ZEISS continues to grow – and there’s no end in sight. In particular, the company’s innovative strength and its decisions to make investments in digital business models ensured an exceptionally successful fiscal year 2017/18. Once again, the positive development of all key performance indicators is a feature of the increased competitiveness, which is by no means a given in light of global uncertainty.
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, articles of association and rules of internal procedure. The Executive Board provided us with written and verbal information about the business situation and development, the current earnings situation, the risk situation, risk management, short- and long-term planning, investments and organizational measures. I 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 important decisions and passed the resolutions required by law, the articles of association and rules of internal procedure. Our decisions were based on the reports and decisions proposed by the Executive Board, which we subjected to in-depth scrutiny. The Executive Board and the Supervisory Board have joined forces to ensure ZEISS remains successful.
Supervisory Board meeting topics
In fiscal year 2017/18, the Supervisory Board convened on four occasions. ZEISS’ success is thanks to highly motivated talents who have always worked at the company. In December 2017, alongside the 2016/17 Annual Report, we poured our energies into recruiting strategies and the process of strategic personnel planning as a way of safeguarding our future. The meeting held in April 2018 focused primarily on current and planned acquisitions in line with the Agenda. The Executive Board reported on specific M&A measures and further intensification of the strategy, particularly in the growth areas of digitalization and software. Furthermore, the Supervisory Board approved future-oriented building projects such as the new integrated high-tech site in Jena, which will bring together the units located there and create capacities for expansions. The expansion of production areas in Guangzhou (China) for the Medical Technology segment and the Vision Care strategic business unit was also approved. Our strategy meeting in July focused on the portfolio and the targets at the different segments. The Executive Board presented a clear strategic plan on how it will continue enabling positive development at ZEISS by working with managers and employees alike. The budget plan for 2018/19 was approved at the fourth meeting in September. At this meeting, the Supervisory Board also approved the acquisition of IanTECH, Inc., a US specialist for micro-invasive cataract surgery. We are thus making sizeable investments in the future of ZEISS.
Changes to the Executive Board
In order to continue implementing the ZEISS structure as a portfolio company as per market and customer segments, in December 2017 the Supervisory Board approved the expansion of the Executive Board of four members: On 1 January 2018, Dr. Karl Lamprecht for the Semiconductor Manufacturing Technology segment and Dr. Jochen Peter for the Industrial Quality & Research segment were appointed to it. After eight years as Chief Financial Officer, Thomas Spitzenpfeil will pursue new challenges outside of the ZEISS Group. In July 2018, it was announced that Dr. Christian Müller would become the new CFO on 1 October 2018.
Work of the Supervisory Board committees
The Audit Committee met three times as scheduled. It evaluated the efficacy of risk management and discussed subjects such as compliance, internal auditing, the internal control system, accounting and the key issues of the annual audit and the annual financial statements. The Chairman’s Committee convened four times. At the meetings, personnel decisions were prepared and the reallocation of business was discussed in connection with the changes to the Executive Board. Target achievement and Executive Board remuneration were subjected to the regular review. At the Supervisory Board meetings the Chairmen of the Audit and Chairman's Committees reported regularly about the work of the committees. The Mediation Committee did not convene during the year under review.
Changes to the Supervisory Board
On 1 January 2018, Dr. Carla Kriwet was appointed to the Supervisory Board. She replaces Prof. Dr. Günter Stock, who has retired from the Supervisory Board after a term of more than eight years. Wilhelm Ulrich stepped down from his position on the Supervisory Board on 30 September 2018 to begin the passive phase of his retirement. Andreas Kopf was appointed as his successor by way of a court ruling.
Audit of the annual and consolidated financial statements
Auditing firm Ernst & Young GmbH, Stuttgart, has audited the consolidated financial statements of Carl Zeiss AG, including the Management Report, for fiscal year 2017/18 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. Ernst & Young GmbH Wirtschaftsprüfungsgesellschaft, 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 closely examined the documents and discussed them in detail at the meeting of the Audit Committee on 12 December 2018 and at the Supervisory Board meeting held on 13 December 2018. The independent auditor attended both meetings, presented the major results of the audit, provided supplementary information and answered questions. The Chairman of the Audit Committee reported in the plenary assembly about the result of the examination of the consolidated financial statements by the Audit Committee. After examining the documents, the Supervisory Board endorsed the results 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 2018.
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 2017 to 30 September 2018. 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.
In addition, the Auditing Committee was presented with a separately published non-financial Annual Report of Carl Zeiss AG. The non-financial report was sent to PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft (PwC), Munich, for a voluntary financial assessment to obtain limited assurance. As per the recommendation of the Auditing Committee, the Supervisory Board ends by confirming adherence to the CSR Guideline Implementation Law (EU Directive 2014/95/EU) of the non-financial report for the ZEISS Group and approving it.
The Executive Board's proposal to pay a dividend of EUR 54.3m from net income to the sole shareholder, the Carl Zeiss Foundation, was approved.
On behalf of the Supervisory Board, I would like to thank the members of the Executive Board and all ZEISS employees for their commitment and declared intent to ensure ZEISS remains just as successful in the future.
Oberkochen, December 2018
On behalf of the Supervisory Board
Prof. Dr. Dieter Kurz
Chairman of the Supervisory Board