Comparable opportunities and risks from different areas of the Group are reported together under the following categories where appropriate. The order in which the categories are listed does not imply any significance.

The basis for the assessment of the opportunities and risks of the environment and industry can be found in the sections "Future macroeconomic development" and "Future development of Uzin Utz" of the forecast report.

Risks

Business environment and industry

The forecast economic development in our core and growth markets is decisive for the opportunities and risks for Uzin Utz arising from the environment and the industry. The IMF forecasts global economic growth of 3.3% for the year 2025. This is below the historical average of 3.7% for the years 2000 to 2019. The largest increase is expected for the US growth market with a rise of 2.7%, while the expected growth rates in our other core and growth countries are between 0.3% and 1.6%. According to the forecasts for the construction industry as a whole, a decline is expected in two of our six core and growth countries in 2025. The forecast growth in construction output opens up opportunities in the UK, Switzerland and the USA in particular. In addition, despite the expected decline in overall construction output, there are growth opportunities in certain areas of the construction industry in our focus markets, which we will exploit using our strengths.

Forecasts for economic development in our core market of Germany are at a similar level, ranging from stagnation to a slight increase. Construction output is expected to decline slightly, partly due to high construction and financing costs. Nevertheless, there are slight growth trends in non-residential and commercial construction. The Forecast economic growth for our core markets of the Netherlands and Switzerland is almost identical at 1.6% and 1.5% respectively. In the Netherlands, a slight increase in the overall volume of construction output is forecast due to the upturn in residential construction activity. However, this is offset by structural bottlenecks such as the lack of building land and complex project developments. An increase in construction activity is forecast for Switzerland. The reduction in the key interest rate is having a positive effect on construction investment in building construction. An increase in building permits is forecast, which will boost investment in new construction and conversions.

The economic growth forecast for the growth markets of the UK, USA and France varies. A slight increase in GDP of 1.6% is expected in the UK and 0.8% in France. In the USA, on the other hand, an increase of 2.7% is forecast, which positions the USA as the strongest of our growth markets. Growth in the construction sector in the UK is due in particular to opportunities in private residential and non-residential construction. A moderate increase is forecast for the USA, which is attributable to the rise in single-family homes and increased maintenance and modernization. The single-family home sector in particular is benefiting from interest rate cuts and political support, offering significant growth opportunities. The development of the French construction industry continues to be characterized by a downward trend, which is likely to continue in 2025. The main reasons for this are the continuing rise in real estate prices and high interest rates. Despite these inhibiting factors, there is an opportunity for slight growth in the area of maintenance and modernization.

In addition to the factors that already hampered economic development in the previous year, geopolitical uncertainties continue to weigh on growth forecasts. However, a recession is not expected in any of our core and growth countries. Estimates for the construction industry vary, with forecasts for the countries we focus on ranging from a slight decline to a slight increase. We are once again confronted with a challenging market environment, which may have a significant impact on business performance depending on how the sector actually develops. Overall, however, there are slight opportunities for growth that are in line with the company's strengths. Positive business development is therefore also expected in the 2025 reporting year. A slight reduction in earnings is expected due to the forecast increase in all cost items, particularly as a result of staff increases, consulting costs and higher raw material prices.

The quantifiable risks in the "Environment and sector" area amount to a mid-single-digit million euro sum.

Products

The further development of Uzin Utz is closely linked to the ability to create innovations in the product range and to refine existing formulations. Intensive efforts are aimed at intensifying research and development activities in order to identify market requirements and trends promptly by means of benchmarking and competitive analyses. This serves to prevent the company from falling behind its competitors in terms of technology. The risk of technological deficits and the risk of product defects represent significant challenges for the Group. Significant investments in research and development, continuous in-house innovations and strict internal quality controls are aimed at eliminating product defects from the outset. This is intended to meet the high quality and faultlessness requirements of Uzin Utz products. In the event that damage nevertheless occurs, comprehensive international insurance cover, including product liability, provides protection. Operational risks are covered by prudent provisions.

Customer needs and legal requirements, especially in the chemical industry, are subject to continuous change. New regulations regarding the prohibition or restricted use of certain chemicals or hazardous substances force the Uzin Utz Group to develop innovative formulations that meet these new requirements without compromising product quality. In the course of the REACH regulation (Registration, Evaluation, Authorization and Restriction of Chemicals), importers of raw materials from non-EU countries who import hazardous substances are obliged to notify us. Uzin Utz is committed to researching substitute raw materials to ensure long-term security of supply and greater independence from suppliers without compromising product quality.

Product risks are classified as insignificant for the reasons mentioned above.

The quantifiable risks in the "products" area amount to a maximum low single-digit million euro amount.

Financial instruments

Assessing the extent of financial risks remains challenging in the current situation. In view of potential volatility on the financial markets, it is essential to implement adequate hedging strategies for currency risks, always striving for a balance between costs and expected benefits. The development of the currencies critical to the Group is discussed in more detail in the "Results of operations" section of this report. In addition, the Group's currency risks are explained in more detail in the notes to the consolidated financial statements under other disclosures. Group-wide, strict receivables and liquidity management guarantees the maximization of available resources, with a particular focus on the continuous review of customers' creditworthiness. The majority of customer receivables are also covered by credit insurance. All significant liabilities to financial institutions are generally taken out at fixed interest rates or protected against interest rate risks by an interest rate swap. The primary means of financing include bank loans and working capital credits, leasing obligations and trade payables. Their main objective is to support and maintain operating activities. In addition, the Group has various financial assets, such as trade receivables as well as cash and short-term investments, which contribute to improving liquidity. The Uzin Utz Group has used derivative financial instruments to a limited extent to hedge against interest rate and currency risks resulting directly from business and financing activities. Future possible significant currency and interest rate fluctuations always harbor an inherent risk. A company-wide treasury guideline effectively supports risk management and aims to optimize financial transactions and minimize currency and interest rate risks. The introduction of an integrated liquidity forecast improved quarterly reporting to the Executive Board through the use of real-time data. In addition, the project to standardize and automate global payment transaction formats was continued with the aim of managing the Group's payment transactions via a central platform.

For the reasons mentioned, the financial risks are classified as low.

The quantifiable monetary risks in this area amount to a maximum mid-single-digit million euro amount.

Production and essential IT-supported processes

In the production areas of the various sites, continuous maintenance as well as fire protection and preventive measures significantly minimize the risk of suboptimal performance of the production facilities. Special insurance policies have been taken out against damage caused by natural disasters and the possible resulting business interruptions, although the associated risks cannot be precisely quantified. The Group sees opportunities in the ongoing improvement of production processes and in additional investments in advanced technologies in order to continuously increase the efficiency of production facilities worldwide. The increasing networking of international production facilities and strict quality management help to continuously optimize production quality across the entire Group.

The operational and production processes as well as the internal and external communication of Uzin Utz are increasingly dependent on information technology. Significant impairments or even the failure of global and regional IT systems could lead to data losses and disruptions in operating and production processes. Targeted technical, structural and organizational measures are taken to minimize the risk of a failure of critical IT systems.

Risks in the area of production and risks relating to IT-supported processes are classified as insignificant.

The risks in these areas that can be quantified in monetary terms amount to a maximum low single-digit million euro amount.

Investments

Risks associated with significant investment decisions are subject to detailed preliminary analyses and require the approval of the Uzin Utz Executive Board. If necessary, the expertise of external consultants is consulted. Potential takeovers are always assessed with the involvement of external expertise, evaluated by the Executive Board and require the approval of the Supervisory Board. Targeted investments lay the foundations for the Group's future growth, continuously creating new opportunities to increase sales and thus improve the Group's overall result.

The investment risks can be classified as insignificant for the reasons mentioned above.

The quantifiable risks in the area of "investments" amount to a maximum very low single-digit million euro amount.

Purchasing, suppliers and raw material prices

For years, Uzin Utz has pursued a multi-supplier strategy in order to minimize dependence on various suppliers and to be able to change them if necessary. Furthermore, framework agreements are concluded with suppliers in order to absorb price increases as far as possible. Through continuous research into substitute raw materials within our research and development departments, we also try to minimize our dependence on suppliers or certain raw materials.

The procurement, supplier and raw material price risks can be classified as low thanks to the measures taken. This also reflects the continuous delivery capability of Uzin Utz in the past.

The monetarily quantifiable risks in the areas of "procurement, suppliers and raw material prices" amount to a maximum mid-single-digit million euro amount.

Personnel

Personnel-related risks encompass the range of potential dangers that can arise from the behavior and circumstances of our workforce, including, but not limited to, misconduct, wrong decisions, accidents at work, health problems or general staff absenteeism. To manage these risks, we implement a variety of strategies within our risk management system. For each identified personnel risk, there are specific measures aimed at reducing the probability of occurrence. Examples include further training, preventative health measures, ensuring safe working conditions and conducting regular employee appraisals in order to effectively minimize the aforementioned risks. The shortage of skilled workers also plays a key role. Active consideration and strategic planning to overcome this shortage are crucial to ensure the long-term competitiveness and productivity of our company. Our primary goal is to establish an open and transparent corporate culture in which all employees feel valued, communicate risks openly and actively work to reduce them in order to limit them as much as possible.

Risks that fall under the category of personnel risks are classified as insignificant.

The risks that can be quantified in monetary terms in the area of "personnel risk" amount to a maximum low single-digit million euro amount.

Distribution

Sales risks relate to the uncertainties and challenges that can arise in the sales process. These include market fluctuations, changes in customer behavior, competitive pressure and dependence on certain sales channels. Careful market analysis and a flexible sales strategy are crucial to counteracting these risks and ensuring sales stability.

Risks that fall under the category of sales risks are classified as insignificant.

The monetarily quantifiable risks in the area of "sales risk" amount to a maximum low single-digit million euro amount.

Environment

Environmental risks comprise the potential negative effects of environmental factors on our company. These include regulatory changes resulting from environmental laws and regulations, as well as physical risks from natural disasters. Proactive measures must be taken to fulfill their environmental responsibilities and prepare for possible changes in environmental legislation in order to avoid long-term damage.

Risks that fall under the category of environmental risks are classified as insignificant.

The risks that can be quantified in monetary terms in the area of "environmental risks" amount to a maximum low four-digit euro amount. However, there are also non-quantifiable risks that will have to be quantified further in future as part of CSRD reporting.

Other

In the current reporting year, all risks in the "Other risks" category were regrouped into the other risk categories. There are currently no risks classified under this risk category.

Risks threatening the existence of the company

None of the risks listed above currently pose a threat to the company as a going concern. Other risks that could jeopardize the existence of Uzin Utz are not currently discernible, even taking into account the Group's risk-bearing capacity.

Opportunities

Most of the risks described also offer the Group opportunities. These are often reflected in risk reduction measures. Due to its size, market position and the internal success factors already described, the Group can and will continue to exploit every commercially viable market opportunity that arises in order to gain further market share. Opportunities for strategically sensible company acquisitions will also be closely examined and, if necessary, realized.

In line with the risk groups, the opportunities have been expanded compared to 2023 to include the sales and environmental categories:

Due to their validity for all market participants in conjunction with the Group's high standards in the areas of product quality, service and logistics concepts, the divisions in particular offered and continue to offer excellent opportunities to expand relationships with existing customers and acquire new customers in order to expand our market positions in the respective countries. In this way, we can position ourselves on the market with quality and innovation and differentiate ourselves from our competitors. With regard to further opportunities and risks for Uzin Utz, please refer to the forecast report.

Extraordinary influencing factors

In 2024, the economic environment was again characterized by considerable geopolitical uncertainty. The ongoing Russian war of aggression in Ukraine continued to cause uncertainty on the energy and commodity markets, while sanctions and trade restrictions impacted global supply chains. At the same time, the escalating conflict in the Middle East caused additional geopolitical tensions, which had a particularly negative impact on the stability of global oil supplies and international trade flows. These developments led to volatility on the financial markets, growing inflation risks and an overall challenging economic environment. We are countering these challenges with strategic and operational measures, including, for example, the conclusion of framework agreements and constant monitoring and assessment of the situation.

Overall statement by the Executive Board

The Executive Board of Uzin Utz SE assesses the risk and opportunity situation in the 2024 reporting year as positive against the background of the challenging economic conditions. The Group is in a position to take entrepreneurial risks if the business activities initiated and the resulting additional earnings opportunities are expected to increase the value of the company.