Report of the Human Resources Committee

Strategic human resources work in 2024 was influenced by the replacement of the CEO position and the economic challenges that necessitated a comprehensive reorientation of the organization.

On July 1, 2024, Domenico Iacovelli, an internationally experienced industry expert, took over the operational management of Bystronic. The selection of the new CEO was supported by the Human Resources Committee and the election was made by the entire Board of Directors.

The economic challenges of the machinery industry required extensive action. The cost-cutting measures already introduced early in the year were insufficient for achieving economic balance in the foreseeable future. A significant global reduction in headcount and the simplification of the organisational and management structure made important contributions. Following this logic, the executive management team was pared down and, since October 2024, has consisted of four members.

The Human Resources Committee convened five regular meetings during the reporting year, while additionally maintaining close contact. The members of the committee are Urs Riedener (Chairman), Inge Delobelle, and Robert F. Spoerry. As a general rule, the Chairman of the Board of Directors, the CEO, and the CHRO of the Group also participate in the meetings in an advisory capacity, albeit not when their own compensation is discussed.

The direction for our human resources and compensation strategy is based on three central areas of action defined as part of Strategy 2025:

1. Culture & Leadership Focus on performance and learning culture, diversity, inclusion, employer branding, and the development of leadership competencies.
2. Talent Management Measures for acquiring, developing, and retaining talent, succession planning, career development, and employee engagement.
3. HR Processes & Efficiency Optimization and standardization of HR processes and systems, introduction of new concepts (e.g., compensation models), as well as data analytics and knowledge databases.

Bystronic has been able to achieve consistent progress in the development of global HR processes in recent years.

In addition to intensive support and supervision of the overall transformation by the human resources division, significant resources were invested in strengthening our employer branding. This included optimizing the careers website, creating and publishing authentic employee stories on social media.

In addition, a comprehensive job architecture was implemented to create a solid foundation for integrated, globally oriented human resources management. The compensation system for employees will be further developed with particular attention to this in the coming years, ensuring both internal and external comparability. Through an objective classification of jobs, we hope to strengthen the engagement and motivation of our employees for the long term.

The compensation strategy revised in 2021 and 2022 was again implemented consistently in 2024. Increased transparency in the presentation of compensation in the Annual Report had a markedly positive effect. At the 2024 Annual General Meeting, the Compensation Report was passed with 93.65% approval.

The compensation strategy is based on clear targets and comprises three central components:

1. Short-Term Incentives (STI) Compensation is more closely tied to business success. In 2024, sales, EBIT, operating free cash flow, individual targets, and ESG targets (8% weighting) were evaluated. Due to target shortfall, the average payout rate was well below target.
2. Long-Term Incentives (LTI) For the second time, the LTI model with Performance Share Units (PSUs) was implemented, unifying shareholder and management interests. PSUs are subject to a three-year vesting period based on EPS (earnings per share) and rTSR (relative total shareholder return).
3. Sales Incentives Plan (SIP) A new Sales Incentive Plan was introduced for area sales managers, in order to foster profitable growth, reward individual performance, and create transparency in sales compensation.

The compensation system for the Board of Directors remained unchanged in the reporting year.

Regular review and further development of the compensation system is undertaken continuously, taking into consideration the dialog with different stakeholders, the business strategy, best practices, and market trends. Due to the reorganization, adjustments to both the compensation system and entitled parties are to be expected in the coming year.

As part of the Bystronic Groupʼs sustainability strategy, targets were defined in the human resources area.

In addition, the performance targets set at the beginning of the year were evaluated, and the compensation for the Executive Board and the Board of Directors was determined and submitted to the committees responsible.

The compensation budgets approved at the 2023 and 2024 Annual General Meetings for the Board of Directors and the Executive Board were adhered to fully and in accordance with the Articles of Association. At the 2025 Annual General Meeting, the shareholders will decide on the future compensation budgets for these bodies and restate their positions on the 2024 Compensation Report by way of a consultative vote.

Our main objectives remain to put Bystronic back on a course for sustainable success with a strong leadership team to further strengthen operational management, while maintaining a focus on balancing the interests of shareholders, employees, and other stakeholders.

Urs Riedener

Chairman of the Human Resources Committee