Dear Shareholders,

The SIMONA Group once again achieved record revenue and earnings in 2022. Sales revenue surged to over €700 million, mainly due to price-related effects and acquisitions. In absolute terms, the Group also recorded growth in earnings on the back of a strong performance posted in the previous year, while the EBIT margin fell slightly due to the more pronounced increase in revenue. It should be noted that the previous year's EBIT had included financial aid from the US government to mitigate the impact of the covid-19 pandemic, equivalent to approximately €4 million. Sales revenues were expanded in all three reporting regions. In EMEA, the acquisition of PEAK Pipe Systems in the United Kingdom, a leading manufacturer of piping systems, has strengthened the Group's market position when it comes to infrastructure and aquaculture applications.

The SIMONA Group once again achieved record revenue and earnings in 2022. Sales revenue surged to over €700 million, mainly due to price-related effects and acquisitions. In absolute terms, the Group also recorded growth in earnings on the back of a strong performance posted in the previous year, while the EBIT margin fell slightly due to the more pronounced increase in revenue. It should be noted that the previous year's EBIT had included financial aid from the US government to mitigate the impact of the covid-19 pandemic, equivalent to approximately €4 million. Sales revenues were expanded in all three reporting regions. In EMEA, the acquisition of PEAK Pipe Systems in the United Kingdom, a leading manufacturer of piping systems, has strengthened the Group's market position when it comes to infrastructure and aquaculture applications.

Cooperation with the Management Board

Over the course of the 2022 financial year, the Supervisory Board discharged its duties under statutory provisions, the company's articles of association and rules of procedure, advised the Management Board on a regular basis and evaluated and monitored management's activities in respect of legality, appropriateness and regularity. It also conducted an assessment of the company's risk management and compliance procedures and came to the conclusion that the system implemented meets the requirements to the fullest extent. The Management Board and Supervisory Board engaged in dialogue concerning the strategic direction of the company and regularly discussed the status of execution with regard to strategic initiatives. This also included aspects relating to sustainability. The Supervisory Board was directly involved in all decision-making processes of fundamental importance to the company. The Management Board informed the Supervisory Board as part of regular written and verbal reports, furnished in a timely and comprehensive manner.

At the same time, the Management Board outlined any deviations between specified targets and the actual course of business, elucidated them in full and explained any countermeasures taken to rectify the situation. The content and scope of reports furnished by the Management Board met the requirements set out by the Supervisory Board. In addition to the above-mentioned reports, the Supervisory Board asked the Management Board to provide supplementary information relating to certain issues.

In particular, the Management Board was available at Supervisory Board meetings for the purpose of discussing specific points and answering any questions put to it by the Supervisory Board. Transactions requiring the Supervisory Board's consent were discussed and examined in depth in cooperation with the Management Board. Where required, the Supervisory Board also convened without the Management Board being present.

Supervisory Board meetings

The Supervisory Board convened four scheduled meetings in 2022, two of which were held as face-to-face meetings and two of which were virtual. In addition, the Supervisory Board held an extraordinary meeting in a virtual format for the purpose of discussing a company acquisition.

Each member of the Supervisory Board personally attended all meetings convened during the 2022 financial year with the following exception: due to illness, Supervisory Board member Markus Stein was unable to attend the meeting on 8 December 2022.

At the meeting on 13 April 2022, the consolidated financial statements and the annual financial statements of the AG (parent company) were adopted and approved. The proposal by the Management Board for the appropriation of profit generated in the 2021 financial year, to be submitted to the Annual General Meeting, was discussed and approved. Furthermore, the report by the Supervisory Board for the 2021 financial year was adopted and the result of the audit conducted by PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft, Frankfurt am Main, was discussed. At this meeting, the Supervisory Board also approved the Non-Financial Statement pursuant to Section 289b and Section 315b HGB and the Corporate Governance Statements in accordance with Section 289f HGB and Section 315d HGB as well as the agenda for the Annual General Meeting in 2022. In addition, the Supervisory Board informed itself about the direction taken by business, focusing in particular on the situation within the commodity markets, as well as about projects relating to acquisitions and ongoing strategic efforts.

The meeting of 9 June 2022 focused on the current business performance and the outlook for the full annual period. In addition, the Supervisory Board informed itself about the integration of the acquired entity SIMONA PEAK Pipe Systems, United Kingdom. Other items on the agenda included measures aimed at drawing up and implementing the sustainability strategy as well as measures relating to cyber security. Furthermore, the Supervisory Board reviewed new developments in the field of corporate governance and adopted targets for the proportion of women on the Supervisory Board and Management Board in accordance with Section 76(4) and Section 111(5) of the German Stock Corporation Act (Aktiengesetz – AktG).

The meeting of 9 June 2022 focused on the current business performance and the outlook for the full annual period. In addition, the Supervisory Board informed itself about the integration of the acquired entity SIMONA PEAK Pipe Systems, United Kingdom. Other items on the agenda included measures aimed at drawing up and implementing the sustainability strategy as well as measures relating to cyber security. Furthermore, the Supervisory Board reviewed new developments in the field of corporate governance and adopted targets for the proportion of women on the Supervisory Board and Management Board in accordance with Section 76(4) and Section 111(5) of the German Stock Corporation Act (Aktiengesetz – AktG).

At the meeting on 8 December 2022, the Supervisory Board informed itself about the status of the integration of the acquired entities in the United Kingdom, Norway and Türkiye as well as the status of further strategic projects. Furthermore, based on the proposal put forward by the Audit Committee, it adopted the proposal for the auditor of the Group and the auditor of the parent company (AG) from the 2023 financial year, in addition to adopting the financial calendar for 2023. Additionally, the Supervisory Board informed itself about energy-related purchases and discussed the outcome of a self-evaluation relating to the efficiency of the work performed by the Supervisory Board.

Committee work

The Audit Committee and the Personnel and Nomination Committee are responsible for supporting the Supervisory Board. Both committees regularly provide the Supervisory Board with extensive information relating to their activities. The Audit Committee is responsible primarily for issues relating to the supervision of the accounting process, the efficacy of the internal control system, the internal risk management system and the internal auditing system, year-end auditing, with a particular focus on the independence of the auditor, the quality of the audit, the additional services provided by the independent auditor, the determination of auditing focal points and arrangements relating to fees as well as compliance.

The principal duties of the Personnel and Nomination Committee are centred around compensation as well as the conclusion, amendment, extension and termination of Management Board members' employment contracts. In addition, its task is to nominate suitable candidates to the Supervisory Board for its proposals to the Annual General Meeting for the election of Supervisory Board members.

Audit Committee

The Audit Committee convened on five occasions during the 2022 financial year. All committee members attended the meetings in person. The principal topics of the meetings were the call for tenders relating to the audit of the financial statements as from the 2023 financial year, the insolvency resistance of pension provisions and the risk management system, including cyber security. Meetings with the auditors were conducted for the purpose of preparing the adoption of the annual financial statements and the focal points of the audit for the following year as well as for the purpose of providing information on amendments to the German Corporate Governance Code.

Personnel and Nomination Committee

The Personnel and Nomination Committee met on three occasions during the 2022 financial year. All committee members attended the meetings in person. The deliberations were mainly centred around the issues of setting targets for the proportion of women on the Management Board and the Supervisory Board, accident statistics and the definition of ESG criteria for variable Management Board compensation.

Dealing with conflicts of interest

All members of the Supervisory Board are obliged to disclose conflicts of interest as soon as they occur. As in the previous years, there were no conflicts of interest during the 2022 financial year. Following our review, we ascertained that all members of our board are independent within the meaning of the German Corporate Governance Code. In this context, please refer to the Corporate Governance Statement issued pursuant to Section 289f HGB and Section 315d HGB.

Annual financial and consolidated financial statements

The accounts of SIMONA AG for the 2022 financial year were audited by PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft, Frankfurt am Main. It was elected as auditor at the annual general meeting held on 10 June 2022. Before proposing PricewaterhouseCoopers GmbH as auditor to the Annual General Meeting of Shareholders, the Chairman of the Supervisory Board had obtained confirmation from PricewaterhouseCoopers GmbH that there were no circumstances which might prejudice its independence as an auditor. The auditor conducted an audit and furnished an unqualified audit opinion with regard to the financial statements and management report of SIMONA AG and the consolidated financial statements and Group management report, which was combined with the management report of SIMONA AG, as well as the explanatory report by the Management Board in respect of disclosures under Section 289a and 315a HGB in conjunction with the accounting records. The financial statements mentioned above, the audit reports and the Management Board's proposal for the appropriation of the unappropriated surplus were submitted to all Audit Committee and Supervisory Board members in good time. At the Supervisory Board meeting on 21 April 2023, the independent auditor furnished detailed information about all material conclusions of the audit and answered all questions put forward by the Supervisory Board in a detailed and comprehensive manner. The Supervisory Board independently examined the financial statements and management report of SIMONA AG as well as the consolidated financial statements and the Group management report, which has been combined with the management report of SIMONA AG, as prepared by the Management Board, in addition to the explanatory report by the Management Board in respect of disclosures required under Section 289a and Section 315a HGB, the audit reports issued by the independent auditor and the proposal put forward by the Management Board with regard to the appropriation of profit. The Supervisory Board raised no objections upon conclusion of this final examination. The Supervisory Board concurs with the findings of the audit conducted by the independent auditor and approved the company's financial statements, which are thereby adopted pursuant to Section 172 sentence 1 AktG, as well as the consolidated financial statements at its meeting on 21 April 2023. It also approved the report by the Supervisory Board. Furthermore, the Supervisory Board concurs with the Management Board's proposal for the appropriation of profit. The Supervisory Board conducted a thorough review of the Non-Financial Statement issued by the company in accordance with Section 289b and Section 315b HGB; it discussed it at its audit meeting on 21 April 2023 and adopted it accordingly. No voluntary review by the independent auditors was conducted in respect of the Non-Financial Statement, as the Supervisory Board possesses the requisite expertise in this matter.

The demands placed on staff throughout the SIMONA Group were again considerable in 2022. Among the major challenges were significant levels of order intake and capacity utilisation for much of the year, ongoing distortions within the commodity and energy markets, and the integration of acquired entities. It is a testimony to the personal commitment and efficiency of staff members that these obstacles were overcome. We would therefore like to extend our special thanks to all SIMONA employees worldwide. We would also like to thank our suppliers and business partners for their spirit of cooperation and the many projects that we were able to pursue in 2022. Last but not least, we thank all our shareholders for placing their trust in our company.

Kirn, 21 April 2023
The Supervisory Board
Dr. Klaus F. Erkes, Chairman

This document is published in German and as an English translation. Only the German original shall be deemed authoritative.