacher has been a member of the Executive Board of Frequentis AG since April 2015, originally with responsibility for Sales & Marketing. He was appointed CEO in April 2018.

Responsibilities: Strategy, Global Sales, Strategic Business Units, Corporate Communications & Marketing, Investor Relations, New Business Development & Invest4Tech, New Market Solutions, Partnerships and M&A.

Monika Haselbacher has been a member of the Executive Board of Frequentis AG and Chief Operating Officer (COO) since 1 January 2023.

Responsibilities: Project Management & PMO, Customer Services, Health Safety Environment (HSE) Management, Group Governance, Processes & Efficiency, Quality Management, Safety Management, Group Management.

Peter Skerlan has been Chief Financial Officer (CFO) of Frequentis AG since 16 April 2021.

Responsibilities: Finance, Human Resources, IT, Legal, Facility Management, Environment, Social & Governance (ESG), Internal Audit & Compliance.

Hermann Mattanovich was a member of the Executive Board of Frequentis AG from January 2009 and stepped down from the Executive Board on 30 June 2024 as part of the long-term succession plan.

Karl Wannenmacher was appointed by the Supervisory Board as a member of the Executive Board and successor to Mr. Hermann Mattanovich in his function as Chief Technology (CTO) from 1 July 2024.

Responsibilities: Technology Management, Production & Logistics, Procurement, Product Management, Security.

In 2024, the Supervisory Board of Frequentis AG comprised the following members:

Information provided to and sustainability matters addressed by the undertaking's administrative, management and supervisory bodies

ESG organisation

In response to the broadly based environmental, social, and governance aspects and to improve their presentation to stakeholders, at the start of 2022 Frequentis pooled its expertise in these three areas in a Group-wide ESG organisation. As a representative of the Executive Board, CFO Peter Skerlan bears executive-level responsibility for ESG topics. This was defined by the Supervisory Board at its meeting on 30 March 2022 in the rules of procedure for the Executive Board of Frequentis AG.

The interdisciplinary ESG team is coordinated by an ESG Steering Group, which involves and works closely with the Executive Board. Alongside the CFO, the members of the ESG Steering Group are the staff responsible for environmental, social, governance, and compliance aspects and the ESG Group Coordinator. The ESG team maintains regular contact with Frequentis' stakeholders.

Specific projects are analysed, prioritised, and driven forward at a monthly jour fixe. Current sustainability measures are continuously examined and modified, and new sustainability projects are initiated as necessary. At the annual ESG management review led by the CFO, the past year's ESG activities and ESG indicators are discussed and actions to achieve targets and further improvements are defined.

The CFO and the members of the ESG Steering Group regularly attend specialist congresses and events to network with experts and enhance their knowledge. Reading relevant literature is also very important. The knowledge gained in this way is shared widely within Frequentis. This ensures that the company always has up-to-date knowledge of the fast-changing fields of sustainability and transparent ESG reporting.

The Executive Board and Supervisory Board, as the highest governance bodies, support all measures. The Supervisory Board regularly considers ESG topics and ESG is a recurrent item on the agenda for Supervisory Board meetings.

Integration of sustainability-related performance in incentive schemes

To strengthen the sustainable development of the company, in addition to financial targets, the variable remuneration of every Executive Board member includes ESG targets for 2024 and 2025. The ESG targets cover energy, the circular economy, compliance, and cybersecurity.

The ESG targets are used as a calculation factor for the variable remuneration of every Executive Board member. At the end of the agreed performance period, the variable remuneration resulting from the financial targets may be increased or decreased depending on the degree of achievement of the ESG targets. The targets are set by the remuneration committee on the basis of the remuneration principles for the members of the Executive Board.

Statement on due diligence

The next table shows where key aspects and steps in the due diligence compliance procedure can be found in this consolidated non-financial statement.

Risk management and internal controls over sustainability reporting

For information on risk management and internal controls over sustainability reporting, see ↗ Opportunity and risk management and ↗ Internal control system (ICS) for the accounting process.

Strategy, business model and value chain

Business model

Wherever Frequentis' solutions are used, people bear responsibility for the safety of other people and property. Its mission is "For a safer world". The Frequentis Group is an international provider of communication and information systems for safety-critical control centres. Custom-tailored control centre solutions are developed and marketed by the Air Traffic Management segment (for civil and military air traffic control, AIM [aeronautical information management], and air defence) and the Public Safety & Transport segment (police, fire service, emergency rescue services, railways, coastguards, and port authorities).

The primary objective of a control centre is to protect people and property from danger. Optimised solutions for this are especially important to customers operating in safety-critical sectors. More than 90% of the customers are state-run authorities / individual governments or the administrative arms of other public authorities. The products supplied by the Frequentis Group are part of the safety-critical infrastructure of the respective country. This underscores the robustness and long-term nature of Frequentis' business model. It is difficult to reduce or halt investment in safety-critical infrastructure. It has to be available and ready for operation at all times – irrespective of the number of flights / flight movements or how often the police, fire service, and emergency rescue services are deployed.

Customer requirements often include requests for even more efficient and sustainable solutions and the need to adapt quickly to constantly changing conditions. That increases the demand for integrated solutions. A human-centric design process enables the provision of a secure, efficient, and stable working environment for operators, air traffic controllers, and dispatchers. As a recognised specialist for the supply of safety-critical infrastructure, Frequentis develops future-oriented solutions for control centres in collaboration with key account customers and makes new technologies usable for safety-critical applications. Frequentis has an international network of companies and local representatives in more than 50 countries. In addition to its headquarters in Vienna, Austria, Frequentis' locations include Australia, Brazil, Canada, the Czech Republic, France, Germany, Italy, Norway, Romania, Singapore, Slovakia, Switzerland, the UK, and the USA.

The central focus is on long-term customer relationships. Customers – public authorities, organisations, and companies with safety-critical tasks – often use the solutions provided for several decades. That requires a deep understanding of the customer's requirements, maximum reliability, and long-term trust. The extensive installed base also drives the sustained growth of the Frequentis Group.

Governance organisation

Frequentis' business model is based on a strong governance organisation, which is reflected in a three-dimensional matrix and ensures optimised interaction between the central units, the business domains, and the international subsidiaries.

Frequentis' two segments and the business domains grouped in these segments focus on successful business operations as their contribution to the Group's overall performance. The main responsibility is allocated to local value-generating functions such as Domain Sales, Key Accounts, Product Management, and Project Management. Innovation is very important to Frequentis. At all stages in the Frequentis innovation process, close and interdisciplinary collaboration with the business domains is ensured on topics with high relevance for the business.

As an integral part of the value chain, the subsidiaries and equity investments make a significant contribution to the overall success of the Frequentis Group. They have different areas of responsibility and competencies within the value chain. Governance and process orchestration take place within the framework of the management of the Frequentis Group to ensure harmonised rollout of governance requirements based on accountability.

The Central Group Functions, most of which have governance responsibility, are divided into value-generating functions such as Sales, Production, and the provision of services, and central functions with a statutory governance remit, such as Human Resources, IT, Finance & Controlling, and Compliance.

Strategy

The Frequentis Group's objective, as set out in its vision, is to be the global number one on the market for safety-critical control centres. Its strategy defines the direction to be pursued. It is influenced by the wide range of industries and solutions covered. Internally, the strategy is divided into a corporate strategy and the strategies of the segments, business domains, and all other areas.

The segment and business domain strategies form the heart of the Group's strategy. They comprise specific strategies for the industries they serve or the products and solutions within these industries. Other areas such as the regions and central functions develop their strategies in conformance with the corporate strategy and the business domain strategies in order to provide the best possible support.

Frequentis' aspiration includes a sustained growth strategy which aims to raise profitability while keeping risk exposure reasonable. To this end, the first step is to fully utilise the potential of existing products and solutions before investing in significant new solutions. The strategy defines guidelines for sustained growth, for example focused growth in the regions, driven by the Regional Sales Units, and scope for interesting equity investments to extend the product portfolio.

Further, the strategy is aligned with the three relevant megatrends, i.e. mobility, safety & security, and technological change, which have a major influence on the future development of the industries served. These megatrends are still responsible for the steadily rising demand for additional safety-critical infrastructure.

Value chain

The value chain is defined as the entire spectrum of activities, resources, and relationships associated with the company's business model and the external environment in which it operates. In this context, Frequentis concentrates on monitoring its direct upstream and downstream relationships.

In the upstream value chain, these are mainly relationships with suppliers and subcontractors and various service partners up to and including company catering. The focus of Frequentis' own value chain is on product development and production, domain sales, key accounts, and product and project management.

Downstream activities comprise implementation partners and service providers who support delivery and the wide range of customers. Customers are organisations and authorities to which the Frequentis Group supplies its solutions (air traffic management, emergency services, railways, and the air traffic controllers, operators, and dispatchers they employ); these are the end-users of Frequentis systems.

Further, domain partners, affiliated companies, and financial partners make a contribution to both the upstream and the downstream value chain.

Interests and views of stakeholders

In the materiality assessment conducted in late 2023 / early 2024, the following stakeholder groups of key significance for Frequentis were asked to assess the relevance of the ESRS topic list (37 ESRS sub-topics) plus four sub-topics relating to the entity-specific issue of safety & security:

• Employees • Supervisory Board • Managers • Executive Board members and Managing Directors of Frequentis companies • Shareholders / capital market representatives • Banks • Suppliers and subcontractors • Customers • NGOs and advocacy groups • Project partners (sales, execution)

Active engagement with these stakeholders and target-group specific reporting remain important to Frequentis. Regular dialogue with stakeholders plays a key role in this. Here is an overview of current communication measures:

For communication with stakeholders, extensive use is made of digital platforms – videoconferencing, virtual training sessions, social media. In addition to this, personal contact is very important, for example, through local meetings and at a wide range of international trade shows.

Furthermore, Frequentis offers all internal and external stakeholders a whistleblower service, which is available via the Frequentis website www.frequentis.com/whistleblowing. This service allows simple and anonymous reporting of concerns about possible non-compliant behaviour.

Material impacts, risks and opportunities and their interaction with strategy and business model

The double materiality assessment identified the six material ESRS sustainability topics E1, E5, S1, S2, S4, and G1 and one entity-specific sustainability topic: safety & security. The outcome is presented in a materiality matrix encompassing three dimensions:

• Impact materiality on the x axis shows the outcome of the expert workshop. This identifies sustainability aspects that are connected with the company's impact on people and the environment. • The y axis shows financial materiality. This assesses the impact of sustainability aspects on the company's financial and business performance. • The size of the dots indicates the significance of the topics identified in the stakeholder survey. The larger the dot, the more significant the topic is for the stakeholders.

The following tables list the material impacts, risks, and opportunities identified:

E1 – Climate change

E5 – Circular economy

S1 – Own workforce

S2 – Workers in the value chain

S4 – End-users

G1 – Business conduct

Safety & security

Description of the processes to identify and assess material impacts, risks and opportunities

The ESG Steering Group started to examine the extended requirements of CSRD reporting at the beginning of 2023. Based on the previous materiality assessments, the standardised ESRS list of environmental, social, and governance topics was supplemented by an entity-specific "Safety & Security" section. A corresponding concept was presented to the Executive Board and Supervisory Board. The Executive Board approved its implementation in summer 2023.

For the inside-out perspective (impact materiality), the relevant stakeholders were included through an anonymous online questionnaire. The stakeholder groups were modified and greatly extended compared with the previous materiality assessments. In all, about 3,250 people were addressed. The questionnaires were distributed by the parent company, Frequentis AG, to the entire Frequentis Group. To obtain a geographical perspective, the regions were included.

This process was accompanied by two workshops that brought together internal experts at Frequentis' headquarters, firstly for a more detailed discussion of impact materiality, and secondly to assess the financial materiality (outside-in perspective).

Phases 1 to 3 were performed in 2023. Phases 4 and 5 were completed in 2024. Based on the evaluations by Frequentis experts and the risk management team, the sustainability topics were compared and all relevant topics were presented in a materiality matrix. The outcome was presented to the Executive Board and the Supervisory Board. Together, they discussed the material topics and defined the principal areas of action. The outcome of the materiality assessment was subsequently used in planning and actions.

The following methods were used to assess the impacts, risks, and opportunities:

Impacts: The first step was determining whether Frequentis' business activities or its value chain had a positive and/or negative impact on people or the environment in connection with the specific sustainability aspect. In addition, the type of impact, time horizon, and location of the impact were established. The second step was assessing whether the impact is material. The assessment was based on a score (1-4) calculated from the average of scale, scope, irremediable character, and likelihood, depending on the type of impact. The results were compared with the stakeholder survey.

Risks and opportunities: In addition to the material impacts already identified, the risk assessment examined the dependence on resources, physical risks, and transition risks. Five risk categories were used. For each risk category, thresholds were defined for the EBIT impact in the event of the risk or opportunity materialising and assigned a score (1-4). Moreover, time horizons and probabilities were defined for the assessment.

Climate-related impacts, risks, and opportunities

The process of identifying and evaluating climate-related impacts, risks, and opportunities used the materiality assessment steps described in ESRS 2 IRO-1.

Impacts: The climate-related impacts were analysed as part of the expert workshop. This included Frequentis' own business activities and the upstream and downstream value chain. In addition, an analysis of the Scope 3 categories was performed. The business activities and value chain were analysed in particular with a view to greenhouse gas emissions.

Climate-related physical risks: A climate risk and vulnerability analysis of Frequentis' own business activities and assets was performed for the Frequentis Group's locations in 2023. As part of the materiality assessment, this was extended to the upstream and downstream value chain. The evaluation was based on three climate scenarios (SSP1-2.6, SSP2-4.5, and SSP5-8.5), reflecting different temperature developments and the related risks. Short, medium, and long-term climate risks were taken into account. Identified vulnerabilities in connection with climate-related physical risks and transition risks to assets were adapted as necessary.

Climate-related transition risks to Frequentis' own business activities, assets, and the value chain were evaluated on the basis of five risk categories. These are based on the TCFD (Task Force on Climate-related Financial Disclosures) classification of climate-related transition events. Short, medium, and long-term time horizons and one climate scenario were used in the assessment. No assets or business activities were identified that are incompatible with the transition to a climate-neutral economy or where considerable efforts would be required to make them compatible.

Disclosure requirements in ESRS covered by the undertaking's sustainability statement

The material information relating to the impacts, risks, and opportunities to be disclosed as material were determined on the basis of the list of ESRS datapoints (EFRAG implementation guide 3 "List of ESRS Datapoints"). The ESRS metrics were evaluated for their relevance and their ability to support users of the consolidated non-financial statement in their decisions. Following a thorough analysis, some metrics were classified as not relevant and are therefore not reported. Supplementary entity-specific metrics are included. Policies, actions, and targets – where available – are reported for material sustainability aspects in accordance with the ESRS minimum disclosure requirements.

The following table lists the ESRS disclosure requirements covered in the consolidated non-financial statement, together with information on where they can be found:

| ESRS E1 | Climate change | | | E1-1 | Transition plan for climate change mitigation | ↗ E1 – Climate change / Actions | | E1-2 | Policies related to climate change mitigation and adaptation | ↗ E1 – Climate change / Policies | | E1-3 | Actions and resources in relation to climate change policies | ↗ E1 – Climate change / Actions | | E1-4 | Targets related to climate change mitigation and adaptation | ↗ E1 – Climate change / Targets | | E1-5 | Energy consumption and mix | ↗ E1 – Climate change / Energy consumption and mix | | E1-6 | Gross Scopes 1, 2, 3 and Total GHG emissions | ↗ E1 – Climate change / Greenhouse gas emissions | | E1-9 | Anticipated financial effects from material physical and transition risks and potential climate-related opportunities | Disclosure omitted in the first year of preparation as permitted by ESRS 1 Appendix C. |

| ESRS E5 | Resource use and circular economy | | | E5-1 | Policies related to resource use and circular economy | ↗ E5 – Circular economy / Policies | | E5-2 | Actions and resources related to resource use and circular economy | ↗ E5 – Circular economy / Actions | | E5-3 | Targets related to resource use and circular economy | ↗ E5 – Circular economy / Targets | | E5-4 | Resource inflows | ↗ E5 – Circular economy / Resource inflows | | E5-5 | Resource outflows | ↗ E5 – Circular economy / Resource outflows | | E5-6 | Anticipated financial effects from resource use and circular economy-related impacts, risks and opportunities | No financial risks and opportunities identified. |

| ESRS S1 | Own workforce | | | S1-1 | Policies related to own workforce | ↗ S1 – Own workforce / Policies | | S1-2 | Processes for engaging with own workers and workers' representatives about impacts | ↗ S1 – Own workforce / Engaging with own workers | | S1-3 | Processes to remediate negative impacts and channels for own workforce to raise concerns | ↗ S1 - Own workforce / Processes to remediate negative impacts and channels to raise concerns | | S1-4 | Taking action on material impacts on own workforce, and approaches to mitigating material risks and pursuing material opportunities related to own workforce, and effectiveness of those actions | ↗ S1 – Own workforce / Actions | | S1-5 | Targets related to managing material impacts, advancing positive impacts, and managing material risks and opportunities | ↗ S1 – Own workforce / Targets | | S1-6 | Characteristics of the undertaking's employees | ↗ S1 – Own workforce / Metrics | | S1-7 | Characteristics of non-employee workers in the undertaking's own workforce | ↗ S1 – Own workforce / Metrics | | S1-8 | Collective bargaining coverage and social dialogue | ↗ S1 – Own workforce / Metrics | | S1-9 | Diversity metrics | ↗ S1 – Own workforce / Metrics | | S1-10 | Adequate wages | ↗ S1 – Own workforce / Metrics | | S1-11 | Social protection | ↗ S1 – Own workforce / Metrics | | S1-13 | Training and skills development metrics | ↗ S1 – Own workforce / Metrics | | S1-14 | Health and safety metrics | ↗ S1 – Own workforce / Metrics | | S1-15 | Work-life balance metrics | ↗ S1 – Own workforce / Metrics | | S1-16 | Compensation metrics (pay gap and total remuneration) | ↗ S1 – Own workforce / Metrics | | S1-17 | Incidents, complaints and severe human rights impacts | ↗ S1 – Own workforce / Metrics ↗ G1 – Business conduct / Compliance |

| ESRS S2 | Workers in the value chain | | | S2-1 | Policies related to value chain workers | ↗ S2 – Workers in the value chain / Policies | | S2-2 | Processes for engaging with value chain workers about impacts | ↗ S2 – Workers in the value chain / Engaging with value chain workers | | S2-3 | Processes to remediate negative impacts and channels for value chain workers to raise concerns | ↗ S2 – Workers in the value chain / Processes to remediate negative impacts and channels to raise concerns | | S2-4 | Taking action on material impacts on value chain workers, and approaches to managing material risks and pursuing material opportunities related to value chain workers, and effectiveness of those actions | ↗ S2 – Workers in the value chain / Actions | | S2-5 | Targets related to managing material negative impacts, advancing positive impacts, and managing material risks and opportunities | ↗ S2 – Workers in the value chain / Targets |

| ESRS S4 | Consumers and end-users | | | S4-1 | Policies related to consumers and end-users | ↗ S4 – End-users / Policies | | S4-2 | Processes for engaging with consumers and end-users about impacts | ↗ S4 – End-users / Actions | | S4-3 | Processes to remediate negative impacts and channels for consumers and end-users to raise concerns | ↗ S4 – End-users / Actions | | S4-4 | Taking action on material impacts on consumers and end-users, and approaches to managing material risks and pursuing material opportunities related to consumers and end-users, and effectiveness of those actions | ↗ S4 – End-users / Actions | | S4-5 | Targets related to managing material negative impacts, advancing positive impacts, and managing material risks and opportunities | ↗ S4 – End-users / Targets |

| ESRS G1 | Business conduct | | | G1-1 | Corporate culture and business conduct policies | ↗ G1 – Business conduct / Policies | | G1-2 | Management of relationships with suppliers | ↗ S2 – Workers in the value chain / Actions | | G1-3 | Prevention and detection of corruption and bribery | ↗ G1 – Business conduct / Anti-corruption and anti-bribery | | G1-4 | Confirmed incidents of corruption or bribery | ↗ G1 – Business conduct / Anti-corruption and anti-bribery | | G1-5 | Political influence and lobbying activities | ↗ G1 – Business conduct / Political influence | | G1-6 | Payment practices | ↗ G1 – Business conduct / Payment practices |

Resource outflows

Frequentis' products and solutions are designed for long-term use by customers, often for decades. The company supports this extended life cycle through extensive service and maintenance programmes and life cycle management. Customer Service offers various service levels and service teams are available worldwide around the clock.

For a number of years, Frequentis has repurchased hardware components from its customers. Repurchased parts are subject to a quality control check and then stored. Some of these components are refurbished to good-as-new assemblies and reused for many years in customer projects.

The modular structure and high repairability of Frequentis systems make them suitable for long-term operation. The product portfolio includes options for the use of systems through scalability and divisibility, including mobile systems and remote digital towers.

Products are designed to be:

• Largely free of toxic substances
• Repairable and upgradeable
• Energy efficient

No specific percentages of recyclable materials or recycled content in products are disclosed.

Waste

Waste Management Approach

Most of Frequentis' waste is non-hazardous and occurs in the production and transport of Frequentis' systems. Hazardous waste accounts for less than 5%.

For Frequentis AG in Vienna, there is an extensive Waste Management Policy (based on the Vienna waste management law [AWG]) in place. This outlines the waste occurring at Frequentis AG and the related statutory provisions on correct disposal. At the other companies, too, waste is managed in compliance with local statutory regulations.

Thanks to a mindful waste avoidance approach and systematic sorting of waste in line with local regulations, Frequentis' waste impact is low. An annual HSE (Health&Safety and Environment) audit evaluates the action taken to reduce and dispose of waste and recommends new initiatives to ensure correct sorting of waste and help avoid waste.

Waste Data (Frequentis AG only)

Waste data are only disclosed for Frequentis AG in Vienna as this is the largest production location. No reliable data on waste volumes are available for other manufacturing companies in the Group; however, the amount of waste is not considered to be material.

Waste Diversion and Disposal (Frequentis AG)

¹ Data not available