Inside information

Publication of inside information pursuant to Article 17 of Regulation (EU) No 596/2014 (MAR)

Accounting errors in annual and consolidated financial statements / Revenue and earnings forecast for the group with profit warning / Postponement of the publication of the financial statements for the 2025 financial year

The Management Board of Alexanderwerk AG has just determined that, with regard to its wholly-owned subsidiary Alexanderwerk GmbH, Remscheid, the annual financial statements (individual financial statements prepared in accordance with German Commercial Code (HGB)) for the last 10 fiscal years, and in particular for fiscal years 2022, 2023, and 2024, contain accounting errors (due to incorrect valuation methods for inventory items). These accounting errors also persist in the annual financial statements, particularly for fiscal years 2022, 2023, and 2024, of Alexanderwerk AG, as well as in the consolidated financial statements of Alexanderwerk AG for fiscal years 2022, 2023, and 2024, which are prepared in accordance with IFRS standards – meaning that accounting errors are also present there.

Specifically, in the HGB individual financial statements of Alexanderwerk GmbH, material overhead costs were capitalized in an impermissible amount as current assets.

Due to the profit transfer agreement between Alexanderwerk GmbH and Alexanderwerk AG, these errors directly affect the financial statements of Alexanderwerk AG. However, the financial statements of Alexanderwerk GmbH and Alexanderwerk AG are not void within the meaning of Section 256 of the German Stock Corporation Act (AktG) because the materiality threshold has not been reached. A correction can therefore be made during the current accounting period, i.e., in the course of preparing and adopting the financial statements of Alexanderwerk GmbH and Alexanderwerk AG for the 2025 financial year and is currently being carried out. This will result in a negative impact on earnings in the range of TEUR 450 to TEUR 500 before taxes as a generally one-time corrective effect, which will also affect the net income of Alexanderwerk AG for the 2025 financial year.

In previous consolidated financial statements of Alexanderwerk AG (prepared according to IFRS), excessive administrative overhead costs were improperly capitalized in addition to the aforementioned excessive material overhead costs. Based on the information now available, a retrospective correction of the consolidated financial statements for the 2024 financial year in accordance with IAS 8 is required.

The correction in accordance with IAS 8 has the following significant effects on the past consolidated financial statements for the financial year 2024:

1. Reduction of inventories as of January 1, 2024, in the range of TEUR 1.800 to TEUR 2.100,
   this will result in a reduction of deferred tax liabilities as of January 1, 2024, in the range of TEUR 500 to TEUR 600,
   this will result in a reduction of equity capital as of January 1, 2024, in the range of TEUR 1.300 to TEUR 1.500.
   
   
2. Reduction of the change in inventory for the financial year 2024 in the range of TEUR 400 to TEUR 500,
   this will result in a reduction in the group’s net profit for the 2024 financial year in the range of TEUR 300 to TEUR 400.

Only after this correction has been completed can the consolidated financial statements for fiscal year 2025 be finalized.

Considering the aforementioned corrections from previous years, the Management Board has reviewed the annual financial statements and the consolidated financial statements of Alexanderwerk AG as part of the ongoing preparation of the financial statements for fiscal year 2025.

The Management Board expects the following consolidated financial figures in accordance with IFRS for fiscal year 2025, subject to final audit of the annual financial statements and consolidated financial statements by the appointed auditor:

Consolidated revenue is expected to be between TEUR 39,000 and TEUR 39,500 (2024: TEUR 35,660).

Due to an unplanned reduction in inventories of approximately TEUR 2,750 to TEUR 3,000 (2024 adjustment according to IAS 8: TEUR 440), which runs counter to the revenue development, the Group's total output is expected to be between TEUR 36,250 and TEUR 36,500 (2024 adjustment according to IAS 8: TEUR 35,740). Despite significant revenue growth within the Group, total output will therefore remain almost unchanged compared to the previous year and thus fall considerably short of our forecast (approx. TEUR 38,000).

The Group's operating profit (EBIT) for 2025 – influenced by the aforementioned effects as well as additional, mostly planned increases in fixed costs (personnel costs, other operating expenses) – is expected to be in the range of TEUR 4,000 to TEUR 4,200 (2024 adjustment according to IAS 8: TEUR 6,741). Triggered by the effects on total output, significant deviation from the original forecast for fiscal year 2025 (approx. EUR 7,500 thousand) will inevitably also be reflected in the Group's operating profit (EBIT).

The consolidated net profit after taxes is expected to be between TEUR 2,500 and TEUR 3,000 (2024 according to IAS 8 correction: TEUR 4,362).

The individual financial statements of Alexanderwerk AG (according to German GAAP) are expected to show a net profit after taxes of between TEUR 2,200 and TEUR 2,400 (2024: TEUR 4,162), which is significantly lower than the previous year's result. The operating result of Alexanderwerk AG (according to German GAAP) is largely determined by the profit transfer agreement of Alexanderwerk GmbH (according to German GAAP). After considering the aforementioned one-time error correction from previous years in the range of TEUR 450 to TEUR 500, Alexanderwerk GmbH will also experience a significant one-off effect, impacting earnings from the reduction in inventories, expected to amount to between TEUR 2,750 and TEUR 3,000. The significant increase in sales revenue in 2025 compared to previous years will be offset by the reduction in capitalized assets of semi-finished goods, finished goods, engineering hours, and material overhead costs required to realize the revenue. The sum of these two effects results in an expected reduction in inventories of between TEUR 3,200 and TEUR 3,500, which will significantly impact on the remaining total output and operating profit (EBIT) of Alexanderwerk GmbH. As previously explained, both effects will then be reflected in the consolidated net income according to IFRS.

The Management Board and Supervisory Board announce that the timely publication of the annual and consolidated financial statements for the 2025 financial year in April 2026 cannot be met. Due to various exceptional circumstances related to the preparation and auditing of the financial statements, the publication of the annual and consolidated financial statements for the 2025 financial year has been delayed.

Remscheid, April 28, 2026

Alexanderwerk AG
Management Board