Please refer to the "Macroeconomic development" section of the forecast report for an analysis of the risks and opportunities associated with the environment and industry. The order does not imply any prioritisation of the categories.

Business environment and industry

The anticipated macroeconomic and industry-specific developments in our core and growth markets are pivotal for evaluating opportunities and risks for the Uzin Utz Group. The IMF forecasts global growth of 3.3% for 2026 and thus stable development at the previous year's level. The USA will once again have the highest growth rate at 2.4%, while the other core and growth markets will be in a range of 1.0% to 1.3%. We are confident that positive developments are on the cards for the construction industry in 2026 across all the core and growth countries within our focus area. This will result in additional market potential in the Netherlands, the UK and France in particular.

It is anticipated that construction output in Germany, our primary market, will increase by 0.5% in 2026. The special fund for infrastructure and climate neutrality is expected to provide a significant source of stimulus. New residential construction remains in slight decline, while rising approval figures indicate a gradual stabilisation. The Netherlands recorded above-average growth of 2.8%. It is anticipated that both new residential and non-residential construction will experience modest growth, driven by government subsidy measures and a resurgence in approvals and building starts. It is anticipated that construction activity in Switzerland will increase by 1.5%. Multi-family house construction and infrastructure investments are having a stabilising effect, although regulatory restrictions and limited space are dampening growth.

It is anticipated that economic growth in our key markets of the UK, USA and France will be uneven. In the UK, construction output is expected to increase by 2.8%, driven primarily by the positive development in residential and non-residential construction. In the USA, moderate growth in construction expenditure of 1.0% is forecast. While residential construction is increasing marginally, non-residential construction is declining slightly overall. Segments such as the construction of data centres continue to demonstrate high growth rates. Infrastructure programmes are providing additional impetus. It is anticipated that there will be a 2.1% increase in construction output in France. This development is supported in particular by the revitalisation of new residential construction, while non-residential construction is largely stagnating.

It is evident that global economic development continues to be influenced by geopolitical tensions and trade policy uncertainties. Concurrently, technology, and notably AI investments, are providing a discernible impetus to growth. Growth is anticipated in all of our core and growth countries. Estimates for the construction industry vary across the sectors, although the forecasts for the countries under review are positive. In light of these developments, we acknowledge that we are operating within a challenging market environment, the full implications of which may have a substantial impact on our business performance. Concurrently, structural growth drivers present selective opportunities that align with the company's strategic positioning.

The risks that can be quantified in monetary terms in the "environment and sector" area amount to a maximum low single-digit million euro amount and can therefore be categorised as low risk.

Products

The continued development of the Uzin Utz Group is closely linked to our ability to innovate and continuously refine existing formulations. Extensive research and development activities, supported by benchmarking and competitive analyses, serve to identify market requirements as well as technological and regulatory trends at an early stage and to prevent potential competitive disadvantages. Risks are particularly associated with technological deficits or product defects that could result in complaints, liability claims or reputational damage. In order to limit these risks, the Group makes continuous investments in research and development, promotes its own innovations and subjects all products to rigorous internal quality and safety tests. The objective is to identify and resolve potential product defects during the development process, thereby ensuring that Uzin Utz Group products consistently meet the highest quality and safety standards. Comprehensive international insurance cover, including product liability, is in place in the event of damage. Where necessary, operational risks are additionally covered by provisions.

Customer requirements and the legal framework, particularly in the chemical industry, are subject to constant change. New regulatory requirements, including the REACH regulation, require continuous adaptation of existing formulations and the development of innovative solutions that fulfil regulatory requirements without compromising product quality. Through targeted research into replacement and substitute raw materials, the Uzin Utz Group also enhances supply chain security and reduces dependencies on individual raw materials and suppliers.

Concurrently, these activities facilitate the identification of market trends in an early stage, enabling the successful positioning of innovative, sustainable and low-emission products in the market. Investments in research and development, as well as the increasing use of robotics and automated development, production and testing processes, present a valuable opportunity to reduce development times, enhance process stability and sustainably boost efficiency in product development and manufacturing. The increasing regulatory pressure in the chemical industry is both a risk factor and an impetus for innovation. The Uzin Utz Group is already fulfilling high quality and environmental standards and proactively addressing customer requirements.

The Uzin Utz Group has the capacity to adapt product developments specifically to regional requirements due to its combination of company size, global presence and in-depth local market knowledge. The close cooperation between central development departments and international subsidiaries ensures the transfer of best practice throughout the Group, accelerates time-to-market and increases customer satisfaction in the long term.

The quantifiable monetary risks in the "Products" segment amount to a maximum low single-digit million euro amount and can be categorised as low for the reasons mentioned.

Financial Management

The assessment of the extent of financial risks remains challenging due to the current economic framework conditions. The liquidity risk of the Uzin Utz Group is primarily attributable to its financing of growth and innovation, as well as to the fact that Uzin Utz SE or subsidiaries may be unable to fulfil their financial obligations (e.g. repayment of financial debt or payment of interest). The Uzin Utz Group manages liquidity risks as part of regular liquidity forecasts and medium-term financial planning. It is also important to note that there are fluctuations in liquidity requirements. The Uzin Utz Group has sufficient liquidity reserves in the form of financial resources and loans or working capital lines.

Due to the global orientation of the Uzin Utz Group, the operating business and reported financial results are exposed to financial market price risks. This includes currency and interest rate risks. The associated opportunities and risks are managed centrally. The Uzin Utz Group is committed to limiting potentially negative effects through the use of financial instruments and contractual agreements, to the greatest extent that is both feasible and economically viable.

The Uzin Utz Group is exposed to the risk of default on customer receivables or customer insolvencies. In order to limit this risk, the Uzin Utz Group has implemented a receivables management system that is appropriate to the situation. Furthermore, credit insurance provides coverage for customer receivables, a benefit that is especially relevant for European companies. This approach is intended to minimise the likelihood of default.

The quantifiable risks in the area of finance amount to a maximum mid-single-digit million euro amount and can be categorised as low for the reasons mentioned.

Production

In the production areas of the various locations, continuous maintenance of the facilities and comprehensive fire and preventive measures play a key role in minimising the risk of performance impairments to the production facilities. Appropriate insurance policies are in place to cover natural hazards and any resulting business interruptions, although the associated risks can only be quantified to a limited extent. Concurrently, the ongoing enhancement of production processes and strategic investments in modern systems, automation and robotics present significant opportunities for enhancing efficiency. The increasing networking of international production sites, standardised processes and uniform Group-wide quality management make it possible to sustainably improve productivity, process stability and manufacturing quality and realise economies of scale.

The potential financial risks in these areas are negligible, amounting to a maximum mid-six-figure euro sum.

IT Security and environment

Operating and production processes, as well as internal and external communication, are increasingly dependent on information technology. Significant impairments or even the failure of global or regional IT systems could lead to data loss and disruptions in operating and production processes. A range of targeted technical, structural and organisational measures are in place to minimise the risk of a failure of critical IT systems. These include multi-level security concepts, regular system checks, emergency plans and continuous monitoring of the IT infrastructure. The continuous further development and modernisation of IT systems also offer opportunities to increase the efficiency and stability of business processes. Improved system transparency, automated processes and standardised data structures support secure and smooth collaboration within the Group.

The risks associated with IT security and the environment can be quantified in monetary terms and are currently categorised as low. These risks amount to a maximum mid-single-digit million euro amount. Although the identified IT risks are categorised as low due to the existing security measures, there is the potential that a serious IT incident could have a significant impact on business operations in extreme cases. However, due to the low probability of occurrence, this scenario is not reflected in the quantitative calculations. Despite the low probability of occurrence, this risk is taken into account as part of special crisis measures and emergency tests.

Investments

Risks associated with significant investment decisions are subject to detailed preliminary analyses and require the approval of the Management Board of Uzin Utz SE. Should the situation demand it, the expertise of external consultants is called upon. Potential takeovers are always evaluated by the Management Board and require the approval of the Supervisory Board. Investment in new locations, technologies and acquisitions is essential for ensuring future growth. The expansion of our production and sales networks creates opportunities to increase market share and realise synergies that contribute to long-term profitability. Investments represent the greatest opportunities for the Uzin Utz Group to achieve its corporate goals in the long term.

The potential financial risks associated with investments are limited to a maximum amount of four digits in euro, and are categorised as minimal due to the reasons outlined.

Purchasing, supplier and raw material prices

The Uzin Utz Group has pursued a multi-supplier strategy for many years. This approach has two main benefits: it reduces dependency on individual suppliers and ensures security of supply, even in the event of market distortions or supply bottlenecks. Furthermore, framework agreements are concluded to limit price fluctuations and ensure the most stable cost structure possible. These measures not only reduce procurement risks, but also increase the flexibility and resilience of the supply chains.

At the same time, the company's multi-supplier strategy and close collaboration between the Research & Development and Procurement departments provide opportunities to react flexibly to changes in the raw materials markets. By identifying and qualifying alternative and substitute raw materials, the Group can further reduce its dependence on individual materials and benefit from potential reductions in raw material prices. In addition, it presents the opportunity to enhance material efficiency and optimise the cost structure over the long term.

Further opportunities are created through strategic collaborations with suppliers and research partners, which provide early access to new materials and technologies. This underscores the Uzin Utz Group's commitment to innovation and supports the development of resilient, future-oriented supply chain management.

The quantifiable monetary risks in the areas of "procurement, suppliers and raw material prices" amount to a maximum low single-digit million euro amount and can therefore be categorised as low risk.

Personnel

Personnel-related risks include potential adverse effects that may result from the behaviour or general conditions of the workforce. Such risks may include misconduct, wrong decisions, accidents at work, health restrictions or staff absences. The Uzin Utz Group recognises the importance of maintaining a safe and healthy work environment. To this end, we have implemented a comprehensive set of measures to mitigate potential risks. These include regular training and further education programmes, the provision of preventative health initiatives, the establishment of safe working conditions, and the implementation of structured employee appraisals. There is a particular focus on the ongoing shortage of skilled labour, which is addressed through targeted personnel development, qualification measures and systematic succession planning.

Concurrently, a robust employer brand and targeted employee retention strategies generate opportunities to attract and retain qualified specialists, thereby ensuring the Group's long-term access to expertise. The implementation of ongoing professional development programmes can lead to a number of key benefits for employees, including the enhancement of their expertise, innovation capabilities and motivation levels. These programmes can also contribute to achieving productivity gains within the workplace. An open, appreciative corporate culture also supports the early identification of personnel-related risks and helps to channel positive impulses from the employee environment into the further development of the Group.

The risks that can be quantified in monetary terms in the area of "Personnel" amount to a maximum high five-digit euro sum and are to be categorised as insignificant.

Sales and distribution

There are several potential risks associated with sales, including market fluctuations, changes in customer behaviour, increasing competitive pressure and dependence on individual sales channels. It is vital to constantly monitor the market, to have sales strategies that can be adapted to changing circumstances, and to ensure close coordination between sales, marketing and production. This is the only way to ensure sales and to be able to react quickly to variations in demand.

Concurrently, the ongoing digitalisation of sales processes, enhanced customer communication and the Group's high-quality and service standards are creating opportunities to further strengthen existing customer relationships and access new customer segments. Digital sales solutions and data-based approaches enable a more targeted customer approach and support the development of new markets.

Further opportunities will be created by the ongoing development of logistics and service concepts. These initiatives have the potential to increase customer satisfaction in a sustainable manner, to differentiate our company from the competition, and to strengthen the long-term market position of the Uzin Utz Group.

The quantifiable monetary risks in the "Sales" segment amount to a maximum mid-single-digit million euro amount and are classified as medium.

Environment

Environmental risks refer to the potential negative impact of environmental factors on business operations. The aforementioned factors include regulatory changes in the context of stricter environmental and climate laws, as well as physical risks due to natural events or extreme weather conditions. The Uzin Utz Group is committed to mitigating these risks through a combination of preventive measures, compliance with all relevant environmental standards, and continuous monitoring of legal developments. This proactive approach enables the Group to react to new requirements promptly and effectively. Concurrently, the mounting demands of sustainability are creating significant opportunities for us to distinguish ourselves in the market. By focusing on environmentally friendly products, resource-conserving production processes and sustainable supply chains, the Group can position itself as a reliable and responsible partner and gain additional market share in growing segments.

The risks that can be quantified in monetary terms in the area of "environment" amount to a maximum mid-six-figure euro sum and can be categorised as insignificant. However, there are also non-quantifiable risks that will need to be quantified further in future as part of CSRD reporting.

Regulatory framework

Regulatory risks arise from possible changes to legal and official requirements that may have an impact on products, production processes or business practices. The aforementioned amendments pertain to legislation concerning chemicals, the environment, taxation, and commerce. They also include novel requirements that have been instigated by the Corporate Sustainability Reporting Directive (CSRD) and the Supply Chain Duty of Care Act. The Group maintains continuous oversight of regulatory developments at both the national and international levels, enabling prompt responses to emerging requirements. We work closely with professional associations, external consultants and authorities to ensure that we can minimise the risk of violations and resulting sanctions. We also continually adjust our internal guidelines and processes.

Concurrently, the emergence of a revised legal framework presents opportunities to establish a positive market presence through transparency, sustainability and compliant conduct. The early implementation of regulatory requirements is beneficial in strengthening customer, partner and investor trust, while also supporting sustainable corporate development.

The risks that can be quantified in monetary terms in the "regulatory" area amount to a maximum mid-six-figure euro amount and can be categorised as insignificant.

Extraordinary influencing factors

In 2025, the economic environment continued to be characterised by geopolitical and economic policy uncertainties. In addition to the ongoing Russian war of aggression in Ukraine and the situation in the Middle East, trade policy developments and structural adjustments in global supply chains in particular had an impact on the international economy. Notwithstanding the above, the global economy continues to demonstrate considerable strength in general terms. In light of the recent changes to US trade policy, we are closely monitoring any adjustments to US customs policy and conducting thorough analyses to assess their potential impact on our sales markets and existing supply chain structures. Should the situation demand it, we are committed to responding promptly and appropriately to mitigate any potential risks. We address these challenges with strategic and operational measures, including continuous monitoring and assessment of macroeconomic and geopolitical developments.

Risks that threaten the company's survival

At the time of report preparation, there were no identifiable risks that, when considered together, could potentially jeopardise the ongoing existence of the Uzin Utz Group. When compared with the previous year, the overall assessment indicates sufficient risk-bearing capacity with a low overall risk.

Overall statement by the Management Board

The Management Board of Uzin Utz SE considers the risk and opportunity landscape for the 2025 financial year to be positive, despite the challenging economic conditions. The Uzin Utz Group is in a position to take on business risks, particularly within the framework of its new strategic direction, provided that the associated business activities and the resulting additional revenue opportunities are expected to strengthen its position and increase the company’s value.