Notes to Group Financial Statements

1 General

These consolidated financial statements were approved by the Board of Directors on 4 March 2026 and released for publication on 10 March 2026. They are subject to the approval of the shareholders at the Annual General Meeting on 1 April 2026.

2 Accounting policies

2.1 Basis of preparation

The consolidated financial statements of the HUBER+SUHNER Group are based on the individual financial statements of the Group companies and were prepared in accordance with all of the existing guidelines of the accounting and reporting recommendations of Swiss GAAP FER. Unless otherwise stated in the consolidation and accounting policies, the consolidated financial statements have been prepared under the historical cost convention.
Due to rounding, numbers presented throughout this report may not add up precisely to the totals provided. All ratios and deltas are calculated using the underlying amount rather than the presented rounded amount.
The financial year-end date for HUBER+SUHNER AG, all Group companies and the Group financial statements is 31 December.

2.2 Scope and principles of consolidation

Investments in subsidiaries are included in the Group financial statements as follows:

• All subsidiaries which HUBER+SUHNER controls are fully consolidated. Control is usually presumed where the Group directly or indirectly owns more than 50% of the voting rights of the subsidiaries. All of the assets and liabilities as well as the income and expenses of these companies are fully included. Minority interests in the consolidated equity and net income are shown separately. All intercompany transactions and balances as well as intercompany profits in inventory and other assets are eliminated on consolidation.
• Those companies purchased during the reporting year are included in the consolidation as at the date on which control was effectively transferred. All previously recognised assets and liabilities as well as contingent liabilities of the company are valued from the date of transfer of control and at fair value. Companies which have been divested during the reporting year are included in the consolidated financial statements until the date on which control ceased.
• Joint ventures and investments with voting rights of between 20% and 50% are recognised using the equity method and with the proportionate equity share as at the balance sheet date. They are reported under financial assets in the balance sheet and as joint ventures and investments in the notes. Using the equity method, the proportional share of net income is shown as income (expense) in the consolidated income statement.
• Capital consolidation is based on the purchase method (acquisition method). The net assets acquired are revalued at the acquisition date and compared with the purchase price; only previously recognised assets are revalued. Any resulting goodwill is directly offset against equity. This approach is used for both positive and negative goodwill. If parts of the purchase price are dependent on future results, they are estimated as accurately as possible at the date of acquisition and recognised in the balance sheet. In the event of disparities the goodwill offset in equity is adjusted accordingly.
• Acquired intangible assets which are relevant to the decision to obtain control are identified, recognised and amortised over the useful life (Swiss GAAP FER 30, 14). The remaining goodwill or badwill are offset as in the past against equity (Swiss GAAP FER 30, 15 and 19).

2.3 Foreign currency translation

Functional and presentation currency

The consolidated financial statements are prepared in Swiss francs (CHF). CHF is the Group’s presentation currency and, unless stated otherwise, the information is given in CHF 1’000 (TCHF).

Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the respective transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement.

Group companies

The results and financial position of all the Group entities with a functional currency different from the presentation currency are translated into the presentation currency as follows:

• assets and liabilities, for each balance sheet, are translated at the closing rate on the balance sheet date;
• income and expenses, for each income statement, are translated at average exchange rates of the period;
• all resulting exchange differences are recognised as a separate component of equity.

On consolidation, profit and loss are not affected by exchange differences arising from the translation of the net investment in foreign operations and of borrowings and other currency instruments which are designated as hedges of such investments.

2.4 Cash and cash equivalents

Cash and cash equivalents include cash on hand, postal and bank accounts, cheques and term deposits with an original maturity of three months or less. Cash and cash equivalents are stated at nominal value.

2.5 Marketable securities

Marketable securities are short-term investments in readily realisable notes, bonds, quoted shares and term deposits, which are traded in liquid markets. Marketable securities are stated at fair value. Term deposits are stated at nominal value.

2.6 Trade receivables and other short-term receivables

Trade receivables and other short-term receivables are valued at nominal value less provision for doubtful trade receivables, if any. Indications for provisions for doubtful trade receivables are substantial financial problems on the customer side, a declaration of bankruptcy or a material delay in payment.

2.7 Inventories

Inventories are stated at the lower of cost and net realisable value. The cost of goods comprises direct material and production costs and related production overheads. Borrowing costs are excluded. Early payment discounts are treated as a deduction of the purchase price. The inventory valuation is based on standard costs; these are verified annually. Slow-moving and obsolete stock that have insufficient inventory turnover are systematically value-adjusted, either partially or fully.

2.8 Property, plant and equipment

Property, plant and equipment are stated on the balance sheet at the purchased or manufactured cost less accumulated depreciation and impairment. Using the straight-line method, depreciation is charged over the estimated useful lives of the related assets. Investment properties (including undeveloped property) are held for the purposes of rental income and capital gains. They are valued at purchase cost less accumulated depreciation and impairment, and are depreciated over their estimated useful life (20 to 40 years) using the straight-line method. Land is not depreciated. Assets under construction are not depreciated. Depreciation starts once the asset is available for use.

2.9 Intangible assets

Software

Acquired computer software and other intangible assets are capitalised on the basis of the costs incurred to acquire and bring the asset to use. These costs are amortised over their estimated useful life (3 to 10 years). Development costs for software are capitalised on the basis that the asset generates future economic benefits such as revenues or owner-utilisation and that the costs of the asset can be identified reliably. Self-developed intangible assets are not capitalised (including internal costs associated with developing or maintaining software).

Other intangible assets

Acquired rights of land use are capitalised on the basis of the acquisition costs incurred. They are amortised on a straight-line basis for the full term of the rights.

2.10 Impairment of assets

Property, plant and equipment and other long-term assets including intangible assets are reviewed for impairment if events or changes in circumstances have occurred that indicate that the book value cannot be recovered. Assets with a book value above the recoverable amount are deemed impaired and are carried at no more than the recoverable amount. The recoverable amount is the higher of an asset’s fair value less the cost to sell and value in use. To determine the reduction in value, assets are allocated to specific cash-generating units; cash flows for the latter are determined separately.
If there is an indication that the impairment in the prior period no longer exists or has decreased, the carrying amount is, with the exception of goodwill, increased to its recoverable amount and is recognised immediately in the income statement.

2.11 Financial assets

Financial assets include securities with a long-term investment horizon where the share in equity is less than 20%, joint ventures and investments as well as loans, assets from employer contribution reserves, long-term rental deposits and re-insurance of retirement plans. As a general rule, marketable securities are valued at the current market price; in some circumstances, they are valued at the cost of acquisition. Joint ventures and investments are accounted for using the equity method (in case that the investment is negative it is recognised in the balance sheet under other long-term liabilities). Loans are valued based on the nominal values less any value adjustments. Assets from employer contribution reserves are valued at their current value; long-term rental deposits are valued at their nominal value and are only discounted if material. Re-insurance of retirement plans is accounted for using an actuarial valuation.

2.12 Financial liabilities

Financial liabilities consist of bank debt and are recognised at nominal value.

2.13 Trade payables and other short-term liabilities

Trade payables and other short-term liabilities are recognised at nominal value.

2.14 Provisions

Provisions are made for warranties, personnel expenses, restructuring costs, as well as legal and other miscellaneous operational risks that meet the recognition criteria. They are recognised when the Group has a current legal or constructive obligation as a result of past events and if it is more likely than not that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated.
Warranty provisions are generally measured and recognised based on prior experience. The amount of the provision is measured by the current value of the expected cash outflows insofar as the cash outflow substantially underlies interest effects.

2.15 Off-balance-sheet transactions

Contingent liabilities and other non-recognisable commitments are valued and disclosed at each balance sheet date. If contingent liabilities and other non-recognisable commitments lead to an outflow of funds without a simultaneous usable inflow of funds, and the outflow of funds is probable and can be measured reliably, a corresponding provision is made.

2.16 Employee benefits

Companies in the HUBER+SUHNER Group operate employee pension plans in accordance with the regulations of the country where the given company is domiciled.
The economic impact of these pension plans on the HUBER+SUHNER Group is determined annually. For Swiss pension plans, economic benefits and/or economic obligations are determined on the basis of the annual financial statement, which is prepared in accordance with Swiss GAAP FER 26. The economic impact of foreign pension plans is determined according to the methods applied in the given country.

An economic benefit is capitalised if it is permissible and the intention is to use the pension plan funds to cover the company’s future pension expense. An economic obligation is recognised when the conditions for the recognition of a provision are met. Existing employer contribution reserves are recognised as a financial asset. Changes in the economic benefit or the economic obligation are recognised in the income statement as personnel expenses incurred during the reporting period.

2.17 Share-based payment

Members of the Board of Directors, Executive Group Management and selective Senior Management employees are partly compensated in HUBER+SUHNER AG shares. These are issued with a blocking period of at least three years. The allocation of shares is subject to approval by the Annual General Meeting for Members of the Board of Directors and Executive Group Management; the valuation of the share-based payment is determined at the grant date (i.e. the date at which the share allocation was approved by the Annual General Meeting). Share-based payment transactions which have not yet been approved by the Annual General Meeting are valued at the year-end share price. The market value of the shares is fully recognised in equity based on the accruals principle and the one-year vesting period in the accounts of the respective year under review. Any subsequent variances between the year-end share price and the share price at the date of the retroactive approval by the Annual General Meeting are recorded in the income statement of the following year.

2.18 Revenue recognition

HUBER+SUHNER generates revenues mainly from the sale of products, services and systems. Revenues from these sales are recognised upon delivery to the customer. Depending on the terms of the sales contract, delivery is made when the risks and rewards of the sold products are transferred to the customer, when the service has been performed or when the contractual arrangement with the customer has been fulfilled. Sales are shown as a net amount in the income statement. They represent the total value of invoices to third parties less sales taxes, credits for returns and revenue reductions (primarily rebates and discounts).

2.19 Gross profit

The income statement is presented by function, whereby gross profit represents net sales less the cost of goods sold.

2.20 Government grants

Government grants (e.g. for research and development, Covid, property, plant and equipment) are recognised when there is reasonable assurance that the HUBER+SUHNER Group complies with any conditions attached to the grant and the value can be estimated reliably.

Government grants related to assets are offset against the purchased or manufactured cost of the asset. The reduced depreciation amounts are thus taken into account in profit or loss over the useful life of the assets. Government grants related to income are presented in the income statement as “Other operating income” or in objectively justified cases are offset against the corresponding expenses.

2.21 Income taxes

Income taxes are accounted for on the basis of the income for the reporting year, less the use of tax losses carried forward, using expected effective (local) tax rates. Income tax receivables and payables outstanding at the balance sheet date are disclosed under other short-term receivables or other short-term liabilities. Deferred income tax is calculated using the liability method for any temporary difference between the carrying amount according to Swiss GAAP FER and the tax basis of assets and liabilities. Deferred income tax is measured at tax rates that are expected to apply to the period when the related deferred income tax asset is realised or the deferred income tax liability is settled, based on tax rates/laws that have been enacted or substantively enacted at the balance sheet date.
Deferred income tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be offset.

Deferred income tax is provided for temporary differences on investments in subsidiaries and associates, except when the Group can control the timing of the reversal of the temporary difference and the reversal is not foreseen as of the balance sheet date.

Since 2024, HUBER+SUHNER is subject to the provisions of the pillar two OECD/G20 BEPS 2.0 project (a global minimum tax of 15%) in several jurisdictions. The respective top up tax consequences are considered.

2.22 Alternative Performance Measures

Alternative Performance Measures are key figures not defined by Swiss GAAP FER. HUBER+SUHNER uses alternative performance measures as guidance parameters for both internal and external reporting to stakeholders. For the definition of Alternative Performance Measures please visit Publications.

3 Changes in the scope of consolidation and other changes

On 28 May 2025, the ownership of BKtel photonics SAS (France) was increased from 57% to 78%. The company had already been fully  consolidated. The purchase price for the 21% is CHF 2.4 million. The goodwill of CHF 1.2 million from this transaction is offset against equity.

On 19 April 2024, ARGE Connectivity Systems GbR, a partnership under the German Civil Code (Gesellschaft bürgerlichen Rechts [GbR]) was founded based on a customer request in the framework of a public tender. The control of HUBER+SUHNER is 50% and the company is recognised using the equity method. The net income distribution of the partnership is 70% (HUBER+SUHNER) : 30% between the partnership parties. See chapter Joint Ventures and Investments.

A complete list of all Group companies can be found in chapter Joint Ventures and Investments.

4 Exchange rates for currency translation

The following exchange rates were used for the Group’s main currencies:

5 Segment information

The segment reporting of HUBER+SUHNER consists of three market segments and Corporate.

Industry segment

HUBER+SUHNER leverages its expertise in power and data connectivity to develop advanced and differentiated solutions for demanding applications in a variety of industrial markets. Customers benefit from a wide range of components, including cables, connectors, cable assemblies, antennas, lightning protection and resistive components – all of which can be customised to meet specific requirements. This comprehensive portfolio features products specifically designed to withstand the harsh environments of space and offshore applications, ensure data integrity and connectivity to safeguard protective forces, guarantee accuracy and repeatability for test and measurement systems, maintain safe handling in high power electric vehicle charging, provide lifetime data transfer and control for wind energy and industrial automation, and deliver the precision and flexibility necessary for medical applications in improving lives.

Markets served: Test & Measurement, Aerospace & Defense, High Power Charging, General Industrial.

Communication segment

HUBER+SUHNER is a strategic partner to the communication market, combining profound technical expertise with close customer proximity to meet the needs of mobile networks, fixed access networks, data centers and communication equipment manufacturers. Customers benefit from a comprehensive and customisable portfolio of physical layer connectivity products and systems that are based on fiber optic and radio frequency technologies. HUBER+SUHNER provides an extensive range of reliable, future-ready solutions that draw from products such as harsh environment connectivity, antenna transmission, residential access, video overlay, bandwidth expansion, cable systems, cable management, hardware interconnection, optical switching and wavelength-selective switching. Each solution is designed and engineered to provide the highest performance, density and scalability for today and beyond.

Markets served: Mobile Network, Fixed Access Network, Data Center, Communication Equipment Manufacturer Components.

Transportation segment

HUBER+SUHNER develops comprehensive and sustainable connectivity solutions for the transportation market by combining three in-house technologies to create innovations. The solutions in the transportation segment address the mobility needs of today and tomorrow in the railway and automotive markets. These needs also include the addition of communication solutions, enabling mobility while staying connected. The portfolio includes an extensive range of cables, cable assemblies, hybrid cables and cable systems, as well as antennas, radar and connectors. By specialising in polymer compounds using a patented formula developed in-house for high-quality cable insulation, and in combination with electron beam cross-linking technology, low frequency cable products offer competitive advantages of space and weight savings, and durability, even under extreme conditions. Altogether, customers benefit from efficient electrical transmission, high-speed data transfer, and autonomous control in future-ready transportation concepts.

Markets served: Rolling Stock, Rail Communications, Electric Vehicle, Advanced Driver Assistance System.

Corporate

This segment chiefly covers the expenses of corporate functions in Switzerland and all business activities that cannot be allocated to one of the three market segments.

Net sales by segment

Net sales by region (sales area)

Operating profit (EBIT)

6 Other operating income

Government grants received are in Switzerland, Germany, United Kingdom, France and India (previous year: Switzerland, Germany, United Kingdom and France). Other operating income includes amongst others licences, rental income and a reimbursement of previously remitted charges due to a change in legislation.

7 Financial result

Other financial expense includes amongst others bank charges.

8 Income taxes

The differences between the expected and the effective income taxes were as follows:

The expected Corporate income tax rate corresponds to the weighted average income tax rate based on the net income before taxes and the income tax rate of each individual Group company. The net income before taxes complies with the ordinary result according to Swiss GAAP FER.

In the reporting year, the difference between the expected income tax rate of 18.5% and the effective income tax rate of 16.7% is mainly attributable to the following three factors: First, in several countries (Switzerland, China, France, UK, Germany) research and development and other tax benefits are available, that are used by HUBER+SUHNER (shown in the line “effect of non-tax-deductible expenses and non-tax-deductible income”). Second, HUBER+SUHNER faces non-refundable withholding taxes on dividends from Group companies (shown in the line “effect of non-refundable withholding taxes on dividends”). Third, for 2025, HUBER+SUHNER is subject to the provisions of the pillar two OECD/G20 BEPS 2.0 project (a global minimum tax of 15%) in several jurisdictions (shown in the line “effect of BEPS Pillar 2.0 (15% minimum taxation))".

The capitalised deferred tax assets on losses carried forward amount to CHF 4.1 million (previous year: CHF 7.4 million). The decrease compared to prior year is mainly related to the usage of capitalised prior year tax losses in one Group company. The unrecognised tax loss carried forward was CHF 35.1 million (previous year: CHF 35.1 million). This corresponds to a potential tax asset of CHF 8.0 million (previous year: CHF 8.8 million). In 2025, no tax losses carried forward expired (previous year: CHF 0.0 million).

The valuation of related tax assets on losses carried forward is generally based on business plans. The capitalisation of usable tax losses carried forward is assessed on a yearly basis. Tax losses carried forward are recognised only to the extent that it is probable that future taxable profits will be available and therefore allow the assets to be utilised. In countries and for Group companies where the use of tax losses carried forward is not foreseeable, tax loss is not capitalised. For the calculation of deferred income taxes in the consolidated balance sheet, the expected tax rate per tax subject is applied.

9 Personnel expenses

Personnel expenses included in the income statement amount to:

10 Post-employment benefits

In Switzerland, according to local law, autonomous pension funds bear the risks relating to the defined benefits. In the event of restructuring measures, the employer must pay an additional contribution alongside its normal contributions. Through the HUBER+SUHNER AG pension fund, HUBER+SUHNER AG provides pension benefits for its employees in the event of retirement, invalidity and death.
The leading body administering the fund is the Board of Foundation, which comprises an equal number of employee and employer representatives. The Board of Foundation establishes an Investment Committee, which is responsible for investing the funds held by the pension plan in accordance with the investment regulations defined by the Board of Foundation. All insured persons can claim their pension or part thereof in the form of either capital or retirement pension payments. HUBER+SUHNER AG also has two paternal foundations.

Most HUBER+SUHNER Group companies operate defined contribution pension plans. As a general rule, these involve employees and employer paying into pension funds administered by third parties. The HUBER+SUHNER Group has no payment obligations beyond these defined contributions, which are recognised as personnel costs in the profit and loss. The economic obligation recognised in the balance sheet for pension plans without own assets (mainly for a few retired executives) concern pension plans operated in Germany and the United States.

Employer contribution reserves (ECR)

Economic benefit/economic obligation and pension benefit expenses

11 Share-based payment

Compensation and remuneration for Members of the Board of Directors, for Members of the Executive Group Management and for selective Senior Management employees includes, amongst others, long-term incentives in the form of shares (see Compensation Report, Notes 2 and 3).

The Members of the Board of Directors annually receive a long-term incentive in the form of a fixed number of HUBER+SUHNER AG shares, with a blocking period after assignment of at least three years.

As long-term compensation, the Members of Executive Group Management receive a variable number of HUBER+SUHNER AG shares each year. The number of shares that are effectively granted is determined by the Board of Directors and driven by long-term business success, which is assessed according to three factors: market environment, strategy implementation and financial situation. The shares are allocated also with a blocking period of at least three years.

As part of the yearly compensation, selective Senior Management employees receive a variable number of HUBER+SUHNER AG shares each year. The number of shares that are effectively granted is determined by the CEO and driven by long-term business success, which is assessed according to three factors: market environment, strategy implementation and financial situation. The shares are allocated also with a blocking period of at least three years.

Share-based compensation is calculated based on the market price of CHF 73.90 (previous year: CHF 75.50) at date of allotment for 2’000 shares (previous year: 2’000 shares) allotted during the year and the 2025 year-end share price of CHF 144.80 for outstanding shares (previous year: CHF 74.20). In the year under review, 24’288 shares (previous year: 28’557 shares) were allocated. Expenses, which included social security, in the amount of CHF 3.8 million (previous year: CHF 2.4 million) are recognised accordingly in the income statement. For Members of Board of Directors and Executive Group Management, the assignment is subject to approval by the Annual General Meeting. The 2’000 shares (previous year: 2’000 shares) that were allotted during the year were assigned to the Board of Directors in turn of the Annual General Meeting held in 2025.

12 Related party transactions

Business relationships with joint ventures and investments are as follows:

Net sales and other income and expenditure

Receivables

There were no services purchased from other related parties in 2025 and 2024.

The joint venture is described in Note 3.

Pension contributions to the HUBER+SUHNER AG pension plan are disclosed in Note 10, line item ‘Pension plan with surplus’.

13 Depreciation and amortisation

Depreciation and amortisation expenses included in the income statement are as follows:

14 Liabilities from operating lease

Some Group companies lease a number of offices, warehouses and cars under operating lease contracts which cannot be cancelled at short notice.

Liabilities from operating lease

15 Cash and cash equivalents

16 Marketable securities

17 Trade receivables

In the reporting year, the decrease is mainly due to the payments received from a customer in relation to a major project in India to expand the mobile communications infrastructure in previous year.

18 Other short-term receivables

Other short-term receivables include value-added and withholding tax receivables, current income tax receivables, received letters of credit, and other short-term receivables such as a receivable relating to prepayments, pledged fixed deposits to secure a bank guarantee and letter of credits and other current assets.

19 Inventories

In the reporting year, the decrease of the inventory provision is caused by decreasing slow moving parts mainly in the Communication and Transportation segment.

20 Derivative financial instruments

To hedge exposure related to fluctuation in foreign currencies, the Group uses derivative financial instruments, in particular forward exchange contracts. Derivative financial instruments used for hedging balance sheet items are recognised at current value and at the date a derivative contract is entered into. They are recorded as other short-term receivables or other short-term liabilities. Derivatives are subsequently re-measured, based on current market prices, to their fair value at each balance sheet date; unrealised gains and losses are recognised in the income statement.

Derivative financial instruments

21 Property, plant and equipment

Other equipment includes vehicles as well as IT, testing and measurement equipment.

22 Intangible assets

Other intangible assets include, amongst others, the land use right in Changzhou, China.

Theoretical movement schedule for goodwill

Goodwill from acquisitions is fully offset against equity at the date of acquisition. The theoretical amortisation of goodwill is based on the straight-line method over the useful life of five years. Goodwill from new acquisitions is set in Swiss francs and calculated based on the closing rate at the acquisition date. This procedure means that the movement schedule no longer has to include foreign exchange differences. The impact of the theoretical capitalisation and amortisation of goodwill is presented below:

Cost

For the changes in goodwill see note 3.

Accumulated amortisation

Impact on balance sheet

Impact on income statement

23 Financial assets

Others include rental deposits and re-insurance from retirement plan obligations.

24 Trade payables

In the reporting year, the decrease is mainly due to the payments to suppliers in relation to a major project in India to expand the mobile communications infrastructure in previous year.

25 Other short-term liabilities

Other liabilities include indirect tax liabilities and advance payments from other third parties (not customers).

26 Provisions

Retirement plan obligations include liabilities in connection with defined contribution plans (pension plans without own assets) and primarily concern specific former employees.

Employee-related provisions mainly include length-of-service rewards and obligations to employees. In 2024, for HUBER+SUHNER AG the amount for length-of-service rewards was benchmarked and improved.

Order-related provisions are directly related to services arising from product deliveries and projects, and are formulated based on the experience and estimation of each project. Order-related provisions relate to warranties, customer claims, penalties and other guarantees.

Other provisions include obligations which do not fit into the aforementioned categories, such as current or possible litigations arising from divestments, licence agreements or duties as well as other constructive or legal obligations.

Due to the nature of the long-term provisions, the timing of the cash outflows is uncertain. However, a partial cash outflow can be expected within two to three years, on average.

In both the reporting and the prior-year period, there were no restructuring provisions.

27 Deferred tax assets and liabilities