Other disclosures

27. Statement of cash flows

Accounting policies: statement of cash flows

The cash and cash equivalents presented in the statement of cash flows correspond to the “Cash and cash equivalents” balance sheet item (see Note 19. Cash and cash equivalents). Current account overdraft facilities are not presented as a component of cash and cash equivalents in the statement of cash flows, but are reported in net cash used in/provided by financing activities if they are used.

The changes in balance sheet items presented in the cash flow statement cannot be directly derived from the balance sheet, as effects from currency translation and changes in the basis of consolidation do not affect cash flow and are reported separately.

In 2025, net cash provided by/used in operating activities contained interest received of €1,557 million (previous year: €1,484 million) and interest paid of €1,442 million (previous year: €1,510 million). Net cash provided by/used in operating activities in 2025 also contained dividends received from joint ventures and associates amounting to €133 million (previous year: €159 million) as well as dividends received from other equity investments of €2 million (previous year: €1 million). Other noncash income and expenses result primarily from measurement effects relating to financial instruments denominated in foreign currencies and fair value changes relating to derivatives.

We report the acquisition and disposal of subsidiaries in investing activities. Payments from the disposal of subsidiaries are reported net of cash and cash equivalents disposed at the date of disposal. Payments of €17 million (previous year: €1 million) were offset against cash and cash equivalents disposed of €2 million (previous year: €1 million) in 2025. A further €6 million (previous year: €31 million) was received in the reporting period in the context of purchase price adjustments from the disposal of MWM in 2022. When subsidiaries are acquired, cash and cash equivalents acquired are deducted from the purchase price paid. In the year under review, €47 million (previous year: €4 million) of cash and cash equivalents acquired was therefore deducted from the purchase prices paid in the total amount of €68 million (previous year: €73 million). In the previous year, this had included a purchase price payment of €58 million, less €4 million in cash and cash equivalents received, for the expansion and acquisition of rights to MAN’s financial services business.

The following reconciliation shows the changes in financial liabilities, classified by changes affecting cash flows and noncash changes.

1 Prior-period amounts adjusted to reflect the current presentation The commercial paper programs were removed and are now shown in the line “Schuldscheindarlehen and commercial paper programs.”

2 Other changes in lease liabilities largely contain noncash additions to lease liabilities.

3 Other changes in foreign exchange derivatives in connection with financing activities result from changes in fair value.

28. Significance of financial instruments for net assets, financial position, and results of operations

Recognition, derecognition, and classification of financial instruments

Accounting policies: recognition, derecognition, and classification of financial instruments

Primary financial instruments are accounted for at the settlement date in the case of regular way purchases or sales⁠ ⁠—⁠ ⁠that is, the date on which the asset is delivered. Financial instruments are recognized at the time when TRATON becomes a party to the contract. A financial asset is derecognized if the rights to receive cash flows have expired or have been transferred, and TRATON has transferred substantially all the risks and rewards of ownership, in particular the bad debt and payment date risk. A financial liability is derecognized when the obligations specified in the contract are fulfilled or canceled.

Classification of financial assets depends on the contractual cash flow characteristics and TRATON’s business model for managing financial assets. Since generally all cash flows from primary financial instruments of the TRATON GROUP, with the exception of other equity investments, consist exclusively of payments of principal and interest on the principal amount outstanding, and since TRATON’s intention is to collect these contractual cash flows, financial assets in the form of a debt instrument are exclusively allocated to the “at amortized cost” measurement category. If, in individual cases, the cash flows from primary financial instruments do not consist exclusively of principal and interest payments on the principal amount outstanding, these financial assets are assigned to the “at fair value” measurement category.

In the case of derivatives and other equity investments, the cash flows do not consist exclusively of payments of principal and interest on the principal amount outstanding. They are therefore allocated to the “at fair value” measurement category. For further information on derivative financial instruments included in hedge accounting, see the Derivatives and hedge accounting section in this chapter.

With the exception of derivatives, all financial liabilities are allocated to the “at amortized cost” measurement category.

Investments in associates and joint ventures as well as lease receivables and liabilities are allocated to “no measurement category”.

Reconciliation of balance sheet items to classes of financial instruments

The following table shows the reconciliation of the balance sheet items to the relevant classes of financial instruments, broken down by the carrying amount and fair value of the financial instruments. For reasons of materiality, the fair value of current balance sheet items is generally considered to be their carrying amount.

Reconciliation of balance sheet items to classes of financial instruments

The “Financial liabilities” item contains liabilities from bonds with a carrying amount of €1,519 million (previous year: €2,571 million) and a fair value of €1,520 million (previous year: €2,527 million) that are included in hedge accounting as a fair value hedge. They were allocated to the “at amortized cost” measurement category.

Carrying amount of financial instruments by measurement categories

Financial assets and liabilities measured at fair value

Accounting policies: financial assets and liabilities measured at fair value

As a rule, fair value corresponds to the market or stock exchange price. If no active market exists, fair value is determined using observable inputs as far as possible. If no observable inputs are available, fair value is determined using valuation techniques.

Measurement and presentation of the fair value of financial instruments are based on a fair value hierarchy that reflects the significance of the inputs used for measurement and is categorized as follows:

Level 1 inputs: Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets and liabilities.

Level 2 inputs: Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. The fair value of Level 2 financial instruments is determined on the basis of the conditions prevailing at the end of the reporting period, such as interest rates or exchange rates, and using recognized models, such as discounted cash flow or option pricing models.

Level 3 inputs: Level 3 inputs are inputs for the asset or liability that are not based on observable market data (unobservable inputs). The fair value of these assets and liabilities is determined on the basis of previous transactions, option pricing models, or discounted cash flow models.

The financial instruments that are categorized within fair value Level 2 primarily comprise derivative financial instruments.

The other equity investments measured at fair value are categorized within Level 3 of the fair value hierarchy. These equity investments largely comprise shares in unlisted companies for which there is no active market. Due to the small carrying amount of these investments, a change in unobservable inputs would not result in a significantly lower or higher fair value of the instruments. The shares of CreateAI Holdings Inc. (formerly: TuSimple Holdings Inc.), San Diego, USA, (CreateAI) were delisted in February 2024. As market prices are no longer available, the shares were reclassified from Level 1 of the fair value hierarchy into Level 3 in the previous year.

The item “Other financial assets” includes a receivable relating to contingent consideration from the sale of International Indústria Automotiva Da América Do Sul Ltda, São Paulo, Brazil (MWM) in 2022. The receivable is measured at fair value through profit or loss and categorized within Level 3 of the fair value hierarchy, since it was measured using probability and usage assumptions. In addition, the “Other financial assets” item also includes receivables from associates arising from convertible loan agreements. The receivables are measured at fair value through profit or loss and categorized within Level 3 of the fair value hierarchy, as assumptions are made regarding the various conversion scenarios and their probability of occurrence. Any change in the unobservable inputs would not result in any significant change in the fair value of any of the instruments.

The following table shows changes in other equity investments and other financial assets measured at fair value and categorized within Level 3:

Changes in balance sheet items measured at fair value based on Level 3

The major part of the fair value changes in “Fair value measurement of other equity investments” recognized in other comprehensive income in the previous year had related to the decrease in fair value of the other equity investment in Northvolt AB due to the filing for creditor protection under US law in November 2024. The decline in fair value was calculated using unobservable inputs and based on the best information available. The change reported as realization in the previous year relates to the conversion of convertible bonds.

Reclassifications between the levels of the fair value hierarchy are accounted for at the relevant reporting dates. The reclassification from Level 1 into Level 3 in the previous year had related to the investment in CreateAI, for which no market price data is available due to the delisting in February 2024. There were no reclassifications between levels of the fair value hierarchy in the reporting year.

Net gains and losses on financial instruments MEASURED at fair value

Net gains and losses on financial assets and liabilities measured at fair value through profit or loss mainly comprise measurement and realization effects from derivatives not included in hedge accounting.

Net results have increased sharply compared to the previous year, mainly as a result of currency derivatives and interest-currency hedging. In 2025, the appreciation of the euro against the US dollar was among the factors, while the appreciation of the euro against the Brazilian real was noticeable in the previous year.

Financial assets and liabilities measured at amortized cost

Accounting policies: financial assets and liabilities measured at amortized cost

As a rule, primary financial assets and liabilities are initially recognized at cost, plus or minus transaction costs. Primary financial assets and liabilities are subsequently measured at amortized cost. Amortized cost is the amount at which financial assets or liabilities are measured at initial recognition, minus any principal repayments, plus or minus the cumulative amortization of any difference between the original amount and the amount repayable at maturity, amortized using the effective interest method. In the case of financial assets, the amount is adjusted for any loss allowances.

For the impairment of financial instruments, with the exception of lease receivables and trade receivables, the TRATON GROUP recognizes the expected credit loss (ECL) over the term if there has been a significant increase in credit risk since initial recognition (hereinafter also referred to as the “general approach”). By contrast, if the credit risk of the financial instrument has not increased significantly since initial recognition, a loss allowance is measured for that financial instrument at an amount equal to 12-month ECLs. To the extent that the internal risk management and control systems do not indicate a significant increase in credit risk at an earlier point in time, there is generally a rebuttable presumption in the TRATON GROUP that a significant increase in credit risk has arisen if payments are more than one day past due.

Financial instruments are allocated to one of four loss stages:

Stage 1: financial instruments at initial recognition and whose credit risk has not increased significantly

Stage 2: financial instruments with a significant increase in credit risk since recognition of the instrument, based on expected credit losses over the lifetime of the underlying contract

Stage 3: credit-impaired financial instruments

Stage 4: purchased or originated credit-impaired financial instruments

Allocation to a stage is reviewed in each reporting period. A financial asset is credit-impaired if one or more events have occurred that negatively impact future expected cash flows. Among other things, these events include delayed payment over a certain period, the institution of enforcement measures, the threat of insolvency or overindebtedness, the application for or opening of bankruptcy proceedings, or the failure of reorganization measures. The amount of expected credit losses is based on the probability of default, the loss given default, and the exposure at default. Both historical and current data on payment behavior are considered. The loss given default takes into account collateral received and other credit enhancements. Forward-looking macroeconomic assumptions are regularly modeled using gross domestic product by means of scenario analysis and are also included in the calculation. The TRATON Financial Services segment takes the current geopolitical uncertainties into account in its macroeconomic assumptions and in the design of its scenario analysis. Events that diverge from the normal economic cycle, such as geopolitical risks, are also reflected in the recognition of expert-based, centralized loss allowances. For financial assets, expected credit losses are calculated as the present value of the difference between all contractual cash flows payable to the TRATON GROUP under the terms of the contract and all cash flows that the Group expects to receive. This difference is discounted using the original effective interest rate (or the credit-adjusted effective interest rate for Stage 4 financial instruments). If, based on the internal risk management and control systems, there are no grounds for assuming that there will be an increase in credit risk at an earlier point in time, there is a rebuttable presumption in the TRATON GROUP that default has occurred if payments are more than 90 days past due. Appropriate groupings for the inputs are made when determining the expected credit losses. The financial asset is always derecognized if there are no longer any reasonable expectations that it is collectible. The loss allowance for the subsequent measurement of Stage 4 financial instruments is measured as the cumulative change in lifetime expected credit loss. These instruments are not reclassified from Stage 4.

For lease receivables, the TRATON GROUP always applies the ECL over the term (hereinafter also referred to as the “simplified approach”), based on the inputs and assumptions regarding probability of default, loss given default, and exposure value described in the previous paragraph.

Impairment losses for trade receivables are also measured using the simplified approach. For this purpose, expected credit losses are estimated using a provision matrix unless there is objective evidence of individual impairment. The provision matrix is based on the Group’s historical loss experience, adjusted for debtor-specific factors, general economic factors, and an estimate of both current and expected changes in variables as of the reporting date, including the time value of money. The provision rates depend on the number of days a receivable is past due:

• Not impaired and not past due: 1.0% of the receivable
• Up to 30 days past due: 1.5% of the receivable
• 31 to 90 days past due: 2.0% of the receivable
• More than 90 days past due: 3.0% of the receivable

If fair value is disclosed for financial instruments measured at amortized cost, it is calculated by discounting, using a market rate of interest for a similar risk and matching maturity. For a description of the levels of the fair value hierarchy, please refer to the Financial assets and liabilities measured at fair value section.

The following tables contain an overview of the financial assets and liabilities measured at amortized cost by fair-value level:

Fair values of financial assets and liabilities measured at amortized cost by level

The lease receivables have a carrying amount of €7,621 million (previous year: €6,423 million) and a fair value (Level 3 of the fair value hierarchy) of €7,613 million (previous year: €6,414 million).

Total interest income and expenses from financial instruments measured at amortized cost

Net gains and losses on financial instruments measured at amortized cost

Net gains and losses on financial assets and liabilities measured at amortized cost comprise interest income and expenses measured using the effective interest method under IFRS 9, including currency translation effects. In addition, net gains and losses on financial assets include impairment losses as well as related reversals.

For further information on credit risk, refer to Note 29. Nature and extent of risks arising from financial instruments.

Derivatives and hedge accounting

Accounting policies: derivatives and hedge accounting

Derivatives are initially recognized and accounted for at each subsequent reporting date at their fair value. They are generally recognized at the trade date.

The recognition of gains and losses from fair value measurement depends on the designation of the derivative. Derivatives that do not meet the IFRS 9 hedge accounting criteria are measured at fair value through profit or loss (also referred to in the following as “derivatives or hedging instruments not included in hedge accounting”). These gains and losses from measurement and realization are recognized in other operating income/expense (for example, foreign currency derivatives for customer orders) or in financial result (for example, foreign currency hedges for net liquidity items), depending on the underlying risk.

A condition for applying hedge accounting is that the hedging relationship between the hedged item and the hedging instrument is clearly documented and that there is an economic relationship between the hedged item and the hedging instrument that is not dominated by the effect of the credit risk. The hedging instruments are selected so that they are essentially affected by the same risk as the underlying transactions, namely foreign exchange risk or interest rate risk.

In the case of cash flow hedges, gains or losses from the remeasurement of the effective designated portion of the derivative are recognized in the cash flow hedge reserve in other comprehensive income. If the forward element and the cross-currency basis spread are not designated, the resulting gains and losses are recognized in the reserve for cost of hedging. The amounts recognized in other comprehensive income are reclassified to the income statement as soon as the hedged future cash flows are recognized in profit or loss. The reclassification of both the cash flow hedge reserve and the reserve for cost of hedging is recognized in the item to which the hedged item is allocated. If a cash flow hedge subsequently results in the recognition of a nonfinancial asset, the cash flow hedge reserve and the reserve for cost of hedging are included in the initial cost of the nonfinancial asset; this does not constitute any reclassification adjustment. The ineffective portion of a cash flow hedge is recognized in profit or loss for the period.

When hedging against the risk of changes in the value of balance sheet items (fair value hedges), both the hedging instrument and the hedged effective risk portion of the underlying transaction are measured at fair value. Changes in the fair value of hedging instruments and hedged items are recognized in profit or loss. The hedged items in the TRATON GROUP relate to bonds that are measured at amortized cost. Changes in amortized cost because of hedging gains and losses are amortized at the latest when hedge accounting is discontinued.

For further information on the risk strategy, refer to Note 29. Nature and extent of risks arising from financial instruments.

The following table contains an overview of the TRATON GROUP’s derivative financial instruments, broken down by whether or not they are included in hedge accounting and by the hedged risk.

Overview of the TRATON GROUP’s derivative financial instruments

Hedging of currency and interest rate risk through cash flow hedge accounting

The TRATON GROUP partly hedges currency risk arising from receivables and liabilities, order backlog, and planned unit sales. Companies that enter into hedging transactions choose the hedge ratio for expected sales revenue on the basis of past experience in order to avoid ineffectiveness. Nevertheless, ineffectiveness can result from changes in counterparty credit risk or if the spot component of a forward is not separated from the forward element. There are no fair value hedges relating to currency risk.

In the current year, TRATON has entered into interest rate swaps with a notional value of €897 million (previous year: €– million) to hedge the interest rate risk of variable-rate financial liabilities in the TRATON Financial Services segment. The swaps are receive-variable/pay-fixed interest rate swaps based on interest rate benchmarks in the EU, the US, and Brazil (EURIBOR, SOFR, and CDI). Interest rate swaps and underlying transactions generally have matching parameters, which is why an offsetting economic relationship can be assumed. The hedge ratio is generally 100%, only in the case of one company is it 99%. Potential sources of ineffectiveness include credit risk that is not designated in the hedging relationship and, in the case of one company, a floor that is only included in the hedged item. Another source could be significant early repayments or defaults if they lead to overhedging.

The following tables show details of derivatives included in hedge accounting by risk category:

Amount, timing, and uncertainty of cash flows

Currency risk was hedged by cash flow hedges at the following average hedging exchange rates for the major currency pairs: 6.12 BRL/USD; 0.88 EUR/GBP; 0.92 EUR/CHF. The average rate for interest rate swaps used to hedge interest rate risk in cash flow hedges was 2.69% (previous year: –%).

Information on hedging instruments included in hedge accounting

Information on hedged items included in hedge accounting

The change in fair value used to determine ineffectiveness corresponds to the change in fair value of the designated component.

Information about the effects of hedge accounting on the statement of comprehensive income

Reconciliation of the reserve for cost of hedges

Hedging of interest rate risk through fair-value hedge accounting

Of the outstanding total EMTN amount of €11,610 million (previous year: €10,819 million) issued by TRATON Finance, €1,050 million (previous year: €2,050 million) is included in hedge accounting as of December 31, 2025; interest rate swaps are used to hedge against interest rate changes. In addition, the TRATON GROUP entered into interest rate swaps with a nominal value of €553 million (previous year: €624 million) to hedge the interest rate risk of International Financial’s fixed-rate asset-backed securities debt. The interest rate swaps and the hedged items have the same material conditions, which is why an offsetting economic relationship can be assumed. Nevertheless, ineffectiveness arises mainly because of TRATON’s nondesignated own credit risk, which is reflected in the measurement of the swaps.

The following tables show details of the derivatives:

Amount, timing, and uncertainty of cash flows

The average rate for interest rate swaps used to hedge interest rate risk in fair value hedges was 1.83% (previous year: 1.72%).

Information on hedging instruments included in hedge accounting

Information on hedged items included in hedge accounting

Offsetting financial assets and liabilities

Accounting policies: offsetting financial assets and liabilities

Financial assets and financial liabilities are generally reported at their gross carrying amounts. They are only offset if the TRATON GROUP currently has a legally enforceable right to offset the recognized amounts and intends to do so.

The following table presents information about the effects of offsetting on the consolidated balance sheet and the potential financial effects of offsetting in the case of instruments that are subject to a legally enforceable master netting arrangement or a similar agreement. With the exception of the offset amounts presented below, the gross amounts correspond to the net amounts because they were not offset in the consolidated balance sheet.

Offsetting financial assets and liabilities

1 Prior-year figure adjusted

The “Financial instruments” column shows the amounts that are subject to a master netting arrangement but that have not been offset in the consolidated balance sheet because they do not meet the offsetting criteria, for example because the default of a counterparty.

The “Collateral pledged” column contains financial receivables that were pledged as collateral for leases. Vehicles were also pledged as collateral in addition to these leases. It also contains payments for receivables that were pledged as collateral in order to obtain more favorable financing conditions. Only under certain conditions laid down in the loan agreements, such as default, is the liability made due and an offsetting can take place.

29. Nature and extent of risks arising from financial instruments

Principles of financial risk management

Due to the TRATON GROUP’s business activities and international focus, its assets, liabilities, and forecast transactions are exposed to credit, liquidity, currency, interest rate, and commodity price risk.

The Group’s currency, interest rate, and commodity price risks are hedged with banks on the basis of internally defined limits. The TRATON GROUP uses suitable financial instruments such as derivatives to do this. Financial risks from balance sheet items, the order backlog, and other projected transactions are hedged. Such risks are not managed centrally, but directly by TRATON SE and each of its brands. The relevant requirements of each company are considered since different functional currencies and business environments apply.

Counterparty risk is diversified as much as possible and monitored centrally. Liquidity risk is minimized by diversifying the sources of funding and ensuring a balanced mix of funding with different maturities, currencies, and interest rate agreements.

The TRATON GROUP management is notified regularly about the financial risk position. Compliance with the applicable Group policies is reviewed by the internal Audit function.

Credit and default risk

The TRATON GROUP is exposed to credit risk through its business operations and financing activities. From the Group’s perspective, credit risk entails the risk that a party to a financial instrument will fail to meet its contractual obligations and thus cause a financial loss for the Group. Credit risk comprises both the direct default risk and the risk of a deterioration in credit quality.

The maximum credit risk is reflected in the carrying amount of the financial assets recognized in the balance sheet. The TRATON GROUP holds collateral and other credit enhancements to further mitigate credit risk. Assets assigned as security, credit insurance, and guarantees are used as collateral. The risk from primary financial instruments is additionally accounted for by recognizing bad debt allowances.

The financial institutions and investment forms are carefully selected when investing cash funds, while a central limit system ensures diversification. Significant investments and derivatives are only entered into with national and international prime-rated banks. There are no material concentrations of credit risk in the TRATON GROUP.

Credit risk related to credit commitments to customers is managed decentrally, considering certain limits and using local credit quality assessments. Decisions on major credit commitments for the TRATON GROUP are made in subgroup credit committees. The maximum exposure to credit risk resulting from financial guarantees issued and irrevocable credit commitments is determined by the amount that the TRATON GROUP would have to pay in the event of claims under these guarantees.

Reconciliation of the loss allowance for financial assets measured at amortized cost

The loss allowance relates mainly to credit risk from trade receivables and financial services receivables. The increase in the risk allowance for purchased or originated credit-impaired assets (Stage 4) primarily relates to an existing loan claim and is based on an update of the valuation of the existing collateral. The corresponding value adjustment was recorded in the Other financial result.

The gross carrying amounts of financial assets measured at amortized cost increased by €994 million to €17,472 million (previous year: €16,478 million) due in particular to new financial services receivables (Stage 1) and an increase in cash and cash equivalents (Stage 1).

The TRATON GROUP uses collateral, among other things, to lower credit risk. Collateral mitigates risk in the amount of €177 million (previous year: €159 million) for financial assets with objective evidence of impairment as of the reporting date.

Changes in loss allowance for lease receivables

1 Prior-year figure adjusted

The carrying amounts of financial assets and the credit risk exposure of financial guarantees and credit commitments by credit risk rating grade are presented in the following. Credit risk rating grade 1 consists of financial instruments not exposed to any credit risk. Credit risk rating grade 2 consists of financial instruments that are subject to intensive credit management. Credit risk rating grade 3 consists of impaired financial instruments.

Gross carrying amounts of financial assets by rating grade

In the case of financial guarantee contracts and credit commitments, the bulk of the default risk exposure, accounting for €887 million (previous year: €1,381 million), relates to financial instruments for which the impairment loss is calculated on the basis of the expected 12-month credit loss (Stage 1), and is therefore allocated to credit risk rating grade 1.

Liquidity risk

Liquidity risk describes the risk that the TRATON GROUP will have difficulty in meeting its obligations associated with financial liabilities or that it can only procure liquidity at a higher price. To counter the liquidity risk, cash inflows and outflows and due dates are continuously monitored and managed. Cash requirements are primarily met by our operating business and by external financing arrangements. The TRATON GROUP’s solvency is managed on the basis of rolling liquidity planning. The TRATON GROUP’s liquidity is assured at all times by a liquidity reserve in the form of cash, credit lines with financial institutions and companies of the Volkswagen Group, and the issuance of securities on international money and capital markets. Among other things, local issuance programs and financing lines have been established for companies in the TRATON Financial Services segment to cover their funding requirements. There were no liquidity bottlenecks or situations where liquidity could only be obtained at a higher price in the past fiscal year.

Cash and cash equivalents amounted to €2,805 million (previous year: €2,542 million) as of December 31, 2025. Cash and cash equivalents in certain countries (e.g., Brazil, China, and Argentina) in the amount of €736 million (previous year: €834 million) are subject to capital and exchange controls and are not available to the Group for cross-border transactions without restriction. Such amounts are used locally to cover the financing needs of the operating business.

The TRATON GROUP’s credit facilities contain standard market change-of-control clauses. This means that the counterparty may demand early repayment in the event of significant changes in ownership. Two loans of a subsidiary of the TRATON GROUP used to develop and construct production and assembly facilities in China (China loans), with a total life of ten years each, include financial covenants. For loan liabilities with a carrying amount of €221 million (previous year: €308 million) as of December 31, 2025, the ratio of total liabilities to total assets of the subsidiary may not exceed 90%. The bank monitors compliance with this financial covenant annually as of December 31 on the basis of the audited single-entity financial statements of the subsidiary. For the second loan, which was refinanced in fiscal year 2025, the subsidiary’s net profit must be positive and the debt service coverage ratio may not fall below 1.2. The debt service coverage ratio describes the ratio between the subsidiary’s net profit before interest expenses attributable to the China loans and depreciation and amortization, to the principal amount, interest payments, and interest due on both China loans. The carrying amount of the loan as of December 31, 2025, is €395 million (previous year: €– million). Compliance with the net profit covenant is monitored annually by the bank as of December 31 on the basis of the audited single-entity financial statements, and the debt service coverage ratio is monitored semi-annually as of June 30 and December 31 on the basis of the subsidiary’s unaudited half-year financial statements and the audited single-entity financial statement. As of December 31, 2025, the TRATON GROUP did not breach the financial covenants included in the loan agreements.

The TRATON GROUP also has an unused confirmed syndicated credit line of €4,500 million (previous year: €4,500 million) available as a liquidity reserve. As an additional liquidity reserve, the TRATON GROUP has revolving credit lines of €4,300 million (previous year: €4,300 million) at Volkswagen AG, of which €250 million (previous year: €943 million) was drawn down. In addition, the TRATON GROUP has unused unconfirmed credit lines from banks amounting to €563 million (previous year: €562 million) in order to enhance flexibility in financing decisions.

The following table shows how the cash flows relating to liabilities, derivatives, and financial guarantees affect the TRATON GROUP’s liquidity position:

1 The amounts were calculated as follows:
– If there is no agreement on contractual maturity, the liability refers to the earliest possible maturity date.
– In the case of variable interest rate agreements, interest reflects the conditions as of the reporting date.
– It is assumed that the cash outflows will not occur earlier than shown.

2 The undiscounted maximum cash outflows from buyback obligations are recognized as a financial liability.

Derivatives comprise both cash outflows from derivatives with negative fair values and cash outflows from derivatives with positive fair values for which gross settlement has been agreed. Derivatives entered into through offsetting transactions are also accounted for as cash outflows. The cash outflows from derivatives for which gross settlement has been agreed are matched by cash inflows that are not disclosed in the maturity analysis. If these cash inflows had also been recognized, the cash outflows presented would be significantly lower. This also applies in particular if hedges have been closed out through offsetting transactions.

The cash outflows from irrevocable credit commitments are presented in Note 33. Other financial obligations classified by contractual maturities.

Currency risk

The TRATON GROUP is exposed to currency risks caused by fluctuations in exchange rates. Currency risk is a result of its investments, financing measures, and operating activities. Currency forwards, currency options, currency swaps, and cross-currency swaps are used to mitigate risks to future cash flows.

The inclusion of subsidiaries or other affiliated Group companies in countries outside the eurozone in the consolidated financial statements represents a risk as a result of currency translation. As a general rule, TRATON does not use derivatives to hedge these translation risks.

Assets in the TRATON Financial Services segment should generally be funded by liabilities in the same currency.

Hedging transactions entered into as part of foreign currency risk management were mainly in Brazilian reais, British pounds sterling, Swedish kronor, and US dollars.

The primary and derivative financial instruments at the end of the reporting period were measured in a hypothetical scenario as part of a sensitivity analysis. The effects of a 10% increase/decrease in an exchange rate were as follows:

Interest rate risk

The TRATON GROUP is exposed to interest rate risk caused by fluctuations in interest rates. Interest rate risk takes the form of either fair value risk or cash flow risk. Fair value risk is calculated using the sensitivity of the carrying amount of a recognized financial instrument to changes in market interest rates. Cash flow risk describes the exposure to variability in future interest payments in response to interest rate movements. Interest rate swaps and cross-currency swaps are used to implement the risk management strategy.

The TRATON GROUP is exposed to interest rate risk from interest rate-sensitive assets and liabilities. Intragroup financing arrangements are mainly funded at matching maturities. Departures from the Group’s standards are subject to centrally defined limits and are monitored continuously.

The Group’s activities in the TRATON Financial Services segment are managed to largely match assets and liabilities in order to minimize interest rate mismatches. Appropriate risk methodologies are applied.

If market interest rates had been 100 basis points (bps) higher as of December 31, 2025, earnings after tax would have been €67 million lower (previous year: €20 million lower). If market interest rates had been 100 bps lower as of December 31, 2025, earnings after tax would have been €67 million higher (previous year: €19 million higher).

Commodity price risk

The TRATON GROUP is primarily exposed to commodity price risk from fluctuations in the price and availability of commodities. Geopolitical tensions and conflicts such as tariff announcements, export restrictions, and production losses led to sharp price fluctuations for commodities in 2025. Commodity price risks are captured centrally at regular intervals for MAN Truck & Bus and International Motors and hedged externally based on defined risk limits, provided there are liquid markets. This approach also considers whether changes in commodity prices will be reflected in higher selling prices for the products. The Group enters into cash-settled commodity futures to mitigate these risks. There were no material concentrations of risk in the past fiscal year.

Cash-settled commodity futures had been entered into at the balance sheet date to hedge commodity price risks relating to purchase contracts with a fair value of €–14 million (previous year: €–2 million). Hedge accounting is not used at present.

The maximum remaining maturity of hedges of future transactions at the end of fiscal year 2025 was 30 months (previous year: 33 months). Reflecting the sensitivity analysis of currency risk, a hypothetical 10% increase/decrease in the value of commodity prices did not have any significant effect on earnings after tax.

30. Capital management

The TRATON GROUP’s capital management ensures that the goals and strategies can be achieved in the interests of its shareholders, employees, and other stakeholders. Management focuses in particular on the net financial debt/EBITDA (adjusted) ratio for the TRATON Operations business area, including Corporate Items, and on increasing the return on equity in the TRATON Financial Services segment. Corporate Items comprises TRATON Holding, consolidation effects between the business areas and with TRATON Holding, and the effects of purchase price allocation from the acquisition of individual segments.

As a general rule, the capital structure of the TRATON Operations business area including Corporate Items should correspond to an implied solid investment-grade classification. The net financial debt/EBITDA (adjusted) ratio is a key performance indicator in this context. If justified by extraordinary financing requirements or special market circumstances, this target can be temporarily relaxed subject to certain conditions. TRATON SE has been awarded external credit ratings by Moody’s and Standard & Poor’s (S&P) since June 2020. Moody’s is currently awarding a long-term rating of Baa2 (stable outlook), and S&P’s rating is BBB (negative outlook). Both ratings are investment-grade range.

The net financial debt to EBITDA (adjusted) ratio is calculated by dividing net liquidity/net financial debt by EBITDA (adjusted) for the past twelve months and is determined for the TRATON Operations business area, including Corporate Items.

Net liquidity or net financial debt is calculated as gross liquidity, meaning cash and cash equivalents, marketable securities, investment deposits, and loans to affiliated companies (incl. restricted cash), less third-party borrowings (noncurrent and current financial liabilities). It reflects cash and cash equivalents, marketable securities, investment deposits, and loans to affiliated companies not financed by third-party borrowings. The net financial debt to EBITDA (adjusted) ratio for the TRATON Operations business area including Corporate Items includes the total net liquidity/net financial debt of the TRATON Operations business area and Corporate Items.

EBITDA (earnings before interest, taxes, depreciation, and amortization) reflects operating performance before interest, taxes, depreciation, and amortization, after accounting for the use of resources. Since depreciation and amortization may depend on the chosen accounting policies, the carrying amounts, the capital structure, and the way in which an asset was acquired, EBITDA (adjusted) is used as a key performance indicator for peer group comparisons, in particular. Adjustments to operating result are also taken into account in determining EBITDA (adjusted). These adjustments concern certain items in the financial statements that, in the opinion of the Executive Board, can be presented separately to enable a more appropriate assessment of financial performance. They include, in particular, costs of restructurings and structural measures as well as one-time events with a material impact on the TRATON GROUP’s earnings. The EBITDA (adjusted) for the TRATON Operations business area including Corporate Items is used to calculate the net financial debt/EBITDA (adjusted) ratio for the TRATON Operations business area including Corporate Items.

The return on equity in the TRATON Financial Services segment is calculated as the ratio of earnings before tax to average equity. Average equity is calculated from the equity at the beginning and the end of the reporting year.

An additional goal is to satisfy the capital requirements of the banking regulator. To do so, a planning procedure integrated into internal reporting has been put in place, allowing the required equity to be continuously determined on the basis of actual and expected business performance. The external minimum capital requirements applicable to certain companies in the TRATON Financial Services segment were met.

The net financial debt/EBITDA (adjusted) ratio for the TRATON Operations business area including Corporate Items as well as the return on equity in the TRATON Financial Services segment are shown in the following table:

1 Prior-year period adjusted

31. Contingent liabilities and commitments

Accounting policies: contingent liabilities and commitments

If the criteria for recognizing a provision are not met, but the outflow of financial resources is not improbable, or if the provision amount cannot be measured reliably, such obligations are disclosed in the form of the note shown below. Contingent liabilities are only recognized as a provision once the obligations are more certain, i.e., the outflow of financial resources has become probable, and their amount can be reliably estimated.

Contingent liabilities and commitments

1 Prior-year period adjusted

Customer liabilities to financial services companies of the Volkswagen Group, to joint ventures, and, to a small extent, to third parties are covered by standard industry buyback guarantees under which TRATON is obliged to buy back vehicles from the financial services company in the event of default. Liabilities under buyback guarantees as of the end of the fiscal year amounted to €1,732 million (previous year: €2,478 million) owed to financing companies of the Volkswagen Group, €11 million (previous year: €10 million) owed to joint ventures, and €4 million (previous year: €6 million) owed to third parties. The year-on-year decline in obligations arising from buyback guarantees is due to the acquisition of key aspects of the global financial services business of Volkswagen Financial Services for MAN by the TRATON Financial Services segment. The obligations under buyback guarantees correspond to the maximum expenses that may arise from obligations of this type. However, experience shows that the majority of these guarantees expire without being drawn upon.

As of December 31, 2025, contingent liabilities under guarantees include financial guarantees of €266 million (previous year: €500 million). These are mostly expiring default guarantees by International in favor of banks.

Among other things, other contingent liabilities contain contingent liabilities for potential charges from tax risks, which primarily concern Volkswagen Truck & Bus in Brazil. For further information, refer to Note 32. Litigation/legal proceedings.

32. Litigation/legal proceedings

MAN and Scania/EU antitrust proceedings

In July 2016, the European Commission reached settlements (the “Settlement Decision”) with MAN and four other European truck manufacturers (excluding Scania) finding collusive arrangements on pricing and the timing and the passing on of costs for emission technologies for medium- and heavy-duty trucks from January 17, 1997, to January 18, 2011 (for MAN: until September 20, 2010). MAN was granted immunity from fines since it had revealed these practices to the European Commission in September 2010. Scania decided not to apply for leniency and not to settle this antitrust case and, by decision of the European Commission dated September 27, 2017 (the “Scania Decision”), received a fine in the amount of approximately €880.5 million. Scania appealed the Scania Decision to the General Court of the European Union and asked for full annulment. On February 2, 2022, the General Court rendered its judgment, whereby Scania’s appeal was dismissed in its entirety and the amount of fines set by the European Commission upheld. On April 8, 2022, Scania appealed against the judgment of the General Court of the European Union from February 2, 2022, to the European Court of Justice. The €880.5 million fine plus interest from the EU antitrust proceedings was paid on April 12, 2022, to avoid additional interest penalties. On February 1, 2024, the European Court of Justice decided to dismiss Scania’s appeal. Following the Settlement Decision, a significant number of (direct and indirect) truck customers in various jurisdictions have initiated or joined lawsuits against MAN and/or Scania. With the merger of MAN SE with TRATON SE taking effect, TRATON SE has⁠ ⁠—⁠ ⁠in most jurisdictions⁠ ⁠—⁠ ⁠automatically assumed the procedural role of MAN SE as legal successor in the respective proceedings (and is insofar covered by “MAN-companies”). Even if such claims may have expired under the respective applicable local laws, it cannot be excluded that further lawsuits will be filed. The claims against MAN-companies differ significantly in scope; while some truck customers only bought or leased a single truck, other cases concern a multitude of trucks. Furthermore, some truck customer damages claims have been combined in class actions or through claim aggregators to which the truck customers assigned their respective damages claims. A number of (direct and indirect) customers in various jurisdictions have initiated or joined lawsuits against Scania. Further, Scania has received a number of third party notices from other defendant commercial vehicle manufacturers. As is the case for MAN, the claims against Scania differ significantly in scope as some customers only bought or leased one truck while others operate a whole fleet of commercial vehicles. Furthermore, some customer damages claims in other jurisdictions have been combined in class actions or through claim aggregators.

MAN and Scania take the view that there are well-founded arguments against such claims and take appropriate steps to defend themselves. However, it cannot be excluded that these claims result in substantial liabilities for MAN and/or Scania including significant costs for their defense, which may have a material adverse effect on MAN’s and/or Scania’s financial results, cash flows and financial positions. Given the inherently complex nature of these claims and the different stages of the proceedings (with a number of cases still in a rather early stage), it is not possible to make a reliable estimate of the total liability that may arise from these claims. MAN and Scania are continuously monitoring the development and re-assesses the respective risks on a regular basis.

TRATON recognized a negative impact on its operating result in the amount of €173 million (previous year: €162 million) for cases in which, as a result of a reassessment of the risks, a final and unappealable ruling under which MAN or Scania would have to pay damages is more likely than unlikely at present. In accordance with IAS 37 “Provisions, Contingent Liabilities and Contingent Assets” (paragraph 92), no further information is disclosed so as not to prejudice TRATON’s position.

VW Truck & Bus Ltda.

In the tax proceedings between Volkswagen Truck & Bus Indústria e Comércio de Veículos Ltda. (VW Truck & Bus Ltda.), formerly MAN Latin America Indústria e Comércio de Veículos Ltda. (MAN Latin America), and the Brazilian tax authorities, the Brazilian tax authorities took a different view of the tax implications of the acquisition structure chosen by MAN SE (now merged with TRATON SE) for the acquisition of VW Truck & Bus Ltda. in 2009. The tax proceedings have been divided into two auditing periods, covering the years 2009–2011 (Phase 1) and 2012–2014 (Phase 2). In December 2017, an adverse last instance judgment was rendered by the Brazilian Administrative Court (Phase 1), which was negative for VW Truck & Bus Ltda. VW Truck & Bus Ltda. appealed this judgment before a regular judicial court in 2018. This lawsuit was dismissed in 2019, and an appeal was filed against the dismissal. The appeal was then rejected in June 2023, and a petition for review was filed in July 2023. In the tax proceeding related to Phase 2, a partial success was achieved that partly reduced the penalties. An appeal against this decision was filed, which was rejected in September 2023, thus concluding the Administrative Court proceedings. As a result of a new law regarding the handling of casting vote decisions in September 2023, VW Truck & Bus Ltda. filed an objection to the determinations in October 2023. In May 2024, the amendment to the law already resulted in a significant reduction in penalties in Phase 2, and in November 2024 the complete abolition of isolated and qualified penalties in Phase 2 was finally achieved. In May 2025, the Brazilian Office of the Attorney General of the National Treasury reviewed Phase 1 of the proceedings. As a result of this review, the amount in dispute was reduced due to the partial removal of penalties, the associated interest, and the related legal costs.

Due to the potential range of penalties plus interest which could apply under Brazilian law, the estimated size of the risk in the event that the tax authorities are able to prevail overall with their view is uncertain. The partial success in Phase 1 has reduced the risk from approximately BRL 3,068 million (equivalent to €477 million as of December 31, 2024) to approximately BRL 2,353 million (equivalent to €366 million as of December 31, 2025) for the contested period from 2009 onward.

MAN SE merger squeeze-out

The merger of MAN SE with TRATON SE was entered in the commercial register of MAN SE and TRATON SE on August 31, 2021. With this, MAN SE ceased to exist as an independent legal entity, and all rights and obligations were transferred to TRATON SE. MAN SE shares were delisted at the same time.

Cash compensation in the amount of €70.68 per common and preferred share was paid out to MAN SE noncontrolling shareholders on September 3, 2021. This marked the conclusion of the MAN SE merger squeeze-out. The appropriateness of the cash compensation will be reviewed by a court-appointed auditor as part of the judicial award proceedings initiated by affected noncontrolling interest shareholders as applicants.

By way of a ruling dated December 20, 2024, which is not yet final, the Regional Court of Munich I increased the cash compensation to €79.71 per common and preferred share. Various applicants as well as TRATON SE appealed against this ruling in January 2025. The appeal proceedings are currently pending in the second instance at the Bavarian Higher Regional Court. Expenses of €3 million (previous year: €98 million) were recognized for this transaction in other financial income and interest expense in fiscal year 2025.

33. Other financial obligations

1 Prior-year amount adjusted

On December 15, 2021, the TRATON GROUP signed the contract to establish the Milence charging infrastructure joint venture together with Daimler Truck and the Volvo Group and undertook to invest a total amount of up to €167 million in this joint venture. In 2025, €40 million (previous year: €38 million) was paid into Milence’s equity. The obligation amounts to €45 million (previous year: €85 million) as of December 31, 2025.

34. Related party disclosures

Accounting policies: related party disclosures

Related parties from the TRATON GROUP’s perspective as of December 31, 2025, were:

• Volkswagen International Luxemburg as direct parent of TRATON SE
• Volkswagen AG and its subsidiaries, together with its significant investees outside the TRATON GROUP
• Porsche Automobil Holding SE, Stuttgart (Porsche Stuttgart), which has significant influence on the Volkswagen Group’s operating policy decisions within the meaning of IAS 28 Investments in Associates and Joint Ventures, together with its affiliated companies and related parties
• The state of Lower Saxony and its related majority-owned interests
• Other individuals or entities that can be influenced by the TRATON GROUP or that can influence the TRATON GROUP, such as:

• Members of TRATON SE’s Executive and Supervisory Boards

• Members of the Board of Management and Supervisory Board of Volkswagen International Luxemburg

• Members of the Board of Management and Supervisory Board of Volkswagen Finance Luxemburg

• Members of the Board of Management and Supervisory Board of Volkswagen AG

• Associates and joint ventures

• Unconsolidated subsidiaries

Some members of the Executive and Supervisory Boards of the TRATON GROUP or their direct family members are also key management personnel (or members of the management of the parent company) or members of supervisory and executive boards or shareholders of other companies with which the TRATON GROUP has relations in the normal course of business.

On December 31, 2025, Volkswagen International Luxemburg S.A., an indirect subsidiary of Volkswagen AG, held 87.52% (89.72%) of TRATON SE’s share capital.

The following tables present the amounts of supplies and services transacted, as well as outstanding receivables and obligations, between consolidated companies of the TRATON GROUP and its related parties, including Volkswagen AG. There were no significant transactions with Porsche Automobil Holding SE, Stuttgart, Volkswagen International Luxemburg S.A., or the state of Lower Saxony in any of the reporting periods presented.

Related parties

Supplies and services rendered to other subsidiaries and investees of Volkswagen AG that are not part of the TRATON GROUP mainly relate to the sales financing business of MAN Truck & Bus, in which customer finance for vehicles is provided by Volkswagen Financial Services. The decline is attributable to the acquisition of key aspects of the global financial services business of Volkswagen Financial Services for MAN by the TRATON Financial Services segment. Supplies and services received from other subsidiaries and investees of Volkswagen AG that are not part of the TRATON GROUP relate mainly to unfinished goods and products.

On July 12, 2023, companies of the TRATON GROUP and companies of the Volkswagen Group signed a framework agreement on the gradual acquisition of key aspects of the global financial services business of MAN and Volkswagen Truck & Bus (VWTB). The TRATON Financial Services segment thereby progressively acquired the rights to the future financial services business for MAN and VWTB customers in 14 countries. The rights to the future financial services business for MAN and VWTB were transferred in several countries in the 2025 fiscal year, including in Brazil effective June 30, thereby completing the acquisition. For more information, see Note Acquisitions.

The increase in receivables from Volkswagen AG is essentially due to a short-term interest-bearing cash deposit of €392 million (previous year: €– million).

Liabilities to Volkswagen AG include loans granted by Volkswagen AG in the amount of €250 million (previous year: €750 million) resulting from a €4,000 million (previous year: €4,000 million) credit line. The credit facility is subject to market interest rates. The additional €300 million line of credit from Volkswagen AG for short-term liquidity management had not been utilized as of December 31, 2025 (previous year: €193 million).

The decrease in liabilities (including obligations) to other subsidiaries and equity investments of Volkswagen AG that are not part of the TRATON GROUP is attributable to the fact that Northvolt no longer meets the IAS 24 definition of a related party as of the reference date. Accordingly, the long-term purchase obligations under battery procurement contracts between TRATON GROUP companies and Northvolt Group companies in the amount of €7,974 million at the end of 2024 are no longer disclosed among related parties. However, this category includes loan liabilities of €1,278 million (previous year: €478 million) to Volkswagen Group of America Finance, the loan of €691 million (previous year: €691 million) taken out with Volkswagen International Finance at standard market terms, and the loan of €124 million (previous year: €201 million) taken out with Volkswagen Financial Services. There are also other liabilities to Volkswagen Financial Services companies.

The TRATON GROUP signed the agreement to establish the Milence charging infrastructure joint venture together with Daimler Truck and the Volvo Group on December 15, 2021. As a result, the TRATON GROUP made a capital contribution of €40 million (previous year: €38 million) as of December 31, 2025. The outstanding obligation as of year-end 2025 is €45 million (previous year: €85 million).

The sale of receivables to subsidiaries of Volkswagen AG that are not part of the TRATON GROUP amounted to €916 million (previous year: €1,016 million) in fiscal year 2025. See Note 18. Trade receivables for more information. This relates to the volume of receivables that were transferred and derecognized in each reporting period. Customer liabilities to Volkswagen Financial Services are covered by standard industry buyback guarantees, see Note 31. Contingent liabilities and commitments.

The remuneration system for the Executive Board comprises fixed and variable components. The variable remuneration consists of a performance-related profit bonus with a one-year assessment period and a long-term incentive (LTI) in the form of share-based payment as a performance share plan with a forward-looking four-year term. The remuneration system applies to all members of the Executive Board. The previous three-year term ended on the December 31, 2025, reporting date.

Liabilities to the current members of the Executive Board and Supervisory Board comprise outstanding balances for the remuneration of the Supervisory Board, for the fair values of performance shares granted to members of the Executive Board, and for variable remuneration in the amount of €27 million (previous year: €26 million). The pension provisions for the members of the Executive Board in office amounted to €4 million (previous year: €3 million) as of December 31, 2025.

The following expenses were recognized in fiscal year 2025 for the benefits and remuneration granted to members of the Executive and Supervisory Boards of TRATON SE in the course of their activities as members of governing bodies.

The employee representatives on the Supervisory Board who are employed by TRATON SE or other TRATON GROUP companies also receive their regular salaries as specified in their employment contracts. If they are members of German works councils, this is based on the provisions of the Betriebsverfassungsgesetz (BetrVG⁠ ⁠—⁠ ⁠German Works Council Constitution Act).

Post-employment benefits relate to additions to pension provisions, expenses for defined contribution pension plans, and⁠ ⁠—⁠ ⁠depending on the social security system⁠ ⁠—⁠ ⁠contributions to the Swedish pension system for current members of the Executive Board.

35. Share-based payment

Accounting policies: share-based payment

Selected beneficiaries within the Group are granted share-based payments. Share-based payment obligations are accounted for as cash-settled plans under IFRS 2 Share-based Payment. For these plans, obligations are measured at fair value during the term of the plan using a recognized option pricing model. The total remuneration expense to be recognized corresponds to the actual payout and is recognized over the vesting period.

The remuneration system for the Executive Board comprises fixed and variable components. The variable remuneration consists of a performance-related profit bonus with a one-year assessment period and a long-term incentive (LTI) in the form of share-based payment as a performance share plan with a forward-looking four-year term. The remuneration applies to all members of the Executive Board. The previous three-year performance periods, some of which also apply to the members of the Executive Board during the passive period, ended or will end on December 31, 2025, and December 31, 2026.

At the beginning of fiscal year 2022, the group of beneficiaries offered a performance share plan was expanded to include members of the brand Executive Boards who are not members of the Executive Board of TRATON SE under stock corporation law and, in 2023, to include members of International’s management who are entitled to LTIs. The performance share plan for brand Executive Board members and members of International’s management largely works in the same way as the performance share plan that applies to the members of the Executive Board of TRATON SE. The performance period is four years for the brand Executive Board members and three or four years for the members of International’s management.

At the time the LTI is granted, the annual target amount under the LTI is converted into virtual performance shares on the basis of the initial reference price of TRATON SE shares. These performance shares are allocated to the individual beneficiary as a pure calculation value. At the end of the three- or four-year performance period, a final number of virtual performance shares is determined, based on the degree to which the earnings per share (EPS) performance criterion of the TRATON GROUP has been met. A cash settlement is made at the beginning of the fiscal year following the last fiscal year of the performance period; the issuance of shares of the company is excluded. The payment amount corresponds to the number of specified performance shares multiplied by the closing reference price at the end of the three- or four-year performance period, plus a dividend equivalent for the relevant term. The payment amount under the performance share plan is limited to 250% of the target amount for the Executive Board of TRATON SE under stock corporation law and 200% of the target amount for the brand Executive Board members.

If the employment contract begins or ends during a year, the target amount is reduced pro rata temporis. At International, the performance shares lapse without replacement or compensation if the employment relationship ends before the end of the performance period.

Executive Board of TRATON SE, brand Executive Boards, and members of International’s management

Members of management and employees of the TRATON GROUP not covered by collective bargaining agreements (excluding International)

Since fiscal year 2022, members of management and employees of the TRATON GROUP not covered by collective bargaining agreements have received a long-term bonus in the form of a share-based with a four-year performance period and a one-year forward reference. The length of the performance period has been increased gradually starting in fiscal year 2022. It only covers the fiscal year in question for fiscal year 2022, two years for fiscal year 2023, three years for fiscal year 2024, and four years for the first time starting in fiscal year 2025. Payment depends on the TRATON GROUP’s average EPS performance and TRATON’s share price performance (including dividends) over the performance period, and is limited to 200% of the target amount.

The payment amount for all beneficiaries is determined by multiplying the target amount by the degree of EPS target achievement and the ratio between the closing reference price at the end of the period, plus a dividend equivalent, and the opening reference price.

As of December 31, 2025, the total carrying amount of the obligation, which corresponded to the intrinsic value of the liabilities, amounted to €25 million (previous year: €33 million). A total expense of €15 million (previous year: €34 million) was recognized for these awards in the reporting period.

36. Remuneration of the Executive Board and the Supervisory Board in accordance with section 314 of the HGB

The total remuneration granted to the members of the Executive Board amounted to €19 million (previous year: €20 million).

Under the performance share plan, the members of the Executive Board were awarded a total of 284,735 (previous year: 352,597) performance shares for fiscal year 2025, whose value at the award date amounted to €7 million (previous year: €6 million).

In addition, a loan extended to a member of the Executive Board in 2021 was outstanding in the amount of €3 million (previous year: €3 million) as of December 31, 2025.

Former members of the Executive Board and their surviving dependents were paid €1 million (previous year: €1 million) in pensions in fiscal year 2025. There were pension provisions of €11 million (previous year: €12 million) for this group of persons.

The total remuneration granted to the members of the Supervisory Board amounted to €3 million (previous year: €3 million).

37. Fees paid to the auditor of the consolidated financial statements

Of the total fees of €5 million (previous year: €5 million) charged in the year under review for the work performed by the auditor of the consolidated financial statements, EY GmbH & Co. KG Wirtschaftsprüfungsgesellschaft in Germany, €4 million (previous year: €4 million) related to audit services. These comprised the audits of TRATON SE’s consolidated financial statements and of the annual financial statements of the German Group companies as well as intraperiod reviews of the interim financial statements of TRATON SE and the German Group companies. Furthermore, €0 million (previous year: €0 million) related to other assurance services, and €0 million (previous year: €0 million) to other services.

38. German Corporate Governance Code

The Executive Board and Supervisory Board of TRATON SE issued their annual Declaration of Conformity in December 2025 in accordance with section 161 of the Aktiengesetz (AktG⁠ ⁠—⁠ ⁠German Stock Corporation Act), which is reproduced in the Corporate Governance Statement as a separate part of the Combined Management Report and published on TRATON SE’s website at Corporate Governance | TRATON. Furthermore, TRATON has published a statement regarding departures by TRATON’s corporate governance system from the Swedish Corporate Governance Code. This is also available at https://ir.traton.com/en/corporate-governance?url_redirect=true.

39. Events after December 31, 2025

In January 2026, the TRATON GROUP issued several bonds in euros and Swedish kronor with a total equivalent to €1,075 million under the €18,000 million EMTN program.

On January 20, 2026, TRATON sold 2.1% of the shares outstanding of Sinotruk. The sale generated proceeds of approximately €170 million for the TRATON GROUP, which is reported in net cash provided by/used in investing activities of TRATON Holding. TRATON’s interest in Sinotruk amounted to 23.2% after completion of the transaction.

40. List of shareholdings

List of shareholdings of TRATON SE pursuant to section 285 (11) of the HGB

1 Short fiscal year

2 Profit and loss transfer agreement

3 Currently not trading

4 Newly acquired company

5 Newly established company/spin-off

6 Transformation in accordance with §1 Transformation Act (UmwG)

7 Structured company in accordance with IFRS 10 and IFRS 12

8 Different fiscal year

9 Newly acquired company/newly established company/spin-off in the previous year

10 In liquidation

11 Figures included in the consolidated financial statements of the parent company

12 Consolidated financial statements

13 Figures in accordance with IFRS