Traton : 2024 Annual General Meeting TRATON SE 2023 Annual Financial Statements

Annual Financial Statements of TRATON SE

2023

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Annual Financial Statements
of TRATON SE
for the fiscal year from January 1
through December 31, 2023	3
Income Statement	4
Balance Sheet	5
Notes to the Annual Financial
Statements	6
Members of the Supervisory Board
and Executive Board and their
Appointments	27

1

Combined Management Report

51

The management report for TRATON SE and the management report for

the Group have been combined in accordance with section 315 (5) of the Handelsgesetzbuch (HGB - German Commercial Code) in conjunction with section 298 (2) of the HGB and published in TRATON's 2023 Annual Report.

2

Further Information	52
Responsibility Statement	53
Independent Auditor's Report	54
Publication Details	61

3

ANNUAL FINANCIAL	1
STATEMENTS
OF TRATON SE

Annual Financial Statements of
TRATON SE	3
Income Statement	4
Balance Sheet	5
Notes to the Annual Financial Statements	6

Members of the Supervisory Board and

Executive Board and their Appointments 27

Annual Financial Statements of TRATON SE		Combined Management Report	Further Information

ANNUAL FINANCIAL STATEMENTS OF TRATON SE

Income Statement

for the period from January 1 through December 31, 2023

€ thousand		Note	2023	2022
Net investment income/expense	(1)	839,319	-150,425
Income from long-term loans	(2)	189,191	46,192
Net interest income/net interest expense	(3)	-247,704	11,511
Sales revenue	(4)	35,596	25,579
Cost of sales				-33,429	-23,519
Gross profit				2,167	2,060
General and administrative expenses	(5)	-137,310	-101,868
Other operating income	(6)	381,006	495,146
Other operating expenses	(7)	-381,061	-562,710
Income taxes	(8)	-81,045	-574
Earnings after tax				564,563	-260,668
Net income/loss for the year				564,563	-260,668
Profit carried forward from the previous year				15,768	26,436
Withdrawal from capital reserves				400,000	600,000
Allocation to retained earnings				-28,228	-
Net retained profit				952,103	365,768

TRATON SE 2023 Annual Financial Statements

4

Annual Financial Statements of TRATON SECombined Management ReportFurther Information

Balance Sheet

as of December 31, 2023

€ thousand		Note	Dec. 31, 2023	Dec. 31, 2022
Assets
Intangible assets				1,852	2,768
Property, plant, and equipment				2,384	2,678
Financial assets				22,844,483	20,547,478
Fixed assets	(9)	22,848,719	20,552,924
Receivables and other assets	(10)	2,081,065	5,035,439
Bank balances				219,534	77,169
Current assets				2,300,599	5,112,608
Deferred charges and prepaid expenses	(11)	12,500	4,419
				25,161,818	25,669,951
Equity and liabilities
Subscribed capital				500,000	500,000
Common shares				500,000,000	500,000,000
Contingent capital in € thousand				50,000	50,000
Capital reserves				13,295,313	13,695,313
Retained earnings				28,228	-
Net retained profit				952,103	365,768
Equity	(12)	14,775,644	14,561,081
Provisions for pensions				4,272	3,828
Tax provisions				154,272	78,385
Other provisions				104,538	83,650
Provisions	(13)	263,082	165,863
Liabilities to banks				3,643,978	3,988,706
Other liabilities				6,478,534	6,953,003
Total liabilities	(14)	10,122,512	10,941,709
Deferred income				580	1,298
				25,161,818	25,669,951

TRATON SE 2023 Annual Financial Statements

5

Annual Financial Statements of TRATON SE		Combined Management Report	Further Information

NOTES TO THE ANNUAL FINANCIAL STATEMENTS

Basis of Presentation

TRATON SE has its registered office in Munich, Germany, and is entered in the commercial register at Munich Local Court under no. HRB 246068. The Annual Financial Statements of TRATON SE for the fiscal year from January 1 through December 31, 2023, have been prepared in accordance with the provisions of the Handelsgesetzbuch (HGB - German Commercial Code) and the SE Regulation, in conjunction with the Aktiengesetz (AktG - German Stock Corporation Act). The provisions for large stock corporations apply.

To enhance clarity, individual items in the balance sheet and income statement have been combined. These items are disclosed separately in the Notes to the Annual Financial Statements. All figures shown have been rounded so minor discrepancies may arise from addition of these amounts. To improve comparability, certain prior-period information was adjusted to reflect the current presentation. Comparable prior-year figures are presented in brackets alongside the figures for the fiscal year under review.

The income statement has been prepared using the cost of sales method.

As of the reporting date of December 31, 2023, TRATON SE was an 89.72%-owned direct subsidiary of Volkswagen Finance Luxemburg S.A., Strassen, Luxembourg (Volkswagen Finance Luxemburg), which in turn is a wholly owned subsidiary of Volkswagen Aktien­ gesellschaft, Wolfsburg (Volkswagen AG). TRATON SE is included in the consolidated financial statements of Volkswagen AG, Wolfsburg (largest basis of consolidation). TRATON SE prepares consolidated financial statements for the smallest basis of consolidation. Both sets of consolidated financial statements are published in the Company Register.

At its meeting on March 20, 2023, the TRATON SE Supervisory Board revised the composition of the Company's Executive Board. The appointment of Christian Levin, Chairman of the Executive Board of TRATON SE and Chief Executive Officer of Scania CV AB, was renewed until January 2029. Furthermore, Executive Board member Antonio Roberto Cortes, who is also Chief Executive Officer of Volkswagen Truck & Bus, will remain on the Executive Board until January 2027. Dr. Michael Jackstein has been heading the

combined Finance and Human Resources division of TRATON SE, which also includes the Business Development division, since April 1, 2023. Former Executive Board members Bernd Osterloh (Human Resources) and Annette Danielski (Finance and Business Devel- opment) left the Executive Board on this date. At the same time, the introduction of the new Global Product Management area of responsibility within the Executive Board safeguards the heart of the business model: the strategic and operational integration of the commercial and industrial systems of the four brands and coordinated Group functions. Catharina Modahl Nilsson has been responsible for this since April 1, 2023.

The Schuldscheindarlehen that had been placed by TRATON SE in 2021 were drawn down in the amount of €700 million (previous year: €700 million) as of December 31, 2023.

TRATON SE's total liquidity reserve consists of unused confirmed credit lines of €8,000 million (previous year: €6,780 million), including €3,500 million (previous year: €2,280 mil- lion) from Volkswagen AG. A further €4,500 million (previous year: €4,500 million) is attributable to the syndicated loan that TRATON SE entered into on July 28, 2020, and increased from €3,750 million to €4,500 million on December 15, 2021. The revolving credit line has a term of five years and has been extended twice for one year each. The banking consortium consisting of 23 banks approved both extension requests. The term of the syndicated loan ends on December 16, 2028. The credit line serves general corporate purposes as well as to safeguard the TRATON GROUP's liquidity.

The TRATON GROUP has had a European Medium Term Notes (EMTN) program since March 12, 2021. The €12,000 million capital market issuance program enables the TRATON GROUP to raise capital on the debt markets flexibly and efficiently. As well as TRATON SE, the indirect subsidiaries TRATON Finance Luxembourg S.A., Strassen, ­Luxembourg (TRATON Finance) and TRATON Treasury AB, Södertälje, Sweden (TRATON Treasury AB) can issue bonds under the program. TRATON SE, TRATON Finance, and TRATON Treasury AB are using the issuance program to raise capital for general corporate purposes, and the capital raised will be used as needed within the

TRATON SE 2023 Annual Financial Statements

6

Annual Financial Statements of TRATON SE		Combined Management Report	Further Information

TRATON GROUP. The total principal amount of bonds as of December 31, 2023, was €8,330 million (previous year: €5,700 million) under TRATON Finance's €12,000 million European Medium Term Notes (EMTN) program, and is hedged in part by interest rate derivatives.

In September 2023, the TRATON GROUP launched a commercial paper program (CP pro- gram) with a volume of €2,500 million, €999 million of which had been used by Decem- ber 31, 2023, for financing in the TRATON Financial Services business area. In addition to TRATON SE, the Company's indirect subsidiaries TRATON Finance and TRATON Treasury AB can also issue commercial paper under the CP program. This has opened up an additional financing market for the TRATON GROUP and complements the existing TRATON Finance EMTN program. The CP program finances short-term maturities with tenors of up to one year.

Accounting Policies

The principal accounting policies used to prepare the Annual Financial Statements, which were essentially unchanged from the previous year, are set out below.

Sales revenue

Sales revenue primarily comprises revenue from services rendered within the

TRATON GROUP.

Intangible assets

Purchased intangible assets are recognized at cost and amortized over their useful life (generally three to five years) on a straight-line basis.

Property, plant, and equipment

Property, plant, and equipment are carried at cost less depreciation and, in some cases, write-downs.

Buildings on third-party land are depreciated on a straight-line basis over their rental term. Movable items of property, plant, and equipment are generally depreciated over 13 years.

Low-value movable assets used by the Company that are subject to wear and tear are recognized immediately as expenses or capitalized and written off in the year of acqui- sition.

Write-downs are recognized if impairment is expected to be permanent.

Financial assets

Shares in affiliated companies and other equity investments are measured at the lower of cost or their net realizable value.

Loans are recognized at the lower of their nominal amount or present value on the reporting date.

Write-downs are recognized if impairment is expected to be permanent. In accordance with the requirement for write-downs to be reversed, if the reasons for permanent impairment no longer apply, the write-down is reversed, but not beyond cost.

Current assets

Receivables and other assets are carried at their principal amounts. Appropriate loss allowances are recognized for identifiable individual risks.

Bank balances are carried at their nominal amount.

TRATON SE 2023 Annual Financial Statements

7

Annual Financial Statements of TRATON SE		Combined Management Report	Further Information

Deferred taxes

Deferred taxes are only recognized if accounting differences result in a surplus of liabilities over assets, after taking into account applicable loss and interest carryforwards, and an overall tax expense is expected in future fiscal years. In this, accounting differences relating to companies in the tax group are included insofar as it is assumed that future tax income and expense will result from the reversal of temporary differences at TRATON SE as the head of the tax group. If deferred tax assets exceed deferred tax lia- bilities, they are not capitalized due to exercise of the recognition option pursuant to section 274 (1) sentence 2 of the HGB.

Deferred tax assets and liabilities are measured using the applicable corporation tax and trade tax rates for the TRATON tax entity (31.88%, (previous year: 31.88%)).

Offset of assets and liabilities, and of income and expenses

Assets that are earmarked solely for meeting pension obligations or obligations under partial retirement agreements and that are protected from all other creditors are recognized at fair value. Income and expenses relating to these assets are offset against the expense for the unwinding of interest for the corresponding obligation and recognized in net interest income/net interest expense. These assets are offset against the settlement amount of the underlying obligation. If the fair value of these assets exceeds the amount of liabilities, the excess amount must be recognized as "excess arising from the offset of assets and liabilities." If liabilities exceed assets, the difference is recognized as a provision.

Pensions and other post-employment benefits

Pension obligations are calculated using the projected unit credit method. Under this method, future obligations are measured on the basis of the proportionate benefit entitlements acquired at the balance sheet date and discounted to their present value. Measurement reflects assumptions about the future development of certain parameters, which affect the amount of future benefits. The discount rate for all obligations is the average market interest rate for the past ten years published by the German Bundesbank for a residual maturity of 15 years, in accordance with section 253 (2) of the HGB.

Pension provisions are reduced by the fair value of the assets used to cover the benefit obligations. See also "Offset of assets and liabilities, and of income and expenses."

Tax provisions, other provisions, liabilities

The tax provisions and other provisions relate to uncertain liabilities. Measurement ensures that they take account of all identifiable risks, taking into consideration future price and cost increases. Provisions with a maturity of more than one year are discounted on the basis of their remaining maturity.

Liabilities are recognized at their settlement amount.

Currency translation

Receivables and liabilities denominated in foreign currencies and hedged are measured at the hedged rate if they are accounted for using the net hedge presentation method. If the gross hedge presentation method is used, they are measured at the closing rate on the reporting date. Miscellaneous current foreign currency receivables and liabilities are translated at the average exchange rate on the reporting date. Miscellaneous non- current foreign currency receivables and liabilities are translated at the exchange rate on the date of recognition, or, in the case of receivables, at the lower exchange rate applicable on the reporting date, or, in the case of liabilities, the higher exchange rate applicable on the reporting date.

Derivatives and micro hedges

TRATON SE uses derivatives exclusively for hedging purposes. Provided the necessary criteria are met, the derivative is combined with the hedged item as a micro hedge. For certain micro hedges, the offsetting changes in the value of the hedged item and the hedging instrument due to the hedged risk are recognized on the balance sheet (gross presentation method). In other cases, the offsetting changes in the value of the hedged item and the hedging instrument due to the hedged risk are netted. In both cases, any net negative amount resulting from changes in the value of the hedged item and hedging instrument (ineffectiveness) is recognized through a provision for the hedge.

By contrast, derivatives that do not form a micro hedge with the hedged item are accounted for using the imparity principle, i.e., provisions are recognized for negative fair values but positive fair values are not recognized.

TRATON SE 2023 Annual Financial Statements

8

Annual Financial Statements of TRATON SE		Combined Management Report	Further Information

Income Statement Disclosures

(1) Net investment income/expense

€ thousand	2023	2022
Income from profit and loss transfer agreements	805,384	142,978
Income from equity investments	50,749	40,141
of which from affiliated companies	50,663	40,141
Expenses for the absorption of losses		-16,814	-333,653
Income from the disposal of equity investments		-	109
of which from affiliated companies		-	109
	839,319	-150,425

The income from profit and loss transfer agreements mainly comprises the earnings of MAN Truck & Bus SE, Munich, (MAN Truck & Bus SE), Scania CV Deutschland Holding GmbH, Koblenz, Scania Finance Deutschland GmbH, Koblenz, and Scania Real Estate Deutsch- land GmbH, Koblenz.

The income from equity investments contains the pro-rata profit of MAN Brand GmbH & Co. KG, Grünwald.

The expenses for the absorption of losses mainly comprise the loss made by TB Digital Services GmbH, Munich. In the previous year, this item had contained the loss made by MAN Truck & Bus SE.

(2) Income from long-term loans

The interest income from long-term loans was €189,191 thousand (previous year: €46,192 thousand) and included €189,191 thousand (previous year: €46,192 thousand) from affiliated companies. The increase resulted principally from the €3,500,000 thousand loan to TRATON Sweden AB, Södertälje, Sweden (TRATON Sweden AB) and was attributable to the increase in interest rates and the payment of interest for the full year. The interest income reported in fiscal year 2022 had only related to a six-month period. In 2022, income from long-term loans in the amount of €31,129 thousand had been reported in net interest income; this is now reported in this item. The figures for 2022 have been adjusted accordingly.

(3) Net interest income/net interest expense

€ thousand	2023	2022
Miscellaneous interest and similar income	124,901	101,728
of which from affiliated companies	114,000	90,820
Interest and similar expenses		-375,803	-84,048
of which due to affiliated companies		-187,587	-42,965
Interest from pension provisions	3,198	-6,169
		-247,704	11,511

The interest income and expenses mainly relate to intragroup receivables, liabilities from financial transactions, and bank interest and commission payments. The interest income contains interest income on taxes of €1,165 thousand (previous year: €10,753 thousand).

The increase in interest and similar expenses mainly reflects the higher interest rates on both intragroup and external financing. In the 2023 fiscal year, net interest income/ expense contained €-14 thousand (previous year: €-65 thousand) from the unwinding of discounts on provisions and €4,095 thousand (previous year: €4,138 thousand) from the discounting of provisions.

TRATON SE 2023 Annual Financial Statements

9

Annual Financial Statements of TRATON SE		Combined Management Report	Further Information

(4) Sales revenue

€ thousand	2023	2022
Services/cost allocations	32,902	22,921
Rental and leasing	2,664	2,589
Other	30	69
	35,596	25,579
By region
Germany	14,469	12,709
Rest of Europe	11,840	11,103
Other regions	9,287	1,767
	35,596	25,579
(5) General and administrative expenses
€ thousand	2023	2022
Personnel expenses	73,074	55,195
Depreciation and amortization	1,364	1,679
Other administrative expenses	62,872	44,994
	137,310	101,868

The increase in personnel expenses is mainly attributable to the personnel changes on the Executive Board, higher remuneration of the Executive Board (for further details, see Note "(23) Remuneration of the Executive Board and the Supervisory Board"), and higher retirement benefit expenses. The rise in other administrative expenses was mainly due to higher consultancy expenses in connection with realization of the TRATON Way Forward strategy.

(6) Other operating income

Other operating income of €381,006 thousand (previous year: €495,146 thousand) mainly comprises income from financial derivatives and from foreign currency translation of €325,573 thousand (previous year: €483,756 thousand). It also includes prior-year income of €6,853 thousand (previous year: €10,593 thousand) from the reversal of provisions and income from final accounting for legacy issues.

(7) Other operating expenses

Other operating expenses of €381,061 thousand (previous year: €562,710 thousand) include expenses that cannot be allocated to functional expenses and other taxes. €331,413 thousand (previous year: €403,113 thousand) of this amount comprises expenses for currency translation. The other operating expenses do not include any prior-period expenses (previous year: €5,035 thousand).

(8) Income taxes

Tax expense for the 2023 fiscal year was €81,045 thousand (previous year: €574 thousand), comprising €26,133 thousand in German corporate income tax for the period (including the solidarity surcharge) and trade tax of €29,418 thousand. A further €22,447 thousand comprises nonperiodic taxes and €3,047 thousand comprises foreign income taxes. In the previous year, the tax expense of €574 thousand had been dominated by nonperiodic tax income and foreign income taxes.

TRATON SE 2023 Annual Financial Statements

10