Rheinmetall

Supervisory Board

The Supervisory Board carefully and continuously monitored and accompanied the work of the Executive Board in fiscal 2024. This was done in accordance with the statutory provisions, the articles of association and the rules of procedure on the basis of differentiated reports of the Executive Board and other executive officers of the company, which were made in written and oral form.

The Supervisory Board received the documents for the preparation of our meetings in a timely manner and thus always had sufficient space to critically acknowledge the reports, presentations and proposed resolutions in the plenary and in the committees, to specifically question them and to check their plausibility.

The cooperation between the Supervisory Board and the Executive Board was characterised by trust, openness and constructive dialogue. The Supervisory Board has been involved in all decisions of decisive importance for the Rheinmetall Group immediately and early.

The following overview shows the composition of the Supervisory Board and its committees as of the balance sheet date:

Executive Board

In fiscal 2024, the Executive Board consisted of three members: Armin Papperger, as Chairman of the Executive Board of Rheinmetall AG, as well as the Executive Board members Dagmar Steinert (CFO) and Peter S. Krause (HR) and Dr Ursula Biernert-Kloß, to whom Peter Sebastian Krause's official duties were fully transferred on 1 October 2024.

The transformation of the Executive Board of Rheinmetall AG consists of various individual measures that became effective from 1 January 2025. Armin Papperger, who has been the CEO of Rheinmetall since 1 January 2013, was appointed Chairman of the Executive Board for an additional five years from 1 January 2025.

Committee Structure

The Supervisory Board prepares its work on five committees:

• Nomination Committee
• Human Resources and Compensation Committee
• Audit Committee
• Strategy, Technology and ESG Committee
• Mediation Committee

These committees have the primary task of pre-structuring complex and time-intensive topics for the meetings of the plenary and to review proposed resolutions submitted by the Executive Board in advance.

Information provided to the Supervisory Board

During the reporting period, the plenary of the Supervisory Board intensively dealt with the political and economic environment of the company in five regular and five extraordinary Supervisory Board meetings. In addition to the development of the Rheinmetall Group as a whole, the focus of our attention was in particular the development in the divisions and ongoing projects in the Group.

The Supervisory Board received differentiated reports of the Executive Board and other executive officers of the company, which were made in written and oral form. We received the documents for the preparation of our meetings in a timely manner and thus always had sufficient space to critically acknowledge the reports, presentations and proposed resolutions in the plenary and in the committees.

Using this detailed information, we intensively discussed the company's operational, economic and organizational development and its strategic development. At the Supervisory Board and Committee meetings, the Executive Board explained all relevant matters and fully answered our questions.

Committee Activities

The Strategy, Technology and ESG Committee met in March and August during the reporting year. The Committee specifically addressed ESG issues, including, but not limited to, the Corporate Sustainability Reporting Directive (CSRD), the reporting obligations associated therewith, conducting a double materiality analysis to determine the relevant factors and aligning the ESG strategy with the company strategy.

The Audit Committee met in March, May, August, November and December. The Committee was informed about the status of the preparations for the holding of the Annual General Meeting and the dividend proposal. The audit focus of 2024 was explained, including the new requirements by the implementation law on CSRD.

During the year, the members of the Audit Committee were also informed in the meetings by executives of the company on the corporate function Legal, Corporate Sustainability Responsibility (CSR), Compliance and Tax Compliance, Risk Management and Internal Audit in the Rheinmetall Group.

Meeting attendance

At 97%, the participation rate of the members of the Supervisory Board in the consultations in the plenary and in the committees was again at a high level.

Integration of sustainability-related performance in incentive schemes

Remuneration components, which include sustainability targets, serve to further strengthen sustainable positive corporate development. The implementation of measures in the areas of environmental, social and governance have been taken into account for the members of the Executive Board in the LTI and STI with 20% each since fiscal 2022. For managers, this also applies since fiscal 2022 in the STI and since fiscal 2024 in the LTI.

Executive Board Remuneration Structure

The Human Resources and Compensation Committee prepared for the Supervisory Board plenary in the meetings in February, March, April, September, October and November 2024, among other things, topics such as the content and structure of the target agreements, the degree of achievement for fiscal 2023 as well as the setting of the objectives, ranges and calculation basis for the variable remuneration of the Executive Board in 2024.

The extraordinary meeting of the Supervisory Board on 4 March 2024 served to discuss the results of the HR and Remuneration Committee and its adoption of a resolution. The proposed resolution for the achievement of the STI 2023 (Short Term Incentive) target and for the achievement of the EBT and OFCF target were discussed, which were each accepted with abstention. We also discussed 2024 targets by calibrating ESG targets, the 2024 LTI (Long Term Incentive) tranche and the 2023 Compensation Report.

Risk management and internal controls over sustainability reporting

The Audit Committee dealt with the monitoring of the accounting process, the effectiveness and further development of the internal control system (including the sustainability-related internal control system), the risk management system, the internal audit system, the business continuity management and the compliance management system including data protection management.

The audit focus of 2024 was explained. In this context, the new requirements were further addressed by the implementation law on CSRD, the regulations of EU sustainability reporting and the specific aspects of accounting, as well as the audit requirements for the sustainability statement, including the resulting expansion of the task list of the Audit Committee due to CSRD.

As a result, the Audit Committee has not become aware of any circumstances that would contravene the adequacy and effectiveness of these systems in their entirety. The Audit Committee has ensured that the Company continuously reviews the systems and systematically and consistently expands them.

During the year, the members of the Audit Committee were also informed in the meetings by executives of the company on the corporate function Legal, Corporate Sustainability Responsibility (CSR), Compliance and Tax Compliance, Risk Management and Internal Audit in the Rheinmetall Group.

Internal Control Systems

The members of the Audit Committee were able to gain a deeper impression of the existing structures and organizations, processes and regulations, as well as to question and comment on the further developments and planned improvement measures presented in these topics.

Structure of the Rheinmetall Group

Rheinmetall is an international group in various markets with high-tech products and services. The sales focus is on the security technology and mobility. With its product portfolio, Rheinmetall fulfills these basic key needs of modern society.

Divisions:

• Vehicle Systems Europe: Armored tracked vehicles, CBRN protection systems, artillery, turret systems, wheeled logistics vehicles, wheeled tactical vehicles
• Vehicle Systems International: Similar portfolio but focuses on the markets of Australia, the US and Great Britain
• Weapon and Ammunition: Weapons and ammunition, propellants, protection systems, international projects and services
• Electronic Solutions: Air defence systems, radar technology, soldier systems, command/control and reconnaissance systems, fire control systems, sensors, simulation
• Power Systems: Emissions reduction, actuators, solenoid valves, pumps, engine blocks/components, plain bearings, global replacement parts business

Business Model and Value Chain

Vehicle Systems Europe, Vehicle Systems International, Weapon and Ammunition and Electronic Solutions offer system and subsystem solutions in the defence and security industry and a broad service portfolio for mobility, surveillance, management, impact and protection.

Power Systems is a system provider for high-quality and innovative (mobility) solutions, control technologies and digital applications, among other things, for the automotive and energy industry, but also increasingly for industrial applications.

Key Markets and Customers

Defence and Security Technology Markets: The product and capability spectrum of Rheinmetall is tailored to the central defence requirements, which result nationally and internationally from the continued high technical modernization or replacement needs of numerous armed forces.

Key strategic markets include:

• Germany (armed forces modernization)
• Eastern Europe (Hungary, Ukraine, Lithuania)
• UK and Australia (long-term partnerships)
• USA (growing through acquisitions)

Civilian Products and Mobility Applications: The business performance is largely determined by the production trends of international customers in the automotive industry. The business units of Power Systems assume a Tier 1 position within the value chain of automotive production, supplying automotive manufacturers directly.

Strategic Position

Rheinmetall's overarching goal is to be a leading integrated technology group that develops solutions for a secure and livable future. The transformation from a provider of security and mobility applications to a fully integrated technology group was initiated in 2020.

Key strategic growth areas include:

• Artillery systems, rocket artillery and ammunition
• Ground-based Air Defence
• Main Fighting Tank and Infantry Fighting Vehicles
• Aviation (F-35A production, helicopter maintenance)
• Military Unmanned Air Systems
• Digitalization and networking solutions
• Civil sector diversification (hydrogen, electrification)

Technology Transfer and Integration

The technology transfer between the individual areas is firmly integrated into the structure. Power Systems is increasingly integrated integrally into the value chain of the other divisions, representing Rheinmetall's organizational umbrella for key technological competencies in civilian markets.