Dear shareholders,
The Supervisory Board devoted its attention to the Group’s strategic development in terms of digitisation, modularisation and internationalisation in addition to measures for securing and enhancing its earnings and financial strength on a sustained basis. The 2023 financial year was once again overshadowed by geopolitical crises as well as challenging economic conditions caused by inflation, rising interest rates, muted economic growth in key markets and pronounced uncertainties. Various conditions such as a temporary reluctance to invest in new printing presses and delayed ordering in some business areas as well as the strong momentum in the launch of future-oriented products and new digital business left adverse traces on target achievement in the year under review. However, the extraordinarily broad product portfolio, which is aligned to growth and stable niche markets, stabilised business performance, with service business once again proving to be a reliable earnings pillar.
In addition to discussing market trends and growth business, the Supervisory Board dealt in detail with the business and earnings situation as well as the financial position of Koenig & Bauer AG and the Group together with the situation at key subsidiaries. Business policy, the M&A strategy, the competitive situation, risk management, compliance, the internal control system, internal auditing, cybersecurity, the capital market and personnel strategy were discussed at length. The Supervisory Board and the Audit Committee dealt with sustainability issues pertaining to environment, social and governance matters (ESG for short) as well as with the new ESG-related regulatory requirements. In addition to the Management Board’s corporate and investment planning, further items on the agenda of the Supervisory Board and the committees included the dividend policy, governance and remuneration matters and, in particular, the revision of the Management Board remuneration system. All necessary resolutions were passed after detailed examination and intensive discussion.
In the year under review, the Supervisory Board was again informed promptly, regularly and comprehensively by the Management Board of all events that were of material importance for the Company. In 2023, this was done in the form of hybrid Supervisory Board meetings with combined in-person attendance and online participation, in video conferences as well as over the phone and in writing. The Chairman of the Supervisory Board and the Chief Executive Officer meet on a weekly basis, and further regular meetings are held between the Chair of the Audit Committee and the Chief Financial Officer. In addition, the Supervisory Board received continuous reports concerning the Company’s key performance indicators.
The Supervisory Board performed its duties with great care in accordance with the law, the Articles of Association and the Rules of Procedure. Six Supervisory Board meetings and six information events for the Supervisory Board were held on matters of current relevance in 2023. These were supplemented by internal preparatory video conferences held prior to the Supervisory Board meetings. The Supervisory Board also met at times in the absence of the Management Board to discuss matters that concerned either the Management Board itself or internal Supervisory Board subjects. Of the six meetings of the Supervisory Board, four were held as hybrid meetings with in-person attendance and online participation and two as in-person meetings. Five of the six information events for the Supervisory Board were held as video conferences and one in hybrid form with in-person attendance and online participation. The chairpersons of the Supervisory Board committees reported regularly to the full Supervisory Board on the agenda and recommendations of the committee meetings. In the year under review, no members of the Supervisory Board were subject to any conflict of interests. The breakdown of the attendance at the meetings of the Supervisory Board and the committees is set out in the following table:
| Name | Member since | Supervisory Board meetings (6) | Personnel Committee (7) | Audit Committee (6 | Strategy Committee (2) | Nominating Committee (1) | Total participation |
| Prof. Dr.-Ing. Raimund Klinkner, Chair | 2018 | 6/6 | 7/7 | – | 1/2 | 1/1 | 94 % |
| Gottfried Weippert, Deputy Chair | 2001 | 6/6 | 7/7 | 6/6 | 2/2 | – | 100 % |
| Dagmar Rehm, Deputy Chair | 2014 | 6/6 | 7/7 | 6/6 | – | 1/1 | 100 % |
| Claus Bolza-Schünemann (ab 16. Juni 2023) | 2023 | 4/4* | – | – | 1/1* | – | 100 % |
| Julia Cuntz | 2016 | 6/6 | – | – | – | – | 100 % |
| Carsten Dentler | 2017 | 6/6 | – | – | 1/2 | – | 88 % |
| Marc Dotterweich | 2015 | 4/6 | – | 6/6 | – | – | 83 % |
| Werner Flierl (until 31 July 2023) | 2021 | 0/4* | – | – | – | – | 0 %** |
| Matthias Hatschek (until 31 July 2023) | 2006 | 2/2 | – | – | 1/1 | 1/1 | 100 % |
| Christopher Kessler | 2016 | 6/6 | – | – | 2/2 | – | 100 % |
| Prof. Dr.-Ing. Gisela Lanza | 2015 | 5/6 | – | – | 2/2 | – | 88 % |
| Dr. Johannes Liechtenstein | 2019 | 6/6 | – | 5/6 | – | – | 92 % |
| Simone Walter | 2016 | 6/6 | – | – | 2/2 | – | 100 % |
| Sabine Witte-Herdering (from 1 August 2023) | 2023 | 2/2* | – | – | – | – | 100 % |
* On a time-proportionate basis due to entry or exit during the year
** For health-related reasons
While there were no changes in the composition of the Management Board in the year under review, the composition of the Supervisory Board did change in the course of 2023. Following the resignation of Mr Matthias Hatschek as a shareholder representative on the Supervisory Board at the end of the Annual General Meeting on 16 June 2023, Mr Claus Bolza-Schünemann was elected to the Supervisory Board as his successor at the Annual General Meeting. The Supervisory Board thanked Mr. Hatschek for his long-standing confidence-inspiring contributions and for his commitment to the Company. The composition of the committees was determined at the constituent meeting of the Supervisory Board held following the Annual General Meeting on 16 June 2023. Details of the current composition of the Supervisory Board’s committees can be found on the Company’s website. With the elections held during the 2023 Annual General Meeting, the Supervisory Board was able to advance its own profile of skills, particularly with regard to industry-specific knowledge. Effective 31 July 2023, Mr. Werner Flierl resigned from the Supervisory Board as a trade union representative. His successor, Ms Sabine Witte-Herdering, was appointed to the Supervisory Board as an employee representative for the remainder of Mr Werner Flierl’s term of office under a ruling issued by the Würzburg Registry Court on 1 August 2023. No modifications were required to the composition of the Supervisory Board committees as a result of this change.
The members of the Supervisory Board receive appropriate support from the Company in the form of training and further education. The Supervisory Board training system, which was expanded in 2022, comprises two webinars a year on selected topics together with optional external training events. The training events in the year under review focused on the rules for adhoc disclosures, the Annual General Meeting and proxy advisors as well as enterprise valuation. As well as this, the Koenig & Bauer Board Academy has developed its own website as a platform for training and further education for the members of the Supervisory Board. In addition, the employee representatives are able to make use of the conferences organised by the Hans Böckler Foundation as well as the further education provided by the trade unions and DGB-Bildungswerk.
The meetings of the Supervisory Board and its committees as well as the information events dealt with the following matters in 2023: The video conferences of the Supervisory Board on 16 February 2023 and 23 February 2023 were dedicated to governance topics and the preliminary figures for 2022 as well as the guidance for 2023. At this meeting, the Supervisory Board approved the Management Board’s proposal for the allocation of the unappropriated surplus expected for 2022.
At its hybrid meeting of 21 March 2023 with in-person attendance and online participation, the Supervisory Board dealt at length with the annual financial statements for Koenig & Bauer AG and the Group as of 31 December 2022, the combined management report, the non-financial Group report and the 2022 remuneration report for the members of the Management Board and the Supervisory Board together with the relevant audit reports. The 2022 annual and consolidated financial statements including the combined management report and the non-financial Group report, the 2022 remuneration report and the Management Board’s proposal for the allocation of the unappropriated surplus for the 2022 financial year were approved or adopted. Furthermore, the Supervisory Board approved the resolution passed by the Management Board to submit the 2022 remuneration report to the Annual General Meeting on 16 May 2023 for approval by the shareholders. The wording of the invitation to the Annual General Meeting including the nine items of the agenda and the proposals for the adoption of the corresponding resolutions was also approved. In addition to the current status of the P24x project as of 31 December 2022, the lengthy agenda for the March meeting of the Supervisory Board included strategy, financing and capital market issues. Furthermore, the Management Board explained in detail to the Supervisory Board the partnership agreed with Sealed Air in the digital printing press segment.
On 12 May 2023, the Supervisory Board held a video conference to discuss the Q1 figures. The in-person meeting of the Supervisory Board on 15 June 2023 was held on the day prior to the Annual General Meeting. In addition to cybersecurity and the HR strategy, the agenda included the refinancing of the syndicated loan, the development of the subsidiaries and strategic issues such as the partnership agreement entered into with Volkswagen subsidiary PowerCo SE concerning joint development activities in sustainable battery cell production. Further topics entailed Management Board remuneration matters and a decision on the topics on which the Supervisory Board was to receive training in 2024. As well as this, the results of the Supervisory Board’s efficiency audit, which is conducted internally every year with external support and regularly updated in the light of current matters and legal requirements, were discussed. The Supervisory Board held its constitutive meeting on 16 June 2023 following the Annual General Meeting. Due to the changes in the shareholder representatives, adjustments were made to the composition of the Supervisory Board committees.
At the strategy meeting of the Supervisory Board on 25 July 2023, the Management Board presented the results of the rolling strategy process with this year’s focus on internationalisation in a hybrid meeting with both in-person attendance and online participation. Particular attention was paid to the Group’s global footprint as well as the three strategic pillars of sustainability, digitisation and modularity. A further item on the agenda of the strategy meeting concerned governance matters.
On 27 July 2023, the Supervisory Board was briefed on the report for the first half of 2023 in a virtual meeting. In a hybrid Supervisory Board meeting held on 28 September 2023 with both physical and online attendance, the Management Board presented the high-level business plan for the years 2024 to 2028. The Supervisory Board also approved the Management Board’s proposal for the early refinancing of the existing syndicated loan by means of a new syndicated credit facility. The Supervisory Board was briefed on the progress being made within the Group with respect to the new regulatory ESG requirements, particularly under the Corporate Sustainability Reporting Directive (CSRD). Strategic issues were also on the agenda.
At a hybrid meeting with in-person attendance and online participation on 7 November 2023, the Supervisory Board deliberated on the Q3 report as well as the Management Board’s revenue and EBIT projections for 2024. During the Supervisory Board’s video conference on 15 November 2023, the proposals for the revision of the Management Board remuneration system, which had been prepared with external support, were discussed. At the hybrid Supervisory Board meeting held on 7 December 2023 with in-person attendance and online participation, the Management Board presented in detail the corporate and investment plans for 2024 and provided an outlook for the years until 2028. The Supervisory Board approved the corporate and investment budget for 2024 and acknowledged the medium-term plans. In addition to the Green Energy project, the agenda also included strategic issues and the development of the subsidiaries. In addition, the person responsible for compliance, internal auditing and risk management submitted a status report on these three areas. The Supervisory Board approved the Management Board’s proposal to submit the merger of Koenig & Bauer Immobilien GmbH with Koenig & Bauer AG to the Annual General Meeting on 26 June 2024 for approval. The revised Management Board remuneration system was adopted by the Supervisory Board with retroactive effect from 1 January 2024 and will also be submitted to the 2024 Annual General Meeting for approval. In the course of intensive discussion of Management Board issues, the Supervisory Board appointed Dr Andreas Pleßke, Spokesperson of the Management Board, to the position of Chief Executive Officer and Dr Stephen Kimmich, Chief Financial Officer, to the position of Deputy Chief Executive Officer with effect from 1 January 2024.
Much of the Supervisory Board’s work is performed by its various committees. Five ordinary committees assist the Supervisory Board in the performance of its duties by preparing the resolutions to be passed by the Supervisory Board and the matters to be discussed in the plenary sessions. The Personnel Committee met seven times and the Nominating Committee once in video conferences. Of the six meetings of the Audit Committee, three were held as in-person meetings, two in hybrid form with in-person attendance and online participation and three as a video conference. In addition to the strategy conference, which was attended by the entire Supervisory Board, a further two meetings of the Strategy Committee were held during the year under review. All the meetings of the Strategy Committee were held in hybrid form with in-person attendance and online participation. It was again not necessary for the Mediation Committee appointed under section 27 (3) of the Codetermination Act to convene in 2023.
In addition to examining the quarterly reports and updated annual forecasts, one of the main tasks of the Audit Committee was to review in detail the annual financial statements of Koenig & Bauer AG and the consolidated financial statements as well as the combined management report, the non-financial Group report and the corresponding audit reports as well as the remuneration report for the members of the Management Board and the Supervisory Board. Throughout the entire process of preparing the financial statements, regular meetings were held between the Chair of the Audit Committee and the external auditor. During the discussion of the annual financial statements, the representatives of the statutory auditor reported to the committee on the results of their audit and were available to answer any questions and for detailed discussion of various matters. The Audit Committee prepared the approval and adoption of the financial statements and the remuneration report by the Supervisory Board. It reviewed the quality of the audit of the financial statements, monitored the independence of the external auditor and obtained his declaration of independence. The Audit Committee also prepared the proposal for the election of the auditor of the annual financial statements and the consolidated financial statements for submission to the Annual General Meeting. The Audit Committee reviewed the non-auditing activities requested by the Company from the external auditor on a quarterly basis. In addition to determining the priorities of the external audit of the financial statements, the Audit Committee also discussed the compliance management system and the compliance plan, internal auditing and the audit plan, the risk management system and the risk situation within the Group, the internal control system, export control, ESG issues and cybersecurity. In addition, it received comprehensive and regular updates on the progress of SAP migration and the organisational project for the interaction of governance, risk management and compliance (GRC). The Management Board presented the standardised M&A process together with the processes for post-merger integration (PMI) to the members of the Audit Committee. Various aspects of a future dividend policy were also discussed. The focus of two extraordinary meetings of the Audit Committee was on the ESG roadmap and regulations, internal auditing and a review of the annual financial statements. The Chief Executive Officer and the Chief Financial Officer regularly attended the meetings of the Audit Committee.
In the year under review, Management Board matters, remuneration and structural matters dominated the meetings of the Personnel Committee. In addition to overseeing the preparation of the remuneration report, the Personnel Committee prepared various draft resolutions for the Supervisory Board concerning variable Management Board remuneration and the target agreements with the Management Board, the revision of the Management Board remuneration system, Management Board governance and further training of the Supervisory Board in the following year. The Nominating Committee prepared recommendations for the full Supervisory Board concerning a candidate for election to the Supervisory Board at next Annual General Meeting, as well as proposals for rendering the term of office on the Supervisory Board more flexible and for determining a regular term of office. The Strategy Committee was closely involved in the new Group strategy process and was briefed at length by the Management Board in its meetings on digitisation and digital printing as well as market strategies and trends.
The application and further development of the corporate governance rules by the Company, particularly the implementation of the recommendations of the Code, are regularly monitored by the Supervisory Board. The Corporate Governance Statement published on the Company’s website describes the activities of the Supervisory Board with regard to the Declaration of Conformity pursuant to section 161 of the German Stock Corporation Act.
At its meeting on 20 March 2024, the Supervisory Board adopted the annual financial statements for Koenig & Bauer AG as of 31 December 2023 prepared by the Management Board and the remuneration report for the members of the Management Board and the Supervisory Board for 2023 and approved the consolidated financial statements for the Koenig & Bauer Group as of 31 December 2023, including the combined management report and separate non-financial Group report following a discussion with the auditors, its own careful examination and intensive deliberation. The annual financial statements of Koenig & Bauer AG are thus duly adopted in accordance with section 172 of the German Stock Corporation Act. The Supervisory Board also approved the Management Board’s proposal for the allocation of Koenig & Bauer AG’s unappropriated surplus for the 2023 financial year. The resolutions were prepared by the Audit Committee. The chairperson of the Audit Committee reported to the Supervisory Board in detail on the results of the intensive audits and the Committee’s findings as well as on the discussions with the auditors and the Management Board. The auditors reported at length to the Supervisory Board on their audit procedures and findings and were available to answer additional questions. PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft in Frankfurt am Main, Nuremberg branch, issued unqualified audit opinions for both sets of financial statements including the combined management report. Furthermore, the separate non-financial Group report underwent a limited assurance review by PricewaterhouseCoopers GmbH. The Supervisory Board, like the Audit Committee, approved the auditor’s findings at its meeting on 19 March 2024 based on its own review. Neither body raised any objections to the consolidated financial statements, the annual financial statements of Koenig & Bauer AG, the combined management report, the non-financial Group report or the remuneration report for 2023.
The external auditor also confirmed that the Management Board had established a risk early detection system meeting the requirements of section 91 (2) of the German Stock Corporation Act. The information and monitoring system, which is appropriate and meets the requirements of the Company, appears to be suitable in terms of its design and actual implementation to identify at an early stage any developments liable to jeopardise the Company’s going-concern status. No material shortcomings in the internal control system and the early risk detection system were reported.
The Supervisory Board would like to thank all employees, the Management Board, managers and employee representatives for their active commitment and constructive cooperation in the 2023 financial year. It expresses its gratitude to the shareholders for their confidence in the Company.
Würzburg, den 20. März 2024
Der Aufsichtsrat der Koenig & Bauer AG
Prof. Dr.-Ing. Raimund Klinkner
Chairperson of the Supervisory Board