DEUTZ (DEZ) investor relations material

Strategic rationale and market context

• European defense spending is entering a multi-decade expansion, with NATO budgets projected to exceed €700bn and Germany's defense funds protected from electoral risk.

• There is a significant growth opportunity in land-systems and sustainment contracts, driven by aging NATO vehicle fleets and a focus on upgrades and modernization.

• FFG is a rare asset with ~€760m revenue in FY2025, best-in-class margins, and an order backlog of €1.9bn, serving over 15 NATO nations and supporting 30+ platform types.

• The combination creates a European land platform champion, uniquely spanning propulsion, platform integration, MRO, and modernization across the NATO land vehicle lifecycle.

• FFG's awarded contracts and pipeline provide strong visibility and growth potential beyond its current revenue base.

Transaction structure and financial impact

• The acquisition is valued at ~€1.6bn, funded by ~€1bn secured debt and ~€0.6bn in newly issued shares to the seller families, who will become long-term shareholders with 29.9% ownership.

• The deal is structured to preserve balance sheet strength, with organic deleveraging expected to return leverage to current levels within three to four years.

• An independent fairness opinion confirms the financial appropriateness of the deal for shareholders.

• The transaction is expected to be EPS accretive on a pro-forma basis, with further upside from synergies and FFG's order book and pipeline.

• Shareholders are invited to vote on the share issuance at an Extraordinary General Meeting on 24 August 2026, with closing anticipated by end of 2026 or Q1 2027, subject to regulatory approvals.

Strategic and operational synergies

• The combined group will leverage DEUTZ's engine and service footprint with FFG's established MRO and platform integration capabilities.

• Revenue synergies are expected from integrating DEUTZ powerpacks into FFG platforms, expanding aftermarket and spare parts business, and cross-selling new technologies.

• Cost synergies will be realized through bundled procurement, site optimization, and G&A savings.

• The combination enables a unique offering across the full land vehicle lifecycle, providing a competitive advantage in the European defense market.