Dear shareholders,
In 2022, the Group’s operating profitability continued to improve. In addition to good capacity utilisation due to the strong momentum in order intake, the P24x efficiency and restructuring programme made a significant contribution to stabilising and boosting earnings. With product innovations, new digital business and systematic M&A activities, the course has been set for further profitable revenue growth. In view of the geopolitical, energy and economic upheavals resulting from the Russia-Ukraine conflict and causing significant supply chain constraints and material shortages, uncertainties over energy supplies and high inflation, the progress achieved is particularly encouraging. The product portfolio and service business, which are geared towards growth and stable niche markets, proved to offer a reliable and promising basis for business success.
In addition to strategic factors for advancing the Group based on the three pillars of digitisation, modularisation and sustainability, the Supervisory Board dealt in detail with the business performance, earnings and financial condition of Koenig & Bauer AG and the Group. Business policy, the competitive situation, risk management, compliance, the internal control system, internal auditing, cybersecurity, the capital market strategy and the ESG roadmap were discussed at length. In addition to the Management Board’s corporate and investment planning, remuneration matters were further items on the agenda of the Supervisory Board and the committees. All necessary resolutions were passed after detailed examination and intensive discussion.
In the year under review, the Supervisory Board was again informed promptly, regularly and comprehensively by the Management Board of all events that were of material importance for the Company. In 2022, this was mostly done in the form of hybrid Supervisory Board meetings with combined in-person attendance and online participation, in video conferences as well as over the phone and in writing. The Chairman of the Supervisory Board and the Chief Executive Officer meet on a weekly basis, and further regular meetings are held between the Chair of the Audit Committee and the Chief Financial Officer. In addition, the Supervisory Board received continuous reports concerning the Company’s key performance indicators.
The Supervisory Board performed its duties with great care in accordance with the law, the Articles of Association and the Rules of Procedure. A total of eight Supervisory Board meetings and seven information events for the Supervisory Board were held on matters of current relevance in 2022. These were supplemented by internal preparatory video conferences held prior to the Supervisory Board meetings. Of the eight meetings of the Supervisory Board, four were held as hybrid meetings with in-person attendance and online participation, two as in-person meetings and a further two as video conferences. Six of the seven information events for the Supervisory Board were held as a video conference and one in a hybrid form with in-person attendance and online participation. The chairpersons of the Supervisory Board committees reported regularly to the full Supervisory Board on the agenda and recommendations of the committee meetings. In the year under review, no members of the Supervisory Board were subject to any conflict of interests. The breakdown of the attendance at the meetings of the Supervisory Board and the committees is set out in the following table:
| Name | Member since | Total meetings (8) | Personnel Committee (5) | Audit Committee (6) | Strategy Committee (2) | Nominating Committee (1) | Total participation |
| Prof. Dr.-Ing. Raimund Klinkner, Chair | 2018 | 8/8 | 5/5 | – | 2/2 | 1/1 | 100 % |
| Gottfried Weippert, Deputy Chair | 2001 | 8/8 | 5/5 | 6/6 | 2/2 | – | 100 % |
| Dagmar Rehm, Deputy Chair | 2014 | 8/8 | 5/5 | 6/6 | – | 1/1 | 100 % |
| Julia Cuntz | 2016 | 8/8 | – | – | – | – | 100 % |
| Carsten Dentler | 2017 | 8/8 | – | – | 2/2 | – | 100 % |
| Marc Dotterweich | 2015 | 8/8 | – | 6/6 | – | – | 100 % |
| Werner Flierl | 2021 | 6/8 | – | – | – | – | 75 % |
| Matthias Hatschek | 2006 | 7/8 | – | – | 2/2 | 1/1 | 91 % |
| Christopher Kessler | 2016 | 8/8 | – | – | 2/2 | – | 100 % |
| Prof. Dr.-Ing. Gisela Lanza | 2015 | 7/8 | – | – | 2/2 | – | 90 % |
| Dr. Johannes Liechtenstein | 2019 | 8/8 | – | 6/6 | – | – | 100 % |
| Simone Walter | 2016 | 8/8 | – | – | 2/2 | – | 100 % |
The office held by Carsten Dentler as a shareholder representative on the Supervisory Board was renewed by the shareholders at the Annual General Meeting on 24 May 2022. Otherwise, there were no changes to the composition of the Supervisory Board during the year under review. The composition of the committees was determined at the constituent meeting of the Supervisory Board held following the Annual General Meeting. Details of the current composition of the Supervisory Board’s committees can be found on the Company’s website. Similarly, there were no changes to the composition of the Management Board.
The members of the Supervisory Board receive appropriate support from the Company in the form of training and further education. The Supervisory Board training system, which was expanded at the beginning of 2022, comprises semi-annual webinars on selected topics and also optional external events. A webinar on “Due Diligence Requirements of the Supervisory Board with respect to the Supervision of the Management Board” was held at the beginning of April 2022. In October 2022, the Executive Online Programme for Supervisory Boards consisting of five different digital modules organised by the magazine “Der Aufsichtsrat” was made available for the purpose of further training of the Supervisory Board. The diverse and comprehensive courses covered such subjects as the “Role and tasks of the Supervisory Board” and “Successful practical work” as well as currently relevant matters such as “ESG for Supervisory Boards”, “Accounting and auditing skills” and “Strategy and risk management”. In November 2022, a further training event for supervisory boards on “ESG and the capital market” was held. In addition, the employee representatives are able to make use of the conferences offered by the Hans Böckler Foundation as well as the further education provided by the trade unions and DGB-Bildungswerk. As well as this, the Koenig & Bauer Board Academy is developing its own website as a training and further-education platform for the members of the Supervisory Board.
The meetings of the Supervisory Board and its committees as well as the information events dealt with the following matters in 2022: At the hybrid Supervisory Board meeting held on 2 February 2022 with in-person attendance and online participation, the Supervisory Board approved the Management Board’s proposals for the utilisation of the expected unappropriated surplus and for the general structure of the Annual General Meeting on 24 May 2022 as a solely virtual event. At the video conferences of the Supervisory Board on 25 February 2022 and 3 March 2022, the Management Board outlined the preliminary figures for 2021 and the current status of the P24x efficiency/restructuring programme.
At its hybrid meeting of 22 March 2022 with in-person attendance and online participation, the Supervisory Board dealt at length with the annual financial statements for Koenig & Bauer AG and the Group as of 31 December 2021, the combined management report, the non-financial Group report and the corresponding audit reports as well as the 2021 remuneration report for the members of the Management Board and the Supervisory Board. The 2021 annual and consolidated financial statements, the 2021 remuneration report and the Management Board’s profit appropriation proposal for the 2021 financial year were approved or adopted. Furthermore, the Supervisory Board approved the Management Board resolutions to submit the remuneration report for 2021 to the Annual General Meeting on 24 May 2022 for approval by the shareholders and to organise the Annual General Meeting as a purely virtual event subject to the arrangements set out by the Management Board. The wording of the invitation to the Annual General Meeting with the ten agenda items and the proposals for the adoption of the corresponding resolutions was also approved. In addition to Management Board remuneration matters, the agenda of the Supervisory Board’s meeting in March included strategy and capital market issues as well as the business performance of the subsidiaries.
On 4 May 2022, the Supervisory Board held a video conference to discuss the Q1 figures. In addition, the Management Board provided information on the current forecast for 2022 and a current M&A project. The Supervisory Board’s in-person meeting on 23 July 2022 dealt mainly with the preparation of the virtual Annual General Meeting on the following day. In addition to cybersecurity and Management Board remuneration matters, the agenda also included updates on the P24x project, capital market issues and a current M&A project. Furthermore, the Management Board presented plans for safeguarding supplies of electricity and gas. As well as this, the results of the Supervisory Board’s efficiency audit, which is conducted internally every year with external support and regularly updated in the light of current matters and legal requirements, were discussed. Following the virtual Annual General Meeting on 24 May 2022, the Supervisory Board held a constitutive meeting, in which the composition of the Supervisory Board committees was confirmed.
On 24 June 2022, the Supervisory Board held a meeting in the form of a video conference during which the Management Board presented a report on the status of a current M&A transaction. In addition to the comprehensive discussion of strategic issues, the Supervisory Board also set the course for continuity on the Management Board with the early renewal of the Management Board contracts with Messrs Christoph Müller and Ralf Sammeck until 30 June 2026 and 30 June 2025, respectively.
On 27 July 2022, the Supervisory Board was briefed on the report for the first half of 2022 in a hybrid in-person/online meeting. The Management Board also provided a preview of the high-level business planning for the years 2023 to 2027. At its strategy meeting on 28 July 2022 in a hybrid session with in-person and online participation, the Supervisory Board discussed in detail the strategic issues submitted by the Management Board on the basis of a comprehensive rolling strategy as well as focus projects within the framework of the “Exceeding Print” Group strategy. The focus of the consultations was also on strategic considerations in priority cross-sectional areas as well as on sustainability/ESG. At a video conference of the Supervisory Board on 4 August 2022, the Management Board provided an update on the status of the P24x efficiency/restructuring programme.
In a hybrid Supervisory Board meeting held on 20 September 2022 with both in-person attendance and online participation, the Management Board presented the high-level business plan for the years 2023 to 2027 and reported that the Celmacch M&A transaction had been closed on 16 September 2022. In addition, the persons responsible for compliance, internal auditing and risk management submitted a status report on their respective areas. In addition to organisational matters such as the definition of the Supervisory Board’s training topics for 2023 and amendments to its rules of procedure, the agenda also included capital market issues. Under a resolution of the Supervisory Board passed at this meeting, the Audit Committee assumed responsibility for sustainability/ESG from the Personnel Committee.
The Supervisory Board held video conferences on 7 November 2022 on the Q3 report and on 10 November 2022 on the status of the P24x project. At the Supervisory Board meeting on 7 December 2022, which was held as a video conference, the Management Board presented in detail the corporate and investment plans for 2023 and provided an outlook for the following years until 2027. The Supervisory Board approved the corporate and investment budget for 2023 and acknowledged the medium-term plans. In addition to Management Board remuneration and personnel matters, the agenda also included the HR strategy and the business performance of the subsidiaries. The Supervisory Board has also passed a resolution on the female representation target on Koenig & Bauer AG’s Management Board for the period until 2025.
Much of the Supervisory Board’s work is performed by its various committees. Five ordinary committees assist the Supervisory Board in the performance of its duties by preparing the resolutions to be passed by the Supervisory Board and the matters to be discussed in the plenary sessions. The Personnel Committee met five times and the Nominating Committee once. Of the six meetings of the Audit Committee, one was held as an in-person meeting, two in hybrid form with in-person attendance and online participation and three as a video conference. In addition to the strategy conference, which was attended by the entire Supervisory Board, a further two meetings of the Strategy Committee were held during the year under review. All the meetings of the Strategy Committee were held in hybrid form with in-person attendance and online participation. As a meeting of the Pandemic Committee, which is composed of Ms Dagmar Rehm, Mr Matthias Hatschek, Mr Gottfried Weippert and myself, Prof. Dr.-Ing. Raimund Klinkner, had not been necessary for a number of months, the Supervisory Board decided at its meeting of 23 May 2022 to disband it for the time being. It was again not necessary for the Mediation Committee appointed under section 27 (3) of the Codetermination Act to convene in 2022.
In addition to examining the quarterly reports and updated annual forecasts, one of the main tasks of the Audit Committee was to review in detail the annual financial statements of Koenig & Bauer AG and the consolidated financial statements as well as the combined management report, the non-financial Group report and the corresponding audit reports as well as the remuneration report for the members of the Management Board and the Supervisory Board. Throughout the entire process of preparing the financial statements, regular meetings were held between the Chair of the Audit Committee and the external auditor. During the discussion of the annual financial statements, the representatives of the statutory auditor reported to the committee on the results of their audit and were available to answer any questions and for detailed discussion of various matters. The Audit Committee prepared the approval and adoption of the financial statements and the remuneration report by the Supervisory Board. It reviewed the quality of the audit of the financial statements, monitored the independence of the external auditor and obtained his declaration of independence. The Audit Committee also prepared the proposal for the election of the auditor of the annual financial statements and the consolidated financial statements for submission to the Annual General Meeting. The Audit Committee reviewed the non-auditing activities performed by the external auditor on a quarterly basis. In addition to determining the priorities of the annual audit of the financial statements, the Audit Committee also discussed the compliance and risk management system, the risk situation in the Group, internal auditing, export controls and cybersecurity. In addition, it received comprehensive and regular updates on the progress of SAP migration. The Management Board presented the newly established M&A process and intercompany pricing policy to the members of the Audit Committee. Special attention was paid to the internal control system (ICS) and sustainability/ESG at two extraordinary meetings of the Audit Committee. After assuming responsibility for sustainability/ESG from the Personnel Committee, the Audit Committee underwent a comprehensive onboarding process on all ESG matters. The Chief Executive Officer and the Chief Financial Officer regularly attended the meetings of the Audit Committee.
In the year under review, Management Board matters, remuneration and structural matters dominated the meetings of the Personnel Committee. The Personnel Committee prepared various draft resolutions for the Supervisory Board concerning the remuneration of the Management Board, the early renewal of the Management Board contracts with Messrs Christoph Müller and Ralf Sammeck, the Supervisory Board’s target for female representation on the Management Board and further training of the Supervisory Board in the following year. The Nominating Committee prepared the recommendations for candidates for submission to the full Supervisory Board for the Supervisory Board election scheduled for the next Annual General Meeting. The Strategy Committee was closely involved in the new Group strategy process and was briefed at length by the Management Board in its meetings on the key topics of digitisation, digital printing and service as well as focus markets and projects.
The application and further development of the corporate governance rules by the Company, particularly the implementation of the recommendations of the Code, are regularly monitored by the Supervisory Board. The Corporate Governance Statement published on the Company’s website describes the activities of the Supervisory Board with regard to the Declaration of Conformity pursuant to section 161 of the German Stock Corporation Act.
At its meeting on 21 March 2023, the Supervisory Board adopted the annual financial statements for Koenig & Bauer AG as of 31 December 2022 prepared by the Management Board and the remuneration report for the members of the Management Board and the Supervisory Board for 2022 and approved the consolidated financial statements for the Koenig & Bauer Group as of 31 December 2022, including the combined management report and separate non-financial Group report following a discussion with the auditors, its own careful examination and intensive deliberation. The annual financial statements of Koenig & Bauer AG are thus duly adopted in accordance with section 172 of the German Stock Corporation Act. The resolutions were prepared by the Audit Committee. The chairperson of the Audit Committee reported to the Supervisory Board in detail on the results of the intensive audits and the Committee’s findings as well as on the discussions with the auditors and the Management Board. The auditors reported at length to the Supervisory Board on their audit procedures and findings and were available to answer additional questions. PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft in Frankfurt am Main, Nuremberg branch, issued unqualified audit opinions for both sets of financial statements including the combined management report. Furthermore, the separate non-financial Group report underwent a limited assurance review by PricewaterhouseCoopers GmbH. The Supervisory Board, like the Audit Committee, approved the auditor’s findings based on its own review. Neither body raised any objections to the consolidated financial statements, the annual financial statements of Koenig & Bauer AG, the combined management report, the non-financial Group report or the remuneration report for 2022.
The external auditor also confirmed that the Management Board had established a risk early detection system meeting the requirements of section 91 (2) of the German Stock Corporation Act. The information and monitoring system, which is appropriate and meets the requirements of the Company, appears to be suitable in terms of its design and actual implementation to identify at an early stage any developments liable to jeopardise the Company’s going-concern status. No material shortcomings in the internal control system and the early risk detection system were reported.
The Supervisory Board would like to thank all employees, the Management Board, managers and employee representatives for their great commitment to the Group in 2022, which was a challenging year in view of the demanding underlying conditions. The Supervisory Board wishes to express its gratitude to the shareholders for their confidence in the Company.
Würzburg, 21 March 2023
The Supervisory Board of Koenig & Bauer AG
Prof. Dr.-Ing. Raimund Klinkner
Chairperson of the Supervisory Board