Report of the Management Board

of

AT & S Austria Technologie & Systemtechnik Aktiengesellschaft

regarding the

exclusion of subscription rights upon the issue of a convertible bond based on the resolution of the 30^th Annual General Meeting of AT & S Austria Technologie Systemtechnik Aktiengesellschaft held on July 4, 2024

In the 30^th Ordinary General Meeting of AT & S Austria Technologie Systemtechnik Aktiengesellschaft (“Company“) dated July 4, 2024 (i) the Management Board of the Company was authorized in accordance with Section 174(2) Stock Corporation Act to issue, with the consent of the Supervisory Board, until July 3, 2029, once or repeatedly convertible bonds in bearer form in a total amount of up to EUR 400,000,000.– with the possibility of excluding subscription rights, and to grant the holders of convertible bonds conversion and/or subscription rights for up to 19,425,000 new no-par value bearer shares of the Company in accordance with the terms and conditions for the convertible bonds to be defined by the Management Board, and (ii) to conditionally increase the nominal capital of the Company in accordance with Section 159 (2) (1) Stock Corporation Act by up to EUR 21,367,500.00 by issuing up to 19,425,000 new no-par value bearer shares, whereby this conditional capital increase shall only be carried out to the extent that holders of convertible bonds issued on the basis of the authorization granted by the General Meeting on July 4, 2024 make use of the conversion and/or subscription right for shares in the Company granted to them (the “Conditional Capital 2024“). The conditions of the convertible bonds (in particular the interest rate, issue amount, maturity and denomination, dilution protection provisions, conversion period, conversion rights and obligations, conversion ratio and conversion price) are to be determined by the Management Board, with the consent of the Supervisory Board, whereby the issue amount is to be determined under consideration of calculation methods customary in the market in a standard market pricing procedure.

The Management Board was authorized to exclude the shareholders’ subscription rights to convertible bonds in whole or in part whereby the authorization to exclude subscription rights only applies to convertible bonds that grant the right to convert and/or subscribe to shares in the Company of, in total, no more than 10 % (ten percent, rounded to the second decimal place) of the Company’s nominal capital at the time the authorization is granted.

In preparation for the resolution by the Ordinary General Meeting on July 4, 2024, the Management Board issued a report justifying the exclusion of subscription rights in June 2024, which report forms the basis for this report by the Management Board.

The Management Board intends, subject to the consent of the Supervisory Board and given market conditions (i) to issue, on the basis of the resolution of the Ordinary General Meeting dated July 4, 2024, which authorized the Management Board to issue convertible bonds in a total amount of up to EUR 400,000,000, to which conversion and/or subscription rights for up to 19,425,000 new no-par value bearer shares of the Company may be attached, a deeply subordinated perpetual convertible bond with an early redemption option for the Company ((hybrid) convertible bond), which would be backed by the Conditional Capital 2024 (the “Convertible Bond“), and/or (ii) the issuance of a deeply subordinated perpetual bond with an early redemption option for the Company (hybrid bond). With regard to a potential issuance of the Convertible Bond, the volume of which has not yet been determined, the Management Board has decided to exclude shareholders’ subscription rights. The specific terms of the Convertible Bond, if issued, are to be determined by the Management Board with the consent of the Supervisory Board based on the resolution of the Ordinary General Meeting of July 4, 2024. In the event of the issuance of such convertible bond, it is to be placed with institutional investors in denominations of at least EUR 100,000.

The Company’s Management Board therefore now provides, as to the reasons for the exclusion of shareholders’ subscription rights, the following

Report:

In the view of the Management Board, the potential issue of the Convertible Bond under exclusion of shareholders’ subscription rights, is for the following reasons in the interests of the Company and – at least indirectly – also in the interests of the Company’s existing shareholders.

Company interest

Improved financing conditions: The issue of convertible bonds enables the Company to actively shape its capital structure and optimize its capital costs. By subscribing convertible bonds, investors additionally to the interest payments for their invested capital receive the right to purchase shares in the Company in the future at a price already determined at the time of the issuance of the Convertible Bond, thus enabling them to participate in the substance and profitability of the Company. In this way, investors also obtain the opportunity to participate in a possible increase of the value of the Company, with a lower default risk compared to direct equity investments. By the issuance of convertible bonds, the Company can achieve a flexible and quick access to attractive financing conditions, which are below the levels of pure debt instruments. Convertible bonds also offer the opportunity to utilize the high volatility of the share price in favor of the Company and thus reduce the Company’s capital costs.

However, attractive financing terms can only be achieved if the Company can respond in a quick and flexible way to favorable market conditions. Such advantage can often not be achieved by an issue of subscription rights with a minimum subscription period of at least two weeks. Experience has shown that issues with the exclusion of subscription rights usually can achieve better conditions, since by means of an immediate placement price-influencing risks at the expense of the Company due to changing market situations can be avoided and therefore, in addition, investors being specialized on convertible bonds can be approached. On the contrary, for issuances with subscription rights a minimum subscription period of two weeks has to be observed. Any subscription period could lead to the result, that because of the respective (unusual) structuring or allotment mechanisms and/or market risks for investors during the subscription period, professional investors could not be approached at all or only by receiving a lower issuance amount. Usually, if subscription rights are excluded, more funds can be generated for the Company from a lower number of shares to be issued. Therefore, the exclusion of subscription rights is standard practice on the Austrian and international capital markets for convertible bond issuances.

Convertible bonds issued with an exclusion of subscription rights can also be issued more quickly (and at lower cost) because no lead time is required for the preparation and approval of a prospectus. An issue without a prospectus can also reduce the Company’s liability risks compared with a prospectus-based issue.

Finally, the economic relevance of subscription rights is immaterial if the bonds are valued at market and placed at the best terms available in the markets, as it is intended by the Company in its own interest as well as in the interest of the shareholders. With respect to convertible bonds this can in particular be achieved through determination of the issue amount of the shares to be issued upon exercise of conversion and/or subscription rights at a sufficient level above the current share price so that existing shareholders are protected from dilution to the extent possible.

Without the time consuming and costly implementation of the subscription right, the financing and capital demands of the Company can be met out of short-term market opportunities in a timely and cost effective manner and new investors can be accessed domestically and abroad. Hence, through the opportunity to exclude the shareholders’ subscription rights, a stabilization of the equity capital and a reduction in financing costs both in the interest of the Company and of all shareholders can be achieved.

Because of the conditions which are common for convertible bonds on the capital markets the conversion price of the shares to be issued at conversion (exercise of the conversion and/or subscription right) will be above the share price at the time of issuance of the convertible bonds, so that the Company can achieve a higher issue amount in comparison to an immediate capital increase.

Tapping of new investor groups: Convertible bonds are predominantly subscribed by institutional investors which are specialized in that kind of investment and which shall be reached by the possible Convertible Bond to be issued. Institutional investors make specific demands on the denomination, configuration and temporal flexibility when the convertible bonds are issued. In general, it is appropriate and usual to meet these demands through an issuance with the exclusion of subscription rights. Thus, the Company can tap an additional investor base.

Therefore, the exclusion of the shareholders’ subscription rights is necessary due to strategic, financial and organizational reasons in order to (i) position the potential Convertible Bond appropriately in the capital markets, (ii) offer them to investors specialized in convertible bonds in the best possible and target group-specific manner and (iii) to best utilize the benefits to the Company arising from the issuance of convertible bonds. The issuance of convertible bonds with subscription rights could substantially reduce the aforementioned benefits which result from the comparably favorable interest component as well as from the fast implementation possibility and the flexibility for the Company, in particular because of the heavily increased processing efforts (such as the time-intensive preparation, marketing- and commercial efforts) and the one-time, and recurring processing costs related thereto.

Issue amount, terms of the Convertible Bond and issue amount of the shares

Upon issuance of the Convertible Bond, the Management Board would determine with the consent of the Supervisory Board the emission and configuration features and the terms of the Convertible Bond (in particular the interest rate, issue amount, maturity and denomination, dilution protection provisions, conversion period, conversion rights and obligations, conversion ratio and conversion price).

The price of the potential Convertible Bond shall be determined with regard to market-standard calculation methods in a market-standard pricing procedure. The price (issue amount) of a convertible bond thereby has to be determined by the price (issue amount) of an ordinary fixed-interest bond and the price for the conversion rights taking into consideration the other terms and conditions. The issue price of a bond is determined on the basis of recognized actuarial calculation methods subject to the maturity of the bond, interest rate of the bond, the current market interest rate as well as considering the credit rating of the Company. The value of the conversion and/or subscription right is calculated by means of option price calculation, in particular considering maturity/exercise period, share price development (volatility) or other financial ratios as well as the relation of the conversion and/or subscription price to the share price of the Company. Further conditions, e.g. rights to early redemption, conversion obligations, and a fixed or variable conversion ratio are to be considered.

The issue amount of the shares issued upon conversion (exercise of the conversion and/or subscription right) and the conversion and/or subscription ratio shall be determined with regard to market standard calculation and the price of the shares of the Company (basis of the calculation of the issue amount); the issue amount must not lie below the proportionate amount of the nominal capital.

Since the share price is an important criterion for the determination of the terms and conditions of the convertible bonds, it is in the Company’s interest to have a considerable influence on the date of issuance. Both the share price performance and the market assessment can be subject to very significant changes within a two-week subscription period, whereas in the case of an issue with exclusion of subscription rights, the Company can select what it considers to be a favorable allocation date comparatively quickly and flexibly. As a rule, more funds can be generated in a shorter period of time at more favorable conditions for the Company.

Through the exclusion of the subscription rights the Company is able to determine favorable issuing terms in a flexible way within the term of the authorization and can thus optimize the conversion as well as then financing terms in the interest of the Company and all shareholders. At the same time both the expected share price development as well as the general capital market situation can be accounted for. This way the development potential can be fully utilized to the benefit of the Company and the current shareholders.

Additionally, by the issuance of convertible bonds the capital structure of the Company can be optimized and the balance sheet structure of the Company can be improved. For example, in the case of (hybrid) convertible bonds, analysts are expected to treat a portion of the borrowed capital as equity. Such an assessment may allow an improved rating of the Company by investors and may lead to lower financing costs for future raisings of debt capital of the Company. Furthermore, a convertible bond is often valued as a positive signal on the capital markets in relation to the confidence of the management with regard to the future development of the share price. Such confidence is reflected in the conversion price, which mostly can – due to the above mentioned reasons – be set forth at a higher level, if the subscription rights are excluded.

Weighing of interests

The exclusion of the subscription rights is objectively justified by the aspired goals, namely an optimization of the capital structure and a reduction of financing costs to provide a further stabilization and improvement of the Company’s competitive position in the interest of the Company and the shareholders.

Furthermore, the exclusion of subscription rights is also necessary and required, because the financing and anticipated inflow of equity from the target group specific orientation of the convertible bonds replaces more cost-intensive capital measures, offers favorable financing terms and secures a long-term and flexible business planning and realization of planned corporate goals for the benefit of the Company and therefore also all shareholders. Without the exclusion of the subscription right, the Company will not be able to respond quickly and flexibly to favorable conditions in the market.

The Management Board of the Company expects that the Company’s advantage from issuing the potential Convertible Bond under exclusion of subscription rights will benefit all shareholders and will clearly outweigh the (potential) pro rata reduction in shareholding of the shareholders excluded from the subscription rights. This is particularly true in view of the fact that a noticeable dilution of shareholders is not to be feared due to the restriction of the exclusion of subscription rights to a maximum of 10 % of the nominal capital.

For the reasons stated above, the exclusion of shareholders’ subscription rights, is necessary, suitable, appropriate and objectively justified and advisable in the overwhelming interest of the Company.

Leoben, May 20, 2026

The Management Board of AT & S Austria Technologie & Systemtechnik Aktiengesellschaft

 

This document represents a convenience translation of the official (German) version. In case of discrepancies between the official (German) version and this English convenience translation the official (German) version shall prevail.