4.1 Report of the Supervisory Board

In this report, the Supervisory Board provides a summary of its supervisory work performed in the 2024 financial year.

Message from the Chairman

The year 2024 was marked by both challenges and progress as Nedap continued to navigate a dynamic business environment. Geopolitical unrest continued worldwide, while growing environmental awareness contributed to uncertainty. While revenue and profitability were under pressure, the company achieved significant growth in recurring revenue, underscoring the strength of its SaaS based offerings and the execution of its long-term strategy. These results highlight Nedap's ability to adapt and innovate, reinforcing its focus on creating sustainable value through its Digital Twin Technology and strengthening its position in its four key markets.

At the 2024 Capital Markets Day, Nedap presented an update on its Create & Scale strategy and outlined its financial objectives for 2025-2028. These objectives highlight Nedap's focus on sustainable long-term value creation.

The year 2024 also marked a focus on enhanced governance. The Supervisory Board established two new committees: the Audit & Risk Committee and the Remuneration Committee. These committees were formed to strengthen oversight and ensure focused attention on important areas such as financial integrity, risk management, and executive performance and remuneration, in alignment with the updated Dutch Corporate Governance Code.

On the sustainability front, Nedap built upon the initiatives of previous years. Concrete actions, such as the further implementation of the double materiality assessment results and integration of sustainability into decision-making, have strengthened Nedap's impact. The enthusiasm and engagement of employees in these initiatives highlight the strength of Nedap's culture and continue to inspire the organization.

On behalf of the Supervisory Board, I would like to express our gratitude to the Board of Directors and all Nedap employees for their dedication and achievements in 2024. Their efforts remain the cornerstone of the company’s success. Our appreciation also goes to our shareholders and customers for their continued trust in Nedap. Finally, I extend my thanks to my colleagues on the Supervisory Board for their commitment and constructive collaboration throughout the year.

With confidence, I look forward to 2025, as Nedap continues to build on its solid foundation and pursues its mission to create technology that matters.

Peter van Bommel

Details of the members of the Supervisory Board

Supervisory Board composition and skills matrix

The Supervisory Board supervises, evaluates progress and performance, maintains a healthy and transparent system of checks and balances, and assists the Board of Directors with advice where necessary. The focus is on long-term sustainable value creation in the interest of all of the company's stakeholders. The composition of the Supervisory Board is in line with the profile published on Nedap's website, which was evaluated and updated in 2024 to align with evolving corporate governance standards and the company's strategic priorities.¹ The composition is as such that the members of the Supervisory Board are able to operate independently of and critically toward each other, the Board of Directors, and any kind of particular interest. For more information about the rotation schedule, please refer to our Corporate Governance webpage.

• 1The updated profile will be published on Nedap's website following its discussion as an agenda item during the annual general meeting on 17 April 2025.

Supervisory Board composition and skills matrix

^{+ = possesses a sufficient level of expertise, skills and experience in the area and can make a balanced impartial judgment
++ = in addition, acknowledged as an expert in the respective areas (max. 5 per person)}

^{Explanatory notes:
The purpose of this matrix is to provide an overview of the experience and competencies that Nedap deems most relevant to its stakeholders.
The matrix represents the extent to which the company's Supervisory Board members have such experience and competencies.
For the purpose of creating this overview, each of the members of the Supervisory Board may have a maximum of five specific areas of expertise, and they are considered experts within the respective domain.}

The composition of the Supervisory Board meets current gender diversity requirements. The Supervisory Board believes that the current composition constitutes a good balance between the various required skills, relevant knowledge, and experience, enabling the Supervisory Board to adequately fulfil its statutory duty of supervising and advising the Board of Directors. In the Supervisory Board's view, the Supervisory Board meets the requirements of independence, as specified in best practice provisions 2.1.7 to 2.1.9 inclusive of the Corporate Governance Code.

Financial statements

PricewaterhouseCoopers Accountants N.V. (PwC) audited the financial statements and issued a comprehensive unqualified auditor's report, which is included in the report in section 6.3 Independent auditor's report. The auditor also had the usual final evaluation with the Board of Directors and Group Controlling department this year, and the Audit & Risk Committee. The full Supervisory Board subsequently discussed the auditor’s report and the 2024 report with the Board of Directors and the auditor, covering topics such as integrity and the quality of the company's financial and sustainability reporting, material considerations regarding reporting, and material risks and uncertainties. The outcome of this discussion was incorporated into the audit certificate where necessary. No further specifics were raised in a subsequent meeting with the auditor, which was not attended by the Board of Directors.

The Supervisory Board is briefed on the company's operations on a regular basis through financial reports with explanatory notes from the Board of Directors.

In addition, the Supervisory Board receives detailed quarterly reports on the financial results achieved over the previous three months and progress made on the annual plans. The Supervisory Board had regular meetings with managers and other employees from the various business units again this year to get a good idea of developments in the market and at each business unit. Based on the reports and these meetings, the Supervisory Board is confident that the 2024 annual report provides a solid foundation for the Supervisory Board's accountability vis-à-vis its supervision of the Board of Directors' management of the company.

The Supervisory Board therefore advises the annual general meeting to adopt the 2024 financial statements.

Dividend

The Board of Directors and the Supervisory Board consider it prudent to pay a dividend of €3.20 per share. Nedap maintains the required reserves to be able to guarantee its continuity amidst difficult market conditions and stay on the strategic course that the company has set.

As required under article 43.3 of Nedap's articles of association, any profit not added to the reserves as per article 43.1 of Nedap's articles of association is paid out to holders of ordinary shares in Nedap. As a result, the total amount available for payment will be €21.1 million, which means a payment of €3.20 per ordinary share (€3.20 in 2023).

Strategy

In 2024, the Supervisory Board monitored and provided oversight regarding Nedap's strategic development, particularly with regard to the refined Create and Scale strategy and its implementation in the company’s four key markets: Healthcare, Livestock, Retail, and Security. The strategy emphasizes leveraging Digital Twin Technology and Nedap's unique competitive edge to drive sustainable growth.

The Supervisory Board engaged in multiple strategy sessions, where it reviewed and discussed the refinement and execution of strategic priorities with the Board of Directors and the business unit directors. These sessions facilitated in in-depth discussions on the transition from business units to a focused approach on four key markets. The Supervisory Board assessed progress in aligning these markets with Nedap's broader value creation goals and evaluated the performance and scalability of key solutions across their development phases (Create, Scale or Core).

During the Capital Markets Day, Nedap presented updates to its Step Up! strategy, focusing on sustainable growth targets, including high single-digit organic revenue growth, operating margin expansion, and achieving a return on invested capital (ROIC) of at least 30%. These goals reflect Nedap's commitment to sustainable long-term value creation while strengthening its position in key markets. The Supervisory Board expressed satisfaction with the refined strategy and its alignment with Nedap's overarching goals.

The Supervisory Board provided oversight and observations on several strategic initiatives, such as:

• Portfolio optimization, including the continued investment in high-potential solutions and the divestment of non-core activities.

• Leadership development, ensuring the organization is well positioned to implement its strategy effectively.

• Reflection on lessons learned from previous initiatives, encouraging a culture of continuous improvement across business units.

Specific strategic updates in 2024 included:

• Healthcare: Focused on scaling strategic pillars, supporting the transition to networked care models, and exploring new opportunities in emerging healthcare sectors.

• Livestock: Examined technology's role in enhancing productivity in the dairy sector while addressing market volatility.

• Retail: Considered the adoption of RFID technology and SaaS solutions to meet increasing demands for real-time, end-to-end visibility in retail operations.

• Security: Reviewed advancements such as PIAM (Physical Identity and Access Management) to address growing regulatory requirements and enhance user experiences.

The Supervisory Board emphasized the importance of clear strategic choices and the disciplined implementation to capitalize on identified opportunities. Discussions underscored Nedap's entrepreneurial culture and its ability to adapt to external changes while maintaining a long-term focus.

In conclusion, the Supervisory Board remains confident in Nedap's strategic direction and its ability to achieve sustainable growth. The Supervisory Board appreciates the leadership team's dedication and is committed to fulfilling its role in providing oversight and guidance to support the company's strategic priorities.

Sustainability as part of the long-term strategy

Throughout 2024, the Supervisory Board, and in particular the Audit & Risk Committee, engaged regularly with the Board of Directors and management to review sustainability policies and initiatives. Key discussions focused on the integration of sustainability into Nedap's business model and the progress made in achieving the company’s sustainability goals. The Supervisory Board acknowledges the importance of transparency and accountability in this area and recognizes the progress achieved over the past year. The Supervisory Board also encourages Nedap to explore how sustainability can be leveraged more prominently as a differentiating factor in the market. By clearly communicating the impact of its initiatives, Nedap can further enhance its competitive position and reputation in responsible innovation.

Looking ahead to 2025, the Supervisory Board will continue to closely monitor the further embedding of sustainability within Nedap's business practices. Particular attention will be given to compliance with evolving regulations, such as the Corporate Sustainability Reporting Directive, and ensuring that sustainability responsibilities remain well-defined. The Supervisory Board will also focus on the quality and transparency of non-financial reporting to ensure alignment with both Nedap's strategic ambitions and its obligations.

Diversity, Equity and Inclusion

DEI remains an important part of Nedap's strategic vision, with continued efforts to foster an inclusive and equitable work environment. In 2024, key initiatives included the appointment of a DEI Lead, the formation of a dedicated DEI team to drive initiatives across business units, and a survey on female leadership, which provided valuable insights for future improvements. Looking ahead, focus areas include gender equality, with a leadership and mentoring program to support the development of women into senior roles, and inclusive leadership training for managers. Nedap remains committed to making structural progress, with a long-term ambition to align female representation in senior leadership with the overall workforce composition by 2028.
For more information, please refer to section 2.2 Progress on our people.

Collaboration and responsibilities

In 2024, the Supervisory Board continued its oversight through direct engagement with managers and employees across Nedap's business units. These discussions enhanced communication and provided valuable insights into key operational and strategic developments. The Supervisory Board also maintained regular and constructive dialogue with the Works Council, ensuring a clear understanding of company-wide priorities and challenges.

Risk management

In 2024, the Supervisory Board maintained its active oversight of risk management at Nedap, with a continued focus on ensuring a structured and proactive approach. Periodic reviews of key risks and trends took place, aligning with the Supervisory Board's commitment to thorough supervision. The risk management process was further refined, with strategic risks discussed in the first half of the year and operational, legal, and compliance risks reviewed separately in the second half, allowing for a more in-depth assessment. This structure provided clearer insights and reinforced risk ownership across the organization.

Nedap made progress in embedding risk awareness and accountability within business units, with increasing involvement from leadership. However, discussions highlighted the need to further formalize risk ownership, including assigning clear responsibilities for risk identification, monitoring and mitigation. The Supervisory Board emphasized that making risk management more actionable remains a key priority. The existing Risk Control Framework was assessed as functioning adequately, with a recommendation to further align it with Nedap's evolving leadership structure and the integration of sustainability-related risks (CSRD).

The growing importance of cybersecurity and IT-related risks remained a key focus area, as these risks affect both Nedap's internal operations and its solutions. The Supervisory Board took note of increasing regulatory requirements, such as NIS2.

The Supervisory Board also reviewed risk identification and monitoring processes, including the role of concern control in cross-evaluating risk exposures. Ensuring consistency in risk assessment across business units was identified as an area for further refinement. The Supervisory Board welcomed steps taken to enhance risk monitoring, including a more structured approach to tracking emerging risks and ongoing discussions on how best to balance soft controls with hard controls where required.

In addition, attention was given to fraud risk management, with a focus on implementing a clear policy supported by concrete actions. The Supervisory Board underscored the importance of ensuring that risk mitigation measures are both practical and enforceable, with clear accountability.

Finally, the Supervisory Board reviewed and endorsed the updated Risk Control Framework. It was agreed that the framework should be further refined in 2025, incorporating lessons learned and ensuring alignment with the company’s strategic planning and leadership structure.

In summary, the Supervisory Board acknowledged the structured and proactive approach taken by the organization in risk management and approved the updated Risk Control Framework, as detailed in chapter 3 Governance & risk, section 3.2 Risk management & internal controls. The Supervisory Board remains committed to ensuring that risk management continues to evolve in response to emerging risks, regulatory developments, and Nedap's strategic priorities.

Committees

As of January 2024, the Audit & Risk Committee and the Remuneration Committee have been established. The aim of the committees is to keep the execution of tasks, decision-making, and meetings of the Supervisory Board efficient and effective, with the right focus. The key discussions and outcomes of the committee meetings are systematically reported and deliberated upon in the plenary Supervisory Board meetings.

Audit & Risk Committee

The Audit & Risk Committee supports the Supervisory Board in overseeing the integrity and quality of Nedap's financial reporting and the effectiveness of its internal risk management and control systems. The Audit & Risk Committee consists of Margot Scheltema (Chair), Marijn Pijnenborg, and Sicco Santema, who collectively bring extensive expertise in financial oversight and risk management.

The committee's role is described in its charter, which is part of the Supervisory Board rules and can be accessed on Nedap's Corporate Governance webpage. In 2024, the committee met five times with the CFO and relevant experts. The internal auditor and external auditor, PwC, participated in four of these meetings.

Key topics discussed during these meetings included:

• The progress of the integrated audit activities and follow-up on action plans.

• Financial reporting, including the annual report and financial statements.

• The effectiveness of Nedap's internal risk management systems, including the risk assessment process.

• Business continuity and Information security, including updates on cybersecurity initiatives and audits.

• The external auditor selection process.

• Compliance-related topics, including the Nedap's readiness for CSRD reporting requirements.

• Nedap's tax policy.

Remuneration Committee

The Remuneration Committee advises the Supervisory Board on matters related to the remuneration policy for the Board of Directors and other senior management. The committee also monitors and evaluates matters relating to the nomination, selection and appointment of the members of the Boards, leadership and people & culture (including DEI). The Remuneration Committee consists of Jo van Engelen (Chair until 31 December 2024), Marijn Pijnenborg (Chair as of 1 January 2025), and Peter van Bommel.

The committee's role is described in its charter, available as part of the Supervisory Board rules on the governance webpage. In 2024, the Remuneration Committee met five times.

Key topics discussed during these meetings included:

• Implementation of the remuneration policy, as further detailed in the remuneration report, including the evaluation of variable remuneration for the Board of Directors in 2024.

• The revision of the remuneration policy for the Board of Directors and the Supervisory Board.

• Leadership development, with a specific focus on filling and progressing senior leadership positions in key markets, talent management and succession planning.

• The development of the Supervisory Board profile and updates on its composition, including the search process for a new Supervisory Board member.

• The evaluation of the performance of the Board of Directors.

• Progress on DEI initiatives.

In 2024, the committee was actively involved in the development of a revised remuneration structure for both the Board of Directors and the Supervisory Board. Additionally, the committee played a central role in the search process for a new Supervisory Board member to succeed Margot Scheltema, whose second term will end in 2026. This staggered succession approach ensures a smooth transition, with the nomination for the new member's appointment scheduled for the AGM in 2025. Leadership development and succession planning, while key topics for the Remuneration Committee, were also addressed as separate agenda items during plenary Supervisory Board meetings, reflecting their strategic importance.

Outcome of the auditor selection process

In 2024, the Supervisory Board and the Audit & Risk Committee, with the support of Nedap's finance team and the internal auditor, conducted a selection process for the appointment of a new external auditor, in line with mandatory audit firm rotation requirements. Based on this process, the Supervisory Board nominates KPMG to be appointed as Nedap's external auditor, effective for the reporting year 2026.

Several factors contributed to this decision. KPMG demonstrated strong enthusiasm and commitment to working with Nedap, underlining the company's appeal due to its distinctive culture and strategic focus. The signing partner proposed by KPMG has extensive experience with listed companies ensuring the necessary expertise for Nedap's anticipated growth trajectory.

KPMG's engagement team showcased a high level of preparation and responsiveness. Additionally, KPMG expressed a clear ambition to enhance the efficiency of the audit process and align with Nedap's strategic goals.

The Supervisory Board is confident in KPMG's ability to deliver the required knowledge, skills, and commitment as Nedap's external auditor. This proposal reflects the Supervisory Board's focus on ensuring a seamless transition and securing a strong, experienced audit partner to support Nedap's growth and evolving regulatory environment.

Internal auditor

The internal audit function is intended to provide independent assurance on the effectiveness of governance, risk management and control processes, including compliance with and effectiveness of internal controls, thus adhering to best practice principle 1.3 of the Corporate Governance Code.

The internal audit function was set up bearing in mind the Institute of Internal Auditors' (IIA) Three Lines Model, which is used to manage governance and the risk management structure within an organization and is aligned with the COSO framework for internal control. In this Three Lines Model, the internal auditor is the third line.

The internal audit function reports to Nedap's CEO. The Supervisory Board oversees the internal audit function and has regular contact with the internal auditor. The Board of Directors assesses the internal auditor's performance on an annual basis, for which they also seek the Supervisory Board's opinion.

In early 2024, the Supervisory Board reviewed and approved the work plan for the year 2024 in collaboration with the internal auditor. In this plan, the input from the external auditor has been incorporated. Throughout the year, the Audit & Risk Committee was regularly updated on the progress of the various audit activities undertaken by the internal auditor. Additionally, the internal auditor kept the external auditor informed about the ongoing progress. The outcomes of the 2024 work plan are scheduled for evaluation in early 2025. The internal control activities in 2024 primarily focused on the selection process and preparation for the transition to a new audit firm, subject to appointment by the annual general meeting in 2025, and on operational audits, and also included follow-up actions from previous audits and analyses.

Meetings and attendance

Throughout the year, the Supervisory Board had six ordinary meetings with the Board of Directors. Three brief meetings were held to discuss the quarterly updates and the half-yearly report. As mentioned above, the Supervisory Board was also involved in the strategy event held in July 2024 to discuss progress made on the Create & Scale plan. All the above meetings were attended by all the members of the Supervisory Board. Several of the ordinary meetings were preceded by internal deliberations by the Supervisory Board. The brief meetings were conducted online, while the ordinary meetings primarily took place in person, with some being hybrid. Away from the meetings, the Supervisory Board regularly liaised with the Board of Directors by email, telephone or video call to discuss various topics. Where relevant, Supervisory Board members paid working visits to the organization to keep up to date with the latest state of affairs at the company and with market developments. The intensive and open communications enabled timely and prudent decision-making.

Education

In 2024, the Supervisory Board identified areas where further education was required, particularly in emerging technologies developments and regulatory frameworks. For instance, the Audit & Risk Committee received an in-depth briefing on the implications of the NIS2 regulation, enhancing the Supervisory Board's understanding of its impact on cybersecurity and compliance.
Additionally, recognizing the transformative potential of artificial intelligence, a technology day is planned to be organized in 2025, focusing on the strategic implications of AI for Nedap.  
These educational activities align with the best practice provisions from the corporate governance code.

Evaluation and appraisal

One of the principles of the Dutch Corporate Governance Code says that the Supervisory Board is collectively responsible for its own performance. In this context, the Dutch Corporate Governance Code considers self-evaluation a best practice. During a private meeting, the Supervisory Board evaluated and assessed its own performance, the performance of its committees and the individual members. The main takeaways are the following:

• The Supervisory Board concluded that it had sufficient time and capacity in 2024 to fulfill its supervisory responsibilities effectively.

• The collective expertise of its members was seen as complementary and well-balanced, ensuring comprehensive oversight of the company's strategic developments.

• As part of the self-evaluation, the Supervisory Board also reviewed the functioning of the newly established committees. A discussion was held on optimizing communication between the committees and the full Supervisory Board. It was agreed that further alignment is needed on the division of topics between committee and plenary Supervisory Board agendas to ensure efficiency and focus.

• The necessity of committees was discussed in light of increasing governance requirements.
  The Supervisory Board emphasized the importance of ensuring that governance matters do not overshadow substantive discussions on strategic topics.

Without the Board of Directors present, the Supervisory Board evaluated and assessed the performance of the Board of Directors and its individual members. In the Supervisory Board's view, the Board of Directors demonstrated a strong and effective performance in 2024. The evaluation of the Supervisory Board and its individual members took place through individual meetings with the Board of Directors as a whole and with its individual members, as well as discussions with a delegation of Nedap's senior leadership and the Works Council. Topics such as communication with the Supervisory Board, individual objectives, collaboration within the Supervisory Board, Nedap’s senior leadership, the business units, and the corporate functions, as well as potential company risks, culture, and behavior, were addressed.

Furthermore, discussions regarding the evaluation of the Board of Directors in the context of the refined strategy also addressed the future composition of leadership, culminating in the January 2025 announcement of CFO Daniëlle van der Sluijs' departure following the annual general meeting in April 2025.

Other

Finally, further topics covered by the Supervisory Board over the past year include updates on the development and integration of MediKIT, IP management, and operational and legal affairs. The Supervisory Board has signed off on the tax policy, as set out in the annual report chapter 3 Governance & risk and has approved the decision of the Board of Directors to establish legal entities in Saudi Arabia and New Zealand.

Groenlo, the Netherlands, 3 March 2025

The Supervisory Board
Mr. P. A. M. van Bommel, chairman
Mr. J. M. L. van Engelen, vice-chairman
Ms. M. Pijnenborg
Mr. S. C. Santema
Ms. M. A. Scheltema