Report of the Supervisory Board

By initiating the sale of the Metro shares in summer 2018, the Holding Company freed up additional resources to continue to expand its portfolio. As a family-equity company, we wish to renew our portfolio, expand it and strategically develop our investments. We are optimistic about the steps already taken: both the successful integration of Initial’s activities into CWS-boco and the establishment of appropriate governance and management mechanisms at our most recent portfolio companies ROVEMA and Optimar will make it possible to leverage the potential for further added value.

Our activities continue to focus not only on our buy & build strategy but also our digital transformation. All divisions are pursuing specific projects which are based on their own respective Digital Agendas. Some of their innovative solutions are still in the testing phase, and some have already hit the market. As Haniel has done with Schacht One, ELG has formed its own digital unit and TAKKT bundles all web-based business models into a newly created group of companies. We welcome this dynamic as a prerequisite for the investments’ ability to tackle the future.

Last year, the Supervisory Board held its regular election. The Shareholders’ Meeting elected Dr Stephan Glander to succeed Dr Michael Schädlich as a shareholder representative. In addition, Doreen Nowotne and Patrick Schwarz-Schütte were elected as external shareholder representatives. They will replace Dr Paul-Bernhard Kallen and Thomas Geitner. Two new employee representatives, Lutz Leischner and Dirk Patermann, were also elected. Furthermore, Mario Büscher was elected to the Supervisory Board beginning on 28 April 2018 but was succeeded by René Albersmeyer on 1 February 2019 due to a change in companies. Bernd Hergenröther, Fadi Kamal and Irina Pankewitz no longer serve on the Supervisory Board. I would like to thank all departing members for their commitment and faithful collaboration.

At the inaugural meeting, Haniel’s Supervisory Board re-elected me to serve as Chairman – in addition, Gerd Herzberg und Dr Georg F. Baur were confirmed as Deputy Chairmen. I am extraordinarily grateful for the trust placed in me and look forward to continuing to work together with the Supervisory Board to contribute to the success of the Company.

In accordance with my duty as Chairman of the Supervisory Board of Franz Haniel & Cie. GmbH, beyond the normal meetings of the Board, I have also been in regular contact with the Chairman of the Management Board primarily, but also with the other board members. We discussed important operational and strategic issues affecting the Group. The Supervisory Board continually and carefully monitored the group of companies’ management and business development based on regular written and oral reports of the Management Board. We examined in depth all the decisions requiring our consent in advance of meetings and passed the necessary resolutions at four regular meetings and one extraordinary meeting. Two further resolutions were passed in writing. During the meetings, we discussed not only potential investments with the aim of developing the Group’s portfolio, but also a change to the Group’s leadership tools. A further focus was placed on the Group’s strategy, which was discussed by the Supervisory Board at a separate retreat.

The Audit Committee held four meetings in the 2018 reporting period. It monitored the accounting process and the effectiveness of the internal control system, the Internal Auditing office, and the compliance management system. Moreover, the committee examined and confirmed the independence of the auditor of the financial statements and approved non-audit services. At its meeting on 19 March 2018, it resolved to recommend to the Supervisory Board that it propose to the Shareholders’ Meeting that the previous auditor be reappointed.

As in years past, the cooperation between the Supervisory Board and the Management Board was characterised by an atmosphere of great openness and mutual trust. The Management Board informed us regularly about the status of the Haniel Holding Company and the various divisions – also with regard to important individual events. One major turning point has been Stephan Gemkow’s decision to relinquish his chairmanship of the Management Board at Haniel with effect from 30 June 2019, after nearly seven years’ service in the role. We owe Mr Gemkow a debt of gratitude. With an eye firmly on the future, pragmatism and commercial courage, he brought the Holding Company back to a sound financial footing and laid the strategic foundations for a successful future. We are exceptionally sad to see him go but also understand that Mr Gemkow wishes to turn now to new challenges. He will be succeeded by Thomas Schmidt, who has been a member of the Management Board since January 2017 and who serves as Chairman of the management at CWS-boco.

PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft, Essen, audited the annual financial statements of Franz Haniel & Cie. GmbH and the report of the Management Board for the 2018 financial year. The auditors confirmed that the annual financial statements and Report of the Management Board comply with legal provisions and the Company’s articles of association. The auditors issued an unqualified auditors’ report on the annual financial statements and the report of the Management Board. The auditors also issued an unqualified auditors’ report on the consolidated financial statements and the Group report of the Management Board. The auditors participated in the Supervisory Board’s meeting on the financial statements and in all meetings of the Audit Committee.

The Management Board submitted the consolidated financial statements, the Group report of the Management Board and the Group auditors’ report for 2018 to the Supervisory Board for its examination. Following an in-depth examination, the Supervisory Board approved the consolidated financial statements and the Group report of the Management Board. The Supervisory Board also approved the annual financial statements of Franz Haniel & Cie. GmbH and the Management Board’s profit appropriation proposal. The annual financial statements are thereby adopted and the consolidated financial statements approved.

Following the transactions initiated in the past two years, Haniel’s objective remains to have a portfolio of about ten mid-sized companies. The focus is therefore on a systematic search for attractive investments. The Supervisory Board wishes to thank the Management Board and employees for their commitment and hard work over this past year. We look forward to continuing along the strategic path we have chosen with them. We will continue to advise, monitor and support the Management Board with great care in the year to come.

Duisburg, 9 April 2019

Chairman of the Supervisory Board