Foreword

Dear Readers,

The past fiscal year was challenging for STIHL in many respects. Global crises such as wars, economic downturns in key markets, and climate change have become more persistent. Other trends have gained momentum and are affecting us not only, but above all, in Germany, including high costs for raw materials, energy, and bureaucratic requirements. For STIHL, these costs are a tangible competitive disadvantage. Added to this is the accelerated technological transformation in both the battery and combustion engine sectors, which has necessitated rapid adjustment. Despite these challenges, we still managed to achieve positive results: At 5.33 billion euros, revenue increased by 1.12 percent on the previous year (5.3 billion euros).

Despite all uncertainty, our unwavering commitment to and pursuit of sustainability across ecological, social, and economic dimensions endures. We are systematically integrating our 2021 sustainability strategy into every aspect of our daily operations. Thanks to the commitment of employees across the Group, we were able to make significant progress in our three focal areas: ecosystems, circularity, and care, last year. STIHL has taken an initial step toward having its emission reduction targets scientifically validated by signing the Science Based Targets initiative (SBTi) commitment letter. We aim to contribute to limiting global warming in accordance with the Paris Climate Agreement on the basis of transparent, verifiable actions and quantifiable targets. As one of many measures in the focal area of circularity, we have continued research and development on options for circular product design. In the focal area of care, which addresses people and corporate governance at STIHL, we have continued to work on initiatives such as diversity. These and many other examples that demonstrate how sustainability is embedded both strategically and operationally at STIHL are explored in more detail in the subsequent sections of this report.

At the same time, this STIHL Sustainability Report will most likely be the last in this format. From the fiscal year 2025 onwards, our Group will be subject to the EU Corporate Sustainability Reporting Directive (CSRD), which aims to standardize the disclosure of key sustainability performance indicators in management reports. Although there is still no legal certainty regarding this new regulation, STIHL has set up a team to ensure that we will meet our CSRD obligations. In addition to the CSRD report, we will continue to report on sustainability. We will continue to provide you with insightful updates on our initiatives, and in the meantime, we hope you find this report informative and engaging.