2024

Principles of good corporate governance firmly anchored

Responsible and transparent corporate governance oriented to long-term value creation has high priority at Koenig & Bauer. We are convinced that good corporate governance forms an essential basis for sustainable business success and strengthens the trust of our shareholders, business partners, employees and the financial markets in our company. We regard integrity and compliance as indispensable in business transactions and pursue a zero-tolerance policy.

Declaration of conformity in accordance with section 161 of the German Stock Corporation Act

The Management Board and the Supervisory Board of Koenig & Bauer AG issued the following declaration of conformity on 16 March 2024 based on the current version of the German Corporate Governance Code dated 28 April 2022 (the “Code”).

The recommendations of the Government Commission on the German Corporate Governance Code in the version dated 28 April 2022 published by the Federal Ministry of Justice on 27 June 2022 in the official section of “Bundesanzeiger” (the “2022 Code”) have been observed since the last declaration of conformity dated 17 March 2023 save for the following exceptions: The company is aiming for full-scale conformity to the recommendations of the German Corporate Governance Code in the future.

Recommendation A.5

In accordance with recommendation A.5 of the 2022 Code, the management report should describe the main characteristics of the entire internal control system – and not only accounting-related one – as well as the risk management system. In addition, it should comment on the appropriateness and effectiveness of these systems.

Thus, the recommendation goes substantially beyond the legal requirements set out in sections 289 (4) and 315 (4) of the German Commercial Code. For this reason, Koenig & Bauer AG is currently observing the statutory requirements and describing the main characteristics of the internal control system as it relates to the accounting process and the risk management system in its combined management report. Accordingly, it does not comply with recommendation A.5 of the 2022 Code. However, it is aiming to conform to this recommendation in the future.

This declaration as well as the ones for earlier years are available publicly at the company’s website at https://investors.koenig-bauer.com/en/corporate-governance/declaration-of-compliance/.

Remuneration of the Management Board and the Supervisory Board

Information on the remuneration of the Management Board and the Supervisory Board is published on the company’s website at https://investors.koenig-bauer.com/en/corporate-governance/remuneration/ as well as on page 117 et seq. of the Annual Report 2023.

The 2021 Management Board remuneration system was approved at the Annual General Meeting on 11 May 2021 with a majority of 69.54%. The remuneration report for 2022 was approved by a majority of 63.9% of the capital represented. The Supervisory Board will be proposing a new remuneration system (Management Board remuneration system 2024) for approval at the 2024 Annual General Meeting. In this way, the company is seeking greater approval of both the next remuneration system and the remuneration report. The main criticism of the previous remuneration system concerned the absence of performance targets within the long-term variable remuneration, the absence of any cap on the amount paid under the LTI, the possibility of granting special benefits including special remuneration for extraordinary performance or success of the Management Board members, the absence of any obligation to buy or hold shares in the company and insufficient transparency in the description of the remuneration system.

The remuneration system for the Supervisory Board was approved at the Annual General Meeting on 11 May 2021 with a majority of 99.95% of the capital represented and applied for the first time from 2022. The remuneration rules adopted at the 2019 Annual General Meeting apply to earlier years.

Corporate governance practices further optimised

Beyond the legal requirements, Koenig & Bauer is adopting further leadership rules and corporate practices as a better basis for decisions and monitoring them efficiently. The risk management system, the budgeting, management and control system and the internal control system for ensuring due and proper accounting are described in detail in the company’s combined management report.

Comprehensive and binding instructions with the aim of ensuring legally compliant and ethical conduct on the part of employees are set out in the Code of Business Conduct and the company’s executive guidelines. Koenig & Bauer also expects its suppliers and business partners to recognise and respect these principles as well as human rights and social standards. This is laid down in the Supplier Code of Conduct.
The Code of Business Conduct and the Supplier Code can be found at https://compliance.koenig-bauer.com/en/index/.

Compliance management system meets high standards

Responsible and transparent corporate governance oriented to long-term value creation has high priority at Koenig & Bauer. We regard integrity and compliance as indispensable in business transactions. The Group-wide compliance management system protects employees and companies from breaches of laws or internal rules and simultaneously helps them to duly follow these laws and internal rules.

The compliance management system reports to the Chief Executive Officer and is managed and implemented throughout the Group by the Group Compliance Officer. All Koenig & Bauer AG subsidiaries have designated contact persons to answer questions that employees may have on compliance or to communicate compliance-related matters. Compliance officers have been appointed at the segment level and compliance operatives named at the individual companies. In addition, managers with special responsibility for relevant matters, such as health and safety and environmental protection are appointed, overseeing their areas of responsibility independently and competently based on their specific expertise. Beyond their duties in implementing and monitoring standards, processes and reporting at the subsidiaries, the local compliance officers and operatives have a special function as a direct contact and advisor for local employees for compliance-related matters. Koenig & Bauer AG has also established a central export control unit as well as import and customs governance.

The system is continuously enhanced, structured more effectively and placed on a sustainable footing on the basis of a regularly updated compliance risk analysis. 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. 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. Since 2021, all subsidiaries have additionally submitted 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). Regular sharing with employees together with management’s strong commitment to compliance (“tone from the top”) has additionally strengthened the compliance culture within the Group. As of 1 January 2023, Koenig & Bauer AG is applying the Supply Chain Due Diligence Act. A Human Rights Officer has been appointed, and the internal processes have been defined to ensure fulfilment of the due diligence obligations in this regard as well as to review risk exposure to suppliers with regard to the interests protected under the Act.

The Code of Conduct adopted by Koenig & Bauer AG’s Management Board forms the basis for the Group’s system of values. Numerous Group guidelines have been issued on this basis, detailing the compliance organisation and requirements for processes. Guidelines, work instructions and processes are prepared as required and facilitate the application of the compliance requirements in day-to-day work. All relevant guidelines, forms and guidelines are made available to employees in a suitable manner, primarily via a central portal on the Koenig & Bauer intranet.

At the same time, training and internal communications on the Group-wide Intranet promote broad-based awareness of compliance matters and encourage consistent observance of the applicable rules. Based on SuccessFactors, the “Koenig & Bauer Campus” training management system ensures the efficient and effective control of internally developed and externally sourced learning content across the Group based on employees’ areas of activity. Online training courses are supplemented by in-depth face-to-face sessions structured according to the needs of the specialist departments. Relevant and updated compliance information is regularly made available via the Intranet, the compliance officers at the subsidiaries or individual messages.

In order to obtain swift and direct information on possible breaches of the law, rules and internal regulations, the Group-wide intranet-based whistle-blower system that had been established in 2017 was replaced by an internet-based whistle-blower platform in 2022, which enables employees, business partners and third parties to provide anonymous information on possible breaches of the law and compliance matters. The platform is not limited in terms of the nature of the violations and thus allows, for example, reports to be submitted on human-rights violations or environmental issues. Via an integrated chat function, it is also possible to stay in touch with anonymous whistle-blowers in order to update them on the status of their report or to request additional information. However, employees can still turn to the trusted internal third parties known to them at their companies, the central compliance organisation or management at any level. The whistle-blower system also provides an opportunity of highlighting human rights and environmental risks, as well as violations of human rights or environmental obligations arising from the economic activities of a company in its own area of business or of a direct supplier.

Independent inspections by Internal Auditing or external auditors continuously monitor the effectiveness of the compliance management system. ISO 37001 certification of the compliance management system is also of particular relevance in this connection. The Supervisory Board’s Audit Committee is kept regularly informed at its meetings of any compliance incidents as well as the progress being made in this area.

In addition to permanently improving our compliance management system, we are committed to advancing our international compliance culture and, in particular, to combating corruption and other unfair business practices worldwide. With the KBA-NotaSys Integrity Fund, which was launched in 2017, Koenig & Bauer finances international projects to enhance compliance processes and culture. A total of 42 projects initiated by universities, associations and institutions in Europe, South America and Africa have been funded. 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 fund was formally closed on 31 December 2022 in a ceremony held at the Integrity Europe Conference at the Lucerne University of Applied Sciences and Arts on 26 and 27 October 2023. Of particular importance is the support we provide as a member of the Banknote Ethics Initiative (BnEI). Since its foundation in 2013, 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 developed are not only recognised among the members of the BnEI but also adopted by a significant proportion of central banks and banknote printers worldwide and form part of their procurement processes. As a 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 as part of regular recertification based on an audit programme developed by the BnEI. The accreditation was confirmed in the audit carried out in 2023.

Additional, more detailed information on the compliance management system can be found at https://compliance.koenig-bauer.com/en/index/, in the summary entitled “Corporate governance and compliance” contained in the Annual Report (page 26) and in the non-financial statement included in the Annual Report of Koenig & Bauer AG in accordance with Sections 289b (3) and 315b (1), (3) of the German Commercial Code.

Close cooperation between the Management Board and the Supervisory Board

As a German joint-stock company Koenig & Bauer AG has a two-tier management and control structure, exercised by the members of the Management Board and the Supervisory Board. The Management Board and Supervisory Board work together closely and responsibly in the best interests of the company. The common goal is to ensure the company’s continued viability and to achieve growth in its enterprise value.

Following discussion of Management Board issues, the Supervisory Board appointed on 7 December 2023 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.

The Management Board consists of five members: Dr Andreas Pleßke (Chief Executive Officer and responsible for the Special segment), Dr Stephen M. Kimmich (Deputy Chief Executive Officer and Chief Financial Officer), Christoph Müller (responsible for the Digital & Webfed segment), Ralf Sammeck (responsible for the Sheetfed segment and Chief Digital Officer) and Michael Ulverich (Chief Operation Officer – Production, Purchasing & Logistics). The business allocation plan and the distribution of the Management Board responsibilities and segments as well as functional responsibilities for 2023 is presented in the combined management report on page 20.

As the company’s governance body, the Management Board manages the company’s business and determines and implements its strategy in consultation with the Supervisory Board. In its work, it is committed to pursuing the company’s best interests and the principles of its business policy. The rules of procedure govern the adoption of resolutions. They also define such matters as acquisitions, investments and capital measures for which the Management Board requires the approval of the Supervisory Board. The Management Board informs the Supervisory Board regularly, promptly and comprehensively of all issues relevant to the company, such as planning, strategy implementation, current business performance and the financial, earnings and risk situation. Any deviations are explained in detail.

Reporting by the Management Board to the Supervisory Board and/or the Audit Committee also includes matters relating to risk exposure and risk management, the internal control system and compliance, i.e. the measures taken to comply with legal requirements, official regulations and internal guidelines. The Management Board’s rules of procedure can be found on the company’s website at https://investors.koenig-bauer.com/en/corporate-governance/rules-of-procedure-of-the-management-board/.

Koenig & Bauer AG’s Supervisory Board advises and monitors the Management Board. Under the German Stock Corporation Act, the Supervisory Board is responsible for appointing or dismissing the members of the Management Board, monitoring and advising the Management Board, adopting the annual financial statements, approving the consolidated financial statements and approving or advising on important aspects of corporate planning and decisions. In accordance with the German Co-Determination Act, the twelve-member Supervisory Board is composed of six shareholder representative and six employees’ representatives. The shareholder representatives are elected by the shareholders at the annual general meeting and the employee representatives by the employees at the German sites. In the event of a tied vote on the Supervisory Board, the Chairman has the casting vote. The Supervisory Board may also adopt resolutions in circulatory procedures. The rules of procedure govern the work of the Supervisory Board and its committees. It is available on the company’s website at https://investors.koenig-bauer.com/en/corporate-governance/rules-of-procedure-of-the-supervisory-board/.

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.

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.

Details of the current composition of the Supervisory Board’s committees can be found on the company’s website.

Koenig & Bauer currently has five committees: the Personnel, Audit, Strategy, Nominating and Mediation Committees. The names of the respective committee members and the committee chairpersons are summarised below:

Personnel Committee
Prof. Dr.-Ing. Raimund Klinkner (Chair)
Dagmar Rehm
Gottfried Weippert

Audit Committee
Dagmar Rehm (Chair)
Marc Dotterweich
Dr Johannes Liechtenstein
Gottfried Weippert

Strategy Committee
Prof. Dr.-Ing. Gisela Lanza (Chair)
Claus Bolza-Schünemann
Carsten Dentler
Christopher Kessler
Prof. Dr.-Ing. Raimund Klinkner
Simone Walter
Gottfried Weippert

Nominating Committee
Prof. Dr.-Ing. Raimund Klinkner (Chair)
Claus-Bolza Schünemann
Carsten Dentler

Mediation Committee pursuant to Section 27 (3) of the Co-Determination Act
Prof. Dr.-Ing. Raimund Klinkner (Chair)
Julia Cuntz
Carsten Dentler
Gottfried Weippert

The main purpose of the Committees is to prepare the topics to be discussed by the Supervisory Board in its entirety and the corresponding draft resolutions. The Supervisory Board continuously monitors the Management Board in its management of the company’s business and advises it on basic questions of business policy, strategic orientation and significant projects. The Supervisory Board performs an annual internal self-assessment, which is prepared and updated with external assistance. The results are discussed on the Supervisory Board and improvements implemented promptly.

In addition to discussing market trends and growth business, the Supervisory Board dealt in 2023 at length 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.

Together with the Management Board, the Supervisory Board laid the foundations for long-term succession planning. The personnel development programme established at Koenig & Bauer is a modular system for the Group-wide advancement of employees that defines target-oriented methods for the various hierarchical levels. All personnel development initiatives have an international focus and incorporate all Group companies as well as the global sales and service units. Development assessments are used to appraise executives and junior staff externally. This is followed by an internal process in which the immediate line managers draw up competence profiles based on the results gained. In an ensuing step, the managing directors and department heads evaluate the executives and junior staff from their business units in calibration workshops to gain a neutral view. A comprehensive competence matrix is available in a database for the group undergoing assessment. Within this group, high potentials are identified in the subsequent coordination rounds for each business unit attended by members of the Management Board and executive staff based on criteria such as age, language skills, international profile, leadership capabilities, expertise (technical/commercial skills), career background, mobility/willingness to change and skills/potential. Thereupon, individual development plans with further training measures are drawn up. The goal is to fill management positions from the company’s own ranks in order to strengthen its attractiveness as an employer through systematic career development. Moreover, systematic talent management addresses the expectations of career-oriented high performers and thus also helps the company to retain qualified employees.

The one-year junior management programme (JuMP) with participants aged between the early 20s and 30s aims to systematically prepare junior staff for management tasks. Eleven employees took part 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 Koenig & Bauer and these efforts will be further intensified, including through the mentoring concept that has been implemented. 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.

The age limit for the members of the Management Board and the Supervisory Board is specified in the company’s Articles of Association as follows: Appointees to the Management Board may be no older than 65 years as of the date of appointment, although an exception of up to 67 years is also possible. Only persons who have not yet reached the age of 67 at the time they are elected may be nominated for election to the Supervisory Board.

Objectives regarding the composition of the Management Board and the diversity policy for the Management Board and lower management levels

The Supervisory Board will be including diversity in terms of age, gender, educational or professional background as well as international profile as a criterion for future Management Board appointments. The Supervisory Board and the Management Board respect the objectives pursued with the introduction of a gender representation quota and attach importance to the equal treatment of and equal opportunities for women and men. In accordance with the Act on the Equal Participation of Women and Men in Executive Positions in Private and Public Sector, the Management Board and the Supervisory Board have defined targets for gender representation quotas.

The Supervisory Board has decided that its female representation quota for the Management Board is to remain at 0% until 2025. It has considered closely the planned female representation target on the Management Board to be implemented by 2025 and ultimately set it at 0%. This decision must be seen solely in the light of the service contracts of the members of the Management Board, which continue until 2025 or 2026 and must therefore be respected by the Supervisory Board. Setting a target of more than 0% would have implied that the Supervisory Board was not willing to act in accordance with these service contracts or its own decisions. This is why no woman is currently a member of the Management Board.

The next time a new member is to be appointed to the Management Board, the female representation quota will of course be duly taken into account in accordance with the requirements of the Second Executive Positions Act (FüPOG II). Moreover, the Supervisory Board pays attention to diversity in the composition of the Management Board, while the Management Board itself observes these requirements when filling management positions within the Group. In cases in which female and male candidates have comparable qualifications, the proportion of women is to be increased as far as possible when new appointments are made.

The Supervisory Board has anchored the promotion of women in the Management Board’s personnel objectives (“Level Playing Field”). The Supervisory Board and the Management Board attach importance not only to increasing the number of women in management positions and strengthening their status, but also to raising the number of female employees in the company and in the Koenig & Bauer Group as a whole. The target ratio is 30% for the first level below the Management Board and 11% for the second level below the Management Board. At the end of 2023, the proportion of women at the first and second management levels below the Management Board stood at 33.3% (previous year: 33.3%) and 13.8% (previous year: 11.1%), respectively.

Koenig & Bauer attaches particular importance to the diversity of its workforce in terms of ethnicity, age and religion as well as world view, experience and qualifications. People with mobile disabilities also have a place in the regular workforce. As with many other mechanical engineering companies, Koenig & Bauer has a relatively small proportion of women (15.0%) employed in the Group compared with other sectors, although there was an improvement over the previous year (14.8%). Various measures, such as the analysis of recruiting activities, the expansion of mentoring programmes, “Girls Day”, the expansion of holiday child-care services and more flexible working hours to balance family and work are being offered and enhanced. 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.

Together with a greater number of highly qualified female employees, the proportion of women in management positions is to be widened by means of internal promotions as well as external appointments. At the end of 2023, the proportion of women stood at 33.3% at the first management level and at 13.8% at the second management level below the Management Board at Koenig & Bauer AG. 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%).

The Management Board’s diversity management policy also includes approaching specialists and managers in international labour markets via our production, service and sales companies outside Germany, whose potential for expansion is regularly reviewed.

Objectives regarding the composition (skills profile and diversity policy) of the Supervisory Board and the progress made in implementing these in the past year

An appropriate composition of the responsible governing bodies is essential for good corporate governance. The Supervisory Board should be composed in such a way as to ensure that its members in their entirety possess the knowledge, skills and expertise required to carry out its functions in a globally active group in a fit and proper manner.
Accordingly, the Supervisory Board of Koenig & Bauer AG has defined specific objectives with regard to its composition and adopted a profile of skills and a diversity policy, which is subject to constant review in accordance with the recommendations of the German Corporate Governance Code (the “Code”).

In its nominations to the Annual General Meeting, the Supervisory Board takes into account the objectives that it has set for its composition and at the same time strives to fulfil the profile of skills and the diversity policy. A key condition for the composition of the Supervisory Board is that it should ensure qualified monitoring of and advice for the Management Board. Before any new appointments are made, the Supervisory Board will determine which of the necessary skills and expertise requirement reinforcement.

In addition to different, mutually complementary professional profiles, knowledge and experience in the following areas of competence are considered essential for the composition of the Supervisory Board as a whole:

• Management/ leadership/strategy
• Human resources
• Legal, compliance and corporate governance
• Mergers and acquisitions
• Capital market and corporate finance
• Accounting and auditing
• IT systems /cybersecurity
• Digitisation
• Risk management
• Sales, marketing and after-sales service
• Operations/operational excellence
• ESG (environmental, social and corporate governance)

The members of the Supervisory Board are classified according to their individual skills on the basis of a self-assessment, which is duly evaluated. A distinction is drawn between three skill levels. Skill level 1 refers to basic knowledge in the respective area, skill level 2 to in-depth knowledge, and skill level 3 to expert knowledge in a given area.

In addition, the members of the Supervisory Board should have experience in a corporate environment as well in committee work, ideally at an international level.
Each member of the Supervisory Board should be familiar with and have an understanding of Koenig & Bauer AG’s portfolio, customers, markets and strategy.

The Supervisory Board pays attention to diversity in determining its composition. In addition to appropriate gender representation, this includes a balanced age structure, different professional and international profiles and various educational and professional backgrounds. The proportion of women on the Supervisory Board must be at least 30% in accordance with the statutory requirements.

In terms of personal qualities, the members of the Supervisory Board should possess integrity, personality and social skills, be willing to contribute to the Supervisory Board’s work and be open to innovative approaches and new ideas.
Each member of the Supervisory Board should ensure that he or she has sufficient time to perform his or her duties. When assuming further mandates, the members of the Supervisory Board should observe the statutory restrictions on the number of mandates that may be held and the recommendations of the Code.
The shareholder representatives on the Supervisory Board should include an adequate number of independent members. The Supervisory Board assumes that this is the case if more than half of the shareholder representatives are independent. The Supervisory Board determines independence in accordance with the criteria set out in the Code. Moreover, no more than two former members of the Management Board should hold seats on the Supervisory Board. Persons who hold a management or advisory function for major competitors of Koenig & Bauer AG should be excluded from the Supervisory Board.

As a rule, only persons who have not yet reached the age of 67 at the time they are elected may be nominated for election to the Supervisory Board.  Under the amendment to the Articles of Association adopted at the Annual General Meeting on 24 May 2023, it is now possible for the Supervisory Board to propose individual candidates for election for a shorter term of office than the five-year term previously laid down in the Articles of Association. In the future, candidates for election are as a rule to be nominated for a maximum term of four years. As a rule, no person should be a member of the Supervisory Board for any longer than three terms of office. The Supervisory Board considers regular renewal of its composition to be important but believes that this must always be weighed against the advantages of continuity on the Supervisory Board. Stability in the composition of the Supervisory Board promotes joint activities based on a spirit of mutual trust within the Supervisory Board and with the Management Board. If the experience gained through many years of Supervisory Board membership is also taken into account, continuity on the Supervisory Board may be of greater value for the company than renewal. Candidates who exceed this standard period of membership may in exceptional cases also be nominated as far as this is necessary to secure special expertise at Koenig & Bauer AG or to meet other objectives with regard to the composition of the Supervisory Board.

In accordance with recommendation D.3 of the Code, at least one member of the Supervisory Board representing the shareholders must hold expertise in accounting and at least one other member must hold expertise in auditing within the meaning of Section 100 (5) of the German Stock Corporation Act (“financial expert”). Accounting and auditing also includes sustainability reporting and related auditing procedures. The Chair of the Audit Committee should be an expert and independent in at least one of these two areas.
In addition, the shareholder representatives on the Supervisory Board have decided that, on the part of the shareholder representatives,

• at least three members should have practical experience of working on supervisory boards and/or comparable supervisory bodies,
• at least two members should have experience in a management and key position in international corporations,
• at least one member should have expertise in plant and mechanical engineering;
• at least one further member should have extensive experience in innovation, research, development and technology;
• at least one further member should possess special expertise of the printing and media industry as well as in packaging printing.
• at least one member of the Supervisory Board should have a special understanding of the capital market and corporate finance,
• at least one member should have appropriate expertise in ESG and CSR within the meaning of the Code.

Progress of the implementation of the skills profile and diversity policy of the Supervisory board

The Supervisory Board believes that its current composition fulfils the objectives regarding its composition and enhances the skills profile and diversity policy. The members of the Supervisory Board have the professional and personal qualifications considered to be necessary. The Supervisory Board as a whole is familiar with mechanical and plant engineering as well as the business areas in which the company operates. This expertise also includes a basic knowledge of the printing and media sector as well as the packaging sector. The majority of the members of the Supervisory Board have many years of international management experience as well as practical experience in working on supervisory boards.

As former Deputy Chairman of the Management Board of Gildemeister AG and former Chairman of the Management Board of Knorr Bremse AG, Prof. Dr.-Ing. Raimund Klinkner has many years of experience and expert knowledge of mechanical and plant engineering. As director of wbk Institute for Production Technology for Production Systems at the Karlsruhe Institute of Technology (KIT), Prof. Dr.-Ing. Gisela Lanza has extensive experience in innovation management as well as in research and development.

The Audit Committee of Koenig & Bauer AG has in its chairperson Dagmar Rehm a member with special auditing and accounting knowledge and experience in accordance with the requirements described in greater detail in recommendation D.3 sentence 1 of the 2022 Code. Dr Johannes Liechtenstein is another member of the Audit Committee possessing proven expertise in accounting. The expertise held by Ms Rehm and Dr Liechtenstein also includes sustainability reporting.

As a long-standing member of the Management Board of the US investment and securities trading company Morgan Stanley Bank AG, Mr. Carsten Dentler has a special understanding of the capital market and corporate finance.

With over 25 years of experience in the printing and media industry, Mr Claus Bolza-Schünemann not only possesses strong expertise in assessing new technologies and businesses but is also closely familiar with the challenges facing the industry and the needs and expectations of international customers.

Responsibility for ESG matters on the Supervisory Board lies with the Audit Committee. As its Chair, Ms Rehm has actively dealt with the topics of sustainability, social responsibility and ethical corporate behaviour. With her extensive knowledge of the ESG factors of key relevance for Koenig & Bauer AG, she has a deep understanding of the importance of broad-based sustainability reporting for long-term value creation and the company’s business success.

As Koenig & Bauer AG is a German listed public limited-liability company subject to the German Co-Determination Act, the Supervisory Board must be composed of at least 30% women and at least 30% men in accordance with the principles set out in Section 96 (2) of the German Stock Corporation Act.

As the employee representatives have waived combined compliance with this requirement, the Supervisory Board must be composed of at least two women and at least two men from among the shareholder representatives as well as from among the employee representatives. The inclusion of two female shareholder representatives, Ms Dagmar Rehm and Prof. Dr.-Ing. Gisela Lanza, and the two female employee representatives, Ms Julia Cuntz and Ms Sabine Witte-Herdering, ensures that this minimum requirement is satisfied.

The Supervisory Board has five independent members in line with the Code recommendations, namely Prof. Dr.-Ing. Raimund Klinkner, Dagmar Rehm, Carsten Dentler, Prof. Dr.-Ing. Gisela Lanza and Dr Johannes Liechtenstein. The qualification matrix below provides an overview of how the current profile of skills and requirements adopted by the Supervisory Board of Koenig & Bauer AG is implemented.

Qualification matrix for the Supervisory Board of Koenig & Bauer AG: shareholder representatives

Qualification matrix for the Supervisory Board of Koenig & Bauer AG: employee representatives

The D&O insurance taken out for the members of the Supervisory Board is subject to a deductible of €2,500. There were no conflicts of interest on the part of the members of the Supervisory Board and the Management Board in the year under review. The members of the Management Board and the Supervisory Board are under a duty to disclose to the Supervisory Board any conflicts of interest arising from material transactions or contracts with the company without undue delay.

Würzburg, 27 March 2024