Report by the Supervisory Board

In fiscal year 2021 / 2022 the Supervisory Board regularly advised the Executive Board on the management of the company and continuously supervised its conduct of business. We satisfied ourselves that the Executive Board’s work complied with all legal and regulatory requirements at all times. The Executive Board fulfilled its duty to inform. It furnished us with regular written and verbal reports containing up-to-date and comprehensive information on all issues of relevance to the company and the group relating to strategy, planning, business performance, the risk situation, compliance and the sustainability strategy. This also included information on variances between actual performance and previously reported targets as well as on budget variances (follow-up reporting). In addition, the Executive Board has introduced regular reporting on the development and implementation of sustainability topics. In the committees and in full Supervisory Board meetings, the members of the Supervisory Board had ample opportunity to critically examine the reports and resolution proposals submitted by the Executive Board and contribute suggestions. In particular, we discussed intensively and examined the plausibility of all transactions of importance to the company on the basis of written and verbal reports by the Executive Board. On several occasions, the Supervisory Board dealt at length with the company’s targets, the risk situation – and in this context with cybersecurity in particular –, refinancing and liquidity planning and the equity situation.

Based on the analysis of the value potential of the group’s businesses and the opportunities and risks of strategic steps, critical operating issues were presented to the Supervisory Board for discussion. Where required by law, the Articles of Association or the rules of procedure for the Executive Board, the Supervisory Board provided its approval of individual business transactions.

During the fiscal year the Supervisory Board and Executive Board again worked together very intensively and shared information. At 16 meetings of the Executive Committee, which were attended by Executive Board members and occasionally by external advisors as well, discussions focused principally on the transformation of thyssenkrupp as well as the impacts of the coronavirus pandemic and, above all, the war in Ukraine.

In addition, in the periods between meetings, the chairs of the Supervisory Board and its committees engaged in a close and regular exchange of views and information with the Executive Board and were informed about major developments. Important facts were reported immediately to the subsequent Supervisory Board or committee meetings. Before the Supervisory Board meetings, the shareholder and the employee representatives each held separate meetings to discuss the agenda items. Conflicts of interest of Executive Board and Supervisory Board members, which must be disclosed to the Supervisory Board immediately, did not occur in the past fiscal year.

thyssenkrupp assists the members of the Supervisory Board in the organization of the training and professional development measures that the members themselves are generally responsible for undertaking in fulfillment of their duties and assumes the costs for such measures. To supplement this, the company offers subject-specific information and training events. For example, at an information event for the Supervisory Board on the green transformation, the parameters for the decarbonization of Germany and Europe, the technical and financial requirements for the production of green steel and opportunities to obtain public funding for a first direct reduction plant were outlined and discussed. Special onboarding events are held for new members of the Supervisory Board to familiarize them with thyssenkrupp’s business model and structures.

Meetings of the Supervisory Board and its committees generally take the form of in-person attendance with the option of participation via a video link. Meetings are only held exclusively as telephone or video conferences in exceptional circumstances. In the reporting year, only five out of a total of 41 meetings of the Supervisory Board and its committees were held as video conferences; all others were in-person meetings. The meetings held as video conferences were of short duration and were arranged at short notice.

Attendance at meetings of the Supervisory Board and its committees, which were held as inperson meetings with the option of participation via a video link, was 96.5% (see Annual Report 2021/2022 for individualized attendance table). The members of the Executive Board took part in Supervisory Board and committee meetings; however the Supervisory Board also met regularly without the Executive Board.

In total, six Supervisory Board meetings and one training session were held in the reporting year. The range of topics that the Supervisory Board dealt with included the current business and earnings situation and the parent-company and consolidated financial statements for the year ended September 30, 2021. On the recommendation of the Audit Committee and after discussion with the auditors, PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft (PwC), the Supervisory Board approved the parent-company and consolidated financial statements for fiscal year 2020 / 2021 and thus adopted the parent-company financial statements.

Moreover, following completion of the statutory selection procedure for the auditors, the Supervisory Board accepted the recommendation of the Audit Committee and put a motion to the Annual General Meeting on February 4, 2022 that KPMG Aktiengesellschaft Wirtschaftsprüfungsgesellschaft (KPMG) should be appointed as the new auditor to perform any required auditors’ review of interim financial reports for the company and the group for fiscal year 2022 / 2023 to be issued before the 2023 Annual General Meeting. Further topics, alongside questions relating to the compensation of the Executive Board, were changes in legislation relating to the conduct of virtual annual general meetings and the revised version of the German Corporate Governance Code (GCGC). In addition, the Supervisory Board dealt with corporate governance, the thyssenkrupp Internal Control System (ICS), the subject of compliance, the 2021 EMIR compliance audit pursuant to § 32 German Securities Trading Act (WpHG) and the regular updates on all segments. At the Supervisory Board meetings, individual segments gave detailed presentations on their business performance and business prospects.

The reports by the Executive Board on the state of the thyssenkrupp group and the realization of the transformation process were supplemented from the start of the war in Ukraine by detailed reports on the geopolitical situation and crisis management measures. Against the background of this new situation, the intensive discussions on improving performance, portfolio measures and the short- and medium-term earnings targets for the thyssenkrupp group and all of its segments continued. On the basis of a focused analysis of value drivers along the entire length of the segments’ value chain, the Supervisory Board regularly discussed the performance targets and the extent to which they had been achieved, combined with recommendations for implementing the necessary measures faster. The Supervisory Board also discussed in detail the business and investment plans for fiscal year 2022 / 2023, which were adopted at the September meeting. The portfolio issues discussed at length included the sale of the interest in AST, the potential IPO of thyssenkrupp nucera and the acquisition of MV Werften in Wismar to rapidly increase Marine Systems’ production capacity.

The Supervisory Board also looked intensively at the Steel Europe segment, especially a standalone solution for this business, and discussed in detail the measures required for the green transformation. The Executive Board reports regularly to the Supervisory Board and its committees on progress with the examination of both aspects. The Supervisory Board also looked at the growth opportunities of the remaining thyssenkrupp group following carve-out of the Steel Europe segment.

Following examination of the recommendations and suggestions of the GCGC, in fiscal year 2021/2022, the Supervisory Board adopted a resolution to issue the declaration of conformity. The current declaration of conformity, issued at October 1, 2022, is available here. In addition, the Executive Board and Supervisory Board report on corporate governance at thyssenkrupp in the corporate governance statement.

The primary task of the Supervisory Board’s six committees is to prepare decisions and topics for discussion at the full meetings. The Supervisory Board has delegated individual decision-making powers to the committees where this is legally permissible. The powers of the committees and the requirements on committee members are set out in the rules of procedure for the respective committees. The chairs of the committees provided the Supervisory Board with regular detailed reports on the work of the committees in the reporting year. The chairs of the committees were also in close contact with the other members of their committees outside the regular meetings to exchange views on particularly important topics. The compositions of the six committees as of September 30, 2022, are shown in the section “Supervisory Board.”

The Executive Committee (Presidium) met 16 times in the past fiscal year due to the current situation and the preparations for the seminal meetings of the Supervisory Board. In addition to preparing the full Supervisory Board meetings, the work of this committee focused on the financial position and earnings performance of the group, topics in connection with the transformation of thyssenkrupp and appropriate reactions to the effects of the coronavirus pandemic and the war in Ukraine.

The Personnel Committee held eight meetings in fiscal year 2021 / 2022 in order to prepare personnel matters concerning active Executive Board members and matters related to benefits for former Executive Board members of thyssenkrupp AG for the Supervisory Board. Where required, resolutions were passed or recommendations for resolutions were made to the Supervisory Board. The meetings focused on decisions setting the variable compensation, the review during the year of the defined individual targets, and the disclosures in the compensation report in the new format pursuant to § 162 German Stock Corporation Act (AktG) as well as preparations to extend Executive Board contracts and to implement the German legislation on equal participation of men and women for the Executive Board. The committee also dealt with general Executive Board matters, partly in the context of benefits for former Executive Board members, as well as management development and succession planning in the thyssenkrupp group.

The Audit Committee met five times in fiscal year 2021 / 2022. Alongside Executive Board members, the meetings were also attended by representatives of the auditors, PwC, who were elected by the 2022 Annual General Meeting and subsequently appointed by the Audit Committee. The auditors declared to the Audit Committee that no circumstances exist that could lead to the assumption of prejudice on their part. The Audit Committee obtained the required auditors’ statement of independence, reviewed their qualification and concluded a fee agreement with the auditors. In addition, a groupwide survey of auditing quality was carried out; the results of this as well as the additional services provided by PwC alongside the audit of the financial statements were discussed in the Audit Committee.

Dr. Bernhard Günther, Chair of the Audit Committee until February 3, 2022, and Dr. Verena Volpert, Chair of the Audit Committee since February 3, 2022, engaged in a regular exchange of views with the auditors between meetings. The heads of relevant group functions were also available to provide reports and take questions in the committee meetings.

In the reporting year, the committee’s work focused on examining the 2021 / 2022 parent-company and consolidated financial statements along with the combined management report including the fully integrated non-financial statement, the combined corporate governance statement of the Executive Board and Supervisory Board regarding the statements issued by the Executive Board and the auditors’ reports, as well as on preparing the Supervisory Board resolutions on these items. In addition, the interim financial reports (half-year and quarterly reports) were also discussed in detail and adopted, taking into account the auditors’ review report. With regard to PwC, the list of non-audit services by the statutory auditor that require approval was established, and the budget for the performance of non-audit services for fiscal year 2021 / 2022 was set. Under EU Regulation 537 / 2014, thyssenkrupp has a statutory obligation to regularly rotate the external auditor of the parent-company and consolidated financial statements. Having examined the results of the tender for the audit, the Audit Committee proposed KPMG or alternatively Deloitte GmbH Wirtschaftsprüfungsgesellschaft as the new auditor. The Supervisory Board accepted the recommendation for KPMG and submitted a motion to the Annual General Meeting that KPMG be appointed to perform any required auditors’ review of interim financial reports for fiscal year 2022/2023 issued before the 2023 Annual General Meeting.

In several meetings, the Audit Committee monitored the accounting process and discussed the effectiveness of the internal control system and optimizations made to it, the effectiveness of the risk management system and the internal auditing system. It also dealt in detail with the main legal disputes and compliance in the company and discussed at length the development of strategic compliance measures at thyssenkrupp.

The Audit Committee defined the following mandate as the focus of the audit: “Accompanying audit of project activities for initial implementation of the EU Taxonomy Regulation as of the reporting date September 30, 2022.” The auditors reported the results of their audit to the Audit Committee at its meeting on November 14, 2022. The recommended actions proposed at that meeting are to be promptly implemented in fiscal year 2022 / 2023 following evaluation by the Executive Board and the specialist departments.

In addition, in the presence of the head of Corporate Internal Auditing, the committee discussed the internal audit results, the audit processes and the audit planning of the internal auditing team for fiscal year 2021 / 2022. Further points of focus were the non-financial statement, which is fully integrated into the management report, the equity capital and rating situation, the EMIR compliance audit for fiscal year 2020 / 2021 pursuant to § 32 WpHG, the current performance of all segments and implementation of the reporting requirements of the EU Taxonomy Regulation.

The Strategy, Finance and Investment Committee held three meetings in fiscal year 2021 / 2022. Discussions focused on preparing decision recommendations in its area of responsibility for the Supervisory Board. At each meeting, the committee dealt with the operational and economic situation of thyssenkrupp and its ongoing development, especially in light of the altered geopolitical situation since the start of the war in Ukraine. As in the previous year, the other main topics addressed by the committee included the thyssenkrupp group’s transformation journey and its progress, progress towards a stand-alone solution of the Steel Europe segment, development of the performance of the Multi Tracks segment, including the disposal of further businesses to external buyers, the global challenge of climate protection and the dynamic market environment for hydrogen, the risk assessment regarding cyber attacks on thyssenkrupp and IT security measures, financing and liquidity planning, business and investment planning and the review of the profitability of specific completed investment projects. In September 2022, the committee dealt at length with the group’s business and investment plans for fiscal year 2022 / 2023 and decided on those plans.

The committee also dealt extensively with the key sustainability topics in the reporting year. The members of the Nomination Committee convened for three meetings in the past fiscal year; these included making preparations for the change of the chair of the Audit Committee. Further, with a view to the upcoming election of shareholder representatives at the 2023 Annual General Meeting, the committee established that – in terms of diversity, financial expertise and fulfillment of the profile of required skills – the composition of the Supervisory Board is appropriate.

There was once again no cause to convene the Mediation Committee under § 27 (3) Codetermination Act (MitbestG) in the reporting year.

Elected by the Annual General Meeting on February 4, 2022, to audit the financial statements for fiscal year 2021 / 2022, PwC audited the parent-company financial statements for the fiscal year from October 1, 2021, to September 30, 2022, prepared by the Executive Board in accordance with HGB (German GAAP) rules and the management report on thyssenkrupp AG, which is combined with the management report on the thyssenkrupp group. The auditors issued an unqualified audit opinion. In accordance with § 315e HGB, the consolidated financial statements of thyssenkrupp AG for the fiscal year from October 1, 2021, to September 30, 2022, and the management report on the thyssenkrupp group, which is combined with the management report on the company, were prepared on the basis of International Financial Reporting Standards (IFRS) as applicable in the European Union. The consolidated financial statements and the combined management report were also given an unqualified audit opinion by PwC. The auditors also confirmed that the Executive Board has installed an appropriate reporting and monitoring system that is suitable in its design and handling to identify, at an early stage, developments that could place the continued existence of the company at risk.

The financial statement documents and audit reports for fiscal year 2021 / 2022 were discussed in detail in the meetings of the Audit Committee on November 14, 2022 and the Supervisory Board on November 16, 2022. The auditors reported on the main findings of their audit. They also outlined their findings on the internal control system in relation to the accounting process as well as the risk early detection system, and were available to answer questions and provide additional information. The Chair of the Audit Committee reported in depth at the full Supervisory Board meeting on the Audit Committee’s examination of the parent-company and consolidated financial statements. The Supervisory Board examined the parent-company and consolidated financial statements and the combined management report, including the non-financial statement fully integrated into the management report, as well as the compensation report pursuant to § 162 AktG and raised no objections. The parent-company and consolidated financial statements were approved. The parent-company financial statements prepared by the Executive Board of thyssenkrupp AG were thus adopted.

The Executive Board and Supervisory Board will propose to the Annual General Meeting on February 3, 2023 to pay a dividend of €0.15 per no-par share for fiscal year 2021 / 2022.

There were the following personnel changes on the Supervisory Board of thyssenkrupp AG in the reporting year:

On the employee representatives side, Barbara Kremser-Bruttel stepped down from the Supervisory Board with effect from the end of February 28, 2022 and Friedrich Weber stepped down as of the end of June 30, 2022. Christian Julius and Thorsten Koch were appointed by the court to succeed them as members of the Supervisory Board from March 2, 2022 and August 26, 2022, respectively, for the remaining term of office of the employee representatives on the Supervisory Board.

The members of the Supervisory Board thanked the departing members for their good and constructive work over many years.

The Supervisory Board thanks the Executive Board members, all thyssenkrupp group employees worldwide and the employee representatives of all group companies for their efforts and achievements in fiscal year 2021 / 2022.

The Supervisory Board

Prof. Dr.-Ing. Dr.-Ing. E. h. Siegfried Russwurm, Chairman