Climate Change Data

Environmental Metrics

ESG Focus Areas

• Employee well-being
• Environmental responsibility
• Quality management
• Supplier relationships
• ISO certifications

Environmental Achievements

• Reduced waste and emissions through resource-efficient production and logistics
• Environmentally-friendly disposal of waste products

Social Achievements

• Maintained low employee turnover with an average of 9 years of service
• Provided apprenticeships to young people
• Offered ergonomic workstations, language courses, and company sports
• Achieved ISO 13485 certification for medical device production

Governance Achievements

• Implemented stringent internal control and risk management systems
• Regularly updated the Supervisory Board on the Company's risk exposure
• Complied with German Corporate Governance Code (GCGC) and IFRS accounting principles

Climate Goals & Targets

Environmental Challenges

• Rapid pace of innovation and cheap copycat products from Asia
• Globalization and pressure to ensure fast time to market
• Economic shifts and industry risks
• Procurement risks due to limited number of suppliers
• Competitive and price risks in a highly competitive market
• Product quality and customer satisfaction risks
• Interest rate and currency risks
• Liquidity and default risks
• IT-related risks (unauthorized access, system disruptions)
• Product liability and legal risks
• Personnel-related risks (competition for qualified personnel, staff turnover)
• Other operational risks (natural disasters, fires, accidents)

Mitigation Strategies

• Intensified research and development efforts
• Close contact with leading display manufacturers and customers
• Expanding R&D resources for rapid response to market changes
• Second sourcing for procurement
• Proactive inventory management
• Systematic quality assurance processes
• Regular supplier audits
• Natural hedges against currency risks
• Credit lines and bank guarantees
• Adequate approval procedures and access profiles for IT systems
• Daily data backups and disaster recovery testing
• Attractive training opportunities, staff development, and performance-based pay
• Emergency procedures to mitigate potential negative effects of operational risks
• Insurance coverage for legal disputes and bad debt

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: IFRS, German Commercial Code (HGB)

Certifications: ISO 13485:2012

Third-party Assurance: Ernst & Young GmbH Wirtschaftsprüfungsgesellschaft

Environmental Metrics

ESG Focus Areas

• Employee well-being
• Responsible management
• Sustainability
• Diversity
• Quality
• Innovation
• Customer satisfaction

Environmental Achievements

• Implemented ePaper displays as a more ecological alternative to conventional TFT displays.

Social Achievements

• Continued implementing the long-term decisions made in defining our strategy in fiscal year 2019.
• Expansion and commencement of production at sites in Poland and China.

Governance Achievements

• Implemented a cost reduction program reflecting the concept of “DATA MODUL Organization 4.0”.

Climate Goals & Targets

Environmental Challenges

• Altered market situations, economic turmoil and political uncertainties.
• US-China tensions, Brexit, the German mechanical engineering crisis and changes occurring in the automotive industry.
• Intense competition in the global display markets.
• Lower willingness to invest, competitive pressure and lower incoming orders in the electrical industry.
• Rapid pace of innovation and cheap copycat products, primarily from Asia.
• Globalization increasing pressure to ensure fast time to market.
• Risks related to production processes which could jeopardize product supply.
• Impairment losses may have to be recorded on inventories if customers postpone delivery or cancel orders.

Mitigation Strategies

• Implemented a cost reduction program.
• Expansion of supplier portfolio.
• Expansion and commencement of production at sites in Poland and China.
• Investment in new technologies and highly automated production lines.
• Second sourcing.
• Proactive inventory management.
• Choosing reliable suppliers and logistics providers upholding high safety and security standards.
• Active inventory management.
• Intensifying research and development efforts.
• Identifying customers' requirements early on and responding to their needs with appropriate products and innovations.
• Systematic quality assurance processes.
• Regular supplier audits.
• Credit insurance policy to minimize risk of losses from doubtful accounts.
• Credit checks on new customers before accepting orders.

Supply Chain Management

Responsible Procurement

• Expansion of supplier portfolio.

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: IFRS

Third-party Assurance: Ernst & Young Wirtschaftsprüfungsgesellschaft, Stuttgart

Sustainable Products & Innovation

• ePaper displays

Environmental Metrics

ESG Focus Areas

• Not disclosed

Environmental Achievements

• Not disclosed

Social Achievements

• Not disclosed

Governance Achievements

• Not disclosed

Climate Goals & Targets

Environmental Challenges

• War in Ukraine, high interest rates, inflationary pressure impacting demand, decreased order backlog (22.9% decrease YoY in Q2 2023), increased costs and interest rates negatively impacting construction and display technologies, ongoing impact of the Ukraine conflict on demand.

Mitigation Strategies

• Not disclosed

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Null

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Not disclosed

Environmental Achievements

• Not disclosed

Social Achievements

• Not disclosed

Governance Achievements

• Not disclosed

Climate Goals & Targets

Environmental Challenges

• Not disclosed

Mitigation Strategies

• Not disclosed

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Null

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Not disclosed

Environmental Achievements

• Not disclosed

Social Achievements

• Not disclosed

Governance Achievements

• Not disclosed

Climate Goals & Targets

Environmental Challenges

• Further lockdowns in China and associated production stoppages.
• Partial closure of China’s large ports impairing delivery ability.
• Russia’s war in Ukraine.
• Passing on inflation to end-customers.

Mitigation Strategies

• Conservative inventory policy strengthening delivery ability and defusing inflationary issues on the cost side.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Null

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Sustainability
• Quality
• Environmental Protection
• Innovation
• Personnel Development
• Internationalization

Climate Goals & Targets

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: DIN EN ISO 9001, DIN EN ISO 14001, DIN EN ISO 13485, IATF16949

Environmental Metrics

ESG Focus Areas

• Not disclosed

Environmental Achievements

• Not disclosed

Social Achievements

• Not disclosed

Governance Achievements

• Not disclosed

Climate Goals & Targets

Environmental Challenges

• High costs and weaker order intake
• Economic downturn, particularly in Germany
• General cost increases (unfavorable exchange rates and higher personnel costs)

Mitigation Strategies

• Management's past track record of good decisions and forward-looking planning (personnel, procurement, structures) is expected to ensure stable development.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Null

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

Climate Goals & Targets

Environmental Challenges

• Significant earnings pressure due to a EUR 5m drop in revenue, primarily in the Displays segment (distribution) because of high customer inventory levels and overstocking throughout the supply chain.
• Increased costs (EUR 2.5m higher than expected) due to energy costs, IT expenses, inflation in personnel and rent, and high product investments.

Mitigation Strategies

• No significant personnel reductions planned, expecting a mid-term recovery.

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

ESG Focus Areas

• Not disclosed

Environmental Achievements

• Not disclosed

Social Achievements

• Not disclosed

Governance Achievements

• Not disclosed

Climate Goals & Targets

Environmental Challenges

• Bottlenecks in the supply of components leading to shortfall in figures compared to expectations. Delivery bottlenecks on the procurement side, which will probably continue to have a negative impact on the company's development in the medium term.

Mitigation Strategies

• Impressive management of cost-saving effects led to an increase in Q3 EBIT compared to the same quarter of the previous year despite a decline in sales. Slight changes to model parameters (DCF, WRe) in the long term, anticipating that supply problems should not last forever.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Null

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed