2. Foreword by the Chair of the Nomination and Compensation Committee

Dear shareholders,

On behalf of the Nomination and Compensation Committee (NCC), I am pleased to present the 2024 Remuneration Report.

Once again, an extremely challenging year is behind us. However, despite a strong decline in the building construction industry in Europe, we were able to increase sales and sales volumes. The major success of our recently launched products on the market was very pleasing in this regard. Operating margins were only slightly below the previous year’s level. As a result, it was also possible to absorb most of the impacts of the continued high wage inflation and – compared to most currencies – a significantly stronger Swiss franc. Based on our strategic stability, we have carried out all important, larger investment projects as planned. All in all, this is reference to our structural and financial strength as well as the resilience of our business model. This enabled us to further expand and strengthen our market position as leading supplier of sanitary products.

Throughout the year, the NCC carried out its regular activities on remuneration matters, such as the annual review of the remuneration programmes, the setting of performance targets for the Group Executive Board at the beginning of the year and their assessment at the end of the year, the determination of the remuneration of the members of the Board of Directors and the Group Executive Board, the preparation of the Remuneration Report and the Say-on-Pay votes at the Annual General Meeting (AGM).

At our 2024 AGM, a prospective binding vote was held on the maximum total remuneration for the Board of Directors and the Group Executive Board, and our shareholders had the opportunity to express their views on our remuneration policy through a consultative vote on the Remuneration Report. Our shareholders approved the proposed level of remuneration for the Board of Directors with 97% and for the Group Executive Board with 89%. However, the consultative vote on the Remuneration Report received a lower approval rate of 61%. This result prompted us to engage in a dialogue with our investors and shareholder representatives to better understand their concerns about our remuneration policy. The NCC has used the insights gained from this process to review the disclosure approach and implement measures to improve the transparency, readability and focus of this report.

The next page of this report summarises the issues raised by our stakeholders and how the NCC addressed each of them.

In line with our company culture, our remuneration system is designed more as a participation system than an individual incentive system. We have therefore adapted the names of our variable remuneration plans to better reflect the purpose of the plans, changing the names from Short-Term Incentive and Long-Term Incentive to Short-Term Participation (STP) and Long-Term Participation (LTP).

At the 2025 AGM, you will have the opportunity to express your opinion on this Remuneration Report in a consultative vote. You will also be asked to approve the total remuneration of the Board of Directors for the period until the next AGM and the maximum total remuneration of the Group Executive Board for the 2026 financial year.

Looking ahead, we will continue to foster an open and regular dialogue with our shareholders and their representatives as we evolve our remuneration systems. The NCC values your ongoing input and feedback on our remuneration programmes.

We look forward to the Annual General Meeting in April 2025.

Yours sincerely,

Eunice Zehnder-Lai
Chair of the Nomination & Compensation Committee