Statement pursuant to the UK Modern Slavery Act

The present statement is published in compliance with the Modern Slavery Act (MSA) 2015. It describes the efforts made by SAF-HOLLAND during the fiscal year 2021 in order to prevent human rights violations, including any form of modern slavery and human trafficking in its operations and supply chains. The statement comprises actions taken by the SAF-HOLLAND Group (hereinafter SAF-HOLLAND or SAF-HOLLAND Group).

1. Our business

SAF-HOLLAND SE (the parent company of the Group), located in Bessenbach, Germany, is one of the leading international manufacturers of chassis-related assemblies and components, primarily for trailers and trucks. In addition to axle and suspension systems, the product range includes fifth wheels, coupling systems, kingpins and landing gear, which are sold under various brands.

SAF-HOLLAND supplies original equipment manufacturers (OEM) on six continents. In the Aftermarket business, the Company supplies replacement parts to manufacturers' service networks (OES), wholesalers, and, with the help of distribution centers, to end customers and service centers via an extensive global sales network. In 2021, we generated 71.9 per cent of sales from Original Equipment business and 28.1 per cent from the aftermarket business.

SAF-HOLLAND relies on more than 3,500 committed employees located on 6 continents to make its business successful. We operate 22 production sites located in Australia, Brazil, Canada, China, Germany, India, Italy, Mexico, Singapore, South Africa, Thailand, Turkey and the U.S. We ma we maintain a presence in other locations via our sales offices.

The operating business of SAF-HOLLAND is divided into three regions: EMEA, Americas and APAC.

In 2021, the EMEA region accounted for 58.9 per cent of sales (EUR 734.6 million), the Americas region for 32.2 per cent of sales (EUR 401.8 million) and the APAC region for 8.9 per cent of sales (EUR 110.2 million).

SAF-HOLLAND requires numerous raw materials, products and services, which are procured from 3,395 suppliers across 42 countries. All goods and services purchased totalled around EUR 760 million. Of the goods and services procured in 2021, we purchased 53.4 per cent from suppliers based in EU countries, 29.6 per cent from suppliers based in OECD countries outside the EU and 17.0 per cent from non-OECD countries outside the EU.

2. Our approach to prevent slavery and human trafficking

Internal measures

We believe that clear policies are an important step in communicating our commitments and embedding relevant practices throughout our business. We are also widely committed to the ten sustainability principles of the UN Global Compact Initiative, which we joined in 2018.

In our Human Rights Policy we outline our human rights commitment in line with international human rights and labour standards and apply a Code of Conduct in the Group. In both documents, we clearly outline our rejection of child labour and all forms of modern slavery and human trafficking.

Our human rights commitment extends to our employees, management staff in all business regions, business partners and, in the reach of our leverage and responsibility, to other parties in our supply chain. It is guided by the International Bill of Human Rights, the principles on workers’ rights set out in the Declaration on Fundamental Principles and Rights to Work from the International Labour Organisation (ILO) as well as the OECD Guidelines for Multinational Enterprises.

Our Code of Conduct specifies the basic values and objectives of our responsible business conduct and applies to all employees worldwide. We aim at anchoring uniform and responsible behaviour in our global business activities in line with our corporate values and the respect for internationally recognized human rights. As part of our general principles of conduct, we veto any form of forced labour, as well as all forms of modern slavery and human trafficking.

Our governance structure to prevent and address human rights violations

We are committed to high ethical standards and to using our influence to prevent human rights risks, including modern slavery. We have developed a governance structure to manage and ensure compliance with our Code of Conduct and to implement our sustainability strategy along our activities.

The Compliance & Legal Department serves as a central office and point of contact for compliance issues. The aim of our Compliance department is to establish and continuously improve preventive measures within the business processes as well as the early identification and clarification of potential violations of our Code of Conduct.

We have established a Compliance Committee responsible for clarifying indications of any compliance violations. The committee includes permanent representatives from the following departments: Compliance & Legal, Human Resources and Corporate Audit Services.

Depending on the nature and the extent of the incident, the Compliance Committee may at its own discretion include representatives of other departments as guests, if this appears necessary.

Particularly in the case of serious or urgent incidents, the CFO may also be called in.

The Management Board is responsible for ensuring compliance with legal requirements and the company's internal policies and works to ensure that these are also observed by the subsidiaries. The Management Board informs the Supervisory Board regularly, promptly and comprehensively about all issues of strategy, planning, business development, risk exposures, risk management and compliance that are relevant to the company. It addresses any deviations in the course of business from the plans and targets drawn up, stating the reasons.

The Corporate Audit Services Department reviews the structure and effectiveness of compliance measures through regular audits.

Awareness among employees about the importance of our Code of Conduct is crucial. Therefore, our employees receive regular training on this topic that is mandatory for all employees. Trade unions and works councils represent the interests of our employees. We are not opposed to freedom of association or collective bargaining.

SAF-HOLLAND endeavours to continuously improve its risk identification and management processes. In future we will conduct an initial human rights risk assessment and carry out gap analysis in order to identify any deficits in our processes, prioritise measures at high-risk locations and work towards reinforcing the internal processes.

Our whistleblower system is used to document and process violations of our Code of Conduct. It constitutes a key piece of our compliance organization. The whistleblower system is publicly available on our website, and it gives, not only employees, but also external stakeholders the opportunity to report incidents anonymously. Moreover, any further communication with the whistleblower takes place exclusively via this confidential channel. No human rights violation incidents were identified in our operations or supply chain via the whistleblower system in the year 2021.

Measures in our supply chain

In our Human Rights Policy, we have laid out our human rights expectations towards suppliers. We expect our human rights standards to be upheld by our suppliers and business partners.

We aim to improve the management of human rights risks in our supply chain management procedures. We have categorized our supplier pool, focusing at first on a risk-based approach, that identifies suppliers that are located in potentially risky countries, deliver a high volume of products or services, are not substitutable or have the potential to create a common value in innovation and sustainability.

Subsequently, we have started to identify inherent risks to human rights based on the location of our suppliers using the Global Slavery Index as a source. Through this exercise, we identified that our suppliers operate in countries where the inherent risk of modern slavery varies from low to high.

As part of our supplier qualification procedure, new suppliers go through a screening process, which includes a self-assessment questionnaire in which we have recently added CSR-relevant questions, including aspects of human rights. New suppliers, regardless of their region, are screened based on CSR-relevant criteria. These include environmental issues (CO2 emissions and energy consumption), social issues (occupational safety, employee development and exclusion of child labour) as well as compliance management and corporate governance. All new suppliers are audited by our internal quality department. The CSR-relevant criteria are also part of the audit framework that is applied in all regions.

We will continue working on improvements to our risk identification, countermeasures and management process in our supply chain. To this end, we will keep refining the human rights risk exposure map for our supply chain and conduct gap analysis of our current processes in order to identify any areas for improvement in the way SAF-HOLLAND manages and mitigates its human rights risks, including modern slavery.

3. Our continued commitment

SAF-HOLLAND will continue to review and improve its current processes with the aim of preventing modern slavery and human trafficking in its operations and supply chain. All efforts are communicated in the sustainability report and the annual statement pursuant to the Modern Slavery Act.

4. Next Steps

Modern slavery can take many different forms and is often difficult and challenging to identify. We acknowledge the complexity of monitoring this issue along the value chain. We are nonetheless at the beginning of a journey and, therefore continuously working to adopt the following steps:

Bessenbach, August 2022

Alexander Geis Wilfried Trepels Dr. André Philipp

CEO CFO COO