Koenig & Bauer attaches extraordinarily high importance to its responsibility, which is firmly anchored in its corporate values. As a pioneer of in-company social policies, we have taken our responsibility towards our employees seriously ever since our Company was first established 200 years ago. In addition to investing in our own future, we see our strong commitment to in-company training as part of our corporate responsibility to the community. We are committed to preserving and protecting the environment through our various initiatives for emission- and resource-optimised products and production processes. As a sustainability enabler, we want to support our customers around the world in their sustainability efforts. Social responsibility through donations and sponsorships as well as the strong voluntary commitment on the part of our employees are also part of Koenig & Bauer’s corporate identity. Integrity in our business activities and respect for human rights are core elements of our corporate governance practices. With our sustainability goals, we want to fulfil our social, ecological, societal and ethical responsibilities and strategically advance our company.

The sustainable further development of our Group is one of the pillars of our “Exceeding Print” corporate strategy, which includes a wide range of activities targeted at environmental, social and governance (ESG) concerns. We are aiming to reduce by 2025 the carbon emissions (Scope 1 and 2) of our production plants by 75% compared with 2019 and to achieve carbon neutrality from 2030 onwards. Following an analysis of the current Scope 3 carbon emissions, measures to reduce these are being worked on throughout the Group. Another core objective of our sustainability efforts is to promote the health of our employees, prevent work-related hazards and minimise the number of workplace accidents. We also want to additionally enhance diversity in terms of gender, age, international background and experience. Alongside diversity as an element of our corporate culture, we want to make use of various activities to take a stand against racism and discrimination. And, finally, we are committed to respecting human rights and preserving and protecting the environment in our supply chain by integrating sustainability into the procurement process and complying with comprehensive due diligence obligations.

As a UN Global Compact participant, Koenig & Bauer is actively supporting the implementation of the United Nations’ 17 Sustainable Development Goals (SDGs), which define the framework for responsible business in economic, ecological and social terms. The UN Global Compact is the world’s largest sustainability initiative for sustainable and responsible corporate governance. The participants have undertaken to support the ten principles of the UN Global Compact in the fields of human rights, labour standards, environmental protection and the fight against corruption, to promote the 17 SDGs within their respective spheres of influence and to report annually on the progress achieved. Koenig & Bauer has identified seven of these SDGs as priorities and is addressing them with strategic sustainability initiatives. In particular, the Group’s diverse sustainability activities are targeted at the following SDGs: “3 Good health and well-being”, “4 Quality education”, “5 Gender equality”, “8 Decent work and economic growth”, “12 Responsible consumption and production”, “13 Climate action” and “17 Partnerships for the goals”. We see our scope for influence and for making a difference in these goals.

We have also joined the Blue Competence sustainability initiative. Blue Competence is an initiative launched by German industry association VDMA to promote sustainability in mechanical and plant engineering as well as to further sustainable solutions in this industry. Furthermore, we became the first printing press manufacturer to join the Healthy Printing Initiative in July 2021. The basic idea underlying the initiative is to advance the implementation of the cradle-to-cradle design approach in the printing industry. Accordingly, the initiative aims to promote the use of environmentally friendly substrates, inks, varnishes and auxiliaries in the printing of paper, corrugated board and cardboard products, plastics and other substrates and ultimately to enable efficient recycling systems. Koenig & Bauer is also a member of the 4evergreen alliance, which networks paper and board manufacturers, folding carton manufacturers, producers and retailers of brand-name products and suppliers of technology and materials as well as the collecting, sorting and recycling industry. The alliance aims to communicate more effectively the benefits of fibre-based packaging materials as alternative solutions and to achieve a recycling rate of 90% for them by 2030. Finally, as a member of the Holy Grail 2.0 initiative, we are working towards finding a common solution for intelligent packaging recycling. Under the auspices of the European Brands Association (AIM), numerous companies and organisations along the packaging value chain are pooling their expertise. Stamp-sized digital watermarks that can be printed on the surface of packaging and function as a “digital recycling passport” are a promising approach for an efficient circular economy. At the regional level, Koenig & Bauer has been a member since 2022 of Würzburg AG’s Green Network, which aims to connect local companies on matters relating to sustainability. The regular network meetings start with two best practice presentations, which are then discussed intensively by the participants.

Disclosure option selected

The separate non-financial Group report was prepared in accordance with Section 315c in conjunction with Sections 289c to 289e of the German Commercial Code and Article 8 of REGULATION (EU) 2020/852 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 18 June 2020 on the establishment of a framework to facilitate sustainable investment and amending Regulation (EU) 2019/2088 (hereinafter the “EU Taxonomy Regulation”) and the delegated acts adopted in this regard as well as the interpretation of the wording and terms contained in the EU Taxonomy Regulation and the delegated acts adopted in this regard, as presented in the section entitled “Disclosures on the EU Taxonomy” of the separate non-financial Group report. References to disclosures outside the Group’s non-financial report constitute further information and are therefore not part of the report. The separate non-financial Group report is published independently of the combined management report. The two separate reports are published in the Bundesanzeiger together with the external auditor’s opinion. They are also published on the company’s website at https://investors.koenig-bauer.com/en/publications/financialreports-and-statements/.

Business model, non-financial risk report and materiality analysis

The Koenig & Bauer Group’s business model is presented in the combined management report (see page xx of the 2023 annual report). In terms of sustainability, we as a solution provider and technology partner want to support our customers in reducing their ecological footprint. Various eco-components and innovative technical solutions that we have developed help to reduce carbon emissions by lowering energy consumption, waste and the use of other resources such as paints and varnishes. We incorporate eco-design criteria in the process for new and further developments wherever possible. Using detailed sustainability profiles, we present various eco-components and innovative technical solutions for improving energy and resource efficiency. We are working with various partners and start-ups on algorithms and software solutions for the customised calculation of the product carbon footprint (PCF) in order to sell carbon-neutral machines as an additional feature. The carbon footprint calculated can be offset by means of certified climate protection projects, while a carbon-neutral printing press is available to customers.

Koenig & Bauer’s Management Board is responsible for sustainability, including non-financial reporting on the environmental, employee and social aspects defined by law, the observance of human rights and anti-bribery and anti-corruption precautions. Under the Management Board’s business allocation plan, the Chief Executive Officer is responsible for corporate responsibility (ESG) and, hence, for all reported non-financial aspects. In organisational terms, the Corporate Responsibility department, which reports to the Chief Executive Officer, oversees sustainability. Individual ESG objectives are a component of the Management Board’s remuneration as an element of the short-term incentive (STI), see the comments in the remuneration report on page xx of the Annual Report 2023. Within the Supervisory Board, the Audit Committee is responsible for sustainability/ ESG. In addition to regular updates from the Audit Committee, the entire Supervisory Board is informed of ESG activities and regulations during the annual Strategy Day and at regular Supervisory Board meetings. Within the scope of its statutory duty of supervision, the Supervisory Board has engaged PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft to audit this separate non-financial consolidated report to obtain limited assurance (see the audit opinion on pages xx of 2023 Annual Report).

A materiality analysis was conducted to define the main aspects of the non-financial Group report. In accordance with the CSR Directive Implementation Act (sections 315c/289c of the German Commercial Code), the analysis is composed of the following elements: environmental, employee and social matters, observance of human rights and anti-bribery and anti-corruption precautions. In a preliminary step, a comprehensive list of non-financial matters potentially of relevance for customers, employees, investors and business partners was prepared with respect to these five aspects in accordance with the German Commercial Code to determine the main elements of the report. On the basis of this long list, we initially defined the material non-financial issues for our business activities, business relationships, products and services within the five aspects in accordance with the German Commercial Code (HGB) in internal workshops and subsequently in an online survey of external and internal stakeholders. A short list was then prepared setting out all the matters which on a scale from 0 (not material or relevant) to 10 (highly material or relevant) had an average materiality score of at least 5 for the main issue in question and its business relevance. This was aligned to the current version of the Sustainability Reporting Standards of the Global Reporting Initiative (GRI). The internal respondents were managers and experts from operations management, production, service, personnel management, personnel development, quality management, product management and innovation, construction, development & process technology, safety/health/environment, facility management, compliance & internal auditing & risk management, corporate strategy, business/corporate development, marketing and communications. All business units and, in particular, employee representatives across the Group were involved. In addition to industry representatives from other components industries, the external stakeholders questioned primarily included customers and producers of brand-name articles as well as their customers together with banks, scientific experts and students. The following materiality matrix summarises the results:

As in 2022, the issues and topics presented in this materiality matrix will also be reported in the 2023 non-financial Group report. The decisive factor here was that the comprehensive double materiality analysis, which was carried out in summer 2023 in accordance with the Corporate Sustainability Reporting Directive (CSRD), confirmed the topics already identified in 2022 according to the GRI materiality analysis, but classified additional topics as material due to the different requirements. At the presentation and explanation of the results of the double materiality analysis in accordance with the CSRD at a meeting on 17 August 2023, this procedure was approved by the Chief Executive Officer. Accordingly, the sections below report on the following material non-financial matters: with respect to environmental matters, these are operational environmental and energy management and ecological printing technology. In addition to our appeal as an employer and the need for diversity, the key employee-related aspects include recruiting and training junior specialists and managers, systematic personnel development as well as health and safety. With respect to social aspects, social responsibility and high product quality in the interests of greater work and process safety in printing operations have been defined as material. This is followed by a presentation of the aspects of the Company’s commitment to human rights and high labour standards as well as anti-corruption and bribery precautions.

The risk inventory conducted at the end of 2023 did not identify any material, reportable non-financial risks resulting from business activities, business relationships, products or services that have an adverse impact on the non-financial aspects mentioned. Risks that affect the Company externally are presented in the risk report in the combined management report (see pages xx et seq. of the 2023 Annual Report).

Environmental aspects

At Koenig & Bauer, environmental aspects and the observance of high quality and safety standards are taken into account as far as possible along the entire value chain, from the product idea and purchasing to production and the start-up of the printing presses. Right from the start of the development and design stage, attention is paid to energy and resource efficiency in the assembly and operation of printing presses and finishing equipment. A further focus is placed on minimising noise, dust, odour and carbon emissions during the production and utilisation of our presses as well as the use of environment-friendly substrates and consumables in the printing, finishing and postpress phases. There are different management approaches for the two thematic complexes of corporate environmental and energy management as well as ecological printing technology for customers.

Operational environmental and energy management
Effective environmental and climate protection in the plants as well as the responsible use of resources are priorities for Koenig & Bauer. The production plants in Radebeul, Würzburg and Dobruška hold DIN EN ISO 9001:2015 and DIN EN ISO 14001:2015 quality and environment certification. In addition, our foundry in Würzburg operates an energy management system that has been certified in accordance with DIN EN ISO 50001:2018. A permanent focus of our work is on minimising the consumption of energy and resources in production as well as on reducing workplace emissions. We are consistently investing in efficient technologies and equipment to this end. In addition, employee awareness of environmental issues and energy saving is raised via the brand ambassador Etti, who is used on our social media channels. In a sustainability tip on the intranet in December 2023, employees were reminded to use heating responsibly. As every reduction in the consumption of energy and resources is reflected in lower carbon emissions, Koenig & Bauer is also contributing to climate protection in this way.

With regard to our ecological responsibility, we want to proactively drive forward and achieve the defined goal of carbon neutrality by 2030 at our production plants. In addition to the key financial figures and ROI calculations ahead of investment decisions, the Group framework guideline for investments, which was revised in 2022 with regard to sustainability, includes mandatory monitoring of the sustainability impact of investments. Alongside the mandatory assessment of all capital expenditure plans in the Group based on an environmental score tool used by the requester of the capital expenditure, information from the Corporate Responsibility department on the sustainability impact of the planned capital expenditure is also required from a threshold of 20 thousand euros or more. With the environmental score tool provided on the intranet together with an instruction and FAQ document, capital expenditure projects can be evaluated on a Group-wide basis in a standardised, comparable and efficient manner to determine their contribution to improving sustainability. The environmental score calculated with the tool equals the value of the capital expenditure in thousands of euros per total tons of carbon saved. Together with the numerical environmental score for the capital expenditure under consideration, the tool also categorises the capital expenditure according to classes A to G. Class A carbon savings achieved through the planned capital expenditure are the highest and the quotient the lowest. By contrast, class G capital expenditure projects are less energy-efficient relative to the capital invested. If, as is the case with new capital expenditure plans, no energy or resource reference data is available to calculate the carbon savings potential, a check using soft facts based on the ESG (environmental, social and governance) criteria is required at a minimum.

We are also working on improving the carbon footprint in our plants by adopting a green energy policy, which also includes energy efficiency measures. Since the beginning of 2021, we have been sourcing solely green electricity produced from hydroelectric power in Norway for our main Group sites in Würzburg and Radebeul as well as at some subsidiaries. In addition to three solar thermal systems for climate-neutral water heating, photovoltaic systems are in operation at the Würzburg site to generate its own electricity. Further photovoltaic systems produce green electricity in Mödling and Radebeul. At the Lausanne site, a photovoltaic system has been producing green electricity on the roof of the building since November 2023. As most of the electricity produced is used internally, the project financed by the building owner can cover 18% of the Swiss subsidiary’s annual electricity consumption. In the year under review, 938,258 kWh of electricity was generated by the Group-wide photovoltaic systems. At the Radebeul site, the concept for largely carbon-neutral district heating supplies using green energy could not be executed as planned. However, heating at the Mödling site was switched from gas to district heating using carbon-neutral biomass power plants in the year under review via a connection with the district heating network operated by Energieversorgung Niederösterreich. With regard to a replacement for gas at the Würzburg site, various green environmental heat sources are being tested on the basis of plant planning. To this end, a thermal response test was carried out in spring 2023 to evaluate the possible use of brine geothermal heat pumps.

Alongside the internal production and use of green energy, conservation and energy efficiency at our plants from another important pillar of our green energy policy. In addition to the modernisation and replacement of air compressors and air conditioning units, the compressed air systems are regularly checked for leaks due to their high power consumption in order to save energy through prompt repairs. Compressed air is required at almost all workplaces and production and assembly machines. Another component in our efforts to reduce electricity consumption while simultaneously improving working conditions is the accelerated replacement of lighting systems with highly efficient LED technology at our sites. The corresponding investments and expenses are included in the taxonomy-eligible Category C capital expenditure and operating expenses (see the section on the EU taxonomy). The investment in the new melting plant installed in the Würzburg foundry in the year under review has not yet been capitalised. In addition to the high energy efficiency of the new foundry melting furnaces, the optimised waste heat utilisation allows energy to be fed into the plant’s internal heating network, while the closed water circuit reduces annual water consumption.

In the year under review, the vocational school in Würzburg was included in the group of climate schools in Bavaria, which includes 50 other Bavarian schools. The Bronze certificate was awarded by the Bavarian State Ministries of Education/Culture and of Environment/Consumer Protection. The award recognises schools that make their school operations sustainable and gradually cut carbon emissions. At the same time, a climate school teaches its students skills for shaping a sustainable future and makes climate-friendly behaviour tangible. The calculation of the school’s specific carbon footprint was followed by the preparation of a climate protection plan, in which concrete climate protection measures for the gradual reduction of the carbon footprint in the following years are defined. The project focusses on eight fields of action such as mobility, electricity, heating, waste, purchasing, nutrition, communication & networking and involves teachers and pupils alike.

Dedusting, extraction and solvent distillation plants as well as improved sound insulation in the production and assembly halls reduce workplace emissions such as noise, dust and odour. Supply air systems ensure fresh air at a controlled temperature directly at the workplace. Responsible use of resources also includes sustainable waste management. We avoid waste as far as possible, while waste that cannot be avoided is disposed of or recycled appropriately in accordance with the legal requirements. With disposal activities, a distinction is drawn between hazardous and non-hazardous materials and between waste recycling and removal. The remeltable metal waste generated in metal-cutting activities in Würzburg is an important raw material in foundry operations. Our waste statistics provide detailed information about the type and quantity of waste produced, broken down according to hazardous and non-hazardous waste. 

The following table provides an overview of electricity, natural gas, LNG, district heating, water consumption and waste in 2023 compared with the previous year. To heighten production safety, individual gas-fuelled processes in the Würzburg production facility were converted from natural gas to liquid gas.

Electricity (externally sourced and self-produced)22,948,789 kWh13,011,905 kWh35,960,694 kWh
Natural and liquid gas10,789,041 kWh10,789,041 kWh
District heating9,402,600 kWh9,402,600 kWh
Water30,855 m315,671 m346,526 m3
Amount of waste5,252 t4,945 t10,197 t
Electricity (externally sourced and self-produced)21,317,104 kWh12,570,509 kWh33,887,613 kWh
Natural and liquid gas9,740,829 kWh9,740,829 kWh
District heating8,760,585 kWh8,760,585 kWh
Water34,400 m317,966 m352,366 m3
Amount of waste4,586 t4,785 t9,371 t

Based on these consumption figures, the Scope 1 carbon-equivalent emissions at the large locations in Radebeul and Würzburg came to 3,234.3 tonnes in 2023, below the previous year’s figure of 3,407.3 tonnes, mainly as a result of lower gas consumption. The location-based Scope 2 carbon-equivalent emissions amounted to 14,115.3 t, compared with 16,351.7 t in the previous year. This decline was particularly due to the reduction in emission factors for the German electricity mix from 410 g/kWh in the previous year to 370 g/kWh. The calculations for location-based Scope 2 carbon-equivalent emissions are derived from the provisional average emission factors for the German electricity mix published by Bundesverband der Energie- und Wasserwirtschaft (Federal Association of Energy and Water Management). Despite the discontinuation of nuclear energy for the production of electricity in April 2023, emissions from the electricity industry have fallen sharply over the course of the year, due in particular to the decline in coal-fired power production by more than one quarter. In addition, the further expansion of renewable energies and the largely cyclical decline in domestic electricity consumption reinforced this trend. Market-based Scope 2 carbon-equivalent emissions also fell from 3,651.9 tonnes in the previous year to 3,402.5 tonnes as a result of the lower consumption of electricity and district heating.

The Group-wide Scope 3 carbon emissions for 2023 were again calculated with external support. Scope 3 carbon-equivalent emissions totalled 2,318 kt in the year under review (2022: 2,303 kt carbon-equivalent). At over 99%, Scope 3 carbon-equivalent emissions again account for the largest share of Koenig & Bauer’s carbon footprint. At 93.1%, the downstream side with product utilisation is the main Scope 3 emissions driver. Accordingly, top priority is being given to lowering the energy consumption of products by improving their energy efficiency, expanding digital services for optimum press utilisation and raising customers’ awareness of the importance of transitioning to green electricity. On the upstream side, the strategic orientation in purchasing activities in favour of materials with the lowest possible carbon footprint and the more responsible transportation of materials, finished products and service parts provide further levers for reducing Scope 3 carbon emissions. A reduction in carbon emissions can also be achieved on employees’ commutes to work through targeted incentives to use car pools, bicycles or public transport. Another contribution to climate protection can be achieved through sustainable travel management. Restrictions in business travel to a limited number of participants and important occasions is a significant sustainability lever. In addition, the carbon footprint of every business trip can be improved by means of targeted travel planning including the selection of the method of transport. In 2022, Koenig & Bauer amended the Group policy on business-related outof-office activities with a strong commitment to more sustainable business travel.

The following table provides an overview of Scope 1 and 2 (large plants in Radebeul and Würzburg) and Scope 3 (Group) carbon-equivalent emissions in tonnes and the carbon-equivalent intensity in tonnes per €1m of revenue: 

Carbon-equivalent emissions (tons)
Scope 1 (gas and vehicle fleet)3,407.33,234.3
Scope 2 (electricity and district heating) – location-based16,351.714,115.3
Scope 2 (electricity and district heating) – market-based3,651.93,402.5
Scope 3 (indirect emissions upstream and downstream)2,303,000.02,318,000.0
Carbon-equivalent intensity (in tonnes per €1m) € of
Scope 1 (gas and vehicle fleet)2.92.4
Scope 2 (electricity and district heating) – location-based13.810.6
Scope 2 (electricity and district heating) – market-based3.12.6
Scope 3 (indirect emissions upstream and downstream)1,942.31,747.1

Ecological printing technologyktechnik
We view sustainability and climate protection as part of our responsibility towards future generations, especially with regard to our products. Specifically, this is already opening up a wide range of opportunities for placing new products, equipment options and services on the market and for standing apart from the competition. Accordingly, we pay attention to energy and resource efficiency in the production process and in the operation of the presses and equipment when developing and designing our products. In addition to minimising carbon, noise, dust and odour emissions in production and for product users, the use of environmentally friendly substrates and consumables in printing, finishing and further processing is a particular priority. When considering the environmental impact of our products, we also take account of the recyclability of the equipment. The main components such as steel and grey cast iron are completely recyclable and make a significant contribution to the circular economy.

We incorporate energy-saving technologies in our new and enhanced products to lower carbon emissions in industrial printing. Below we present some of the eco-components and innovative technical solutions developed in recent years to reduce energy consumption, waste and resources such as inks and coatings. Koenig & Bauer offers a range of energy-saving alternatives for the drying process, which is one of the most energy-intensive functions in printing operations. The VariDryBlue drying system that we have developed for sheetfed presses is an energy-efficient solution. Energy requirements for drying water-based dispersion coating can be reduced by 22%. This is done by using the hot air twice in the drier modules. HR and LED drier modules for interim and final drying are powerful but more efficient alternatives to conventional UV driers. Waste can be saved and makeready times shortened by means of various quality measurement and control systems, inspection systems, preset functions and other equipment options. This allows customers to significantly increase the resource efficiency of their printing operations. The technology developed for the AirTronic system for medium-format sheetfed offset presses can reduce the energy consumption of the dryers by up to 40%. By increasing the number of hot air nozzles and optimising them by means of integrated IR emitters and improved exhaust air routing via the sides instead of upwards, superior heating performance and a higher overall temperature level is achieved, which, in addition to boosting energy efficiency, improves the drying process and, thus, the drying result.

In the metal printing presses built by Koenig & Bauer MetalPrint, the HighEcon dryer, which has won the METPACK Innovation Award, cuts gas costs by up to 70% compared to older models thanks to the newly developed high-efficiency KXB burner. With the EcoTNV dryer, the solvent-laden air is fed into the thermal afterburner during drying. In integrated systems such as the High-Econ or EcoTNV dryers, the exhaust air is generally not only cleaned but also produces the heat for the dryer. The solvents in the exhaust air are used to save energy. Thus, if the solvent concentration in the exhaust air is sufficient, gas consumption can be kept to a minimum.

In banknote printing, we have developed a system for reducing the carbon emissions of intaglio presses by lowering power requirements. Intaglio presses require a wiping solution which must be pre-heated before use. On the other hand, some parts must be cooled by means of thermoregulation. In order to conserve and reuse energy, a power-saving unit has been developed to harness the synergistic effects between thermoregulation and the provision of a preheated wiping solution. This solution in combination with compressed air saves approximately 83 kW per hour during operation of the intaglio printing press. If all intaglio presses in operation were to use this system, the carbon footprint of banknote printing could be reduced by around 45,000 tonnes of carbon dioxide per year. 

Banknote printing presses are as a rule equipped with conventional UV lamps for curing the inks during or at the end of the printing process. As an alternative to this, Koenig & Bauer offers UV-LED systems. This does away with the need for air extraction and lowers energy consumption by roughly 45% per press. In addition, UV LED lamps have a far longer service life, do not contain any mercury and do not give off any ozone. If all of Koenig & Bauer’s banknote customers were to use this new LED technology, carbon emissions could be reduced by around 10,000 tonnes a year.

Further innovative solutions in banknote printing permit greater resource efficiency through lower waste and a reduction of up to 25% in ink consumption on the intaglio printing presses. Ink consumption is optimised by aligning the paper to the length and position of the printing plate. The size of the stencil, which has a direct bearing on ink consumption, can be reduced significantly without impairing the print quality. If all intaglio banknote printing machines were equipped with this technology, around 2,500 tonnes of ink would be saved annually, while 5,000 tonnes of waste and the associated carbon emissions would be avoided. A current project is also making it possible to apply ink in the printing process only where it is needed. This reduces ink consumption by a further 25% to up to 50%. 

Koenig & Bauer offers customers the VisuEnergy X management system to additionally improve energy and resource efficiency in their printing operations and throughout the entire company. As a trusted advisor on sustainability, we provide customers with comprehensive support ranging from system and requirements analysis to energy consulting covering energy technology, efficiency and procurement strategies and their orientation as climate-neutral companies. VisuEnergy X permits end-to-end digitalisation of the company, helps to record environmental data and supports an energy management system that has been certified under DIN EN ISO 50001:2018.

A further example of our active environmental policies is water-based and migration-harmless ink for food packaging. in 2023, we took part in successful practical testing of the use of mineral oil-free, low-migration inks that heatset printing companies require for packaging printing in the food sector.

Employee aspects

A motivated, experienced, highly qualified, loyal and healthy workforce is a key pillar in the sustainable success of our company with its broad product portfolio of highly complex presses and services as well as sophisticated digital printing technology. With their ability to develop bespoke premium-quality high-tech printing presses and to provide comprehensive services, our employees generate sustained value for Koenig & Bauer. Against the backdrop of demographic change and the imminent retirement of “baby boomers” resulting in a significantly greater need for replacement employees in the coming years, as well as digitalisation and greater global networking as global trends, the current challenge is to find, recruit and retain young talent and people with broad and detailed expertise in a wide range of professions, especially as the activities often require a high degree of flexibility and willingness to travel. Accordingly, our HR activities in the year under review focussed on recruiting the next generation of specialists and managers, the professional and personal development, motivation and retention of employees, as well as the further promotion of diversity. One particular focus was placed on expanding training capacities and professions in order to secure the skilled labour of tomorrow and align it with the needs of our company as a technology group, as well as to create scope for growth and business expansion. In 2023, we increased the number of placements for vocational training, dual study programmes and internships by over 20% compared to the previous year and additionally diversified the job profiles. Despite the tense situation on the labour market and the higher number of trainees, all vacancies in the Group were filled. In the competition for talent, Koenig & Bauer benefits from its international outlook, its future-oriented products and digital services, its pronounced focus on innovation and value and its long history. A variety of measures, such as the early involvement of young management talent in projects and various training opportunities assist employees in unleashing their full potential. With the Koenig & Bauer Academy and the Koenig & Bauer Campus learning management system, our employees can benefit from an extensive array of training opportunities and learn autonomously and flexibly in line with their needs.

In addition to high standards of workplace health and safety, Koenig & Bauer is committed to offering all employees equal opportunities. We want to additionally consolidate equal opportunities as the basis for personnel decisions in the Group. Respectful and responsible interaction with each other and the prevention of all forms of discrimination are an integral part of our corporate culture. We want to ensure discrimination-free workplaces for employees regardless of gender, age, disability, religion, origin or sexual orientation and promote inclusiveness. People with restricted mobility also have a place in Koenig & Bauer’s regular workforce. Similarly, employing people with special needs is a major priority for us. Some of the companies at the Würzburg and Radebeul sites significantly exceed the quota for employees with special needs stipulated in the German Social Code. At the foundry company in Würzburg, the severely disabled rate stood at 8.3% at the end of 2023 (previous year: 9.3%).

Attractive employer
Koenig & Bauer offers its employees modern working conditions including flexitime and working time accounts as well as mobile working. Mobile working allows them to perform their work outside the company using mobile devices. The organisation is governed by a new company agreement drawn up in the year under review, which incorporates feedback from employee surveys and from managers. In principle, the nature of the tasks, activity and projects determine whether and to what extent mobile working is feasible for employees. Mobile working is not possible in around half of our workplaces, particularly in production and assembly. The proportion of the weekly working hours that can be spent in mobile working is set at 40%, although a certain degree of flexibility can be accommodated by line managers. For employees with children in particular, the option of mobile working offers advantages in reconciling sickness-related childcare and work. To further strengthen Koenig & Bauer’s profile as an attractive employer, we implemented further measures and expanded our benefits in the year under review, including bicycle leasing and a job ticket to additionally flexibilise working hours, new apprenticeships and dual Bachelor degree programmes in IT and international business. Koenig & Bauer grants employees advances towards Job, Germany and 29-euro rail tickets for apprentices in Bavaria as well as for bicycle leasing. There are also other benefits for our employees, such as pay-scale agreements at many Group companies, Group-wide internal personnel development and family-friendly programmes.

Employees are assisted in finding a viable work-life balance by means of special benefits such as flexible working hours, temporary or permanent part-time models, mobile working, childcare services and special leave as well as family leave and sabbaticals. The proportion of part-time employees in the Group widened to 4.9% (previous year: 4.5%). Furthermore, Koenig & Bauer offers various child and holiday care services at its sites. During the 2023 summer holidays, the fourth vacation programme available to the children of employees at the Würzburg site was held over two weeks and included forest adventure hikes, various activities on an adventure farm and a Koenig & Bauer day with factory and printing demonstrations. This holiday programme has been included as a comprehensive concept with two complete childcare weeks in the nationwide company childcare guide as a practical example of one of four organisational models. In the year under review, the holiday care concept, which was recognised as exemplary throughout Germany by the Federal Ministry of Family Affairs, was adopted at the Radebeul site. The Radebeul summer holiday programme included various activities on a farm for children and young people. On the schoolfree Day of Repentance and Prayer, the traditional Children’s and Youth Day took place at the Würzburg plant. This year’s programme included a trip to an animal park. While company childcare is being planned at the Würzburg site, employees at the Radebeul site can already use an existing daycare centre run by an external provider next to the company premises. Koenig & Bauer has been a member of the Family and Work Alliance in the Würzburg region since 2006.

Alongside a low fluctuation rate of 2.2% (previous year: 2%), the average length of service of 18.6 years (previous year: 19.2 years) and the continuously high number of long-service anniversaries are visible indicators of strong employee loyalty at Koenig & Bauer. in 2023, 98 employees (previous year: 129) celebrated a milestone anniversary at the two major Group sites in Radebeul and Würzburg. 26 employees were able to look back on 40 years of service, while 72 had been with the Company for 25 years.

Koenig & Bauer attaches particular importance to the diversity of its workforce and continues to work on further enhancements in terms of gender, internationality and ethnicity, age, religion and world view, experience and qualifications under its diversity policy. We want to harness the potential arising from heterogeneous teams in the interests of sustained corporate development. In terms of internationality, we have already achieved a high degree of diversity thanks to our numerous global locations with employees of different nationalities. This is also reflected in the company’s young talent: in Würzburg alone, young people from a total of eleven different nationalities embarked on their apprenticeships in September 2023. In addition, the Würzburg site was recognised by the University of Konstanz as a “committed training company in the field of integration”. In terms of age structure, the following situation applies to the two large Group sites in Radebeul and Würzburg: of the 3,244 employees at the two plants, 25.6% are aged 35 and under, 49.3% are aged between 35 and 55 and 25.1% are aged over 55. As with many other mechanical engineering companies, Koenig & Bauer has a relatively small proportion of female employees (15%) compared with other sectors, although there was a small improvement over the previous year (14.8%). Various activities are being undertaken to further increase the proportion of female employees in our manufacturing company, including a targeted approach to women during girls’ day, career fairs, internships and school visits. We also want to increase the proportion of women in management positions with special training and female mentoring programmes. In a programme carried out with the Bavarian Metalworkers’ Association (bayme), we are encouraging skilled female employees with development potential to take on management tasks. At the end of 2023, female representation at the first and second management levels below the Management Board at the holding company Koenig & Bauer AG stood at 33.3% and 13.8%, respectively. While the proportion of women at the first management level below the Management Board remained unchanged over the previous year, it widened slightly at the second management level (previous year: 11.1%).

Recruitment of and professional training for the next generation of skilled workers
In-house training is intended to meet the high demand for qualified specialists in development, design, production, assembly, commissioning, service and commercial areas. The dual vocational training model can look back on a long tradition at Koenig & Bauer. The company’s own state-recognised vocational training centre in Würzburg trains specialists by closely interlinking theory and practice. In the 155th year of its existence, it continues to enable modern learning and working. In addition to a well-equipped training workshop with various machine tools, all trainees have access to modern resources such as tablets. Via an internal website, they can use the tablet to access interactive operating instructions, e-learning, training documents, video tutorials and technical drawings. By scanning the QR codes, which are displayed on all machines, devices and containers in the vocational training centre, the trainees can view safety instructions and additional operation and handling information directly on their tablet. Apprentices gain a deep insight into the company’s processes by working in different departments. Additional programmes such as exchange trips, seminars or stays abroad promote young people’s professional skills as well as their personal development.

The next generation of skilled workers is being recruited from all types of schools, while opportunities are also deliberately being given to those with lower grades. At career, vocational and job fairs as well as our own events such as the career information day and the information week with an open training day in Radebeul we are committed, with the active support of our current apprentices, to arousing more people’ interest in the prospect of working at Koenig & Bauer. In 2023, extensive investments were made in equipment and training facilities in the Radebeul training workshop building. For example, a new training cabinet was created for IT trainees. At an information week including an open training day held in July 2023, more than 400 interested young people from schools in the region visited the vocational training centre in Würzburg. Through close co-operation with regional schools, various school events such as career orientation days provide an opportunity to discover more about training opportunities and careers at Koenig & Bauer. A system specially built by Radebeul apprentices with hands-on CNC technology is used to advertise the apprenticeship programme for cutting machine operators. In addition to these tools, we are increasingly using our website and social media to recruit young talent. In this way, school-leavers can gain insight into what a traineeship with the Company entails together with the training syllabus and methods. In addition to the various opportunities for learning more about apprenticeships at Koenig & Bauer, we offer technically or commercially oriented work placements for school students for early career orientation for when they leave school. All internships are structured in such a way that the school students can try things out for themselves and acquaint themselves with the apprenticeship professions at the company. A number of undergraduates are completing their theses at Koenig & Bauer or attending internships or practical semesters at Koenig & Bauer. In addition, the company offers placements for undergraduates to acquaint them with the world of work at Koenig & Bauer.

As of 31 December 2023, the number of technical and commercial apprentices, including interns, stood at 400, significantly up on the previous year’s figure of 331. The Group-wide training ratio rose accordingly to 7% (2022: 6%). With the number of apprentices doubling at the Würzburg site, new instructors and administrative staff were hired, buildings remodelled and constructed and equipment procured. Mechatronics technicians, industrial mechanics and IT specialists are the largest occupational groups among the apprentices. The training figures include dual students who complete their practical phases at the Group locations in addition to attending university. Koenig & Bauer apprentices at the various Group locations regularly occupy top positions in the final examinations held by the Chamber of Commerce and Industry. They are a good indicator of the acknowledged high quality of the Group-wide training centres. Two apprentices from Würzburg achieved top positions in the 2023 IHK final examinations and were each named “Top Apprentice” in their respective professions. A mechatronics technician and an industrial business management assistant were the Würzburg chamber winners in 2023. In addition, three mechatronics engineers at the Radebeul plant finished their training course with the same number of points and the highest possible grade of 1. They each received the “Top Apprentice in the Saxon Metal and Electrical Industry” prize of honour in the “Industrial Electrical Trades” category, which is awarded by the Sachsenmetall employers’ association together with the Johann Andreas Schubert Foundation. This was the 23rd time that the Radebeul plant was among the companies honoured with this recognition – more than any other member company. Upon successful completion of their apprenticeships, the future specialists face good career prospects with the possibility of permanent employment at the Group’s main sites in Würzburg and Radebeul. 

Systematic personnel development
With the establishment of the Koenig & Bauer Academy in 2022, we have bundled all Group-wide personnel development and training activities under a single roof. With its global outlook, the Academy covers relevant fields of personnel and skills development along the employee lifecycle. In line with our Group strategy, the focus is on systematic talent management, target group-specific personnel development programmes, onboarding, individual personal development and organisational development in terms of change and transformation support. Our culture of lifelong learning and respectful interaction with one another is reflected in the wide range of programmes on offer. We ensure equal treatment of our employees, promote diversity and create supportive conditions for this.

Our employees in all consolidated Group companies, including the global sales and service companies, benefit from the Academy programme. From technical/product-related and digital skills to interdisciplinary soft skills and leadership and management competences, interested parties can find sound advice and relevant learning and development opportunities that are accessible via our learning management platform Koenig & Bauer Campus. The entire training management also runs via this system, which, in addition to establishing transparent processes for the use of personnel development tools such as annual employee appraisals, coaching and mentoring, enables key performance indicators to be determined for the needs-based management and monitoring of the programmes.

Our sustainable approach to personnel development is clearly reflected in our target group-specific programmes. The multi-part project and product management programmes are carried out regularly, some of them with external trainers and an external examination. A new programme for designers and developers was introduced in the year under review, providing our engineers with training in several modules on systematic cost reduction in teams and on the methodical development and evaluation of product ideas. While the programmes are mainly conducted by external speakers and tandems of external and internal trainers, the “Campus of Experts” lecture series is organised by Koenig & Bauer experts from a wide range of fields. In the year under review, 526 employees across the Group took advantage of the wide range of training programmes.

Thanks to worldwide collaboration within the Academy network, we ensure that experts from all disciplines shape and develop the range of training programmes offered by the Koenig & Bauer Academy and provide employees with new and important know-how. All employees have access to the online catalogue via a personal profile, where they can view the training courses available to them. In addition to traditional face-to-face sessions, the training and development programme includes live online training and a constantly growing library of e-learning courses. The extensive range of training offered by the Academy is communicated via newsletters, the Academy magazine, its own website as well as at events, training courses and in personal discussions.

Mandatory training on matters such as export control, compliance or occupational safety is allocated to employees directly in their individual training plans at the campus to ensure attendance. Each employee can apply for voluntary training courses from the online catalogue. Managers can authorise the necessary training courses directly in the system. The system documents each employee’s education history It also issues reminders when training sessions are about to take place. In addition, managers are asked to register employees for training programmes. In addition to 2,333 faceto-face training sessions (2022: 522), 20,701 e-learning sessions including the 578 GoodHabitz online courses were held in the year under review (2022: 25,132). Accounting for 7,746 online training courses (2022: 11,248), compliance training is a very important aspect of e-learning. In addition, there is a wide range of technical and other training and further education courses as well as specialist training such as forklift driving licences, first aid courses etc. On top of this, we support in-service further training of our employees, allowing them to qualify as technicians, specialists and business economists, and, if desired, also offer them master training.

Koenig & Bauer has implemented systematic talent management step by step to enable management positions to be filled from its own ranks. Employee motivation through appropriate prospects, employee loyalty and, last but not least, heightened employer attractiveness are the key drivers here. Development assessments and calibrations, in which managers and junior staff undergo a differentiated potential analysis process, are a central element of talent management. In a subsequent internal calibration phase, these results are supplemented with assessments by immediate supervisors, while management and individual development plans with further training measures are drawn up. Vacancies are filled from this group of young talents in regular coordination rounds for each business unit with Management Board members and managing directors.

Eleven employees took part in the Junior Management Programme (JuMP) for up-and-coming managers in the year under review. The number of participants in the middle management programme was 35 in 2023. Encouraging young women to take on management responsibility and leadership roles is very important to us and will be further intensified, including through the new mentoring concept implemented in 2023. Employees were also able to benefit from external and internal coaches. New employees complete a digital onboarding process, which helps them to find their way around the company and familiarises them with its corporate culture. In the year under review, 199 new employees took part in the onboarding process and made their first networking contacts here.

The Koenig & Bauer Academy and the Koenig & Bauer Campus have provided the Group with the framework and tools for in-company personnel development and training. All in all, the measures and initiatives outlined above promote a global leadership and learning culture to overcome the challenges of transformation.

Health and safety
The health and safety standards at the production plants in Würzburg, Radebeul and Dobruška are certified in accordance with DIN ISO 45001:2018. Various measures are being taken to achieve further improvements in safety and ergonomics. Regular checks and consultations are held to monitor compliance with health and safety regulations and to make recommendations for optimising work processes. By avoiding non-ergonomic movements and heavy lifting, it is possible to minimise illness and accidents. The hazard assessments are updated regularly. Regular instruction and training seek to raise employees’ awareness of any hazards that may arise.

11.6 accidents per 1m hours worked (previous year: 15.7) with lost working time of one day or more for the core workforce were registered in the year under review at workplaces in the Würzburg and Radebeul plants. We performed extensive analyses of these incidents as a basis for defining preventive measures and providing training for significantly reducing workplace accidents. At the same time, the monthly report on accident frequency rates by business unit and department facilitates the development of targeted responses. Potential hazards are addressed and highlighted in special monthly campaigns.

Workplace health promotion and prevention as well as comprehensive health management also enjoy high priority at Koenig & Bauer. The various programmes are managed and implemented by human resources management and by the Koenig & Bauer in-company health insurance fund (Koenig & Bauer BKK), which is organised as an autonomous public-law entity. As part of company integration management, HR management offers employees at various business units who have been on sick leave for more than 30 days in the past year a confidential meeting via a personal invitation to discuss possible measures to overcome or prevent incapacity and maintain their performance at the workplace. A health team was established at the Radebeul site under the motto “Promoting health together”. Top priority is being given to workplace ergonomics, the prevention of musculoskeletal disorders and regeneration management. To expand the outdoor seating areas, 45 additional benches for the Würzburg and Radebeul plants were assembled internally and installed by apprentices. The annual Health Day in 2023 focused on nutrition with a nutrition quiz designed by the company doctor. 

In addition to the diverse activities and offers including health courses and vaccinations, counselling and training are a further priority with which health skills are taught, while employees are encouraged to work in a health-conscious and ergonomic manner and to avoid stress. Support is also available from addiction officers for all questions relating to addictive substances and alcohol consumption. Courses were held for the apprentices under a health promotion programme tailored to their needs to raise awareness of such concerns as hearing loss caused by high noise levels, addiction prevention and the avoidance of muscle/skeletal diseases. To strengthen the mental health of apprentices and teachers, the analogue/ digital You!Mind service is offered by the Koenig & Bauer BKK health insurance fund. The active weeks in selected health resorts are a special type of preventive health promotion with individual programmes to maintain or restore performance and well-being. Hearing tests, vein screenings with evaluation and on-site counselling as well as resilience webinars are among the other services on offer. Regardless of where they live, employees suffering from mental illnesses receive a qualified initial diagnosis within 14 days through the in-company health insurance fund’s ProPsych programme. If the initial diagnosis indicates the need for a medical response, the employee concerned receives psychotherapeutic treatment within a further 14 days. Special behavioural therapy for sustainable weight loss in the event of obesity is also offered under this programme. The aim of the “BGM-innovativ” programme held at the Würzburg and Radebeul sites is to provide coordinated care for at-risk and ill employees suffering from musculoskeletal disorders in order to avert illness or to prevent it from becoming chronic, to shorten the duration of the illness and absences and to maintain working capacity permanently. In addition to various sports such as functional training, full-body training with CrossFit and high-intensity interval training, yoga classes are included in the Koenig & Bauer BKK programme, which take place in hybrid form, both at the plant and online. The online skin check offered provides a specialist assessment and treatment recommendation within 48 hours. Special projects are organised to provide regular information on the importance of preventive care for the most common types of cancer. Flyers were distributed on the nationwide Dental Health Day together with a give-away. The apprentice sports day, the apprentice football cup and other team events, support for company sports festivals and the participation of employees in company runs promote health and strengthen team spirit.

Social aspects

Koenig & Bauer attaches great importance to social responsibility and has a long tradition of doing so. Even before social security was introduced in Germany, the Company had already established the predecessor of an in-company health insurance fund in 1855. The disability, widow’s and orphan’s fund founded in 1873 still exists today. As part of our commitment to the community, we are currently promoting social and cultural projects as well as various initiatives to preserve and protect the environment.

Social commitment of Koenig & Bauer and its employees
At Koenig & Bauer, social and cultural commitment includes comprehensive sponsoring and donation activities. Updated in 2021, the Group sponsoring and donations policy governs the basic approach and defines a consistent process throughout the Group, including approval rules. On the Koenig & Bauer sustainability website, there is a separate section setting out the various sponsorship and donation activities and the e-mail address empowerment@koenig-bauer.com as a central point of contact for all requests relating to sponsorship and donations. 

In addition to annual support for the Africa Festival in Würzburg, Koenig & Bauer as the principal sponsor provides financial resources all over the world for community projects and the activities of charitable and non-profit organisations and institutions such as foundations or associations. After supporting Liebe im Karton e.V., a charity that collects relief supplies for people in need, with a monetary donation in 2022, employees at five locations wrapped over 1,000 Christmas parcels for needy children in Germany and Romania in a campaign in the year under review and handed them over to the charity for distribution. In the year under review, donations were made to the Homburg am Main Summer Academy to finance scholarships for various art courses on the subject of paper and to the Kiwanis Club in Würzburg for postnatal care for premature babies as well as for a project to provide 25 needy children with schoolbags. Koenig & Bauer also provided financial support for the Peak Performer Kids Camp 2023 in Lower Franconia and the Würzburg branch of the Bavarian Red Cross water rescue organisation. To encourage technological progress and curiosity among young people, we sponsored the “Team GreenSub-Marine” group from Dresden in their project work in the “First Lego League Challenge” competition. Since 2019, we have been supporting the Baobab Children Foundation’s education project by covering the costs of 15 sponsorships. The aim of the Baobab Children Foundation is to enable young people between the ages of 13 and 18 to complete vocational training as carpenters after completing four years of school plus a practical year. In the year under review, the Fanny Koenig joinery, named after the wife of our company co-founder Friedrich Koenig, was extended and remodelled. In addition, Koenig & Bauer has for a number of years been supporting the Bakita Girls Community Centre in Tanzania, which is based on a micro- and macro-sustainability model and provides school education for young mothers and orphans in particular by providing additional vocational training resources. Koenig & Bauer MetalPrint organises an annual fundraising campaign in the form of an employee raffle, with the proceeds going to a children’s and young people’s hospice in Stuttgart, with the Company doubling the amount donated. Every year, the youth and trainee representatives at the Würzburg plant also collect donations from apprentices and teachers at Christmas time. In the year under review, the beneficiary was the SOS Children’s Village in Hohenroth near Gemünden. Following the severe earthquake in Turkey and Syria in February 2023, we also donated to an aid organisation that helped to build emergency shelters.

In addition to supporting social organisations and school initiatives, we also fund projects aimed at promoting climate protection and the sustainable use of resources. Sponsored by Koenig & Bauer, the “Druck & Medien Awards” for the environmentally oriented company of the year recognises printing companies’ ecological commitment. Initiated by Koenig & Bauer, the Green Dot Award honours international leaders from the global printing industry who have made outstanding innovative contributions to sustainable printing. After the first one in 2022, the next Green Dot Award will be presented at the drupa trade fair in Düsseldorf in May 2024.

Managers and employees make a great contribution to the community through their extensive voluntary activities at the Chambers of Industry and Commerce and the Chambers of Crafts, as honorary judges at the labour and social courts, in emergency-assistance organisations such as the Federal Agency for Technical Relief, the fire brigade and the rescue service, as well as in city and municipal councils. In many cases, employees are released from work by Koenig & Bauer so that they can pursue their various voluntary activities. In the year under review, we called on employees to present their own voluntary work in an organisation and to submit proposals for financial support from Koenig & Bauer for regional associations, events, school campaigns or social projects. Based on the wide range of proposals, we were able to provide financial support for a further 14 regional projects with personal links with our employees in the year under review. In addition, a pilot project for the continued use of decommissioned but still functional IT hardware was successfully implemented at the Radebeul plant. In addition to conserving resources and the environment through the private re-use of returned monitors, the employees made a donation in return for the purchase to support a project run by the Kiwanis Club in Dresden, which supports children from low-income families. In the year under review, the Saxon State Ministry for Culture and Tourism presented one employee at the Radebeul plant with the “Honorary Office in Culture” award for voluntary work in an association.

Activities against racism and discrimination
As a global printing press manufacturer, Koenig & Bauer has always stood for cosmopolitanism and tolerance. Our core workforce includes people who have fled their home countries for political or religious reasons. Some have completed their vocational training at Koenig & Bauer, others have directly started their careers here. At our Radebeul site, we support “Wirtschaft für ein weltoffenes Sachsen” (“Business for a Cosmopolitan Saxony”) by taking specific measures to assist and promote the integration of newcomers and immigrants in the local economy. In the year under review, a donation was made to the “Willkommen in Johannstadt e. V.” association in Dresden, which supports new immigrants and migrants in the Saxon state capital in a variety of ways. In the run-up to the Würzburg Week against Racism, we made a donation to the “Würzburg KUlturS e.V.” association, which works in the community to combat racism, promote greater diversity and equality. The “CSD Dresden e.V.” and “Queer Pride Würzburg e.V.” associations, which have set themselves the goal of achieving full legal equality for queer people in all areas of life, also received financial support. We were very keen to support the work of the “Discover Jewish Europe e.V.” association with a donation via the MS Goldberg culture ship. Guests on board the ship are acquainted with Jewish culture in the form of plays, readings, themed revues, concerts, cinema, talks and experimental forms of presentation. 

High product quality for greater on-site and process safety in printing operations
Koenig & Bauer attaches great importance to the quality of its products and services. Reflecting this, the quality management system aims at achieving ongoing compliance with the highest quality standards in the production and assembly of the Company’s bespoke, innovative and complex products. The quality management systems at the production plants in Radebeul, Würzburg and Dobruška, at the Sheetfed business unit in Radebeul, at the Security business unit at the three sites in Würzburg, Lausanne and Mödling and at the Coding business unit in Veitshöchheim are certified in accordance with DIN EN ISO 9001:2015. Product development focuses on work and process safety, reliability and user-friendliness. 

Commitment to human rights

Integrity in our business activities in our role as an employer and as a supplier and recipient of products and services as well as respect for human rights are core elements of our corporate governance practices. These principles were summarised in a Group-wide Code of Conduct in 2011. One of the guiding principles of our corporate policy is the United Nations Framework on Business and Human Rights (“protect, respect and remedy”).

Koenig & Bauer expects suppliers to comply with Koenig & Bauer’s corporate principles in addition to all applicable laws and regulations as well as international and industry standards. With the incorporation of a duty to observe human rights in the terms and conditions of purchase and the systematic observance of these requirements in all material business activities, the Company makes sure that its business partners acknowledge and respect human rights in the same way that it does. By signing the purchasing conditions, suppliers particularly undertake to refrain from using child labour and forced labour and to avoid all forms of discrimination. The purchasing conditions impose on external business partners a duty to respect employee rights and to observe labour law. The code of conduct for suppliers included in the terms and conditions of purchase also stipulates the observance of statutory and contractual quality and safety standards as well as environmental requirements particularly in connection with the use and processing of hazardous substances. In addition to the standard templates used as framework and purchasing agreements and the purchasing conditions including the Code of Conduct, there are quality assurance agreements in force with around 400 suppliers.

The Code of Conduct also imposes on suppliers the duty to provide information on request on the observance of human rights, the ban on child labour, minimum wages, business integrity, health and safety and sustainability, and to allow audits to be carried out. We have installed different processes to verify our suppliers’ compliance with the required principles initially and on an ongoing basis. A supplier qualification process must be completed whenever a supplier relationship is approved for the first time or re-established. This initial screening of potential suppliers during the selection process includes at least one self-assessment in the form of a questionnaire, in which they must also provide information on their practices for ensuring compliance with human rights and environmental standards at their companies. Further measures are initiated on the basis of the results of the self-assessment and an internal risk assessment. These can include a request for certificates, evidence of the avoidance of human rights risks or environmental risks, audit procedures or an on-site inspection. As part of the ongoing review of the partnership in the form of supplier audits, a random sample is taken from existing suppliers.

The Code of Conduct includes the elements of the Supply Chain Due Diligence Act for preventing violations of human rights in supply chains. It highlights aspects such as fair competition by preventing corruption, fraud and cartels, workplace health and safety, environmental protection, equal treatment and anti-discrimination. Adherence to these principles is ensured by the compliance management system in the form of guidelines, processes, controls, training, standard contracts and other monitoring activities. Under this approach, the measures directed at suppliers are backed by a sustainable and risk-averse purchasing strategy on the part of Koenig & Bauer, with priority given to sourcing from the German-speaking region.

On the basis of the legal obligations under the Supply Chain Due Diligence Act, we have developed a model for analysing and addressing the relevant risks and carried out a corresponding trial risk analysis in 2022. The policy statement on the implementation of the requirements under the Supply Chain Due Diligence Act is published in the Compliance section of the corporate website. In accordance with Section 5 of the Supply Chain Due Diligence Act, a risk analysis was carried out in the year under review using a formalised process. The Central Purchasing department, which is responsible for all purchasing in the Group and is based within the holding company, analysed the databases of all suppliers and, in a preliminary step, listed all countries from which goods or services above a threshold of €5,000 had been purchased directly across the Group in the last 24 months. For each direct source country, a risk score was calculated by the compliance department on the basis of twelve publicly accessible indices published by NGOs. To achieve a systematic scaling of the country-specific risk potential, a risk score of between one and three was assigned to each country for all of the twelve indices in relation to the legal interests to be protected. A risk score of one indicates a low country risk, two a medium country risk and three a high country risk. If no index-specific value was available for a country, a risk score of three was applied as the basis for further calculation. After determining all twelve index-specific country risks, a risk score was derived for each direct supplier country. In relation to the legal interests to be protected, this indicates the extent to which human rights and environmental risks can occur within the supply chain at the country level.

After all country-specific risk scores had been determined, a global average risk score was calculated. This score, which is recalculated annually, forms the basis for further risk analysis at the supplier level. All suppliers from critical countries whose risk score is up to 25% above the average international score undergo a separate audit. After an analysis of the results and approval of the risk assessment, a meeting of the committee consisting of representatives from Central Purchasing, Corporate Responsibility, Compliance and Quality Management as well as the Human Rights Officer was held to determine the suppliers from the critical countries to be audited, as well as an action plan with an audit roadmap and deadlines for high-risk suppliers. In further meetings, the Audit Committee discussed the progress report as well as the evaluation results and measures. Depending on the risks identified, the risk-minimisation action plan can include a qualified self-assessment with internationally recognised documentary evidence or certificates, an on-site audit or an unscheduled audit in the event of any suspicious activity reported. Furthermore, the inspection committee determines the date by which the suppliers that are classified as problematic must be audited. Measures to reduce or eliminate identified risks may include further awareness-raising activities and a declaration of undertaking by suppliers to respect human rights and the environment, closer monitoring of suppliers, agreement with suppliers on concrete action plans to reduce risks and, in cases in which there is a persistent risk to the protected interests, a reduction in or the discontinuation of the relationship with the supplier in question. The implementation of the defined measures and their effectiveness are monitored by the Human Rights Officer. 

The risk analysis also includes information from employees and third parties on potential violations, dangers or grievances, the failure of business partners to comply with human rights and environmental protection requirements, which can also be reported anonymously via the whistleblower system. Based on a written report received, we carried out an event-driven risk analysis in accordance with Section 5 (4) sentence 1 of the Supply Chain Due Diligence Act in the year under review with a survey and other test steps. However, this did not confirm the suspected potential violation of due diligence obligations to prevent human rights violations in supply chains.

Anti-corruption and anti-bribery

Corruption and inadequate measures to combat it deprive the economies concerned of billions of euros every year and have considerable and far-reaching consequences for governments, citizens and the economic and social development of civil societies. International studies have shown that the impact of ongoing corruption not only leads to lower prosperity, but also has a significant adverse impact on respect for human rights and protection of the environment. Corrupt societies generally have a lower level of participation and labour rights, access to care facilities and systems, equal rights, equal access to education, work and equal pay and non-discriminatory lifestyles. In addition, necessary measures or internationally recognised standards or agreements to protect the environment, resources or biodiversity are often undermined as a result of corruption. It is universally acknowledged that the fight against corruption is a joint task for all stakeholders, particularly politicians, international organisations, civil society, but especially all economic players and therefore companies.

Due to the impact of corruption on human rights and the environment, the continued fight against and prevention of corruption forms an intrinsic part of Koenig & Bauer’s corporate strategy. We attach key importance to responsible, sustainable and long-term value creation. We regard integrity and compliance with the law in business transactions as indispensable and pursue a zero-tolerance doctrine in this respect. For this reason, Koenig & Bauer’s Code of Conduct, which applies to all subsidiaries, explicitly states that there is no trade-off between the company’s commercial interests and its duty to follow the law, and that we would rather forego an order or the achievement of internal objectives than violate any laws and regulations. 

Compliance management system (CMS) – control and monitoring
The Group-wide compliance management system (CMS) creates the basis for ensuring that business practices satisfy the highest compliance and integrity standards. Since 2023, all relevant German subsidiaries of Koenig & Bauer have been certified in accordance with ISO 37001 (anti-corruption management). The content and activities of the compliance organisation as well as internal processes and controls are continuously reviewed and enhanced in accordance with this standard and on the basis of any changes to the legal framework. A compliance plan is agreed with the Management Board and the Audit Committee of the Supervisory Board at the beginning of the year in order to monitor the functionality and further development of the CMS. To this end, the compliance plan also defines measurable objectives (KPIs) for the CMS. The following KPIs are currently defined: 

  • Ratio of compliance training completed at the Koenig & Bauer Campus
  • Ratio of compliance on-boarding for new employees as part of
    the Welcome Days
  • Number of compliance reviews conducted at Koenig & Bauer
  • Percentage acceptance of the Koenig & Bauer business principles
    by relevant suppliers
  • Ratio of compliance undertakings signed by relevant employees

Decisions on the modification of KPIs or the inclusion of additional ones are made during annual compliance planning. 

The CMS is designed to prevent violations of laws, standards or internal policies. A regular compliance risk analysis forms the basis for the organisation and processes. More detailed stakeholder and risk analyses are carried out to intensify the analysis of special risks, such as corruption prevention and money laundering. In addition to monitoring changes in the law and reported compliance risks, one component of the risk assessment entails the continuous sharing of information on the internal processes of the Koenig & Bauer Group companies. For this purpose, a compliance team has been set up and is composed of representatives from information technology, human resources, accounting, taxes, data protection as well as the local compliance officers. In 2021, all subsidiaries additionally submitted for the first time a standardised report on their compliance situation as part of the fixed agenda of the meetings of the relevant supervisory bodies (e.g. boards, shareholder assemblies, supervisory boards, governance bodies). 

Guidelines and processes
Comprehensive guidelines have been issued and the necessary processes established on the basis of the results of the risk analysis to ensure compliance and integrity in all business activities. Any changes that are identified in the risk situation or requirements are addressed by duly modifying the internal guidelines. The Code of Conduct rolled out across the Group, the rules on the compliance organisation and the relevant Group guidelines are available to all employees in their most recent version in the guidelines portal on the Koenig & Bauer intranet. In the course of ISO certification and the entry into force of the Supply Chain Due Diligence Act and the Whistleblower Protection Act, various guidelines were revised in 2023 and the processes concerned adjusted.

The CMS attaches great importance to combating corruption and bribery. For this reason, the process for ISO 37001 anti-corruption management certification was initiated at all German subsidiaries in 2022. Companies were defined as relevant if they have sales, service and procurement activities, but are not pure production companies or those that only accompany administrative or management activities, e.g. holding or management companies. The corresponding certification audit was completed in December 2022, with the ISO 37001 certificate issued at the end of January 2023. In addition, the certification process for ISO 37001 (anti-corruption management) was carried out for Swiss-based Koenig & Bauer Banknote Solutions in 2023 in conjunction with the audit for re-accreditation with the Banknote Ethics Initiative (BnEI). Certification was achieved in February 2024. The ongoing certification efforts also reflect Koenig & Bauer’s comprehensive commitment to promoting fair competition.

The comprehensive compliance and integrity standards can only be fully effective if employees are aware of them and adhere to them. For this purpose, 10 online training sessions covering the main aspects of compliance and the Code of Conduct are currently available throughout the Group. in 2023, the content of the training courses was revised and restructured to reflect the current legal situation and company organisation on the one hand and to incorporate the level of knowledge achieved by employees after completing the first training cycles on the other. Available in several languages, they are mandatory for every new employee. The Koenig & Bauer Campus training management system, which is based on SAP SuccessFactors, automatically ensures that training is carried out within the cycles determined according to the risk criteria of the employee’s specific position. Compliance with this requirement is monitored through regular reminders and escalation processes. Following the initial allocation of online training via the Koenig & Bauer Campus at the end of 2017, a total of 5,186 Koenig & Bauer employees completed compliance training directly related to anti-corruption measures. In the training cycle rolled out for 2023, the participation rate for anti-corruption management training exceeded 93%. The Koenig & Bauer Campus has since been rolled out across all 50 relevant subsidiaries, meaning that almost all employees in Europe, Asia, North and South America can attend compliance training via the Koenig & Bauer Campus. Companies were defined as non-relevant if they have no independent operating business activities or are made up exclusively of personnel who also have parallel employment relationships in consolidated companies, e.g. in holding or management companies. In addition, face-toface training sessions are organised as part of the onboarding events for new employees and on-site visits by compliance officers to subsidiaries as required.

Monitoring and whistleblower system
The preventive CMS measures are complemented by a regular review of their effectiveness to identify potential for improvement. In addition to tracking the agreed KPIs for the CMS, internal and external compliance assessments in particular are carried out periodically at Koenig & Bauer AG and its subsidiaries for this purpose. Following an interruption due to the pandemic, more subsidiaries, in particular sales and service companies, were again visited in 2023 for this purpose and compliance assessments carried out on site. In addition to the companies included in the ISO scope, this related to the Koenig & Bauer companies in South Korea, Japan, Malaysia, Singapore, North America, Poland and the sales hubs of Koenig & Bauer Banknote Solutions in Asia.

The internal whistleblower system, which had been in place since 2017, was replaced in 2022 by a new online platform that will continue to ensure that potential compliance violations can be reported anonymously by employees and – in contrast to the previous system – additionally also by third parties. The whistleblowing system also includes a case management function, thereby ensuring full documentation of the actions taken to follow up on the tips received. As well as this, it contains a feedback channel to the whistleblower notifying him or her of the receipt of the report and the status and outcome of the inquiries. Moreover, the system allows for requests for further information or evidence to be made even if the whistleblower wishes to remain anonymous. Under the Group policy, all suspicions are followed up consistently and, if necessary, disciplinary or legal action taken. The platform and the processes for the internal investigation of reports were expanded in 2023 in order to fully comply with the German Whistleblower Protection Act and the transposition laws under the EU Whistleblower Protection Directive (Directive (EU) 2019/1937) enacted in the respective EU member states. The reporting channel was communicated through training courses, the intranet, notices and on Koenig & Bauer’s compliance website. The external reporting centre set up in Germany at the Federal Cartel Office was included in communications to employees. Several reports received in 2023 from various subsidiaries prove that the platform is known and accepted. The systematic follow-up applies equally to reports from the media or authorities regarding potential legal violations by Koenig & Bauer companies. In such cases, cooperation is sought to clarify the circumstances. Koenig & Bauer complies in full with any notification or cooperation duties.

Collective actions and commitment to fighting corruption
Koenig & Bauer is also committed to fighting corruption and encouraging compliance beyond its own business activities. Since its foundation in 2013, the Banknote Ethics Initiative (BnEI) has established a strict code to prevent and combat corruption and anti-trust violations in the field of banknote printing and trading. The principles espoused are not only recognised among the members of the BnEI but are also adopted by a significant proportion of central banks and banknote printers worldwide and form part of their procurement processes. As a founding member of the BnEI, Koenig & Bauer Banknote Solutions has agreed to be bound by strict rules of conduct and transparency, compliance with which is verified under the accreditation to be renewed every three years on the basis of an audit programme developed by the BnEI. The accreditation audit was held at the end of 2023 as scheduled, with accreditation duly received in February 2024.

Via the KBA-NotaSys Integrity Fund, which was founded in 2017, Koenig & Bauer financed international projects to enhance compliance processes and culture. Since the fund was established, it has supported a total of 45 projects from universities, associations and institutes in Europe, South America and Africa. The project initiators include Transparency International, the German Institute for Compliance (DICO), the German Institute for Efficiency Testing (DIEP) and various Swiss and German universities. The results of the projects were published and presented to interested groups and also discussed at two meetings of the project managers organised by the Fund in 2020 and 2022. A total amount of €5m was allocated. The Integrity Fund was formally closed on 31 December 2022. However, projects that have already been awarded will continue to run until the contractually agreed deadline of 2024 at the latest. The Integrity Fund was formally concluded at the Integrity Europe Conference on 26/27 October 2023, which was organised by the Lucerne University of Applied Sciences and Arts and partly financed by the Fund. The conference established a format that had previously not existed in Switzerland by addressing international representatives from academia, business, advocacy practice and the authorities, thus facilitating an interdisciplinary exchange. Many of those responsible for the funded projects attended the conference, which enabled the knowledge gained from the projects to be shared with a broad public. Due to the success of the conference, the management board of the Integrity Fund decided to make returned or unused allocations or incomplete projects available as start-up financing for the second conference in 2024.

Further details of the compliance management system can be found in the compliance section of Koenig & Bauer’s website. 

The ongoing analysis of possible compliance risks is a decisive prerequisite for the Company’s ability to continue meeting the high standards of rule-compliant business conduct and integrity in the future. The analyses and assessments carried out in the individual divisions in 2023 and the findings from internal investigations did not reveal any new compliance risks. Relevant processes and controls were adapted and expanded as described in order to address the shortcomings identified and workarounds as well as the changed legal requirements. 

Disclosures on the EU taxonomy

The EU Taxonomy Regulation is an integral part of the European Commission’s Action Plan on the Allocation of Capital Flows to Sustainable Economic Activities. As a classification system for ecologically sustainable economic activities, the EU taxonomy rules mark a significant step towards achieving the EU objective of climate neutrality by 2050. The taxonomy focuses on six objectives: climate change mitigation, climate change adaptation, sustainable use and protection of water and marine resources, transition to a circular economy, pollution prevention and control and protection and restoration of biodiversity and ecosystems.

The following information is based on the Taxonomy Regulation (EU) 2020/852. We have also adopted the delegated act on the first two environmental objectives of climate change mitigation and adaptation (Commission Delegated Regulation (EU) 2021/2139 on the technical screening criteria pursuant to Articles 10 and 11 of the Taxonomy Regulation, hereinafter referred to as the Climate Law Act), the delegated act on the reporting obligations under Article 8 of the Taxonomy Regulation (Commission Delegated Regulation (EU) 2021/2178) and the minimum protection under Article 18 of the Taxonomy Regulation. Our comments are also based on the additions made by Commission Delegated Regulations (EU) 2023/2486 and (EU) 2023/2485, including with regard to the inclusion of the four non-climate-related environmental objectives in the reporting obligations and new economic activities in the Climate Law Act. The amendments made to the delegated act on Article 8 of the Taxonomy Regulation provide for a phase-in period for environmental objectives 3-6 and for newly added activities to the Climate Law Act. Accordingly, the reporting obligations for these activities in 2024 only include information on taxonomy eligibility (share of taxonomy-eligible and non-taxonomy-eligible revenue, capital expenditure and operating expenditure). The reporting obligation also takes into account Commission Delegated Regulation (EU) 2022/1214 amending Delegated Regulation (EU) 2021/2139 with regard to economic activities in certain energy sectors and Delegated Regulation (EU) 2021/2178 with regard to specific disclosure requirements for these economic activities. As Koenig & Bauer does not engage in any business activities in connection with nuclear energy and fossil gas listed in the annexes to Commission Delegated Regulation (EU) 2022/1214 of 9 March 2022, the reporting forms shown in Annex III are not included for the 2023 reporting year.

In accordance with these regulations, we have, as in previous years, analysed potentially taxonomy-eligible economic activities with regard to the first environmental objective of climate protection in relation to categories 3.6. “Production of other low-carbon technologies”, 7.3 “Installation, maintenance and repair of energy-efficient appliances” and 7.6 “Installation, maintenance and repair of renewable energy technologies” were identified. The new economic activities included in the catalogue with regard to the environmental objective of climate protection in the Climate Change Act are not relevant for Koenig & Bauer. With regard to both the second environmental objective concerning adaptation to climate change and the four non-climate-related environmental objectives (protection of water and marine resources, strengthening the circular economy, reducing pollution and protecting biodiversity), the analyses carried out did not identify any potentially taxonomy-eligible economic activities with a significant contribution to these five environmental objectives. There was also no relevant capital expenditure in the year under review with regard to the economic activity “1.2. Production of electrical and electronic equipment” in the context of the EU environmental objective of transitioning to a circular economy. Under the reporting obligations, the shares of taxonomy-eligible and non-taxonomy-eligible and taxonomy-aligned and non-taxonomy-aligned economic activities in 2023 in total revenue, capital expenditure and operating expenditure from the Group’s activities are also disclosed with regard to the environmental objective of climate protection. Based on the analysis performed, the revenue, capital expenditure and operating expenditure could be clearly allocated to a taxonomy-eligible economic activity. Care was taken to avoid double counting.

Taxonomy-eligible revenue
The taxonomy-eligible share of consolidated revenue is defined as the portion of net revenue in 2023 that comes from products in connection with taxonomy-eligible economic activities (numerator), divided by consolidated net revenue in 2023 (denominator). Our Group net revenue of €1,326.8m is presented in the consolidated financial statements on page xx of the Annual Report 2023 in the line Revenue. Further details on our accounting policies for Group revenue can be found on pages xx et seq. of the Annual Report 2023.

Based on the classification of our economic activities according to NACE codes 28.29 and 28.99, we have used the requirements of category 3.6 “Production of other low-carbon technologies” as a basis for deriving taxonomy-eligible revenues. With regard to the environmental objective of climate protection, we have classified revenue from products or product groups as taxonomy-eligible if the printing presses and systems also aim to significantly reduce carbon emissions for our customers in the printing and finishing industry due to the technology in use and these do not already fall under Sections 3.1. to 3.5 of Annex I of the Climate Action Act. Under environmental concerns in the chapter entitled “Ecological printing technology”, we present in detail the technologies or printing presses developed to reduce carbon emissions in the printing process. These include VariDryBlue drying and the new dryer for the AirTronic delivery for sheetfed offset presses, the HighEcon and EcoTNV dryers for metal decorating presses and the PowerSave unit, LED technology for curing inks in the press and targeted adjustment of the stencil size for banknote presses. We then aggregated the revenue determined in the accounting departments of the Group or the respective business units for each product or product group classified as taxonomy-eligible. Revenue of €365.3m was generated in 2023 from machine technology for banknote printing, sheetfed offset presses equipped with VariDryBluedryingtechnology and metal printing systems and components delivered with TNV technology, on a par with the previous year (2022: €336.4m).

Taxonomy-aligned revenue
To identify taxonomy-aligned revenue, we first analysed the technologies classified as taxonomy-eligible, or the corresponding products and product groups, to determine whether they contribute to a significant saving of greenhouse gas emissions during use of the product over the entire lifecycle of the press compared to the best-performing reference technology available on the market. In doing so, we consistently followed the relevant EU regulations for category 3.6 “Production of other low-carbon technologies” with a focus on reducing greenhouse gas emissions in the user industries and applied internationally recognised standards for calculation. The life cycle greenhouse gas emissions for the most efficient alternative technology available on the market could not be calculated, as we were unable to provide valid evidence or publicly available energy consumption data for competing presses. In the previous year, tenders for banknote printing presses were published on the Internet with energy data that were confirmed by the only competitor in the press class. The content of tender invitations depends on customer requirements and differs in the case of banknote printing presses due to the fact that customers vary considerably from year to year. As a result, no taxonomy-aligned revenue in category 3.6. “Production of other low-carbon technologies” was reported in the year under review.

Abbildung: Anteil des Umsatzes aus Waren oder Dienstleistungen, die mit taxonomiekonformen Wirtschaftstätigkeiten verbunden sind.

Taxonomy-eligible operating expenditure
Operating expenditure in the sense of the EU taxonomy includes non-capitalisable expenses for research and development, building refurbishment measures, short-term leases, maintenance and servicing, among other things. To calculate the taxonomy-eligible share of operating expenditure, the total value of denominator is first determined. One input for the denominator is the non-capitalised R&D costs, which are shown in the consolidated income statement on page xx of the Annual Report 2023. The second input for the denominator is the maintenance and servicing costs in production, sales and administration as well as the expenses for shortterm and low-value leases, which are also included in the cost of sales, selling and administrative expenses recognised in the consolidated income statement on page xx of the Annual Report. The expenses incurred for measures for reducing energy consumption or increasing energy efficiency at the factory buildings form a partial value in the numerator for identifying the taxonomy-eligible proportion of operating expenses. These expenses coming within category 7.3 “Installation, maintenance and repair of energyefficient equipment” are classified as taxonomy-eligible operating expenditure in accordance with Section (c) of Annex I of Commission Delegated Regulation (EU) 2021/2178 on the reporting obligations under Article 8 of the Taxonomy Regulation, including the amendment by Commission Delegated Regulation (EU) 2023/2486. As the remainder of the total operating expenditure for taxonomy-eligible or non-taxonomy-eligible economic activities arises at the Group locations and a more accurate breakdown is not possible for system-related reasons, this difference is disaggregated on the basis of the percentage of taxonomy-eligible revenue in the entire product portfolio in order to determine the taxonomy-eligible category A operating expenses. The sum total of the taxonomy-eligible category A and category C operating expenditure is used as the numerator for calculating the taxonomy-eligible share of operating expenses as no category B operating expenses arose in the year under review.To identify taxonomy-aligned revenue, we first analysed the technologies classified as taxonomy-eligible, or the corresponding products and product groups, to determine whether they contribute to a significant saving of greenhouse gas emissions during use of the product over the entire lifecycle of the press compared to the best-performing reference technology available on the market. In doing so, we consistently followed the relevant EU regulations for category 3.6 “Production of other low-carbon technologies” with a focus on reducing greenhouse gas emissions in the user industries and applied internationally recognised standards for calculation. The life cycle greenhouse gas emissions for the most efficient alternative technology available on the market could not be calculated, as we were unable to provide valid evidence or publicly available energy consumption data for competing presses. In the previous year, tenders for banknote printing presses were published on the Internet with energy data that were confirmed by the only competitor in the press class. The content of tender invitations depends on customer requirements and differs in the case of banknote printing presses due to the fact that customers vary considerably from year to year. As a result, no taxonomy-aligned revenue in category 3.6. “Production of other low-carbon technologies” was reported in the year under review.

Taxonomy-aligned operating expenditure
Taxonomy-aligned operating expenditure in category 7.3 “Installation, maintenance and repair of energy-efficient appliances” could not be reported in the year under review as the suppliers or business partners did not provide evidence of fulfilment of the DNSH criteria and compliance with the minimum protection for individual taxonomy-aligned operating expenditure. As there are no taxonomy-aligned economic activities relating to category 3.6 “Production of other low-carbon technologies”, it was not possible to use a revenue-based allocation key to determine taxonomy-aligned operating expenditure in accordance with category 3.6.

Abbildung: Anteil der Betriebsausgaben (in der Abbildung OpEx) aus Waren oder Dienstleistungen, die mit taxonomiekonformen Wirtschaftstätigkeiten verbunden sind.

Taxonomy-eligible capital expenditure
In order to identify the taxonomy-eligible proportion of capital expenditure, the investments determined by Group accounting in accordance with IFRS are placed in the denominator. This amount can be derived from the additions column in the consolidated statement of changes in assets on page xx of the Annual Report 2023. It includes additions to property, plant and equipment and intangible assets during the year before depreciation and remeasurements, including those resulting from remeasurements and impairments for 2023 and excluding changes in fair value. In addition to additions to fixed assets (IAS 16) and intangible assets (IAS 38), additions to right-of-use assets (IFRS 16) are also included, as are additions to property, plant and equipment and intangible assets resulting from business combinations.

The first input for the numerator for deriving the taxonomy-eligible share of investment expenditure includes the investments in photovoltaic systems (climate protection economic activity 7.6) at the Würzburg site and measures to reduce energy consumption and increase energy efficiency in the plant buildings. These investments coming under category 7.3 “Installation, maintenance and repair of energy-efficient equipment” and category 7.6 “Installation, maintenance and repair of renewable energy technologies” are classified as taxonomy-eligible capital expenditure in accordance with Section (c) of Annex I of Commission Delegated Regulation (EU) 2021/2178 on the reporting obligations under Article 8 of the Taxonomy Regulation, including the amendment by Commission Delegated Regulation (EU) 2023/2486. As the remaining part of the total investments for taxonomy-eligible or non-taxonomy-eligible economic activities, adjusted for investments in non-production areas (corporate investments), is incurred at the Group locations, e.g. for new machining centres in production, this difference is broken down according to the percentage share of taxonomy-eligible revenue in the overall product portfolio in order to determine the taxonomy-eligible share of this capital expenditure. The resulting taxonomy-eligible capital expenditure is assigned to category A. The sum total of the taxonomy-eligible category A and category C capital expenditure is used as the numerator for calculating the taxonomy-eligible share of capital expenditure as no category B capital expenditure arose in the year under review. 

Category b includes capital expenditure that is part of a capital expenditure plan to expand taxonomy-eligible economic activities or to enable taxonomy-eligible economic activities to become taxonomy-aligned. While category a includes capital expenditure on assets or processes that relate to taxonomy-eligible economic activities, category c includes capital expenditure that relates to the acquisition of output from taxonomy-eligible economic activities and individual measures that enable the target activities to become low-carbon or lead to greenhouse gas reductions. The corresponding categorisation applies analogously to the explanations on operating expenditure in the following sections.

Taxonomy-aligned capital expenditure
Taxonomy-aligned capital expenditure in category 7.3 “Installation, maintenance and repair of energy-efficient equipment” and category 7.6 “Installation, maintenance and repair of renewable energy technologies” could not be reported in the year under review because the suppliers or business partners did not provide evidence of fulfilment of the DNSH criteria and compliance with minimum protection for individual taxonomy-eligible capital expenditure. As there are no taxonomy-aligned economic activities under category 3.6 “Production of other low-carbon technologies”, it was not possible to use a revenue-based allocation key to determine taxonomy-aligned capital expenditure according to category 3.6.