The role of the administrative, management and supervisory bodies

The Executive Board manages FUCHS on the basis of various financial performance indicators. The most important of these key performance indicators (KPIs) is the FUCHS Value Added (FVA). It is characterized by the strategic objective and combines profit with capital employed. In addition, other key performance indicators are regularly reported to the Executive Board and the Supervisory Board.

Supervisory Board Responsibilities

The Supervisory Board held five meetings in the reporting year, all of which were conducted in person. Additionally, two topics were dealt with in writing. During these meetings, the Supervisory Board regularly addressed the business performance of FUCHS and the Group companies. They dealt with the budget and strategic focus as well as numerous governance topics, as well as the 2025 budget, including the investment budget. Additionally, the committee addressed matters related to Executive Board compensation and preparations for the 2025 Annual General Meeting.

The Supervisory Board approved the 2024 Declaration of Compliance with the German Corporate Governance Code and adopted adjustments to its rules of procedure, as well as those of the Executive Board. The amended allocation of responsibilities plan presented by the Executive Board was approved. Based on the recommendations of the Personnel Committee, the Supervisory Board established the sustainability factor for the Executive Board's variable compensation for the financial year 2024. It also decided on the criteria for measuring the sustainability factor for 2025 and the target total compensation for 2025.

There was an update on opportunity and risk management, compliance, and the results and recommendations of the internal audit. The Supervisory Board was informed about the current status of the implementation of the CSRD at FUCHS. It also dealt with the procedure and the assessment of the effects, risks and opportunities in accordance with the CSRD. Additionally, an update was given on the company's sustainability strategy.

Committee Structure

Audit Committee

The Audit Committee held five meetings in the reporting year. Two of the meetings were held via videoconference and three in person. The CFO and heads of the Finance and Controlling as well as Accounting departments regularly attended the meetings. The auditor was present at three meetings for individual agenda items. The committee focused on the annual financial statements and the audit of the annual financial statements of FUCHS SE and the consolidated financial statements together with the Combined Management report, the non-financial declaration, the Compensation Report, the requirements of the CSRD on sustainability reporting and compliance issues.

Other main topics were assessment of the quality of the auditor and a detailed discussion of the quarterly statements and half-year financial report prior to their publication. The Audit Committee, together with the external auditor, determined the key areas of focus for the audit of the reporting year, issued the audit mandate, granted general approval for permissible non-audit services by the auditor, and addressed new accounting and reporting regulations.

Additionally, the Audit Committee reviewed financial reporting, monitored the financial reporting process, and assessed the effectiveness of the internal control system, risk management system, and internal audit function.

Personnel Committee

The Personnel Committee advises the Supervisory Board on personnel matters pertaining to the Executive Board and prepares its decisions. In the reporting year, three meetings were held, all of which were conducted in person. In its meetings, the committee focused particularly on the upcoming changes in the Executive Board in 2025, especially the new appointments and the related resolution recommendations to the full committee. Other topics included the new Executive Board remuneration system, including the corresponding adjustment of Executive Board service contracts, the adjustment of pensions for former Executive Board members, the assessment of variable remuneration for the 2024 financial year, and the target remuneration for 2025.

Nomination Committee

The Nomination Committee advises the Supervisory Board on suitable candidates and nominates such candidates for the Board's proposals to the Annual General Meeting for the election of Supervisory Board members. The Nomination Committee convened once in person during the 2024 financial year and issued its recommendation for the election of shareholder representatives at the 2025 Annual General Meeting.

Supervisory Board Composition

As a financial expert, Ingeborg Neumann has expertise in accounting and auditing within the meaning of Section 100(5) of the German Stock Corporation Act (AktG) and of Recommendation D.3 p. 1 of the Corporate Governance Code. As Chairwoman of the Audit Committee, she thus also meets the requirements of Recommendation D.3 on p. 2 of the Code. Dr. Markus Steilemann is also a financial expert with expertise in the field of accounting within the meaning of Section 100(5) of the German Stock Corporation Act (AktG) and of Recommendation D.3 p. 1 of the Code.

Mr. Jens Lehfeldt and Ms. Cornelia Stahlschmidt are the employee representatives on the Supervisory Board.

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

There was an update on opportunity and risk management, compliance, and the results and recommendations of the internal audit. The Supervisory Board was informed about the current status of the implementation of the CSRD at FUCHS. It also dealt with the procedure and the assessment of the effects, risks and opportunities in accordance with the CSRD. Additionally, an update was given on the company's sustainability strategy.

The Supervisory Board established the sustainability factor for the Executive Board's variable compensation for the financial year 2024. It also decided on the criteria for measuring the sustainability factor for 2025 and the target total compensation for 2025.

The committee focused on the annual financial statements and the audit of the annual financial statements of FUCHS SE and the consolidated financial statements together with the Combined Management report, the non-financial declaration, the Compensation Report, the requirements of the CSRD on sustainability reporting and compliance issues.

Integration of sustainability-related performance in incentive schemes

The Supervisory Board established the sustainability factor for the Executive Board's variable compensation for the financial year 2024. It also decided on the criteria for measuring the sustainability factor for 2025 and the target total compensation for 2025.

Variable compensation for local, regional and global management is based on FVA (FUCHS Value Added). Entitlements to variable compensation are only granted when positive added value has been generated in the respective financial year.

Risk management and internal controls over sustainability reporting

There was an update on opportunity and risk management, compliance, and the results and recommendations of the internal audit. The Supervisory Board was informed about the current status of the implementation of the CSRD at FUCHS. It also dealt with the procedure and the assessment of the effects, risks and opportunities in accordance with the CSRD.

Additionally, the Audit Committee reviewed financial reporting, monitored the financial reporting process, and assessed the effectiveness of the internal control system, risk management system, and internal audit function.

In particular, the auditor confirmed that the Executive Board had set up a suitable monitoring system in accordance with Section 91 (2) of the German Stock Corporation Act (AktG) capable of identifying developments that jeopardize the continued existence of the company at an early stage.

Strategy, business model and value chain

LUBRICANTS. 100% focus

Our focus is 100% on the production, development, and distribution of highly efficient lubricant solutions and functional fluids. And on a high level of technical service. This clear orientation defines us. Our holistic products are tailored and customer-specific. We respond flexibly and quickly to challenges in a wide range of application areas and meet a wide range of national and international standards. We have a broad range of more than 10,000 products. It is roughly divided into automotive and industrial lubricants. In a highly fragmented market, FUCHS is a leading provider of systemic solutions with global reach. We are present in virtually all industry segments and provide holistic support to customers throughout the entire product lifecycle. Everywhere in the world.

TECHNOLOGY. Holistic solutions

Advanced, process-oriented and holistic solutions for lubricants and functional fluids are central to FUCHS' success. Almost 10% of employees are active in research and development. A worldwide network of professionals supports them with specialized skills so that intelligent solutions are created, tailored and customized: whether it is a single product, services or a digital solution. Or everything as a whole package. Our products and solutions reduce friction and wear, and sometimes even improve the manufacturing process itself, for example, with 360-degree project monitoring, digital lubricant monitoring, and sustainable supply processes. We continue to build our technology leadership in strategically important application areas. These include the areas of digitalization, new mobility, and sustainability. In doing so, we rely on the effectiveness, safety and sustainability of our lubricants and functional fluids along the entire process and value chain.

PEOPLE. Personal commitment

Over 6,700 employees around the world are committed to satisfaction of our customers and thus form the basis of our success. In an intensive and trusting dialogue with our customers, they are constantly working to offer the best lubricant solution and to fulfil our purpose of MOVING YOUR WORLD.

Global customer service through internationality and scale

FUCHS' business success is based on our global presence and our extensive product and customer portfolio. We are where our customers are. As of the end of the reporting period, out of our 80 operating subsidiaries and our 11 companies consolidated at equity, 58 were active in the Europe, Middle East, Africa (EMEA) region, 11 in the Americas, and 22 in the Asia-Pacific region. This broad geographical structure allows FUCHS to serve global customers worldwide while also offering local customers tailor-made solutions on site.

With more than 10,000 products, FUCHS not only ensures that the increasing specialization requirements of mature markets are met, but is also able to participate in the growth of developing markets. The diversification across regions and industries helps to balance economic and sector-specific cycles.

Group structure

Simple Group structure with largely decentralized management

FUCHS' Group structure has been kept intentionally simple. FUCHS usually holds 100% of the shares in its subsidiaries. Exceptions to this are the joint ventures and associates in Germany, Africa, the Middle East, Saudi Arabia, and Turkey.

The companies are organized into the three geographical regions of EMEA, Asia-Pacific, and North and South America, which is reflected in the management and reporting system. Business is generally managed by the local subsidiaries and the regional managers in charge of them. In addition, local managers are increasingly included in our global excellence networks. Within these networks, joint solutions for current challenges and issues are developed based on an exchange of experience and knowledge across national and corporate boundaries.

Customer Segmentation

Product Portfolio

FUCHS 2025 Strategy

With digitalization, e-mobility, globalized customer requirements, and sustainable products and solutions, FUCHS lives in a highly dynamic world full of new challenges. We see these challenges as opportunities to shape our future and continue to succeed. Our FUCHS 2025 strategy and transformation program, published in July 2020, represents this commitment, and we will continue its consistent implementation through 2025.

Being First Choice Vision

With the "Being First Choice" vision, we are reinforcing and expressing our sharpened focus. Building on our strengths, we want to be first choice worldwide: for customers, employees, and investors.

Six Strategic Pillars

Global strength

• Use segmentation as a basis for strategic and global business development and align the organization accordingly
• Generate above-average growth in Asia-Pacific and North and South America, thereby achieving a balance between our regions
• Enhance brand appeal by 2025 with strong, differentiated positioning and clear brand architecture in all relevant FUCHS segments

Customer and Market Focus

• Establish the greatest possible proximity to customers – strengthen the principle of "one face to the customer" and take advantage of cross-selling opportunities: become the full-line supplier for our customers
• Increase our market share in order to taking a leading position in our target segments
• Develop a global service portfolio by 2025 – from a product-oriented to a solution-oriented approach
• Systematically introduce new business models in the broader lubricant environment

Technology leadership

• Encourage innovation-oriented thinking and strengthen our innovative capabilities. Strengthen / establish our technology leadership in all defined target segments
• Introduce digital solutions and platforms to establish even closer connections with our customers beyond lubricants
• Strengthening regional structures and leveraging the expertise and know-how of the three R&D centers in China, the USA and Germany at a global level

Operational Excellence

• Establish a global production and sales network; independent supply and technology centers in the three global regions by 2025
• Further standardize production and procurement processes, equipment, and output in order to improve efficiency in the supply chain
• Establish data transparency on the basis of global structures and harmonization of systems

People and Organization

• Be the preferred employer for existing and future employees
• Optimize working conditions and promote global cooperation
• Further improve development programs, skills models, and succession planning; strengthen global recruitment and retention of talented employees
• Promote the internationalization of business units, remote leadership, international job changes, etc.

Sustainability

• Economic sustainability: Annual sales revenues growth in the mid-single-digit percentage range, EBIT of €500 million as the target and an EBIT margin of around 15% at Group level in the long term, an average cash conversion rate of 0.8 and an annual increase in the dividend
• Environmental sustainability: Net zero emissions targets for Scope 1 and 2 emissions by 2040 and Scope 3 emissions by 2050. Conversion of FUCHS sites to green electricity by 2025
• Social sustainability: Each FUCHS company invests at least 0.1% of local EBIT in social projects every year

Further development FUCHS 100

Our FUCHS 2025 strategy cycle ends with the 2025 financial year. We are already working on its evolution through our new strategy program, FUCHS 100, which will be published at the end of 2025. Building on FUCHS2025, FUCHS100 will be more of an evolution than a revolution. We plan to increase focus and achieve disproportionate growth in a few defined areas. And of course, we will set new goals – for 2031, the year in which FUCHS will celebrate its 100th anniversary.

Increase in company value

With FUCHS 2025, FUCHS is continuing to pursue the objective of continually increasing the company's value. We create value for our customers, employees and shareholders. Securing and strengthening our market position in mature markets and sustainably expanding our market position in emerging markets form the basis for this. The conditions for achieving these goals are created through organic growth and – insofar as prudent and possible – external growth, as well as through activities to secure the technological leadership of the FUCHS Group.

Independent lubricant manufacturer

Maintaining the independence of FUCHS SE remains a factor of particular strategic importance. Our independence enables us to focus on lubricants and related specialties in an efficient environment, while providing scope to further increase company value. It is based, firstly, on the Fuchs family as an anchor shareholder and, secondly, on stable financial support, which allows a sustainable dividend policy and also creates scope for acquisitions.

Interests and views of stakeholders

FUCHS relies on an intensive dialogue with its shareholders, analysts and all other capital market participants. The aim is to strengthen trust in our company on a sustained basis. All capital market participants are always informed promptly, transparently, and comprehensively of all major events in the FUCHS Group.

In recent years, the company stepped up its investor relations activities. In 2024, the Chair of the Executive Board, the Chief Financial Officer, and the Investor Relations team shared information through international conferences and roadshows as well as in numerous one-on-one meetings with institutional investors and maintained regular contact with retail investors.

The public were also kept regularly informed of current developments through press releases and ad hoc disclosures. Furthermore, the Investor Relations team was always available by phone and email.

In an intensive and trusting dialogue with our customers, they are constantly working to offer the best lubricant solution and to fulfil our purpose of MOVING YOUR WORLD.

FUCHS SE has been offering employees at the companies in Germany employee shares at preferential conditions since 1985. In 2024, each employee could purchase a maximum of 30 shares at a discount of €5 per share. Overall, 386 (402) employees made use of this opportunity, purchasing 10,893 (11,483) shares in total.

ESRS E5-4 Resource Inflows

Disclosure Statement

Fuchs Petrolub reports resource inflow information in the context of its Net-Zero strategy and transition from fossil to biomass-based and recycled raw materials. However, no quantitative breakdown of total inflows by weight, biological vs. non-biological materials, or percentages of renewable/recycled materials is provided in the sustainability statement.

Qualitative Context on Resource Inflows

The company states that "most of the raw materials and packaging used by FUCHS are based on fossil resources" (p. 177). The procurement strategy is described as "Reduction of total cost of ownership while enabling transformation to net zero".

Key Resource Categories

Key resource inflows include (p. 177):

• Base oils
• Additives
• Packaging materials (metal and plastic)
• Water (in smaller quantities for production and sanitary purposes)
• Technical equipment and machinery for manufacturing

Transition to Renewable Materials

FUCHS has identified the use of recyclable materials (recycled, renewable, biogenic) as a key decarbonization lever to reduce Scope 3 emissions (p. 177). The company aims to:

1. Recycled raw materials, mainly sourced from used oil recycling or other post-consumer recycling streams. Available quantities with sufficient quality at market-competitive prices remain limited.

2. Biogenic/bio-based materials produced from plant-based materials, preferably from biomass waste streams to avoid conflict with food production. These materials are available today but in very limited quantities and at prices not yet comparable to fossil resources (p. 174).

Packaging Recyclability

The recyclable proportion of packaging is approximately 74% (p. 179). This was determined based on an expert assessment by the global purchasing department, weighted by packaging mix. Since May 2024, all FUCHS-owned small automotive core-design packaging used in Europe has reached 100% post-consumer recycled (PCR) content (p. 157).

Product Recyclability

The recyclable proportion of products is approximately 60% (p. 179), determined by global product managers using known recyclable shares in product categories weighted by product mix.

Data Limitations

No quantitative data on total weight of materials used, biological vs. non-biological split, or percentages of renewable/recycled materials in the overall material mix is disclosed for the 2024 reporting period. The company notes it is transitioning its procurement strategy but does not provide baseline resource inflow metrics.

Characteristics of the undertaking's employees

As of December 31, 2024, the FUCHS Group had 6,781 (6,272) employees, of whom 133 (123) were trainees. The total workforce increased by 509 people, or 8% compared with the previous year.

Geographical staff structure

Functional workforce structure (excluding trainees)

Compared with the reporting date of the previous year, the number of employees, including trainees, in the EMEA region (Europe, Middle East, Africa) increased, particularly due to acquisitions, by 430 (+11%), in the Asia-Pacific region by 57 (+5%) and in North and South America by 18 (+2%).

Training and skills development metrics

Training Programs

As at December 31, 2024, 80 (78) young people were in dual vocational training at the German companies. 18 (24) trainees and dual students completed their training in the reporting year.

We provide training in different commercial and technical professions. We also offer goal-oriented and qualified high school graduates the opportunity to attend a dual study program, which leads to a bachelor's degree, in cooperation with the Duale Hochschule Baden-Württemberg (DHBW).

Dual study programs are a key building block for junior staff development at FUCHS. In addition to the various training courses and DHBW study programs, we also offer involvement in cross-group, international projects. Many of our current top performers are former FUCHS students, trainees and interns. Many management positions throughout the Group have now been filled by our former students.

Research and Development

In the reporting year 2024, 641 (597) employees, and thus around 10% of the total workforce, were engaged in research and development (R&D), working on around 650 projects (680). R&D expenditures amounting to €79 million (71) contributed to further expanding the innovative strength of FUCHS.