Own workforce – S1

Impact, risks and opportunity management

In the context of our own employees, failing to act on diversity, equality and inclusion (DEI) could have financial consequences due to increased personnel and recruitment costs and the lack of available staff and talent. This has a direct impact on Hydratec because staff influence our strategy and business model. Employee interests and opinions are taken into account in our strategy through discussions with employees and/or their representatives.

In 2025, our employees were on various contract forms (FTEs), categorised into permanent employees, temporary employees and employees with no guaranteed hours. There are also non-employee workers; these are self-employed people and people contracted from third parties. These different groups can be materially impacted by Hydratec’s business operations and are therefore included within the scope of the company’s own workforce.

Human rights are seen as the basis for responsible business conduct by Hydratec. It has therefore been decided to report on this, despite the fact that this issue emerged as non-material from the DMA. By adhering to our ESG policies and Code of Conduct (hereinafter: “Code”), Hydratec is actively fighting against modern slavery, human trafficking and forced labour, including child labour. This policy is not just about protecting our own employees. Operations with an increased risk of forced labour or child labour are identified, also indicating the types of operations and locations where these risks may arise. As there are higher standards within the EU, particular attention is paid to countries outside the EU where such risks may be present. At present, there are no signs or indications of any actual negative effects.

Objectives

Hydratec has targets aimed at diversity, equality and inclusion. The target is to have at least 25% men and 25% women in the workforce by 2030. This pursues a balanced distribution in line with the nature of the sector.

Representatives from the various employee groups were involved in setting these targets. Performance against the set targets is monitored by collecting relevant data and evaluating the extent to which the desired results have been achieved. Based on this information, areas for improvement are identified and policies are adjusted as needed.

Policy

Over the past year, an ESG policy has been implemented to manage the material impact on diversity, equality and inclusion of staff. This policy focuses on identifying, assessing, managing and remediating the consequences of this risk. For Hydratec, underperforming DE&I efforts have a negative impact on our reputation, which may make it more difficult to attract and retain employees. This increases personnel and recruitment costs.

Our Code, which contains our human rights policy, is based on internationally recognised guidelines such as the UN Guiding Principles on Business and Human Rights, the ILO Declaration on Fundamental Principles and Rights at Work and the OECD Guidelines for Multinational Enterprises. The focus is on three key areas: respect for human and labour rights, active involvement of workers and specific measures against human trafficking, forced labour and child labour. Firstly, the human rights of staff are protected, notably their labour rights, such as freedom of association and the right to collective bargaining. Secondly, employees are actively involved in policy and decision-making processes that affect them, including through regular communication and employee participation, supported by a decentralised organisational structure.

With offices in Brazil and India, there is an additional responsibility to ensure decent work and economic growth. By observing the Code, Hydratec takes a stand against modern slavery, people trafficking and forced labour (including child labour). In addition, the policy aims to eliminate discrimination, promote equal opportunities, and promote diversity and inclusion. This policy covers a variety of bases for discrimination, including racial and ethnic origin, colour, sex, sexual orientation, gender identity, disability, age, religion, political opinion, national origin or social origin. Hydratec strives for a diverse and inclusive workforce that reflects society. The recruitment policy does not discriminate on the basis of age, gender or ethnicity. Hydratec also strives for equal pay for women and men who do the same work. Policy guidelines have been laid down on inclusion and affirmative actions for vulnerable groups within our workforce. Working groups have been set up, for example, to reflect on and guide recruitment, retention and how best to harness female colleagues. Facilities are also improved where necessary to create an inclusive work environment.

Processes to consult our own staff and remediate negative impacts, and channels for own staff to raise concerns

To identify potential and actual impacts on our own employees, discussions were held with various employees and managers in our operating companies, as representatives of the wider employee base. The outcomes of this dialogue have been taken into account in establishing and updating policies, objectives and associated action plans.

Hydratec has a common policy and associated processes for providing or contributing to remediation if we have caused or contributed to a material negative impact on our employees. Specific reporting channels and procedures are set out in the whistleblower scheme and enable employees to raise concerns, needs or complaints directly. The availability and operation of these channels are supported by structured processes, whereby reports are followed up on, monitored and evaluated to ensure the process is effective.

The whistleblower scheme, which includes the option of making a report to an external confidential counsellor, was implemented in 2024 and updated in 2025. This policy has been communicated within the Group and published on the website. The individual group companies are responsible for implementing this policy locally. The policy also contains explicit measures to protect against any negative effects or retaliation against persons who make a report.

Actions

In 2025, actions relating to our own personnel were formulated. The purpose of these actions is to achieve our policy targets and to prevent, mitigate and, where possible, remediate negative material risks. In addition, these actions will aim to achieve positive material impacts. Actions within these plans will in any case focus on improving diversity, equality and inclusion across Hydratec.

Hydratec strives to be an attractive and inclusive employer. Hydratec invests in improving and adapting workplace facilities, routinely evaluating the extent to which they meet the needs of employees. In addition, training on social safety is provided, with the aim of promoting a safe and open culture of communication where employees feel free to speak up. Efforts are also being made to make independent expertise readily available.

In the recruitment and selection process, Hydratec focuses on achieving diversity, with specific attention on attracting female candidates. For instance, our goal is to shortlist at least one female candidate for each vacancy. Our external communications and employer branding are aligned with this and the aim is to have a diverse team representing us at recruitment events. Moreover, Hydratec is working to develop a traineeship programme specifically aimed at increasing the intake of female talent.

Metrics

The metrics that have to be reported under the ESRS are mainly related to the impact of diversity, equality and inclusion (DE&I) and less to the associated financial and other risks. The following metrics provide an insight into the relationship between the risk and Hydratec. To gain insight into the determined financial and other risks relating to DE&I, the financial metric uses the operating result as a percentage of revenue. When the recruitment costs rise, constituting a risk to operations, this will affect the operating result despite the fact that this is also affected by other factors.

Characteristics of the company’s employees

The information below provides insight into Hydratec employees’ characteristics.

Diversity measures

The information below provides insight into the gender distribution of senior management, as well as the age distribution of all employees, broken down into three age categories.

• 1Senior management: Persons with the resources, authority and decision-making power of an organisation and who determine what changes take place within the organisation. At Hydratec, this refers to the Supervisory Board, the Management Board of Hydratec and the management teams of the individual companies.

Remuneration metrics (pay gap and total remuneration)

The information below provides insight into the pay gap between female and male employees.

Progress

The table below provides an overview of performance to date and illustrates the progress made on previously established targets within this topic. In 2025, 21.3% of the total workforce consisted of women and 68.7% of men. The figures show that Hydratec is gaining a higher share of female employees at higher organisational levels. At senior management level, the share of women is 43%, thereby achieving the target at this level. This confirms that the policies implemented, the recruitment and progression initiatives, and the focus on inclusion are having an effect. At the same time, increasing gender diversity within executive and technical roles requires a structural, multi-year effort. Hydratec therefore continues to focus on targeted actions, including adapted recruitment strategies, employer branding, traineeships and an even more inclusive working environment to promote the attracting and progression of female talent.

The management report as referred to in Part 9 of Book 2 of the Dutch Civil Code monitors the elements from the foreword to the historical summary inclusive. This version of the annual financial reporting of Hydratec Industries N.V. for the financial year ending on 31 December 2025 is not presented in the ESEF format as specified in the regulatory technical standards for ESEF (Delegated Regulation (EU) 2019/815). The set of ESEF reports can be downloaded at the download page.