Report of the Supervisory Board
Ladies and Gentlemen,
Despite the ongoing COVID-19 pandemic, which primarily impacted the ZEISS businesses in the first half of fiscal year 2021/22, and the immense geopolitical challenges, which have been accelerated by the war in Ukraine in particular, ZEISS achieved record-breaking revenue of around 8.8 billion euros in fiscal year 2021/22 with growth in all segments. Continuous progress in digitalization ensured continued above-average development in the Semiconductor Manufacturing Technology segment, with growth of 20%. The direct-to-market segments also succeeded in further increasing their revenues. ZEISS has thus proved that sustainable sizeable investments in digitalization and in research and development are the foundation for further growth.
In the past fiscal year, the Supervisory Board oversaw and advised the Executive Board in accordance with the duties entrusted to supervisory boards by law, the articles of association and rules of internal procedure. The Executive Board provided the Supervisory Board with written and verbal information about the business situation and development, the current earnings situation, risk factors and risk management, short-term and long-term planning, investments and organizational measures. The Chairman of the Supervisory Board was in close contact with the Executive Board and was regularly informed about the development of the business situation and important business transactions. The Supervisory Board was involved in all decisions of importance and passed the resolutions required by law, the articles of association and rules of internal procedure. The decisions of the Supervisory Board were based on the reports and decisions proposed by the Executive Board, which the Supervisory Board subjected to in-depth scrutiny. The Executive Board and Supervisory Board have joined forces to ensure ZEISS continues to develop successfully.
The Supervisory Board held a total of six meetings during fiscal year 2021/22.
During the previous fiscal year, it approved the annual budget for fiscal year 2021/22 on 30 September 2021. In December 2021, it discussed and approved the annual financial statements. The new Chairman of the Supervisory Board was elected at an extraordinary meeting on 10 January 2022.
During the meeting on 17 May 2022, the particular topics of discussion were the impact resulting from the war in Ukraine and the effects on ZEISS, along with the results of the efficiency audit conducted by the Supervisory Board. In addition, new targets for the representation of women on the Supervisory Board and on the Executive Board of Carl Zeiss AG were set during this meeting. In another extraordinary meeting on 31 May 2022, the expansion of the Executive Board to include the role of Chief Transformation Officer was approved, including deciding who would hold this office.
During the July 2022 strategy meeting, a comprehensive presentation of the company’s strategic portfolio was given to the Supervisory Board. The respective heads of the strategic business units were involved and particular focus was placed on the challenges facing ZEISS that have arisen for the company out of the geopolitical situation. At the strategy meeting, the Executive Board presented a clear strategic plan that continues the long-term positive development of the individual segments with the support of the management and employees. At the same time, it also looked at the changes that might occur in the company’s respective markets, while considering the foreseeability of any expected changes.
The budget plan for 2022/23 was approved at the final meeting of fiscal year 2021/22 on 29 September 2022.
The Supervisory Board's key concern is the optimal ongoing development of the company. Stability and continuity in the management of the company play an important role here.
In order to accommodate the comprehensive transformational changes at the company and thus continue the successful implementation of the strategic growth trajectory, the Supervisory Board decided to expand the Board by adding the role of Chief Transformation Officer (CTO) in May 2022. The main tasks for supporting the digital transformation at ZEISS are consolidated in this department. The Supervisory Board appointed Ms. Susan-Stefanie Breitkopf to the Executive Board of Carl Zeiss AG effective 1 July 2022.
By mutual agreement, the Executive Board contract with Dr. Matthias Metz was terminated as of 30 June 2022. The office was filled internally by appointing Mr. Sven Hermann as a member of the Executive Board with responsibility for the Consumer Markets segment as of 1 July 2022.
By mutual agreement, the Executive Board contract with Dr. Ludwin Monz was terminated as of 31 December 2021. The office was filled internally by appointing Dr. Markus Weber as member of the Executive Board with responsibility for the ZEISS Medical Technology segment as of 1 January 2022. In addition, the Supervisory Board appointed Mr. Andreas Pecher as a new member of the Executive Board with responsibility for the ZEISS Semiconductor Manufacturing Technology segment as of 1 January 2022.
The Supervisory Board would like to thank Dr. Metz and Dr. Monz for his excellent work as Executive Board member of Carl Zeiss AG and wishes Ms. Breitkopf, Mr. Hermann, Dr. Weber and Mr. Pecher all the best in their new roles.
The Audit Committee met three times as scheduled during the period under review. It evaluated the efficacy of risk management and discussed the topics compliance, internal auditing, the internal control system, accounting and the key issues of the annual audit, as well as the annual and consolidated financial statements. The Chairman’s Committee convened four times. The achievement of targets and Executive Board remuneration were subject to regular review. In the Supervisory Board meetings, the Chairmen of the Audit and Chairman's Committees provided regular reports on the work of their committees. Effective 1 September 2022, an additional committee was created, the Digital Committee, to act as a sounding board, in particular to assist the CTO in an advisory capacity; and to foster an exchange between experts, especially as concerns the Digital Committee members' professional experiences within the companies.
The Mediation Committee did not convene during the year under review.
The previous Chairman of the Supervisory Board, of the Chairman's Committee and of the Mediation Committee, as well as member of the Audit Committee, Dr. Dieter Kurz, left the Supervisory Board on 31 December 2021. Also effective 31 December 2021, member of the Supervisory Board and Chairman of the Audit Committee, Dr. Lothar Steinebach, left the Supervisory Board.
Effective 1 January 2022, Dr. Michael Bolle was elected to the Supervisory Board at the Shareholders' Meeting. In an extraordinary meeting of the Supervisory Board on 10 January 2022, Dr. Bolle was elected Chairman of the Supervisory Board. He is therefore both Chairman of the Chairman's and the Mediation Committees according to the rules of internal procedure of the Supervisory Board. He was also elected member of the Audit and the Digital Committees by the Supervisory Board.
Also effective 1 January 2022, Mr. Jan Brecht was elected to the Supervisory Board at the Shareholders' Meeting.
Effective 24 November 2021, Mr. Kai Bliesener was appointed to the Supervisory Board as the union representative. Mr. Bliesener informed the company that he would resign from his office as member of the Supervisory Board of Carl Zeiss AG effective 20 November 2022. The company then applied to the court of registration for the court appointment of a representative nominated by the union to succeed him on the Supervisory Board. The court of registration had not yet ruled on this matter by the editorial deadline for this report.
In order to provide more intensive support for the digital transformation of the company on the part of the Supervisory Board, the Supervisory Board resolved at its meeting on 13 July 2022 to form a Digital Committee as of 1 September 2022 and elected Supervisory Board members Hariolf Abele, Dr. Michael Bolle, Jan Brecht and Dr. Klaus Dieterich to the Digital Committee. Mr. Brecht was elected Chairman by the members of the Digital Committee in the constitutive meeting on 20 October 2022.
Mr. Gert-Hartwig Lescow was elected by the Supervisory Board to the Audit Committee in the meeting on 30 September 2021 and elected its Chairman on 1 January 2022.
Auditing firm Ernst & Young GmbH, Stuttgart, has audited the consolidated financial statements of Carl Zeiss AG, including the Management Report, for fiscal year 2021/22 prepared pursuant to Sec. 315e (3) of the German Commercial Code (HGB) in accordance with International Financial Reporting Standards (IFRS) and issued an unqualified auditor's report in each case. Auditing firm Ernst & Young GmbH, Stuttgart, also audited the dependent company report prepared by the Executive Board.
All members of the Supervisory Board received the independent auditor's documents and audit reports in good time. We examined the documents and discussed the annual and consolidated financial statements at the meeting of the Audit Committee on 12 December 2022 and at the Supervisory Board meeting held on 13 December 2022. The independent auditor attended both meetings, presented the major results of the audit, provided supplementary information and answered questions. At the plenary assembly, the Chairman of the Audit Committee reported on the result of the examination of the consolidated financial statements by the Audit Committee. After examining the documents, the Supervisory Board endorsed the result obtained by the auditor and approved the financial statements prepared by the Executive Board. The Carl Zeiss AG financial statements were thereby adopted, effective 30 September 2022.
Pursuant to Sec. 312 German Stock Corporations Act (AktG), the Executive Board has prepared the above-mentioned dependent company report for the period from 1 October 2021 to 30 September 2022. The independent auditors have issued the following opinion on the findings of their audit of the dependent company report: "Based on our audit, which was carried out in accordance with professional standards, we confirm that
- The actual disclosures contained in the report are correct and
- The payments made by the Company in the legal transactions listed in the report were not unreasonably high.”
The Supervisory Board agreed with the results of the audit presented by the independent auditors. Following the final result of the review by the Supervisory Board, there were no objections to the Executive Board’s concluding statement in the dependent company report.
We will also be paying out a dividend this year to our sole shareholder, the Carl Zeiss Foundation.
On behalf of the Supervisory Board, I would like to thank the members of the Executive Board and all ZEISS employees for their exceptional dedication and outstanding achievements that are at the foundation of our success.
I personally would also like to thank all members of the Supervisory Board and members of the Executive Board for the constructive and successful cooperation, which has made for a very smooth start in my role as Chairman of the Supervisory Board.
Oberkochen, December 2022
On behalf of the Supervisory Board
Dr. Michael Bolle
Chairman of the Supervisory Board