Dear Shareholders

Revenue generated by the SIMONA Group declined in the 2024 financial year, while sales volumes remained stable. This was driven primarily by a general downturn in sales prices amid intense competition and sluggish demand relating to the high-priced fluoropolymer business. The decline was kept in check thanks to a robust final quarter, as a result of which the Group slightly exceeded its revenue guidance. The Group also recorded a significant decline in EBIT due to lower revenue and changes in the product mix. However, it met its EBIT margin target of 6-8 percent.  

In strategic terms, the focus was primarily on sustainability and application orientation. In this context, the key milestones achieved in the period under review were the validation of our CO2 reduction targets through the Science-Based Targets initiative and the implementation of a global marketing concept for SIMONA's extensive range of products and services tailored to the semiconductor industry.  

Cooperation with the Management Board 

Over the course of the 2024 financial year, the Supervisory Board discharged its duties under statutory provisions, the company's articles of association and rules of procedure, advised the Management Board on a regular basis, and evaluated and monitored management's activities in respect of legality, appropriateness, and regularity. It also conducted an assessment of the company's risk management and compliance procedures and came to the conclusion that the system implemented meets the requirements to the fullest extent. The Management Board and Supervisory Board engaged in dialogue concerning the strategic direction of the company and regularly discussed the status of execution with regard to strategic initiatives. This also included aspects relating to sustainability. The Supervisory Board was directly involved in all decision-making processes of fundamental importance to the company. The Management Board informed the Supervisory Board as part of regular written and verbal reports, furnished in a timely and comprehensive manner.  

At the same time, the Management Board outlined any deviations between specified targets and the actual course of business, elucidated them in full, and explained any countermeasures taken to rectify the situation. The content and scope of reports furnished by the Management Board met the requirements set out by the Supervisory Board. In addition to the above-mentioned reports, the Supervisory Board asked the Management Board to provide supplementary information relating to certain issues.  

In particular, the Management Board was available at Supervisory Board meetings for the purpose of discussing specific points and answering any questions put to it by the Supervisory Board. Transactions requiring the Supervisory Board's consent were discussed and examined in depth in cooperation with the Management Board. Where required, the Supervisory Board also convened without the Management Board being present.  

Supervisory Board meetings 

The Supervisory Board held four scheduled meetings in an in-person format in 2024. Each member of the Supervisory Board attended all meetings in person, with the exception of the December meeting, which was attended by Supervisory Board member Markus Stein in the form of a video conference.  

At the meeting on April 17, 2024, the consolidated financial statements and the annual financial statements of the AG (parent company) were adopted and approved. The proposal by the Management Board for the appropriation of profit generated in the 2022 financial year, to be submitted to the Annual General Meeting, was discussed and approved. Furthermore, the report by the Supervisory Board for the 2023 financial year was adopted and the result of the audit conducted by Deloitte GmbH Wirtschaftsprüfungsgesellschaft, Munich, was discussed. At this meeting, the Supervisory Board also approved the Non-Financial Statement pursuant to Section 289b and Section 315b HGB and the Corporate Governance Statements in accordance with Section 289f HGB and Section 315d HGB as well as the agenda for the Annual General Meeting in 2024. In addition, the Supervisory Board informed itself about business developments, aspects of raw material procurement, and trends in energy prices.  

The meeting of June 6, 2024, focused on the current business performance and the outlook for the full annual period. In addition, the Supervisory Board dealt with future reporting obligations, in particular sustainability reporting, and prepared the strategy meeting planned for September together with the Management Board.  

At the meeting on September 10, 2024, the Supervisory Board was informed about the Group's current business performance, the focus being on price trends, commodity markets, and competition. The Supervisory Board also requested a status report on the SAP S/4HANA transformation project and investments. Another item on the agenda was an update on corporate governance and ESG issues.  

At the meeting on December 5, 2024, the Supervisory Board approved the forecast and budget for 2025 prepared by the Management Board. The agenda also included a status update on M&A issues, occupational safety, and the SAP migration project. The Supervisory Board also discussed the outcome of the strategy meeting in September. 

Committee work 

The Audit Committee and the Personnel and Nomination Committee are responsible for supporting the Supervisory Board. Both committees regularly provide the Supervisory Board with extensive information relating to their activities.   

The Audit Committee is responsible primarily for issues relating to the supervision of the accounting process, the efficacy of the internal control system, the internal risk management system, and the internal auditing system, year-end auditing, with a particular focus on the independence of the auditor, the quality of the audit, the additional services provided by the independent auditor, the issuing of the audit mandate to the auditor, the determination of auditing focal points, and arrangements relating to fees as well as compliance. In 2024, the Audit Committee held four scheduled meetings in person and one extraordinary meeting via video conference. 

The principal duties of the Personnel and Nomination Committee are centered around compensation as well as the conclusion, amendment, extension, and termination of Management Board members' employment contracts. In addition, its task is to nominate suitable candidates to the Supervisory Board for its proposals to the Annual General Meeting for the election of Supervisory Board members. The Personnel and Nomination Committee held four meetings in 2024, which took place in person.  

Dealing with conflicts of interest 

All members of the Supervisory Board are obliged to disclose conflicts of interest as soon as they occur. As in the previous years, there were no conflicts of interest during the 2024 financial year. Following our review, we ascertained that all members of our board are independent within the meaning of the German Corporate Governance Code. In this context, please refer to the Corporate Governance Statement issued pursuant to Section 289f HGB and Section 315d HGB.  

Annual financial and consolidated financial statements 

The accounts of SIMONA AG for the 2024 financial year were audited by Deloitte GmbH Wirtschaftsprüfungsgesellschaft, Munich. The firm was elected as auditor at the Annual General Meeting on June 7, 2024. Before proposing Deloitte GmbH Wirtschaftsprüfungsgesellschaft as auditor to the Annual General Meeting of Shareholders, the Chairman of the Supervisory Board had obtained confirmation from Deloitte GmbH that there were no circumstances which might prejudice its independence as an auditor. The auditor conducted an audit and furnished an unqualified audit opinion with regard to the financial statements and management report of SIMONA AG and the consolidated financial statements and Group management report, which was combined with the management report of SIMONA AG, as well as the explanatory report by the Management Board in respect of disclosures under Section 289a and 315a HGB in conjunction with the accounting records. The financial statements mentioned above, the audit reports and the Management Board's proposal for the appropriation of the unappropriated surplus were submitted to all Audit Committee and Supervisory Board members in good time. At the Supervisory Board meeting on April 15, 2025, the independent auditor furnished detailed information about all material conclusions of the audit and answered all questions put forward by the Supervisory Board in a detailed and comprehensive manner. The Supervisory Board independently examined the financial statements and management report of SIMONA AG as well as the consolidated financial statements and the Group management report, which has been combined with the management report of SIMONA AG, as prepared by the Management Board, in addition to the explanatory report by the Management Board in respect of disclosures required under Section 289a and Section 315a HGB, the audit reports issued by the independent auditor, and the proposal put forward by the Management Board with regard to the appropriation of profit. The Supervisory Board raised no objections upon conclusion of this final examination. The Supervisory Board concurs with the findings of the audit conducted by the independent auditor and approved the company's financial statements, which are thereby adopted pursuant to Section 172 sentence 1 AktG, as well as the consolidated financial statements at its meeting on April 15, 2025. It also approved the report by the Supervisory Board. Furthermore, the Supervisory Board concurs with the Management Board's proposal for the appropriation of profit. The Supervisory Board conducted a thorough review of the Non-Financial Statement issued by the company in accordance with Section 289b and Section 315b HGB; it discussed it at its audit meeting on April 15, 2025, and adopted it accordingly. No voluntary review by the independent auditors was conducted in respect of the Non-Financial Statement, as the Supervisory Board possesses the requisite expertise in this matter.

The 2024 financial year brought considerable challenges for employees around the globe due to an intensely competitive environment and ongoing efforts relating to strategic projects. We would therefore like to express our special thanks to them. We would also like to thank our customers, partners and suppliers for their solid cooperation and loyalty. Finally, our thanks go to all our shareholders for the confidence placed in our company.  

Kirn, April 15, 2025
The Supervisory Board
Dr. Klaus F. Erkes, Chairman