Krones Group Annual Report 2023

Shaping the future

FINANCIAL STATEMENTS

¹ | 2 2023 highlights

Krones continued its profitable growth in 2023. Revenue increased by 12.2% year on year to €4,720.7 million.
After the previous year's record (€5,782.8 million), order intake remained at a high level in 2023 at €5,376.6 million. In the fourth quarter, order intake increased by 6.8% year on year on year to €1,263.0 million. The order backlog exceeded the €4 billion mark and, at €4,122.3 million at the end of 2023, was 18.9% higher than in the previous year.
Despite challenging conditions, Krones significantly improved profitability. EBITDA increased by 22.5% in 2023 to €457.3 million. The EBITDA margin rose from 8.9% in the previous year to 9.7%.
As expected, free cash flow was below the extremely high prior-year figure. Before acquisitions, however, it remained positive at €13.2 million in 2023 (previous year: €398.2 million). Krones improved ROCE (return on capital employed) to 16.3% in 2023 (previous year: 14.1%).
Due to the good business performance, Krones intends to pay a dividend of €2.20 per share for 2023 (previous year: €1.75).
The Executive Board is confident for the 2024 financial year and forecasts revenue growth of 9% to 13% with an improved EBITDA margin of 9.8% to 10.3% and ROCE of 17% to 19%. The forecast figures include the eects of the acquisition of Netstal Maschinen AG, which is still to be finalised.

		2023	2022	Change
Revenue	€ million	4,720.7	4,209.3	+ 12.2 %
Order intake	€ million	5,376.6	5,782.8	– 7.0 %
Order backlog at 31 December	€ million	4,122.3	3,466.4	+ 18.9 %
EBITDA	€ million	457.3	373.3	+ 22.5 %
EBITDA margin	%	9.7	8.9	+ 0.8 PP*
EBIT	€ million	291.0	230.4	+ 26.3 %
EBT	€ million	310.5	242.1	+ 28.3 %
EBT margin	%	6.6	5.8	+ 0.8 PP*
Consolidated net income	€ million	224.6	187.1	+ 20.0 %
Earnings per share	€	7.11	5.92	+ 20.0 %
Dividend per share	€	2.20**	1.75	+ 25.7 %
Capital expenditure for PP&E
and intangible assets	€ million	162.7	118.2	+ €44.5 million
Free cash flow	€ million	– 101.3	371.0	– €472.3 million
Free cash flow excluding acquisitions	€ million	13.2	398.2	– €385.0 million
Net cash at 31 December***	€ million	444.7	669.5	– €224.8 million
Working capital to revenue ****	%	17.8	19.0	– 1.2 PP*
ROCE	%	16.3	14.1	+ 2.2 PP*
Employees at 31 December
Worldwide		18,513	17,164	+ 1,349
Germany		10,654	10,130	+ 524
Outside Germany		7,859	7,034	+ 825

*Percentage points **As per proposal for the appropriation of earnings available for distribution

***Cash and cash equivalents less debt ****Average of last 4 quarters

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MANAGEMENT REPORT

CORPORATE GOVERNANCE

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5 | NOTES TO THE CONSOLIDATED 6 | OTHER INFORMATION

1	TO OUR SHAREHOLDERS
	Shaping the future	6
	Letter from the Executive Board .	. 34
	The Executive Board	37
	Report of the Supervisory Board	38
	The Supervisory Board	44
	The Krones share	48

Unter nehmensführung

1 | 5

SOLUTIONS BEYOND TOMORROW

Shaping the future

Krones has mapped out its journey into the future since 2022 with "Solutions beyond tomorrow". This slogan outlines Krones' strategic vision for the years ahead.

In order to realise its ambitious visions, the Krones team has a long, major road ahead. The first steps have already been taken in 2023. This is demonstrated by the examples on pages 24 to 30.

On the way, the company benefits both from its motivated and highly qualified employees (pages 31 to 33) and from the stable growth of the beverage markets (pages 8 to 11).

4 | Consolidated Financial Statements

1 | 7 "Krones embraces its responsibility to society"

Interview with Christoph Klenk, CEO Shaping the future

"Solutions beyond tomorrow" embodies the ambitious vision of producing "sustainable and affordable beverages, food and essentials for everyone and everywhere". Why is the company aiming so high?

Christoph Kenk: "Because we are conscious that, as a company, we bear responsibility for our customers and employees and for people around the world. More beverages and more food are needed to feed the world's growing population. Especially against the backdrop of climate change, it is immensely important for these to be produced in a resource-efficient way. This is where Krones is called upon to contribute to a world worth living in, with future-ready, sustainable technologies. Our ambitious target picture gives all Krones employees guidance on this challenging journey."

How did the workforce respond to the new target picture?

Klenk: "Of course there was a little scepticism at the beginning as to whether such big goals are achievable. But the team spirit in Krones' DNA soon prevailed. Our employees around the world see themselves as part of a larger community working together toward an ambitious goal. Their motivation and enthusiasm to help shape a better future is tremendous. I am proud of how our people bring "Solutions beyond tomorrow" to life every day."

2023 was the first full financial year under your new target picture. Is Krones already a step closer to realising its vision?

Klenk: "We have set out on a long, ambitious journey and have now taken the first steps. Krones already has successes to show that are based on the new target picture. In 2023, we published our Carbon Transition Plan, in which we clearly describe how Krones will achieve its climate targets. Various innovative lines and technologies are also available for our customers to use for resource-efficient, climate-friendly production. We present some examples on pages 24 to 30. But as I said, we are only at the beginning of a long and challenging journey. I am confident that we will successfully complete that journey as the Krones team and make our vision reality."

Megatrends

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The world's population needs more packaged food and beverages

The world's population is growing by about 60 million people a year, the middle class is expanding in emerging and developing countries, and more and more people are moving from rural areas to cities.

These megatrends mean that the global demand for packaged foods and beverages is constantly increasing and that more needs to be produced. At the same time, the industry attaches ever greater importance to sustainable manufacturing processes. Sustainability is now a megatrend in its own right.

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Megatrends

Stable demand for the global beverage industry: Many long-term megatrends support Krones' growth

"With 'Solutions beyond tomorrow', all employees from all areas of the company have a specific vision in mind that we aim to realise together as a team. Krones will make its contribution to feeding the world's growing population."

Uta Anders, CFO

8 bil. 9 bil. 10 bil. 2023 2040 2050 The world population is growing from 8 billion people today to over 9 billion in 2040 and almost 10 billion in 2050¹

91 mil. 113 mil. worldwide Asia Growing middle class More than 110 million people will rise into the middle class in 2024, including 91 million in Asia³

Consistent focus on sustainability among our customers

Sources: ¹ United Nations (World Population Prospects 2022) ² United Nations (World Urbanization Prospects) ³ World Data Lab (August 2023)

1 | 10 Market growth

Increasing demand for innovative filling and packaging technology from Krones

Driven by the megatrends, global consumption of bottled beverages continues to grow. Consumption is expected to rise by an average of 2.7%* per year from 2023 to 2027. Krones benefits from this trend as the world's number one manufacturer of beverage filling and packaging lines.

The global population's increasing consumption of beverages, which is hardly aected by economic fluctuations, ensures long-term stable growth in demand for our products and services.

* Source: Global Data (27 November 2023)

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2006

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Market growth

Krones benefits from stable market growth. Our order intake increased by an average of7% per year from 2006 to 2022. The only dips in order volume were in 2009 (the financial crisis) and 2020 (COVID-19). Order intake in 2023 was also lower than the previous year, but that was due to the extremely strong increase (+34%) in 2022 as a result of the catch-up eect following COVID-19.

"Krones has been growing at an above-average rate for many years. As well as our ability to innovate, this is also because of customer satisfaction. Customers value us for reliably completing international projects in top quality and by the promised deadlines."

Thomas Ricker, CSO

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Opportunities and responsibility

Krones contributes to a future worth living

The opportunities for Krones in this growing and essential market are huge – but so is the social responsibility that goes with them. We are fully aware of this responsibility and address three global challenges in "Solutions beyond tomorrow":

Combating climate change
Feeding the world
Ensuring responsible use of packaging materials

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Opportunities and responsibility

Krones has innovative products and technologies that help feed the world. We combat climate change by reducing carbon emissions not only in the manufacture of our machines and lines, but also in their operation in customers' plants. With our alternative and circular packaging solutions, we combat the problem of plastic waste.

"The challenges of the future are immense. As the Krones team, we help solve important problems every day – for our customers and for humanity."

Ralf Goldbrunner, COO

Right: High-quality recycling solution for plastic packaging: Krones Metapure

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Opportunities and responsibility

Krones helps people to save resources

More and more consumers take care to look after the environment in their daily lives. When purchasing packaged beverages, for instance, people want to be sure that plastic bottles are sustainable and their beverage is produced with the smallest possible carbon footprint.

The beverage industry needs innovative filling and packaging equipment to meet consumers' requirements. As a pioneer in sustainability and sustainable technologies, Krones can deliver.

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Opportunities and responsibility

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"Krones was already developing sustainable products when sustainability was not nearly the issue it is today. Our customers benefit from this. With Krones machines and lines, they can save energy, water and other resources, cut out unnecessary plastic packaging and achieve their climate targets – and all of these things help them score with customers."

Ralf Goldbrunner, COO

Right: LitePac Top plastic-free, fully recyclable secondary packaging

1 | 16 Strategic focus

Our vision: the basis for our strategic focus

We have clearly formulated Krones' vision in our target picture: Sustainable and aordable beverages, food and essentials for everyone and everywhere.

To this end, we develop solutions beyond expectations for our customers, humanity and our planet.

Krones needs this big and ambitious vision to ensure that it will continue to evolve. It provides the basis for our strategic focus.

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1 | 17 Strategic focus

In order to achieve our ambitious goals, we place a clear strategic focus – in all three segments – on the core areas of sustainability, service quality and digitalisation.

"We employ our creative power to preserve nature and safeguard society. Focusing on the core area of sustainability, on digitalisation as an enabler and on our high service quality helps us achieve this."

Thomas Ricker, CSO

1 | 18 Sustainability

Krones provides customers with sustainable solutions

Our customers increasingly require resource- and carbon-e¥cient machines, systems, lines and entire factories.

Krones introduced the enviro sustainability program back in 2008 and has been developing it dynamically ever since. This means the company has been highly successful with sustainable products and services for over ten years, and we aim to further extend our leading position with innovations that go beyond what people can imagine today.

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Sustainability

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Sustainability is also extremely important within our own operations. We published details on the implementation of our climate strategy for the first time in mid-2023, in our Public Carbon Transition Plan. In it, we describe our goals, measures, progress and implementation plans. We will update the Carbon Transition Plan on an annual basis.

"Krones' entire R&D strategy is geared towards the sustainability needs of our customers. The new target picture makes for even greater clarity and agility in our innovation processes. Our goal is to deliver the most sustainable solutions in the beverage industry."

Markus Tischer, Executive Board Member International Operations and Services

Right: Customers' wishes and ideas recorded at drinktec 2022

1 | 20

Service and digitalisation

Better performance with digital services

Service and digitalisation go hand in hand at Krones. We develop industry-specific digital services based on the experience of our 3,000-strong service team and countless interactions with customers.

Working together with our customers, we make the adjustments needed to optimise line performance and thus reduce total cost of ownership (TCO).

Among other things, our smart digital solutions enable customers to save material, valuable resources and waste. They also shorten downtimes and changeover times while reducing the workload for operating personnel.

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Service and digitalisation

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So that we can be quickly on the spot at any customer around the world, we have service companies and lifecycle service centres on every continent. The closer we are to our customers, the faster we can solve their problems.

"Digitalisation is a key enabler for making the industry sustainable. It makes for smarter and more e²cient problem solving. In combination with our expertise in conventional mechanical engineering, in production processes and lifecycle service, we will go on to develop many more solutions that exceed expectations."

Markus Tischer, Executive Board Member International Operations and Services

1 | TO OUR SHAREHOLDERS Shaping the future

1 | 22 Strategic focus in the segments

Strategic focus in the segments

"Solutions beyond tomorrow" determines the strategic direction of our segments.

Filling and Packaging Technology

In our core segment, we focus on integrated packaging solutions, resource e¥ciency and making circularity work.

Process Technology

We position ourselves here as an innovation driver for our customers' products in the food and beverage industry.

Intralogistics

Our focus in this segment is on fully automated and flexible solutions.

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Strategic focus in the segments

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"Thanks to a strong capital base, Krones is able to make the investments in our segments required for ›Solutions beyond tomorrow‹ out of its own resources. This investment in a sustainable and liveable future will pay o¶ in the long term, not only for our customers, but also for Krones."

Uta Anders, CFO

In order to achieve our ambitious goals, we place a clear strategic focus – in all three segments – on the core areas of sustainability, service quality and digitalisation.

Integrated packaging solutions

Process Technology as driver of food and beverage innovation

Fully automated, flexible intralogistics

Filling and Packaging Technology Sustainability Digitalisation

Process Technology Intralogistics

Superior services

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Examples from the segments: Filling and Packa-

ging Technology

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Filling and Packaging Technology

Responsible use of packaging materials: ShoulderFlex

Krones won the German Packaging Award 2023 in the Sustainability category with the ultra-lightweight ShoulderFlex bottle. This weighs just 5.9 grams and saves up to 50% of the plastic of a standard 0.5-litre PET water bottle. It represents an important contribution by Krones to reducing the carbon footprint of bottled water producers and promotes the responsible use of packaging materials.

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Examples from the segments: Filling and Packaging Technology

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Responsible use of packaging materials: LitePac Top Strap

Plastic can be completely eliminated from secondary packaging. The 100% recyclable, plastic-free LitePac Top Strap packaging solution is the latest Krones innovation in the LitePac Top secondary packaging system, which is based on a recyclable paper carrying handle. LitePac Top Strap adds a strap of tear-resistant kraft paper for extra carrying stability.

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Examples from the segments: Filling and Packa-

ging Technology

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Conserving water: Innovative water recycling

Water is a scarce and valuable resource on our planet. With its innovative products, Krones aims to minimise water consumption in beverage production and filling.

An example is an innovative water recycling system with which Krones saves large volumes of rinsing water on can lines. Up to 90% of all rinsing water can be reused in this way and the fresh water consumption of a canning line is reduced by up to 50%.

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1 | 27 Examples from the segments: Process Technology

Process Technology Conserving water: Krones HydroCircle

Valuable water can also be saved in the brewing process. Today, about 3.0 to 3.5 litres of water are consumed for every litre of beer brewed.

The Steinecker Water Sustainability Concept features modules that can already reduce this by 0.7 to 1.0 litres. By recycling wastewater into process water with the Krones Hydro-Circle system, water consumption is even reduced to 1.7 to 1.9 litres per litre of beer brewed. That represents a saving of almost 50%, or around 1.5 litres of water per litre of beer brewed.

3.0–3.5 hl/hl*	Status quo Brewery equipped with state-of-the-art Steinecker equipment
2.3–2.5 hl/hl*	Optimisation variant 1 Steinecker brewery including water sustainability concept Without HydroCircle (recycling of wastewater to process water)
1.7–1.9 hl/hl*	Optimisation variant 2 Steinecker brewery including water sustainability concept With HydroCircle (recycling of wastewater to process water)

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Examples from the segments: Process Technology

Combating climate change: Alternative proteins

There are many reasons for eating foods made from plant-based proteins, ranging from combating climate change and avoiding animal products to maintaining a health-conscious diet. So many reasons, in fact, that plant-based drinks and meat substitutes have developed from a niche product into a rapidly growing market within a short space of time.

In the processing of plant-based dairy alternatives, we benefit from decades of experience in process and brewing technology, as well as in the treatment and filling of animal dairy products.

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1 | 29 Examples from the segments: Process Technology

One relatively new technology is the production of meat alternatives using methods such as precision fermentation. Here, too, Krones can apply its experience in brewing processes to the production of vegan meat alternatives.

"Plant-based and cultured meats and other alternative protein sources allow people to enjoy favourite foods such as meat and dairy products without contributing to the problems associated with conventional livestock farming."

Source: Good Food Institute Europe

Plant-based food share of the European plant-based market 2022

Source: Good Food Institute Europe; Nielsen IQ

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1 | 30 Examples from the segments: Intralogistics

Intralogistics Protecting people: cold-store logistics

In addition to energy and cost savings, a core focus of "Solutions beyond tomorrow" in the Intralogistics segment is improving occupational safety and workplace conditions for customers' employees.

Our intralogistics subsidiary System Logistics achieved this outstandingly for the Tosano Group, which operates 19 supermarkets in northern Italy. System Logistics optimised the frozen products warehouse with a fully automated storage and picking system. This significantly improved the working conditions for warehouse employees. Robots now carry out all work in the cold store, which at 28 degrees Celsius below zero is a hostile environment for humans.

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Workforce bringing "Solutions for tomorrow" to life

The group's employees are crucial to the successful realisation of our target picture. With their actions and commitment, they shape the future of Krones. In a rapidly changing world, the flexibility and creativity of our international workforce is one of our most important assets. Our success at managing the latest challenges underscores the great resilience of our company.

As a diverse organisation operating worldwide, we are open to change. We promote global collaboration and set ambitious goals to drive our performance and development. To accomplish these, all employees constantly ask themselves "how can I contribute – how can I improve in order to achieve our challenging goals?" The entire international team of around 18,500 employees will pull together to realise our great shared goal: shaping a sustainable, liveable future for us all with "Solutions beyond tomorrow".

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Employees

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Employees

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"Our goals are ambitious – just like our international Krones team. So I am sure that our motivated and flexible workforce will breathe life into our target picture for the long term. Krones' target picture is not a status quo, but a long and challenging journey into the future. The first steps show great promise."

Christoph Klenk, CEO

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Employees

Executive Board

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1 | 34 Letter from the Executive Board

"Krones has completed a very successful 2023 financial year. The entire workforce is living our target picture of "Solutions beyond tomorrow" and contributing to Krones' profitable and stable growth." Christoph Klenk CEO

Dear shareholders and friends of Krones,

Despite all the economic and political uncertainties, 2023 was yet another highly successful nancial year for Krones. The entire Krones team has performed exceptionally well. In a very positive year, our new target picture, "Solutions beyond tomorrow", played a signicant role from the start by providing our workforce with additional guidance and motivation. The rst full nancial year of "Solutions beyond tomorrow" has already brought numerous examples of successful projects that are based on it. We present a number of these in more detail in our cover story (pages 6 to 33).

Krones also beneted from the stable growth of the beverage and liquid food market during the reporting year. Customers in the international food

and beverage industry continue to be very keen to invest. This demonstrates that our customer industries and with them Krones are less aected by cyclical uctuations. Leveraging our strong global footprint and our innovative and future-oriented product and service portfolio, Krones maintained and expanded its leading market position.

Very positive figures in the 2023 financial year – significant growth in revenue and earnings

Order intake once again reached a very good level at €5.38 billion – as expected, below the previous year's extremely high gure of €5.78 billion. The continuing very high level of incoming orders led to a further 19% increase in the order backlog to reach an all-time high of €4.12 billion at the end of 2023.

Revenue also developed very positively. Thanks to intelligent production management and the great exibility and creativity of the workforce, we increased revenue in 2023 despite the short supply of electrical components by 12.2% to €4.72 billion. The company thus met its full-year 2023 growth target, which was raised in July 2023 to between 11% and 13% (previously 8% to 11%).

Krones also further enhanced protability during the reporting period, despite rising costs. The company beneted from the strategic measures taken in recent years to reduce costs and increase eciency. We will continue the disciplined implementation of these measures and add new ones. The rigorous implementation of our pricing strategy also had a positive impact on protability in 2023. Krones improved protability, as measured by the EBITDA margin, to 9.7% in the reporting period (previous year: 8.9%). Our third nancial target indicator, return on capital employed (ROCE), went up from 14.1% to 16.3%.

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Shareholders benefit from the company's success – increase in the dividend from €1.75 to €2.20

Our shareholders are also to benet from the good results. Krones will therefore signicantly increase the dividend. Shareholders are to receive a dividend of €2.20 per share for the 2023 nancial year, up 26% from €1.75 per share in the previous year.

Continued importance of sustainability for Krones and customers

The opportunities for Krones in the growing and essential food and beverage market are huge, but they come with signicant social responsibility. We address this responsibility by contributing to sustainable production with future-ready, innovative technologies.

Sustainability and resource-ecient production will remain the most important innovation and growth drivers for our industry in the years ahead. Our customers' ambitious sustainability goals can be achieved with our energy and media-ecient products and services. The sustainable, TÜV-certied enviro product range which we have developed dynamically over the years accounted for a signicant proportion of our order intake in the 2023 nancial year.

Sustainability is also crucial within our own operations. Krones improved many sustainability performance indicators during the reporting year. Further details can be found in the non-nancial statement on pages 85 to 145. We published details on the implementation of our climate strategy for the rst time in mid-2023, in our public Carbon Transition Plan. In it, we describe our goals, measures, progress and implementation plans in detail.

Weak global economy and further risks in 2024

Despite the good business results and prospects, we must continue to be vigilant. The global environment remains unstable. This is demonstrated by the latest geopolitical conicts, which could have a negative impact on the global economy at any time. The experts at the International Monetary Fund (IMF) forecast global economic growth of 3.1% this year. This is once again well below the average growth of 3.8% for the global economy (2000–2019). At the same time, global supply chains and procurement markets continue to be highly vulnerable to disruption. A challenge in 2024 will continue to be the timely procurement of sucient materials and supplier parts to maintain good production capacity utilisation.

The Executive Board expects further improvements in revenue and profitability in the current year

Despite the ongoing uncertainties, Krones is optimistic for the 2024 nancial year and beyond. We started this current year with the biggest order backlog in our company's history. Demand for our products and services remains at a high level. Additionally, assuming no new disruptive factors, we anticipate that the situation on relevant procurement markets will develop better overall. Based on the expected positive market trend and Krones' strong position, the Executive Board expects consolidated revenue in 2024 to be between 9% and 13% higher than last year.

Krones is aiming for a further improvement in protability this year compared to 2023. Alongside higher revenue, the ongoing implementation of the cost optimisation measures will also contribute here. What is more, with the aid of inno-

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1 | 36

vative solutions and good project execution at customers, Krones has been able to achieve appropriate price adjustments to oset cost increases in recent year. At group level, we forecast an EBITDA margin of 9.8% to 10.3% for 2024. Krones plans to improve our third target, ROCE, to between 17% and 19% in the current year.

Acquisitions remain part of the growth strategy

We have continued to successfully implement our acquisition strategy, both in the reporting period and also already in the current year. With the acquisition of US-based Ampco Pumps in the second quarter of 2023, we expanded our components business in Process Technology to include high-quality pumps and significantly added to our sales potential in the US market. Following the completion of the forthcoming acquisition of the Swiss injection moulding machine manufacturer Netstal, which is planned for the rst half of 2024, Krones will be able to oer its customers all important machines, lines and services for the complete PET packaging cycle. Netstal also underpins Krones' strategy of extending the customer focus to the medical/pharmaceutical, cosmetics and food industries. Acquisitions of medium-sized, protable companies continue to be part of our growth strategy.

2025 financial targets will already be largely achieved in 2024

All in all, Krones is well on track to meet its targets for 2025 set at the end of 2021. We planned to generate revenue of at least €5 billion by 2025. Based on our guidance for 2024, we will already meet this target in the current year. The target for the EBITDA margin in 2025 is between 10% and 13%. With our EBITDA margin

forecast of 9.8% to 10.3% for 2024, we are well on track to already reach the target range for 2025 this year. Consequently, the Executive Board will publish a new medium-term forecast in the course of 2024.

Flexible, creative and motivated – the Krones team makes the dierence

Our employees were the key driver behind another strong business performance last year. Their creativity, exibility and motivation form the foundation for our company's ability to deliver projects on time and with top quality. Customers value Krones for this. The innovativeness of our team consistently gives our company the necessary edge, reinforcing our ambitious goal of delivering "Solutions beyond tomorrow" – solutions that surpass customers' expectations.

On behalf of the entire Executive Board, I would like to take this opportunity to thank all employees for their outstanding commitment in the 2023 nancial year. They work every day to realise our shared vision: Sustainable and aordable beverages, food and essentials for everyone and everywhere. I am condent that we, the Krones team, will realise our vision and continue our protable growth in the long term.

Christoph Klenk CEO

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FINANCIAL STATEMENTS

1 | 37 The Executive Board

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1 | 38 Report of the Supervisory Board

Board

Volker Kronseder Chairman of the

Ladies and Gentlemen,

Krones once again faced a range of challenges in 2023. One example was the short supply of electrical components for much of the year. The company was also aected by the global economic impacts of the Russia-Ukraine conict and other geopolitical tensions. Krones mastered all challenges well to complete a very successful 2023 nancial year. This was only possible because the entire Krones team worked hard for the company's success.

The Supervisory Board and Executive Board of Krones AG worked together eciently and in a spirit of trust in 2023. Looking ahead, the Supervisory Board Supervisory Board

will continue to provide the Executive Board with support and advice, particularly in the implementation of the company's strategic goals. In this way, the Supervisory Board helps ensure that the Krones team will be successful in shaping the future around the company's new target picture, "Solutions beyond tomorrow".

Advice and oversight

As prescribed by the German Stock Corporation Act and the company's articles of association, the Supervisory Board of Krones AG continuously oversaw and advised the Executive Board during the 2023 nancial year and discharged its responsibilities with due care.

Provisions of the German Stock Corporation Act and the German Corporate Governance Code concerning the Executive Board's reporting obligations to the Supervisory Board were complied with at all times. The Executive Board regularly informed the Supervisory Board about the company's business and nancial situation and risk management in written and oral reports both during and outside of Supervisory Board meetings. With regard to decisions of particular signicance to Krones AG and the Krones Group, the Supervisory Board was informed and involved by the Executive Board at an early stage. The Chairman of the Supervisory Board and the Chief Executive Ocer in particular maintained regular personal contact between meetings. In that connection, they jointly discussed matters of corporate strategy, current business performance, the risk situation, risk management and compliance.

Over the course of the 2023 nancial year, the Supervisory Board focused on strategic issues such as sustainability and M&A, together with issues relating to corporate governance at Krones.

Changes in membership of the Supervisory Board

The end of the annual general meeting on 23 May 2023 brought changes in the membership of the Supervisory Board of Krones AG. On the shareholder side, Hans-Jürgen Thaus and Norbert Samhammer stepped down. On the employee side, Jürgen Scholz le¾ the Supervisory Board prior to his retirement on 1 June. On behalf of the entire Supervisory Board, I would like to thank all three former members for their many years of exceptional service on the Supervisory Board. They have made a major contribution to Krones' success.

Board

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FINANCIAL STATEMENTS

1 | 39

For the two members who stepped down on the shareholder side, the annual general meeting on 23 May 2023 elected Norbert Broger and Stephan Seifert as new members of the Supervisory Board. Olga Redda joined as a new representative of the employee side.

Krones provided the new Supervisory Board members with appropriate support during their induction. Among other things, they were provided with a virtual Supervisory Board handbook. This contains key information on the role of the Supervisory Board as a body and of its tasks and duties, the rules of procedure for the Supervisory Board and Management Board, including transactions requiring approval, and other documents relating to corporate governance at Krones. The Supervisory Board handbook is continually updated and regularly distributed to all Supervisory Board members in digital form.

Undergoing suitable further training and professional development is at the personal discretion of the members of the Supervisory Board. In the reporting year, individual Supervisory Board members underwent further training, with the support of Krones, on topics such as articial intelligence, new working conditions on the Supervisory Board and sustainability reporting.

No conflicts of interest

According to recommendation E.1 of the German Corporate Governance Code, each member of the Supervisory Board is required to disclose conicts of interest to the Chairman of the Supervisory Board without delay. No conicts of interest were disclosed in the reporting period.

Attendance at Supervisory Board meetings

In total, six ordinary Supervisory Board meetings and two extraordinary Supervisory Board meetings were held in 2023. The Executive Board attended some meetings in a guest capacity. As a rule, however, the Supervisory Board met without the Executive Board. All six ordinary Supervisory Board meetings in the 2023 nancial year and the extraordinary Supervisory Board meeting on 13 September 2023 were held in person, although it was possible for individual Supervisory Board members to take part in the meetings by video link or telephone if required. The extraordinary Supervisory Board meeting on 15 December 2023 was held as a video and telephone conference.

In accordance with Recommendation D.7 of the German Corporate Governance Code, we provide the following information on meeting attendance by individual members of the Supervisory Board:

Supervisory Board member	Number of meetings	Meetings attended
Volker Kronseder	8	8
Josef Weitzer	8	8
Norbert Broger¹	7	7
Nora Diepold	8	4
Robert Friedmann	8	6
Oliver Grober	8	8
Thomas Hiltl	8	8
Markus Hüttner	8	8
Prof. Dr. jur. Susanne Nonnast	8	8
Dr. phil. Verena Di Pasquale	8	8
Beate Eva Maria Pöpperl	8	8
Stefan Raith	8	8
Olga Redda¹	7	6
Norbert Samhammer²	1	1
Petra Schadeberg-Herrmann	8	8
Jürgen Scholz²	1	1
Stephan Seifert¹	7	5
Hans-Jürgen Thaus²	1	1
Matthias Winkler	8	8

¹ Member of the Supervisory Board since 23 May 2023 ² Member of the Supervisory Board until 23 May 2023

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Supervisory Board meeting reports

Board

The rst meeting of the Supervisory Board in the 2023 nancial year took place on 22 March. At this meeting, the Supervisory Board primarily dealt with the annual nancial statements of Krones AG and the Krones Group for 2022. A representative of Krones' auditors attended for a portion of the meeting as a guest. CFO Uta Anders provided the Supervisory Board with a presentation of how the key nancial performance indicators developed in the 2022 nancial year. Following that, the representative of Krones' auditor gave the Supervisory Board an explanation of the audit engagement together with the focal points of the review of the annual nancial statements and details of the audit. He remained available for the Supervisory Board's questions and answered them in full. The Supervisory Board's Audit and Risk Management Committee commented on the results of the audit. Finally, the Supervisory Board ratied the annual nancial statements and management report of Krones AG for 2022 and approved the 2022 consolidated nancial statements and group management report. The Supervisory Board also approved the non-nancial statement for 2022.

Under the "Supervisory Board and Executive Board matters" agenda item, the remuneration report of the Executive Board and the Supervisory Board was endorsed for approval at the annual general meeting. The ndings of the e ciency review on the work of the Supervisory Board were also presented.

Also at its rst meeting of 2023, the Supervisory Board dealt with the agenda for the 2023 annual general meeting and the necessary resolutions. With regard to the Supervisory Board's nomination for the election of new shareholder representatives, the Chairman of the Supervisory Board explained to the Supervisory Board the legal requirements for Norbert Broger to be elected to the Supervisory Board at the 2023 annual general meeting despite the cooling-o period rule under section 100 (2) sentence 1 no. 4 of the German Stock Corporation Act. Satisfying the requirement for this to be permitted under section 100 (2) sentence 1 no. 4 of the German Stock Corporation Act, the Supervisory Board had before it a nomination for election from shareholders holding more than 25% of the

voting rights in Krones AG. With regard to the prot distribution, the Supervisory Board determined that a dividend of €1.75 per share for the 2022 nancial year was to be proposed to the annual general meeting. A further topic of the Supervisory Board meeting was the Executive Board's economic report. This provided the Supervisory Board with an explanation of the current business situation and economic conditions. In addition, CEO Christoph Klenk informed the Supervisory Board about potential acquisition targets. The Supervisory Board passed a resolution in this connection on the intended acquisition of Ampco Pumps, USA.

Following the annual general meeting, the Supervisory Board met on 23 May for its second and constitutive meeting of the reporting year. Supervisory Board Chairman Volker Kronseder took leave of Hans-Jürgen Thaus, Norbert Samhammer and Jürgen Scholz, who stepped down at the end of the annual general meeting, and thanked them for their successful work. At the same time, the Chairman of the Supervisory Board welcomed the new Supervisory Board members Norbert Broger, Stephan Seifert and Olga Redda. At the constitutive meeting, the Supervisory Board re-elected Volker Kronseder as Chairman of the Supervisory Board and Josef Weitzer as his deputy. In addition, the Audit and Risk Management Committee and the Standing Committee of the Supervisory Board were established and their membership decided. In the Executive Board's report, the Executive Board informed the Supervisory Board about the key gures for the rst quarter of 2023, the current business situation and the status of the planned acquisition of Ampco Pumps.

The third meeting of the Supervisory Board in 2023 took place on 19 July in Fiorano Modenese, the headquarters of Krones' Italian subsidiary System Logistics. At this meeting, among other things, Executive Board provided the Supervisory Board with detailed information on the business situation and on the market and competitive situation. In addition, the Executive Board briefed the Supervisory Board with an update on the M&A strategy and on potential acquisition targets.

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1 | 41

The Supervisory Board held an extraordinary meeting on 13 September 2023. The reason for the meeting was the removal of Krones shares from the DAX index family, as announced by STOXX Ltd., a subsidiary of Deutsche Börse AG, on 5 September 2023 following the periodic review of the composition of the indices. The background to the removal of Krones shares from the DAX index family was as follows: In July 2023, Krones published on its website an updated version of the declaration of conformity from January 2023. In it, the company gave the reasons for a partial departure from Recommendation C.10 of the German Corporate Governance Code (the "Code"). Krones had thus complied with the "comply or explain" approach under the Code. However, due to the partial departure from recommendation C.10 of the Code, a basic criterion for inclusion in the DAX index family specied in the rules and regulations of STOXX Ltd. was no longer fullled. With the election of Matthias Winkler as the new Chairman of the Audit and Risk Management Committee at the meeting of that committee on 13 September 2023, Krones once again fully complied with Recommendation C.10 of the German Corporate Governance Code. At the extraordinary meeting, the Supervisory Board adopted an updated declaration of compliance, which was promptly published on the company's website. In it, the company declared that, as from 13 September 2023, it once again fully complied with Recommendation C.10 of the Code and there was no longer any non-compliance. As a result, Krones once again met all the basic criteria for inclusion in the DAX index family as specied in the rules and regulations of STOXX Ltd., thus clearing the way for a quick return to the index family.

The Supervisory Board held its fourth ordinary meeting and ¾h meeting overall of 2023 on 24 October. At this meeting, the Supervisory Board updated its rules of procedure. A key topic at the meeting was cyber security. The Supervisory Board was provided with detailed information on the current status and further development of measures to ensure data security in Krones' IT systems and production facilities, as well as in the company's products. A further item on the agenda was the Executive Board's economic report on the current business situation and further outlook. The Executive Board also informed the Supervisory Board about current developments in Krones' sustainability

strategy. In addition, the Supervisory Board was provided with an overview of current and upcoming legislative changes aecting Krones.

The Supervisory Board met for its sixth meeting in 2023 on 5 December. A focus of this meeting was Krones' strategic direction. The members of the Executive Board informed the Supervisory Board in detail about the growth strategy, the expansion of the company's global footprint and the implementation of the sustainability strategy in the individual segments and business units. A further topic at the Supervisory Board meeting comprised the additional opportunities for Krones involving digitalisation and articial intelligence. The Executive Board also provided the Supervisory Board with new information on acquisitions.

The Supervisory Board held its seventh meeting of 2023 on 6 December. A major item on the agenda was the report of the Audit and Risk Management Committee addressing the topics of risk management, internal auditing, compliance and the internal control systems. Committee chairman Matthias Winkler explained the subject matter of the committee meeting of 27 November 2023 and the determinations on the risk management system and its eectiveness. He gave the Supervisory Board a detailed presentation on the strategic risks and explained that, in the opinion of the Audit and Risk Management Committee, Krones' risk management system adequately reects the risks. He also reported on the review, carried out together with the Executive Board and with the support of external consultants, of the circumstances that led to the removal of Krones shares from the DAX index family. The Executive Board presented the annual and capital expenditure budget for 2024 for the Supervisory Board. The Supervisory Board approved the plans presented by the Executive Board. In addition, the Supervisory Board passed resolutions on the submission of the declaration of compliance in accordance with Section 161 of the German Stock Corporation Act and on an adjustment to the long-term incentive component of Executive Board variable remuneration. A further item on the meeting agenda was the specication and adjustment of the Supervisory Board's prole of skills and expertise.

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1 | 42

The second extraordinary meeting and the eighth Supervisory Board meeting overall of 2023 took place on 15 December. The Supervisory Board met via video link to pass a resolution on the acquisition of Netstal Maschinen AG, Näfels, Switzerland. The Executive Board had provided the Supervisory Board with detailed information about this intended acquisition at earlier meetings during the reporting year. The Supervisory Board gave the Executive Board approval for the purchase of the company.

The work of the Audit and Risk Management Committee

The Audit and Risk Management Committee comprises Volker Kronseder, Josef Weitzer, Norbert Broger, Markus Hüttner, Olga Redda and Matthias Winkler. Matthias Winkler chairs the committee. As tax adviser and partner in a tax consulting rm, he has the necessary expertise in accounting and auditing required by law, as does Norbert Broger (former Chief Finance Ocer of Krones AG).

The Audit and Risk Management Committee oversees the company's accounting and nancial reporting, the audit of the nancial statements and other reporting, and prepares related proposals for Supervisory Board resolutions. The Committee also prepares the Supervisory Board's review of the annual nancial statements, the management report and the auditor's report for the separate and consolidated nancial statements and makes recommendations. Furthermore, the Audit and Risk Management Committee monitors the quality of the nancial statements and the eectiveness of the internal control, risk management and compliance system.

The Audit and Risk Management Committee held six meetings in 2023. Both took place as in-person meetings, although it was possible for individual committee members to take part in meetings by video conference or telephone if required. In accordance with Recommendation D.7 of the German Corporate Governance Code, we provide the following information on meeting attendance by individual members of the Audit and Risk Management Committee:

Committee member	Number of meetings	Meetings attended
Matthias Winkler	6	6
Josef Weitzer	6	6
Norbert Broger¹	5	5
Markus Hüttner	6	6
Volker Kronseder	6	6
Jürgen Scholz²	1	1
Olga Redda1	5	5
Hans-Jürgen Thaus²	1	1

¹ Member of the committee since 23 May 2023

² Member of the committee until 23 May 2023

At its rst meeting of the year on 16 March 2023, the Audit and Risk Management Committee dealt mainly with the reporting on the annual nancial statements and consolidated nancial statements of Krones AG as of 31 December 2022, the auditor's report on the audit of the annual nancial statements and consolidated nancial statements of Krones AG as of 31 December 2022, and the non-nancial statement for 2022. The Audit and Risk Management Committee prepared recommendations on these matters for resolutions of the Supervisory Board at its meeting on 22 March 2023. The committee also prepared the Supervisory Board's resolution on the election of the auditor for Krones AG and the Krones Group at the 2023 annual general meeting.

The second and constitutive meeting of the Audit and Risk Management Committee took place on 23 May a¾er the Supervisory Board meeting. The membership of the Audit and Risk Management Committee was decided at the Supervisory Board meeting, which was held following the annual general meeting. Norbert Broger and Olga Redda joined the committee to replace Hans-Jürgen Thaus and Jürgen Scholz, who ceased to be members of the Supervisory Board at the end of the annual general meeting. At the committee's constitutive meeting, the committee members elected Norbert Broger as chairman and Josef Weitzer as deputy chairman of the Audit and Risk Management Committee.

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1 | 43

The Audit and Risk Management Committee held its third meeting of the reporting year on 13 September. At the meeting, Norbert Broger stepped down as committee chairman. Matthias Winkler was elected as the new chairman. The election of the new chairman was occasioned by the removal of Krones shares from STOXX Ltd.'s DAX index family. The shareholder representatives on the Supervisory Board had decided as a precautionary measure that Norbert Broger, as a former Chief Finance Ocer, should be classied as not being independent of the company and of the Executive Board within the meaning of Recommendation C.7 of the German Corporate Governance Code. Krones consequently partially ceased to comply with Recommendation C.10 of the Code and gave the reasons for this in the updated declaration of conformity published in July 2023. Krones had thus complied with the "comply or explain" approach under the Code. However, due to the partial departure from recommendation C.10 of the Code, a basic criterion for inclusion in the DAX index family specied in the rules and regulations of STOXX Ltd. was no longer fullled.

The Audit and Risk Management Committee was provided with further information and reporting on the causes and consequences of the removal of Krones shares from the DAX index family at the meetings held on 28 September, 19 October and 27 November. The committee worked together with the Executive Board and with the support of external consultants on a review of the circumstances that led to the removal from the DAX index family.

At the sixth meeting of the Audit and Risk Management Committee on 27 November, the heads of function informed the committee in detail about internal auditing, corporate governance and compliance, and risk management. A major topic was the eectiveness of Krones' risk management system. The Audit and Risk Management Committee was also provided with comprehensive information by the head of function on the subject of cyber security. Sustainability matters focused on new European legislation for reporting (the CSRD and the ESRS).

The work of the Standing Committee

The Standing Committee consists of Volker Kronseder, Josef Weitzer, Markus Hüttner and Prof. Dr. jur. Susanne Nonnast. It is chaired by Volker Kronseder. The committee generally deals with all other topics that are outside the remit of the Audit and Risk Management Committee. These include, for example, human resources strategy and Executive Board and Supervisory Board remuneration.

Two meetings were held in 2023, both as an in-person meeting. In accordance with Recommendation D.7 of the German Corporate Governance Code, we provide the following information on meeting attendance by individual committee members:

Committee member	Number of	Meetings
	meetings	attended
Volker Kronseder	2	2
Josef Weitzer	2	2
Markus Hüttner	2	2
Prof. Dr. jur. Susanne Nonnast	2	2

At its rst meeting of 2023 on 16 March, the Standing Committee prepared the recommendation to the Supervisory Board regarding the election of new members to the Supervisory Board at the 2023 annual general meeting. The Standing Committee resolved to recommend to the Supervisory Board that Norbert Broger and Stephan Seifert should be nominated to the annual general meeting for election to the Supervisory Board as new shareholder representatives.

The Standing Committee's second meeting of the reporting period took place on 27 November. A major topic was the recommendation to the Supervisory Board for a revision of the long-term incentive (LTI) performance-related remuneration component of the Executive Board remuneration system with regard to various sustainability aspects.

Supervisory Board concurs with audit results

The annual nancial statements of Krones Aktiengesellscha¾ prepared by the Executive Board, the consolidated nancial statements, the management report for Krones AG and the group management report for the period ended 31 December 2023 were examined by the auditors elected by the annual general meeting, EY GmbH & Co. KG Wirtscha¾sprüfungsgesellscha¾ (formerly Ernst & Young GmbH Wirtscha¾sprüfungsgesellscha¾), and each issued with an unqualied audit report. The audited annual nancial statements and consolidated nancial statements, the management report for Krones AG and the group management report for the period ended 31 December 2023 were duly submitted to all members of the Supervisory Board for review. The audited nancial statements and management reports were the subject of the Supervisory Board meeting held to ratify the nancial statements on 21 March 2024. The auditor also attended for part of that meeting and informed the Supervisory Board of the audit results and the focal points of the audit.

The Supervisory Board noted and approved the audit results. No objections were raised following the nal review by the Supervisory Board, which covered in particular the matters described in the auditor's audit report including the audit procedures. The Supervisory Board has ratied the annual nancial statements of Krones AG and approved the consolidated nancial statements as well as the Executive Board's proposal for the appropriation of earnings available for distribution. The 2023 annual nancial statements for Krones AG are thus ratied.

The auditors included in their audit the Executive Board's report, in accordance with section 312 of the German Stock Corporation Act, on Krones AG's relations to aliated companies and submitted their audit report to the Supervisory Board. The audit by the auditors did not give rise to any objections. The auditor issued the following unqualied audit opinion on the dependency report: "Based on our due audit and assessment, we conrm that

the statements as to fact made in the report are accurate,
the consideration given by the company in respect of the legal transactions referred to in the report was not unreasonably high."

The Supervisory Board's review of the report, in accordance with section 312 of the German Stock Corporation Act, on Krones AG'S relations to aliated companies did not give rise to any objections. The Supervisory Board therefore concurred with the results of the audit by the auditors. Following the nal outcome of its own review, the Supervisory Board did not raise any objections to the Executive Board's concluding declaration on relations with aliated companies.

In addition to the statutory audit, EY GmbH & Co. KG Wirtscha¾sprüfungsgesellscha¾ (formerly Ernst & Young GmbH Wirtscha¾sprüfungsgesellscha¾), also performed a limited assurance review of the combined non-nancial statement of Krones AG and the Krones Group for the period from 1 January to 31 December 2023, which is part of the group management report. On the basis of that review, the auditor did not raise any objections to the non-nancial statement and the fullment of the statutory requirements in relation to it.

Thanks to the Executive Board and the workforce

Krones completed 2023 with very good results. This is largely due to the exceptional work of the committed and motivated Krones team. The members of the Supervisory Board would like to thank the Executive Board and all of the company's employees for their contribution to the successful 2023 nancial year.

Neutraubling, March 2024 The Supervisory Board

Volker Kronseder Chairman of the Supervisory Board

CORPORATE GOVERNANCE

FINANCIAL STATEMENTS

5 | NOTES TO THE CONSOLIDATED 6 | OTHER INFORMATION

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1 | TO OUR SHAREHOLDERS 3 | DECLARATION ON CORPORATE GOVERNANCE 4 | CONSOLIDATED

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5 | NOTES TO THE CONSOLIDATED 6 | OTHER INFORMATION

1 | 46 The Supervisory Board

Volker Kronseder Chairman of the Supervisory Board

* University Hospital Regensburg * Economic Advisory Board, Bayerische Landesbank

Josef Weitzer** Deputy Chairman of the Supervisory Board Chairman of Group Works Council Chairman of the Central Works Council Chairman of the Works Council Neutraubling

* Bay. Betriebskrankenkassen

Norbert Broger Diplom-Kaufmann

Nora Diepold Chief Executive OÎcer NK Immobilienverwaltungs GmbH, Regensburg

Robert Friedmann Chairman of the central managing board of the Würth Group

* ZF Friedrichshafen AG

Oliver Grober** Chairman of the Works Council, Rosenheim

Thomas Hiltl** Chairman of the Works Council, Nittenau

Markus Hüttner ** Deputy Chairman of the Group Works Council Deputy Chairman of the Central Works Council Deputy Chairman of the Works Council Neutraubling

1 | TO OUR SHAREHOLDERS 3 | DECLARATION ON The Supervisory Board

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1 | 47

Prof. Dr. jur. Susanne Nonnast Professor at Ostbayerische Technische Hochschule (OTH) Regensburg

Dr. phil. Verena Di Pasquale** Deputy Chairperson of DGB Bayern (the German Trade Union Confederation in Bavaria)

Beate Eva Maria Pöpperl ** Works Council representative (released from all other responsibilities)

Stefan Raith** Head of Business Line, Line Solutions

* re-sult AG, Regensburg

Olga Redda ** Second authorised representative and managing director, IG Metall Regensburg

* OSRAM Licht AG
* OSRAM GmbH
* ams OSRAM International GmbH
* Maschinenfabrik Reinhausen GmbH

Petra Schadeberg-Herrmann Managing partner Krombacher Brauerei Bernhard Schadeberg GmbH & Co. KG, Krombacher Finance GmbH, Schawei GmbH, Diversum Holding GmbH & Co. KG

Stephan Seifert Chairman of the Executive Board of Körber AG, Hamburg

* Board of trustees of the Körber Foundation

Matthias Winkler Partner at Baker Tilly Germany

The Krones share

""After significantly outperforming the stock market in 2022, our shares closed the reporting year up 6.5% thanks to the good business

Head of Investor Relations

results." Olaf Scholz

New records on the stock markets

Krones share price up 6.5%
Dividend to increase to €2.20 per share for 2023

Global equity markets rise sharply in 2023

A¾er a decline in 2022, stock markets got o to a very dynamic start in the new year. This was driven by falling energy prices and ination rates. The positive sentiment lasted until early March. Share prices then took a price collaps, triggered by a number of US bank failures and the collapse of Credit Suisse, the major Swiss bank. Rescue packages quickly put together by major countries and central banks proved eective in calming the markets. Supported by hopes that the cycle of central bank interest rate increases would end earlier than expected, share prices then rose overall until mid-year.

This was followed by a weak third quarter, mainly due to developments in the bond markets. Long-term interest rates rose sharply in both the US and Europe between July and September 2023. Share prices fell further in October on the back of geopolitical tensions (Middle East). The turnaround came at the end of the month, when stock markets began a strong year-end rally. The prospect of several interest rate cuts by the US Federal Reserve in 2024 led to a sharp rise in share prices. On 14 December, the DAX reached 17,000 points for the rst time in its history. It closed the year at 16,752 points. The DAX thus rose by 20.3% in 2023. The Euro Stoxx 50, the index of the largest market capitalisations in the eurozone, rose even more, by 28.2% in 2023.

Other major international stock markets also performed well in 2023. Driven by enthusiasm for articial intelligence, the US Nasdaq 100 climbed 53.8%. The broad-based S&P 500 rose by 24.2%. The most prominent US share index, the Dow Jones, gained 13.7%. Japan's Nikkei index closed the 2023 stock market year up 28.2%.

Krones shares close a volatile stock market year with a 6.5% price gain

Despite significantly outperforming the market in the previous year, Krones shares gained 6.5% in 2023 (8.1% including the dividend), roughly in line with the MDAX (up 8.0%). The SDAX climbed by 17.1%. After a weak third quarter, our share price once again performed relatively strongly in the fourth quarter.

Following slight gains in the rst two quarters of 2023, the Krones share price fell in the third quarter, along with many important stock market indices. A strong performance at the end of the year resulted in an increase of 6.5% for the year as a whole. The overall positive performance was supported by the company's good business results.

A¾er clearly outperforming the market in 2022, the Krones share price consolidated in the rst quarter of 2023. With a gain of 3.5%, it did not rise quite as a strongly during the rst quarter as the market as a whole. In the following month, Krones shares picked up speed again, reaching their high for the year at €120.30 on 28 April. The share price was driven here by expectations of positive business gures for the rst quarter of 2023. Following the release of the very good quarterly gures, the share price initially fell. Towards the end of the second quarter, our share price beneted from positive analyst commentary and from increased price targets in response to the positive business performance.

A decline in the share price in early July was followed by a sharp rise a¾er Krones raised its full-year revenue guidance for 2023 on 17 July. Our shares beneted from positive analyst comments. Following the publication of very strong half-year results on 1 August, the share price fell in accordance with the investor maxim of "sell on good news". In the weeks that followed, the share price fell, with uctuations, in line with the overall market. Krones shares reached their low for the reporting year at €89.25 on 26 October.

Publication of the strong gures for the third quarter gave the share price a signicant boost from November onwards. It maintained this positive momentum through to the end of the year and closed 2023 at €111.80, up 6.5% over the year. Including the €1.75 per share dividend, the annual performance of the Krones share price in 2023 was 8.1%. Despite signicantly outperforming the market in the previous year (with an increase of 9.5%), Krones shares thus performed roughly in line with the MDAX (previous year: down 28.5%), which rose by 8.0% in the reporting period. The SDAX rose by 17.1% in the reporting year (previous year: down 27.3%).

Key figures for the Krones share
At 31 December	2023	2022	2021
Earnings per share €	7.11	5.92	4.47
Equity per share €	54.3	50.58	44.05
Free cash flow per share €	– 3.21	11.74	6.43
Price-earnings (P/E) ratio
based on closing price for the year	15.7	17.7	21.5

Dividend per share €	2.20 *	1.75	1.40
High €	120.30	111.40	99.60
Low €	89.25	67.50	64.30
Year's closing price €	111.80	105.00	95.90

*As per proposal for the appropriation of earnings available for distribution; share price data source: Xetra

1 | 50 Krones shares significantly outperform MDAX over 10-year period

The Krones share price has risen by an average of 6.0% per year over the last ten years. Including dividends, the average annual performance was 7.7%.

The Krones share price rose by a total of 79% between 2014 and 2023. This corresponds to an average annual price gain of 6.0% over the ten-year period. The MDAX Price Index – the MDAX excluding dividends – gained an average of 2.9% per year over

the same period. Krones shares are thus a clear outperformer. This also applies when dividends are included. Including dividends, and assuming that they are reinvested in Krones shares a¾er payout, the average annual return on our shares since 2014 comes to 7.7%. The comparable MDAX Performance Index rose by an average of 5.1% per year over the last ten years.

Eventful index year for Krones shares

Following their promotion from the SDAX to the 50-share MDAX mid-cap index on 19 June 2023, Krones shares briey le¾ the DAX index family altogether on 18 September 2023. The reason for this was that in the periodic index review in early September, it was determined that Krones shares temporarily no longer fullled one of the basic criteria for index

Krones shares had an eventful year in terms of index family membership. At the end of the reporting period, the shares were listed in the MDAX, one stock exchange league higher than in the previous year (SDAX).

membership. Krones took immediate action and by mid-September had once again fullled all basic criteria for a return to the DAX index family.

At the beginning of October, as the result of an unscheduled index adjustment, Krones was admitted to the SDAX with eect from 9 October 2023. In December, on the basis of the "fast entry" rule, the company was promoted back to the MDAX with eect from 18 December due to its high free oat capitalisation.

Key data for the Krones share
Number of shares	31,593,072
German securities identification number	633500
ISIN	DE 0006335003
XETRA ticker symbol	KRN

Shareholder structure

Krones' shareholder structure remained largely unchanged in the reporting period. At 31 December 2023, Familie Kronseder Konsortium GbR held the majority of Krones AG's shares, with 52.1%. The Kronseder family intends to remain a stable majority shareholder of Krones AG. 5.8% of the shares were held by the Schadeberg family as of the reporting date.

Analyst recommendations for the Krones share

At the end of December 2023, 14 recommendations for Krones shares were available from analysts at various institutes. These included twelve buy recommendations. One analyst rated the Krones share as a hold, while one recommended selling.

The company once again signicantly improved earnings in 2023 compared to the previous year. Shareholders are also to benet from the positive business results. Krones' long-term dividend policy is to pay out 25% to 30% of consolidated net income to shareholders. For the 2023 nancial year, Krones plans to increase the dividend to €2.20 per share (previous year: €1.75). This corresponds to 31.0% of consolidated net income.

* As per proposal for the appropriation of earnings available for distribution

Fundamental information about the group

	CONSOLIDATED MANAGEMENT REPORT
2	Fundamental information about the group Krones at a glance	53
	2023 in review	57
	Systems and lifecycle service – performance matters .	. 61
	Strategy and management system	64
	Research and development (R&D)	79
	Non-Financial Statement	85
	Report on economic position
	Economic environment146
	Krones in figures . .155
	Report from the segments . .171
	Overall assessment of economic position177
	Employees178
	Risk and opportunity report . .180
	Report on expected developments 193
	Takeover-related disclosures . .198
	Dependency report202

MANAGEMENT REPORT Fundamental Information about the group Krones at a glance

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Krones at a glance

Business model, business areas and organisational structure

Krones (KRONES AG and its subsidiaries) oers machinery and systems for lling and packaging and for beverage production. Process technology and innovative digitalisation and intralogistics solutions round out our portfolio. Krones' customers include breweries, beverage producers and companies from the food, chemical, pharmaceutical and cosmetic industries. Services are an important part of Krones' business model. Krones maintains service centres and oces around the world.

Beginning in 2022, Krones reports on three segments: Filling and Packaging Technology, Process Technology and Intralogistics. The Intralogistics segment came under the Process Technology segment until 2021.

Major markets and competitive position

Customers in the beverage industry account for most of Krones' revenue. The remaining revenue comes from business in non-beverage sectors (food, dairy, chemicals, pharmaceuticals and cosmetics).

Krones is heavily export-oriented, generating around 90% of consolidated revenue outside Germany. The regional revenue split is well balanced overall. In the reporting period, Krones generated 53.6% of its revenue in industrialised countries and 46.4% in the rapidly growing emerging and developing markets.

Krones Group revenue by region 2023

Apart from a few large companies that are part of a corporate group, such as KHS (Salzgitter) and Sidel (Tetra Laval Group), Krones competes with a number of companies that do not oer the entire lling and packaging technology product range. Most of our main competitors are based in the euro area. Chinese manufacturers have primarily competed against Krones for orders on their home market. In the two smaller segments, Process Technology and Intralogistics, Krones competes worldwide with major suppliers such as Gea and Kion and with smaller regional competitors.

Backed by our global service portfolio, which enables us to provide fast service to customers on-site, Krones is well positioned in the competitive arena

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MANAGEMENT REPORT Fundamental Information about the group Krones at a glance

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2 | 54 Filling and Packaging Technology segment

This is by far Krones' largest segment. It oers machines and lines for filling, labelling, packaging and conveying products. Machines and lines for producing PET containers and converting used plastic bottles into food-grade recycled material (PET recycling systems) are also part of this segment. A further important part of the segment is the service business.

Product treatment technology
Plastics technology Packing and palletising
Labelling technology technology
Inspection technology Conveyor technology
- Plastics recycling
Filling technology Cleaning technology

Revenue (€ million)

	2021	2022	2023
EBITDA (€ million)	283.2	332.7	402.3
EBITDA margin (%)	9.3	9.5	10.3

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MANAGEMENT REPORT Fundamental Information about the group Krones at a glance

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2 | 55 Process Technology segment

dairy drinks and alternative proteins. In addition to water treatment, the Process Technology segment also includes Evoguard 2021 2022 2023 Brewhouse and filtration technology Water treatment Alternative proteins Components (valves, pumps, etc.) See also Segment report, pages 173 and 225. 2021 2022 2023 Revenue (€ million) 296.6 367.5 453.3

This Krones segment supplies customers with machines and lines for producing and processing beer, soft drinks, fruit juices, milk, brand and Ampco Pumps brand components and the service business.

FINANCIAL STATEMENTS

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	2021	2022	2023
EBITDA (€ million)	18.6	20.4	34.7
EBITDA margin (%)	6.3	5.5	7.7

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MANAGEMENT REPORT Fundamental Information about the group Krones at a glance

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2 | 56 Intralogistics segment

Commencing in 2022, Krones reports on the Intralogistics business as a separate segment. In this segment, through subsidiary System Logistics, Krones provides the planning and design of fully automated warehousing, order-picking and material flow systems with high-speed feeders, conveyors and automated guided vehicle (AGV) systems. Services are an additional part of the segment.

Warehouse and material flow technology
System and software solutions
Conveyors and automated guided vehicles

	2021	2022	2023
EBITDA (€ million)	10.8	20.2	20.3
EBITDA margin (%)	3.7	5.9	5.9

First quarter 2023

Customer demand remained exceptionally strong in the rst quarter of 2023. From January to March, we received orders worth €1,513.1 million. Revenue climbed by 21.4% to €1,198.8 million compared to the prior-year period, which was severely aected by supply chain problems. Material availability was also tight in the rst quarter of 2023. This presented Krones with major challenges. Nevertheless, pro tability improved signicantly. At €114.9 million, EBITDA exceeded the gure for the rst quarter of 2022 by 32.1%.

Krones published its Annual Report for 2022 on 22 March 2023. For the rst time, the non-nancial statement was integrated into the group management report. By combining its nancial and non nancial reporting, Krones underscores the great importance it attaches to sustainability in all business decisions.

From the beginning of the year until mid-March, the stock markets showed an upward trend. Several US bank failures and the collapse of Credit Suisse, the major Swiss bank, then triggered a slide in share prices. Rescue packages quickly put together by major countries and central banks reassured the markets, which made signicant gains in the rst quarter overall. Following strong performance in the fourth quarter of 2022, the Krones share price did not rise quite as strongly as the market as a whole. At the end of March, our shares stood at €108.70, 3.5% higher than at the beginning of the year.

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MANAGEMENT REPORT Fundamental Information about the group 2023 in review

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2 | 58 Second quarter 2023

Krones held its 43rd Annual General Meeting (AGM) on 23 May. The AGM was once again held on site in Neutraubling for the rst time following three virtual AGMs due to the pandemic. All agenda items submitted for voting were approved by a large majority of shareholders. A dividend of €1.75 per share was paid to shareholders for the 2022 nancial year, marking an increase of 25% over the previous year.

Krones' positive business performance continued from April to June. Order intake normalised at a high level and, at €1,272.8 million, was within the guidance range of €1.2 billion to €1.3 billion in each quarter. Despite the tight procurement situation for electrical components, revenue and protability were higher than a year earlier. Revenue went up by 12.5% to €1,122.1 million. EBITDA increased at a higher rate, by 20.9%, to €106.5 million. With the acquisition of US-based Ampco Pumps Inc. in April, we expanded our components business in Process Technology to include high-quality pumps and signicantly added to our sales potential in the US market.

Share prices on the international stock markets moved slightly upwards through the second quarter, with some sharp uctuations. With a gain of 2.2% (including dividend: +3.8%), Krones shares outperformed both the MDAX (down 0.2%) and the SDAX (up +1.9%) between April and June. Our shares beneted from the good business gures and positive analyst comments and higher price targets.

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MANAGEMENT REPORT Fundamental Information about the group 2023 in review

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Third quarter 2023

In the period from July to September, order intake rose compared to the previous year's period to €1,327.7 million. Sustained strong demand for Krones products and services led to an order backlog in the third quarter that exceeded the €4 billion mark for the rst time. Despite challenging production conditions, revenue and earnings also continued to rise. Revenue climbed by 10.0% year on year to €1,164.7 million, while EBITDA increased by 16.7% to €110.9 million. On 17 July, Krones raised the full-year guidance for revenue growth in 2023 to between 11% and 13% (previously 8% to 11%).

Krones' climate strategy species ambitious reductions for greenhouse gas emissions for the entire Group. On 26 July, the company published its Carbon Transition Plan, in which Krones discloses measures, interim results and further plans for achieving its climate targets.

A¾er slight gains in the rst two quarters, the Krones share price performed below average between July and September. Despite good business gures, our share price came under heavy pressure. The value of Krones shares was mainly aected by the general weakness of shares in the mechanical engineering sector. Overall, the share price fell by 12.2% in the third quarter.

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MANAGEMENT REPORT Fundamental Information about the group 2023 in review

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2 | 60 Fourth quarter 2023

The situation on the procurement markets eased in the fourth quarter. For the most part, however, this will not be reected in revenue until 2024. Revenue from October to December reached the highest quarterly gure of the reporting year, at €1,235.1 million (+6.0% compared to the previous year). Order intake was also once again at a high level, up 6.8% on the previous year to €1,263.0 million. The period from October to December showed the strongest increase in protability. EBITDA went up by 21.1% to €125.0 million. Krones improved the EBITDA margin from 8.9% to 10.1%.

A¾er two silver medals in a row, Krones was awarded gold in the October 2023 rating by sustainability rating agency EcoVadis. Krones ranks among the top 5% of the companies rated in its sector. A trade fair highlight in the fourth quarter was BrauBeviale, held in Nuremberg from 28 to 30 November. Krones presented innovative technology from the across the company.

At the beginning of the fourth quarter, Krones shares trended downwards in line with the market as a whole. However, publication of the good gures for the rst nine months of 2023 led to a sharp rise in the share price in early November. Krones shares maintained this positive momentum through to the end of the year. Overall, the share price outperformed the market as a whole in the fourth quarter, rising by 14.6% to close the year at €111.80. This was 6.5% higher than at the beginning of the year.

1 | To our shareholders 3 | Declaration on

Management Report Fundamental Information about the group Systems and lifecycle service

2 | 61 Systems and lifecycle service – sustainable, reliable, high-performance production

Krones delivers turnkey plants to the beverage and liquid food industry. We use our knowhow and our line expertise to reduce customers' total cost of ownership (TCO). As a reliable partner, we also ensure that our customers can produce safely and at high quality.

2 | Consolidated

We supply all machines and lines needed for producing, filling and packaging beverages. Furthermore, we provide complete logistics systems and custom IT and digitalisation solutions that manage and optimise all production processes.

Our lifecycle service (LCS) experts additionally support customers with excellent, 24/7 after-sales service and advice. In this way, we ensure that beverage manufacturers' production runs at the highest possible performance level

at all times. The Krones LCS teams work together with customers to find solutions for efficient, secure, cost-effective and sustainable production – in line with our target picture, "Solutions beyond tomorrow". They also provide expert consulting on maintenance and retrofitting.

The digital services provided by Krones that are accessible to customers on the "Krones.world" portal play an increasingly important role in further improving overall line efficiency. Krones' modular service packages are optimally tailored to customer lines and requirements. The service team analyses production data and works with the customer to find solutions that lastingly improve production performance.

The two illustrations of a complete beverage plant and of a filling and packaging line provide a brief overview of our portfolio.

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FINANCIAL STATEMENTS

MANAGEMENT REPORT Fundamental Information about the group Systems and lifecycle service

2 | 62 Krones supplies complete beverage plants

FINANCIAL STATEMENTS

MANAGEMENT REPORT CORPORATE GOVERNANCE Fundamental Information about the group Systems and lifecycle service

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2 | 63 PET filling and packaging line for carbonated soft drinks

FINANCIAL STATEMENTS

MANAGEMENT REPORT Fundamental Information about the group Strategy and management system

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2 | 64 Strategy and management system

In 2022, on the basis of its technology leadership and customer requirements, Krones developed a new, ambitious target picture: "Solutions beyond tomorrow". Even though we are still at the early stages and have a long way to go, we are already seeing the successes of our activities aligned to the new target picture.

"Krones is very well positioned in a steadily growing market. With its new target picture, "Solutions beyond tomorrow", Krones has mapped out its path to a successful and sustainable future." Christoph Klenk CEO

Through all the changes that we aim for as a company, or that arise as a result of high economic volatility, we benet from the enormous exibility and motivation of the entire workforce. In the past year, the Krones team once again faced some tough challenges. One of these consisted of processing the extremely high 2022 order intake on time and in our usual high quality, despite the ongoing tight supply of materials in 2023. We achieved this thanks to the great commitment of our employees – as shown by the very good business gures for the 2023 nancial year.

Stable demand from attractive markets

We benet from attractive sales markets in the beverage and liquid food industry. Demand for packaged beverages and foods is growing steadily. This is driven by megatrends such as global population growth, a growing middle class in emerging markets and continuously increasing urbanisation, especially in the

Global South. The two focal areas of sustainability and digitalisation also ensure high levels of demand for the long term. As an internationally leading supplier of beverage lling and packaging technology, Krones is exceptionally well positioned to capitalise on market opportunities with its comprehensive global product and service portfolio.

However, despite our good business results, improved material supply and sustained high demand for our products and services, we remain vigilant about both short and long-term risks. Conicts such as those in Ukraine and the Middle East have multiplied signicantly in recent times. Tensions between the USA and China could also cause substantial shi¾s in the global order and reverse the globalisation of the world economy in the medium and long term. Climate change, the availability of natural resources and digitalisation are long-term risk factors faced by nearly all companies. However, sustainability and digitalisation also present huge business opportunities for Krones.

More flexibility and resilience through enhanced cost structure

Growth is an important condition for the continued future success of Krones. But it has to be protable growth. One of our core strategic imperatives is therefore to continually enhance Krones' cost base and organisational structure. To this end, we are implementing cost-cutting programmes in almost all areas. In parallel, we are accelerating and digitalising our internal processes and workows.

The expansion of our global value chain also contributes signicantly to improving cost structures. By broadening and building more redundancy into Krones' global procurement and production footprint, we enhance our ability

FINANCIAL STATEMENTS

MANAGEMENT REPORT Fundamental Information about the group Strategy and management system

2 | 65 Solutions beyond tomorrow

to respond exibly to diverse crisis scenarios, such as protectionist measures, regional supply chain problems or production stoppages. The company has gained signicant cost advantages in recent years by establishing production facilities and associated supply chains in Hungary and China. In the coming years, we intend to progressively increase the proportion of value added generated internationally by the Krones Group.

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The company's aim is to reduce xed costs as a percentage of total costs. This will enable us to respond even more exibly in today's more volatile economic environment and further enhance our resilience in times of crisis.

Maintaining adequate sales prices

Sales prices are a key factor in Krones' protability. By delivering innovative solutions and reliably completing projects for our international customers, we have successfully adjusted our sales prices to meet increased cost levels over the past two years. Although competition remains intense, we will stick to our pricing strategy and pass on rising material and labour costs. The substantial order backlog allows us to uphold our price discipline even in the face of any downturn in demand.

Solutions beyond tomorrow – our strategic focus

Innovations as the cornerstone of Krones' long-term success

High-quality, innovative products and services are also fundamental to maintaining high price quality. They must provide signicant and measurable added value to customers and help them achieve their goals. Our regular contact with customers and collaboration with them on solution development ensure that we have the best possible understanding of their needs. Aligned with our new target picture, "Solutions beyond tomorrow", Krones' focus in innovation is on sustainability, digitalisation and system solutions. We present our R&D strategy and a selection of our innovations from the reporting period on pages 79 to 84.

Solutions beyond tomorrow – for a sustainable and successful future

The focal points of "Solutions beyond tomorrow" are three key challenges confronting humanity: Combating climate change, feeding the world, and ensuring responsible use of packaging materials. The new target picture we have derived from these provides the basis for the company's strategic orientation. Our strategic focus here is on the core areas of sustainability, service quality and digitalisation. These three areas also determine the strategic orientation of our three segments.

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2 | 66

Sustainability

Modulfill Bloc FS-C can filler and seamer, one of Krones' many sustainable solutions

Sustainability: priority issue for customers and Krones

Sustainable products will be the main innovation and growth driver in the next decade. We are seeing a strong rise in demand from our customers for machines, systems, lines and entire beverage plants that save valuable resources and reduce carbon emissions. By enabling customers to produce foods and beverages with high levels of resource eciency and recycling, Krones helps them achieve their sustainability goals.

Our goal: contributing to a climate-friendly industry

Krones has committed to making a signicant contribution to combating climate change and conserving resources. We published details on the implementation of our climate strategy for the rst time in mid-2023, in our Public Carbon Transition Plan. In this document, which will be updated annually, the Group sets out its targets, measures, progress and additional implementation plans for achieving its climate goals.

Beyond optimising our own processes, it is imperative for us to devise and implement sustainable solutions for our customers in the food and beverage industry. Through the TÜV-certied, dynamically evolving enviro sustainability program, Krones provides customers with optimum support in achieving their ambitious climate targets. The energy and media-ecient product range veriably and measurably saves customers valuable resources in the operation of our machines and lines. Our customers have long beneted from the lower energy and resource consumption of enviro products. Additionally, Krones' sustainability consultants support our customers with an integrated, all-factory approach to measurably reduce their ecological footprint, both for new and existing plants.

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MANAGEMENT REPORT Fundamental Information about the group Strategy and management system

2 | 67 Sustainability Krones has set itself the ambitious goal that, by 2030, the machines and lines we manufacture will save our customers an additional 25% in energy and resources in absolute terms compared to 2019. As Krones has signicantly increased unit sales of new machines and lines in the last two years and intends to continue this growth in the future, the savings per machine or line have to signicantly exceed the 25% target. While achieving this will take a lot of work, the strong demand for enviro products gives us a major incentive.

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The company aims for an 80% reduction in its operational greenhouse gas emissions (Scope 1 and Scope 2) and a 25% reduction in value chain emissions (Scope 3) by 2030 relative to 2019. We stand at around a 50% reduction in Scope 1 and Scope 2 at the end of the 2023 nancial year and are also seeing positive eects for Scope 3 from supply chain and product-related savings. At the beginning of 2024, we supplemented our climate strategy to include a net-zero emissions target by 2040.

Closing the loop to reduce emissions and plastic

If we are to solve the problem of plastic waste on our planet, we need to move away from single-use plastics and towards a circular economy. Over the next few years, many beverage producers will signicantly increase the amount of recycled PET (rPET) in their bottles in order to signicantly reduce their reliance on PET, which is a valuable resource. Krones will support its customers here from material-saving packaging design, preform production (injection moulding) and bottle production (stretch blow moulding) through lling, labelling and packaging to the recycling of used plastic bottles and their reuse in the food and beverage industry. In February 2024, we signed the contract to acquire Netstal, a Swiss injection moulding technology company. We expect the transaction to be nally closed in the rst half of 2024. Once the transaction is completed, we will have closed the recycling loop in terms of plastic and will have all of the main products needed to turn used PET bottles into new containers for bottling beverages.

Krones recycling technology can also be used to recycle other high-quality packaging plastics (HDPE, LDPE, PP and PS). With bottle-to-bottle recycling, we contribute signicantly to preventing the loss of plastic as a valuable resource and to curtailing plastic waste. To further harness the potential of our recycling technology, our plan is to carve out this business area as a standalone entity in 2024. We have already successfully completed a carve-out of this kind with our brewery activities.

Tackling climate change and sustainably feeding the world with alternative proteins

One of the three major global challenges that Krones is addressing together with its customers is feeding the world in a way that is sustainable and climate-friendly. The mass consumption of animal protein in industrialised countries especially generates enormous greenhouse gas emissions. A solution to this problem lies in the production of high-quality vegetable proteins as an alternative to animal protein.

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MANAGEMENT REPORT Fundamental Information about the group Strategy and management system

2 | 68 Sustainability Digitalisation

Krones plans to play a major role in this market, which will continue growing in the medium to long term – analysts expect growth of 15% a year up to 2030. The market for plant-based dairy alternatives (based on soy, oats, nuts, etc.) is already established. Leveraging its extensive expertise in dairy production, Krones supports producers here with a complete range of process technology. In the production of solid plant-based proteins, the company draws on decades of experience in fermentation. Krones is thus well positioned in the important growth market for alternative proteins.

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Digitalisation helps save resources and provides the basis for new business models

Beverage plants are undergoing a profound digital transformation. To stay competitive, beverage producers have to optimise their systems for eciency. Digitalisation is a decisive factor here. Krones recognised this trend very early on and has already been supplying digital-ready machines and lines for some years. When it comes to the digitalisation of beverage plants, we benet from our line and factory expertise – our knowledge of how numerous individual machines and lines seamlessly integrate into a unied whole.

Within the Krones Group, approximately 1,500 people are dedicated to digitalisation initiatives. At Krones.digital, a unit established in 2022, around 500 so¾ ware and IT engineers work exclusively on the development of digital products and services. By 2025, we plan to expand the digitalisation unit to nearly 700 specialists.

Digital products and services must create added value for customers, either through enhanced product safety, more reliable production or reduced operating costs. The company has combined all digital services in a single browser-based online portal, Krones.world. This gives plant operators access to all digital services. Krones' goal is to provide digital support throughout the entire life cycle of a machine or line. The company thus intends to evolve more and more from a machine and line manufacturer to a service provider – from "Built by Krones" to "Managed by Krones". Krones provides plant operators with agreed services that measurably improve plant eciency. In return, the company is paid a set fee.

MANAGEMENT REPORT Fundamental Information about the group Strategy and management system

Digitalisation is also changing numerous products and processes from within. Krones improves and accelerates such developments with digital tools, including articial intelligence (AI). Among other things, our team has developed an AI-based solution that signicantly streamlines the quotation preparation process for our sales force, translating into signicant time savings for both customers and Krones.

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Global reach and localised service excellence with some 3,000 service sta worldwide

Looking a¾er the delivery of digital and other services is the job of our approximately 3,000 local service sta in over 70 countries around the world. This enables us to respond quickly and directly to customer needs – a key factor in longterm customer satisfaction. Customers benet from highly trained service employees with considerable system and line expertise.

Our strategically well-located LCS centres around the globe enable the swi¾ supply of spare parts to plant operators worldwide. A long-term growth driver for the attractive LCS business is our growing installed base. We also intend to further increase the proportion of Krones-supplied managed lines.

Growth through further internationalisation

In order to meet the growing demand for service, Krones will continue to invest in the expansion of the sales and service organisation and further increase the size of the service team. The focus here is on international markets, where growth rates will remain above average. Krones will continue to invest heavily in sites in such markets and recruit local talent. In particular, the Asia-Pacic region and Africa are expected to see the strongest growth over the long term. In the reporting period, the company once again increased the size of its workforce in the regions shown in the table by 792 to 6,457 employees.

Development of employee numbers 2019 – 2023 Year South America North America Africa Asia-Pazific Eastern Europe China Total 2019 782 745 671 1,009 933 792 4,932 2020 778 1,011 639 974 922 742 5,066 2021 803 1,046 633 959 1,006 732 5,179 2022 871 1,206 671 1,023 1,092 802 5,665 2023 943 1,430 681 1,143 1,345 915 6,457

2 | 69

Service

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2 | 70 Krones' global footprint

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2 | 71 Strategic focus in the segments

Filling and Packaging Technology:

Continued very strong demand for PET; cans and aseptics support growth Beverage packaging made of PET continues to be highly popular, both with our customers and with consumers. Demand for PET lines remains stable at a high level. The reasons speak for themselves. PET bottles are light and easy to handle, but also sturdy and hard-wearing. This packaging material also has a relatively small carbon footprint and is comparatively inexpensive to produce, which positively aects the selling price of the end products. Our PET lines thus enable the production of sustainable and aordable beverages – in line with our target picture. We aim to consolidate and extend our leading position in PET lines with even better performance and lower resource consumption.

If PET is to remain the most popular packaging material for beverages in the long term, the majority of PET bottles in the future must be made of recycled PET. Krones is well positioned here to support customers with its recycling lines. In addition, we already have numerous lines in operation at customers that can readily process rPET, which has slightly dierent properties from virgin PET.

Segments

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The market for aseptic lling in PET containers also presents good growth opportunities for the core segment. Demand is likely to remain strong in the USA especially, where the standard up to now has been the hotll process – aseptic lling under heat with high energy consumption. US beverage producers are increasingly transitioning from this process to technologically advanced and sustainable aseptic lines. These signicantly reduce the carbon footprint and plastic usage.

Krones picked up on the trend towards metal cans several years ago and is now the global market leader in the canning of beer and so¾ drinks. Aluminium beverage cans are the most recycled form of beverage packaging in the world and are almost innitely recyclable without any loss of quality. This means they make a key contribution to resource conservation. Krones aims to strengthen its position in canning lines with exible, hygienic, space-saving and resourceecient solutions.

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Process Technology:

Energy-e¸cient solutions and alternative proteins are markets of the future The transformation of the Process Technology segment begun in previous years is well underway. Technologies for the production of plant proteins and energy-ecient solutions for beverage production continue to gain in importance. Demand for both technologies will grow at above-average rates in the medium to long term, driven by their potential to reduce global carbon emissions. We also plan to expand the LCS and components business in this segment. Both of these areas will help drive revenue and earnings growth in Process Technology. The acquisition of US pump manufacturer Ampco Pumps in the second quarter of 2023 completed our pump portfolio, strengthening our components business and expanding our sales potential in the US market.

Intralogistics: Market with potential

In addition to the dynamic growth of the logistics market, the Intralogistics segment is also beneting from the sustainability megatrend. Customers still frequently underestimate the potential in intralogistics. Solutions from our subsidiary System Logistics can yield up to 40% energy savings and up to 20% lower operating costs. Our automated solutions also free up logistics sta and reduce the number of operators required – a major gain in terms of added value for customers in times of labour shortages.

In the medium term, Krones intends to further internationalise its intralogistics business and extend it to customer groups outside the beverage and liquid-food market. Increased revenue shares from automated picking systems and autonomous mobile robots, coupled with an expanded service business, will further enhance the segment's protability.

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MANAGEMENT REPORT Fundamental Information about the group Strategy and management system

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2 | 74 Financial position ensures resilience and enables future investment

As a result of the good business performance, Krones continued to maintain its capital and nancial resources at a very high level in the reporting period. At the end of 2023, Krones had a very solid equity ratio of 38.3% and a net cash position of €445 million. In addition, the company has around €850 million in undrawn credit lines. This strong nancial and capital structure gives the company and its employees the stability and security they need in today's unpredictable political and economic landscape. Its comfortable capital base also enables Krones to make strategic investments in growth and the future from internal resources.

The executive board will continue to invest some 5% of revenue in research and development. In addition, the company plans to commit between 2.5% and 3.5% of revenue in the coming years to capital expenditure on capital assets. This expenditure will mainly go on optimizing processes, production structures and IT systems. Internal sustainability projects (Scopes 1 and 2) will continue to account for a notable proportion of capital expenditure.

Acquisitions are and will remain part of Krones' growth strategy. When identifying potential acquisitions, we focus on medium-sized, protable companies that complement the existing portfolio technologically and regionally or provide access to markets beyond the beverage and liquid food industry. Examples include the lling and packaging of food, pharmaceuticals and cosmetics. We have continued to implement our acquisition strategy in the reporting period and also in the current year. With the acquisition of US-based Ampco Pumps in the second quarter of 2023, we expanded our components business in Process Technology

to include high-quality pumps and signicantly improved our access to the US market. Following the nal closing of the acquisition of Netstal, the Swiss injection moulding technology company, which is planned for the rst half of 2024, Krones will be able to oer its customers all important machines, lines and services for the complete PET packaging cycle. Netstal also underpins Krones' strategy of extending the customer focus to the medical/pharmaceutical, cosmetics and food industries.

Krones remains committed to sharing its success with shareholders through dividends. The company's dividend strategy is to distribute an amount of 25% to 30% of consolidated net income to shareholders, although in recent years it has aimed for the upper end of this range.

FINANCIAL STATEMENTS

MANAGEMENT REPORT Fundamental Information about the group Strategy and management system

2 | 75 Improving free cash flow and ROCE, optimising working capital

Key nancial performance indicators for Krones alongside revenue and earnings are free cash ow and return on capital employed (ROCE). To achieve our ROCE target of at least 20% by 2025 (2023: 16.3%), we will both increase EBIT and, in the medium term, further optimise the allocation of resources in working capital. The company has taken various steps to reduce working capital for this purpose. Reducing working capital has a positive eect on ROCE.

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Working capital is also an important determinant of free cash ow. Less working capital tied up in the operating business leaves the company more nancial resources for other purposes. A¾er the exceptionally high free cash ow in 2022, free cash ow decreased signicantly as expected in the reporting period, mainly due to the strong increase in working capital. Free cash ow is expected to return to normal in 2024 and increase in the medium term.

Krones is very well on track to achieve its medium-term targets by 2025 – in some cases earlier

At the end of 2021, the company adopted ambitious targets for the period up to 2025.

Revenue is targeted to grow organically – without acquisitions – by an average of 5% year on year until 2025. Including acquisitions, the company aims for revenue of at least €5 billion in 2025 (2023: €4.72 billion). Due to the strong increase in revenue in 2022 and 2023 and the large order backlog, Krones expects that it will already achieve this target in the 2024 reporting year.

The company's commitment to protable growth is central to its sustainable long-term success. Generating sucient earnings is essential in order to make the necessary investments in the future and navigate potential crises. In the medium term, the company targets an EBITDA margin of 10–13% (2023: 9.7%). The Executive Board is condent that the measures introduced will enable it to achieve this goal, despite the steeply rising material and labour costs.

Krones aims to increase return on capital employed (ROCE) to at least 20% by 2025 (2023: 16.3%).

Overall, Krones currently sees signicantly more opportunities than risks for the achievement of its medium-term goals by 2025.

FINANCIAL STATEMENTS

MANAGEMENT REPORT Fundamental Information about the group Strategy and management system

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2 | 76 The Krones team makes the dierence: Krones' most important success factor

The entire Krones team has done an outstanding job over the past few years. Over recent years marked by various challenges, including the coronavirus pandemic, the Ukraine conict and material shortages, our people have demonstrated their adaptability and exibility in rapidly changing conditions. Even in dicult times, they consistently delivered our customers' projects on time, earning trust and condence. The focus for the current year is on processing orders rapidly and in the usual quality. We are condent that we will meet this challenge to our customers' satisfaction.

Exceptional team spirit, coupled with the unique expertise, creativity, and unwavering dedication of our employees, underpins Krones' resilience and success. Ensuring a motivated and qualied workforce remains a priority. Krones will continue to invest in employee training and development, and will strengthen its workforce, particularly in IT, so¾ware and service, and also in emerging and developing markets.

MANAGEMENT REPORT Fundamental Information about the group Strategy and management system

Krones' management system

Krones' management primarily uses the following nancial performance indicators to steer the group and its three segments:

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Revenue growth
EBITDA margin (earnings before interest, taxes, depreciation and amortisation as a percentage of revenue)
ROCE return on capital employed the ratio of EBIT to average net capital employed in the past four quarters. Net capital employed is dened as non-current assets (excluding goodwill and nancial assets) plus working capital.

In order to strengthen our market position and utilise economies of scale, we will continue to generate profitable growth in all three segments in the medium term.

Earnings before interest, taxes, depreciation and amortisation (EBITDA) is a key earnings performance indicator. Protability, measured as the EBITDA margin (EBITDA as a percentage of revenue) is among our key targets and parameters. The EBITDA margin indicates the company's protability in relation to revenue, irrespective of the tax rate, nancial income/expense and depreciation and amortisation.

Since the 2022 nancial year, our third performance indicator has been ROCE (return on capital employed), calculated at Group level. This is the ratio of EBIT (earnings before interest and taxes) to average net capital employed in the past four quarters. ROCE is a very important protability indicator for the capital markets. Return on capital employed shows investors how eciently the company makes use of capital. Until the 2021 nancial year, our third key performance indicator was working capital as a percentage of revenue.

Development of the key performance indicators in the last five years

	2019	2020	2021	2022	2023
Year-on-year revenue growth	2.7 %	–16.1 %	9.4 %	15.8 %	12.2 %
EBITDA margin	5.7 %	4.0 %	8.6 %	8.9 %	9.7 %
ROCE (from 2022)	2.2 %	–2.2 %	10.0 %	14.1 %	16.3 %
Working capital to revenue (up to and including 2021)	26.9 %	28.3 %	24.8 %	19.0 %	17.8 %

Other financial key performance figures

In addition to the above, a further important performance indicator for Krones is free cash flow (cash ow from operating activities less cash ow from investing activities). We take further guidance from the development of EBT (earnings before taxes), the EBT margin (EBT as a percentage of revenue) and the working capital to revenue ratio.

FINANCIAL STATEMENTS

MANAGEMENT REPORT CORPORATE GOVERNANCE Fundamental Information about the group Strategy and management system

Non-financial performance indicators

In addition to nancial performance indicators, non-nancial targets are also rmly embedded in Krones' corporate strategy. These are set out in detail in the

non-nancial statement (pages 85 to 145). Sustainability is an area of major importance and is also the focus of the Krones target picture.

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Key non-nancial performance indicators comprise greenhouse gas emissions (Scope 1, Scope 2 and Scope 3), water consumption, hazardous waste, workplace accidents and the share of women in management.

As part of the Krones Group's sustainability targets, which the Executive Board ocially adopted in the 2020 nancial year, the company has set ambitious emission reduction targets along the entire value chain.

We aim for an 80% reduction in our own carbon footprint (Scope 1 and Scope 2) by 2030, relative to the 2019 baseline.
For Scope 3 emissions which are much higher and are mainly generated by the operation of our machines and lines at customer sites – we are targeting a reduction of 25% over the same period, again with 2019 as the baseline.

Additional sustainability goals are as follows:

The Krones Group is committed to a 10% reduction in hazardous waste and water consumption by 2030, with 2020 as the baseline.
We will reduce both work-related accidents and the resulting lost days per million hours worked by 30% across the Krones Group by 2030, compared to the 2020 baseline.

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FINANCIAL STATEMENTS FINANCIAL STATEMENTS

MANAGEMENT REPORT CORPORATE GOVERNANCE Fundamental Information about the group Research and development (R&D)

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2 | 79 Research and development (R&D)

Krones invests 4.1% of revenue in R&D
Sustainability remains a key innovation driver
Focus on "line of the future"
Internationalisation and partnerships strengthen R&D

Innovations secure our company's future. Future oriented products and services are essential to the implementation of Krones' new target picture, "Solutions beyond tomorrow". The driving force here is Research & Development (R&D). R&D has always been a major strategic priority at Krones and remains the foundation for the company's sustainable business success.

In 2023, Krones invested 4.1% of revenue in R&D

Krones consistently invests large sums in research and development. Large numbers of patents underscore the success of this investment.

Highly qualied Krones employees drive the development and improvement of machines, systems and services worldwide. To maintain the rapid pace of innovation, the company invests large sums in R&D. In 2023, the company spent €194 million on research and

development – that corresponds to 4.1% of consolidated revenue (previous year: €178 million and 4.2%). €21.7 million of this was capitalised as development costs (previous year: €23.6 million).

Innovative R&D feeds a strong patent portfolio and safeguards Krones' technological lead

The innovative strength of the Krones R&D team is reected in the substantial number of registered patents and utility models. This has increased continuously in recent years and stood at 7,058 at the end of 2023 (previous year: 6,855). By pursuing an active patenting strategy, Krones ensures that all important new developments and improvements have strong legal protection and safeguards its technological lead.

Registered patents and utility models – Krones Group

MANAGEMENT REPORT CORPORATE GOVERNANCE Fundamental Information about the group Research and development (R&D)

2 | 80 The Krones R&D strategy

All R&D activities focus on customer benet. New products and services must create added value for customers. From intensive exchange with our customers, we know their needs and visions. We aim to develop solutions for them that exceed their expectations. Krones' R&D strategy is closely aligned with our target picture based on the slogan "Solutions beyond tomorrow", which serves as inspiration for our R&D team and guides project prioritisation.

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Krones focuses in its R&D strategy on three focal areas:

Sustainability	System solutions	Digitalisation

The primary innovation driver is sustainability. Conserving resources and reducing emissions are top priorities for our customers. Short changeover times, fewer operating personnel and improvements in line eciency also play an important role. We place an equally strong focus in our R&D activities on digitalisation. This is the basis for new business models. Digital data can be used to oer improved services.

Krones follows a top-down approach to new developments and improvements. This means that in all development projects, we initially focus on the entire beverage plant, from beverage production, lling and packaging to intralogistics. We then split out the targeted improvements across the individual line components. It is also important that all new developments and improvements are capable of being retrotted, so that they can be used in existing machines and lines and deliver added value for customers.

R&D strategy programmes

The R&D strategy and value drivers dene Krones' R&D programmes. These have the clear goal of translating our visions embodied in "Solutions beyond tomorrow" as fast as possible into market-ready solutions for our customers. At drinktec 2025, we aim to present the highly innovative Krones "line of the future". In line with our target vision, the development focus of the lling and packaging line of the future is on sustainability, digitalisation and eciency.

Clearly structured R&D organisation accelerates and improves the innovation process

Across all segments and businesses, the entire development portfolio is managed through a clearly dened and focused innovation process. Employees from various organisational units are actively involved in development projects. Development progress is regularly analysed and evaluated by a joint committee, which includes the Executive Board and executives from various technical units.

Reecting the importance of sustainability for customers and Krones, the company has established a Sustainability unit within R&D. This addresses all product and company-specic sustainability questions.

In 2021, we brought together and aligned our digitalisation and automation activities in a new unit, Krones.digital. A total of about 500 employees at various locations and from dierent Krones companies collaborate here in a highly coordinated fashion, working closely together with the R&D team that develops the machines and lines.

FINANCIAL STATEMENTS

MANAGEMENT REPORT CORPORATE GOVERNANCE Fundamental Information about the group Research and development (R&D)

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2 | 81 Additional impetus from internationalisation and in-house innovation units in Germany and abroad

Krones is increasingly internationalising its R&D activities. We made further progress on this strategy in the reporting period with the launch of Krones Digital Solutions India (KDSI) in Bengaluru, India. This new Group subsidiary plays an important role in our digitalisation drive. As well as managing internal IT, around 120 employees there develop digital solutions for customers under the Krones.digital unit. Krones has also established a second IT subsidiary in the Czech Republic, in addition to expanding the Czech subsidiary Konplan (engineering services) in Prague. The R&D hub in Parma, Italy, has also undergone capacity expansion. This unit works with the city's university, among other things to analyse the life cycle (including the carbon footprint) of diverse types of packaging.

Our Innovation Lab, which is located near our headquarters at TechBase Regensburg, undertakes new projects at a very early stage of the innovation process. Its interdisciplinary teams conduct preliminary studies on technical and economic feasibility. The Innovation Lab's focus is on sustainability and digitalisation. In 2023, the Krones Innovation Lab was ranked one of the best digital innovation units in manufacturing industry. This was the outcome of a leading study on the topic carried out in the German-speaking countries by consultancy Infront in partnership with Capital magazine.

Teamwork with partners enhances R&D quality

As well as deploying in-house expertise for innovation, Krones collaborates nationally and internationally with universities and research institutions and also with the R&D departments of numerous other companies and with customers. Krones is also involved in several research networks and promotes basic research in a range of dierent projects.

The major environmental and social problems of our time do not stop at industry or regional borders. Solving them also requires teamwork with partners from outside the company in cross-sectoral international collaboration. To this end, Krones is an active member of a large number of associations and initiatives.

In the reporting year, Krones joined the econsense sustainability network. This initiative provides a platform for some 50 international companies to share practical knowledge on sustainability issues and learn from each other. Alongside ecosense, Krones also cooperates in various other associations and initiatives to promote sustainability. Among others, the company is a member of the European Circular Economy Stakeholder Platform and the Business Ambition for 1.5 °C campaign.

FINANCIAL STATEMENTS

MANAGEMENT REPORT CORPORATE GOVERNANCE Fundamental Information about the group Research and development (R&D)

2 | 82 Innovative new and improved solutions: the products of successful R&D

In the following, we present a selection of Krones innovations from the 2023 reporting period.

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LitePac Top Strap: sturdy, plastic-free and 100% recyclable

The latest innovation in the LitePac Top range is LitePac Top Strap, a fully recyclable and plastic-free secondary packaging solution. A strap made of tearresistant kra¾ paper is wrapped around the pack and ensures that even large PET bottles (up to 2.0 litres) are held in formation. This provides additional

transport security and at the same time oers a functional surface, for example for barcodes or individual advertising messages. In addition to the paper strap, the PET bottles in the packs are held together by carton clips with an integral handle below the bottle neck, as is usual with LitePac Pro packaging.

The strap and the carton clips are made from 100% renewable and recyclable material. LitePac Top Strap thus meets all requirements of the circular economy. The packaging solution also enables customers to save material and reduce energy consumption. A further benet is that the machine technology can be easily integrated into existing lines. The innovation is implemented on the Variopac Pro packer platform.

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MANAGEMENT REPORT CORPORATE GOVERNANCE Fundamental Information about the group Research and development (R&D)

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2 | 83

Linatronic: high-precision bottle inspection with deep learning

Empty-bottle inspection machines for PET and glass bottles are already highly accurate. Nevertheless, they frequently falsely reject a bottle that is undamaged and uncontaminated. To make the Linatronic inspector even better at its task, Krones makes use of articial intelligence, or more precisely, deep learning. In contrast to machine learning, the system improves its accuracy by learning autonomously. For this purpose, Krones deploys a new camera system and the DART inspection so¾ware. That the latest generation of Linatronic is ultraprecise in sorting, is demonstrated by the extremely low false rejection rate of just 0.3%.

A new feature of this system is the four-camera view. Two modules with two cameras each generate a total of eight views per bottle in each pass. This means that separate modules are no longer required to inspect the lateral neck nish and thread. That cuts costs. It also results in a signicant increase in accuracy. Even fewer bottles are falsely rejected and almost all defective bottles are removed that would otherwise break during lling and cause machinery stoppages. In total, the new camera and so¾ware technology leads to a further 50% drop in false rejects compared to the previous product – a signicant reduction in waste and costs, as well as an added boost to system performance.

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5 | NOTES TO THE CONSOLIDATED 6 | OTHER INFORMATION

MANAGEMENT REPORT CORPORATE GOVERNANCE Fundamental Information about the group Research and development (R&D)

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2 | 84

Contiform Asept Speed: top-level aseptic container production

Contiform Asept, rst presented in 2013, enables PET bottles to be produced aseptically, meaning under completely sterile conditions. Krones developed the second generation of this system in the reporting period. It combines the exible, compact and resource-saving technology of the latest Contiform range with the advanced hygiene features of the rst-generation Contiform Asept.

The basic concept of the aseptic stretch blow moulder remains unchanged: Rather than sterilising the nished bottles a¾er blow-moulding, the preforms (PET blanks) are already sterilised with gaseous hydrogen peroxide (H₂O₂). That saves time, energy and sterilisation medium. All components of the blow-moulding station are likewise dry-sterilised with gaseous H₂O₂.

The second-generation Contiform Asept is equipped with a revamped airlock so as to make sure the bottles are discharged without any loss of sterility. Depending on the variant, Contiform Asept can be made up of four to 30 blow-moulding stations. The Speed version has a maximum output of 72,500 containers per hour.

Management Report 1 | To our shareholders 3 | Declaration on Corporate governance 4 | Consolidated

Financial Statements financial statements

5 | Notes To the consolidated 6 | Other information

2 | 85 Non-financial Statement

The Non-financial Statement for the Krones Group serves as the primary means of transparently reporting the sustainability performance of Krones AG and the Krones Group. Consolidation of our group companies is done in parallel to our financial reporting. This statement contains the qualitative and quantitative non-financial information on sustainability topics that are material to the company. Unlike those within the consolidated management report, the forwardlooking statements in the context of our sustainability goals are focused not only on a single year but on a far longer timeframe. The non-financial reporting of the Krones

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Report Non-financial Statement

Page 226

Group is done with reference to the Global Reporting Initiative's Sustainability Reporting Standards (GRI Standards). This is a combined non-financial statement for Krones AG and the Krones Group pursuant to Sections 289b et seq. of the German Commercial Code (HGB), Sections 315b et seq. HGB and Article 8 of the EU Taxonomy Regulation 2020/852 for the financial year 2023.

FINANCIAL STATEMENTS

MANAGEMENT REPORT Non-financial Statement

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CONSOLIDATED

Performance 2023

We reduced our Scope 1 and Scope 2 carbon emissions by 9% year on year. With that, we have achieved a 51% reduction in greenhouse gas emissions compared with the base year 2019.
In our upstream supply chain, greenhouse gas emissions are (following a change in the method of calculation) at the same level as in the previous year and up 24% from the base year.
We were able to reduce the greenhouse gas emissions from the use phase of our products by 10% year on year, for a 7% reduction compared with the base year, and are therefore on target for 2030.
While hazardous waste generation across the group has increased, water consumption is down 6%. Both values are still above the level needed to reach our target.
Participation in continuing education opportunities across the Krones Group is increasing steadily.
Workplace accidents were down slightly year on year, while lost days were up in 2023 from the previous year. Nevertheless, we are on target for both figures.
The Krones Group employed more women, both in management-level positions and in general, in 2023 than in 2022.

Indicator	Unit	2023	2022	Change

Greenhouse gas emissions, Scope 1	t CO2e	15,866	17,583	– 10 %
Greenhouse gas emissions, Scope 2	t CO2e	8,432	9,152	– 8 %
Greenhouse gas emissions, Scope 1 & 2	t CO2e	24,298	26,735	– 9 %
Greenhouse gas emissions, Scope 3 upstream (supply chain)	t CO2e	1,102,362	1,112,024	– 1 %
Purchased goods and services	t CO2e	991,679	970,227	+ 2 %
Capital goods	t CO2e	284	159	+ 79 %
Fuel and energy-related activities	t CO2e	6,245	7,214	– 13 %
Transport and distribution	t CO2e	67,073	99,192	– 32 %
Waste	t CO2e	931	886	+ 5 %
Business travel	t CO2e	36,150	34,346	+ 5 %
Greenhouse gas emissions, Scope 3 downstream (products)	t CO2e	5,672,475	6,287,635	– 10 %
Use of products sold	t CO2e	5,672,475	6,287,635	– 10 %
Greenhouse gas emissions, Scope 3 total	t CO2e	6,774,837	7,399,659	– 8 %
Greenhouse gas emissions, total	t CO2e	6,799,135	7,426,394	– 8 %
Water consumption	m³	189,878	202,366	– 6 %
Hazardous waste	t	1,963	1,660	+ 18 %

Expenditure for charitable contributions and sponsoring	€	974,614	1,113,745	– 12 %

Participation in continuing education opportunities	Absolute	62,700	60,300	+ 4 %

Workplace accidents per 1 million hours worked	Rate	7.22	7.31	– 1 %
Lost days following worklpace accidents per 1 million hours worked	Rate	161.85	150.55	+ 8 %

Percentage of women (employees covered by and exempt from collective agreements)	%	17.4	16.7	+ 4 %
Percentage of women in management roles in general	%	11.9	10.6	+ 12 %

The indicators presented here relate to the Krones Group but only make up part of all sustainability-related figures we track for Krones AG and the Krones Group. The percentages marked in green show a positive change with respect to sustainability, while those marked in red show a negative change.

2 | 87 Sustainability management (GRI 3-1, 3-2, 3-3)

Sustainable business strategy

The sustainability goals of the Krones Group are integrated into our corporate strategy. Our corporate vision, "Solutions beyond tomorrow", shows how sustainability drives our company. The Krones Group wants to do its part to build a sustainable world, and we view digital innovation as a means to enable sustainability in both our own value chain and our customers' business.

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CONSOLIDATED

Non-financial Statement

Ecient and environmentally friendly technologies for safe, high-quality beverages: That is the mission that the Krones Group has set itself in terms of product sustainability. Consumers are making sustainability part of their buying choices more than ever before, and so our customers rely on us to provide sustainable solutions for their production operations.

We work continuously to improve the eciency, longevity and eco-friendliness of our products and services while also increasing the sustainability of our own operations and value creation processes. We rmly believe that a consistent approach to sustainability will help us leverage new opportunities for growth.

Sustainability governance

Sustainability management within the Krones Group is steered and coordinated by a central Sustainability Team, which serves as the main body for sustainability strategy, controlling and reporting along the entire value chain. At the heart of the team's work is its cooperation with the departments and experts responsible for material sustainability topics. In 2023, an additional Regional Sustainability Competence Team was established, consisting of regional sustainability

experts, with the goal of strengthening international cooperation on sustainability. For employees on site, sustainability coordinators are the direct contact person for all sustainability matters.

The central Sustainability Team is part of Corporate Research and Development and thus reports to the Executive Board member responsible for International Operations and Services. Parallel to that, the Sustainability Team and Sustainability Steering Board report directly to the CEO.

2 | 88

Strategy: The Sustainability Team's core responsibilities with respect to strategy include conducting materiality and risk analyses, reporting on sustainability to the Executive Board and coordinating the Sustainability Steering Board. In the latter, representatives from the management of central units consult on our strategic alignment with respect to sustainability and formulate suggestions and recommendations for the Executive Board.

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CONSOLIDATED

Non-financial Statement

Controlling: The Sustainability Team also serves as the controlling and monitoring body for environmental, social and corporate governance (ESG) matters. Besides consolidating sustainability-related performance metrics across the group and monitoring progress toward our targets, that also entails conducting regular reviews with the departments. Surveys, ratings and rankings on sustainability are processed centrally and results shared with the departments.

Reporting: When it comes to sustainability communications, the Sustainability Team works together with Corporate Communications to prepare content for the various channels – for both internal and external stakeholders. The Non nancial Statement, which is approved by the Executive Board, describes the material sustainability aspects. Additional information is available on the sustainability pages of the corporate website.

Sustainability executive reviews

The Executive Board holds coordination meetings on sustainability topics at sixweek intervals so as to bring the management of our sustainability objectives into the top tier of company leadership. In these meetings, the key sustainability performance indicators are tracked and strategic decisions made regarding the company's sustainable development.

Executive Board remuneration linked to sustainability

Sustainability aspects are included in the policies that govern Executive Board remuneration. As of the nancial year 2023, ESG targets account for 15% of the target amount of the long-term incentives (LTIs), and further ESG targets will be added successively. In addition to the Scope 1 and Scope 2 greenhouse gas emissions, the percentage of women in management (Krones AG and Krones Group) are likewise included in the LTI calculation as of the nancial year 2023. Greenhouse gas emissions are weighted at 70%, the percentage of women in management in the Krones Group is weighted at 20% and the percentage of women in management within Krones AG is weighted at 10%.

Non-financial risk analysis

Under the concept of double materiality, not only are the material sustainability topics to be assessed for nancial and non-nancial impacts. So, too, are the risks to the company in this regard. Risks are reported and assessed quarterly within the group-wide risk management processes carried out by Finance. The "outside-in" risks to the company that are identied in this process are then assessed by the Sustainability Team for potential negative impacts that the company can have on sustainability topics (inside-out). For the nancial year 2023, the analysis revealed no risks with a high likelihood of an event and severe negative impact with respect to the company's own business activities, business relationships, products or services.

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1 TO OUR SHAREHOLDERS	2 CONSOLIDATED CONSOLIDATED	3 DECLARATION ON	4 CONSOLIDATED	5 NOTES TO THE CONSOLIDATED	6 OTHER INFORMATION
	MANAGEMENT REPORT	CORPORATE GOVERNANCE	FINANCIAL STATEMENTS	FINANCIAL STATEMENTS
	Non-financial Statement

Materiality analysis (GRI 3-1, 3-2, 3-3)

The materiality matrix for the Krones Group underwent a review in 2023. The topics that had been identied as material in 2022 were once again examined by the Sustainability Steering Board for their impact on our business. The review showed that the results of the 2022 materiality analysis remain valid. Krones

will conduct another materiality analysis in 2024 in order to full future requirements for companies to conduct a materiality analysis under the Corporate Sustainability Reporting Directive (CSRD).

The three dierent circle sizes reect the relative materiality of the topics.

2 | 90 Sustainability goals through to 2030

The Krones Group's sustainability goals were ocially adopted by the Executive Board in 2020. Unless noted otherwise, the goals use 2020 as the base year and 2030 as the target year and apply across the group. The goals are reviewed as

MANAGEMENT REPORT

Non-financial Statement

CONSOLIDATED

needed based on new materiality analyses, legal and regulatory requirements and stakeholder interests.

Environmental
– 80% Reduce greenhouse gas emissions in our operations (base year: 2019).	– 25% Reduce greenhouse gas emissions in our upstream and downstream value chain, with a focus on purchased goods and the use of our products (base year: 2019).	– 10% Reduce hazardous waste generation and water consumption in our operations.
Social Take action to promote diversity in our workforce.	Motivate our employees by oŸering an attractive working environment with opportunities for personal development.	– 30% Reduce the number of work-related accidents and resulting lost days.
Governance 0 Pursue a zero-tolerance policy with respect to compliance and human rights violations along our entire value chain.	Evaluate critical suppliers against sustainability criteria and use raw materials more eÎciently.	100% Ensure the confidentiality of personal data and establish a state-of-the-art IT security architecture along our value chain.

CORPORATE GOVERNANCE

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FINANCIAL STATEMENTS

5 | NOTES TO THE CONSOLIDATED 6 | OTHER INFORMATION

2 | 91

Contribution to the UN Sustainable Development Goals

The United Nations Sustainable Development Goals (SDGs) are considered the most important set of global targets for sustainable development. The 17 goals were published in September 2015 as part of the UN's Agenda 2030. They articulate the key challenges and resolutions of a global sustainability policy and thus serve as a guide for the sustainable development of society, culture and the economy.

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CONSOLIDATED

Non-financial Statement

Because it is part of global value chains, the Krones Group also inuences economic, environmental and social developments – sometimes directly and materially and sometimes only indirectly and to a small extent. Under our corporate vision, "Solutions beyond tomorrow", we have analysed which SDGs our strategic targets impact.

2 | 92 Sustainability network

We believe that we are stronger when we work together. The Krones Group has been a member of the UN Global Compact since 2012. We collaborate with other companies within our industry under a variety of sustainability-focused project groups of the German Engineering Federation (VDMA) and are an ocial partner to the VDMA's Blue Competence sustainability initiative. We have signed the Association of the Beverage Machinery Industry (ABMI) Sustainability Charta and work hand in hand with other companies within this association towards the common goal of driving sustainability forward. As of April 2023, we are also a member of econsense, the sustainability network of German business, in

2 | CONSOLIDATED MANAGEMENT REPORT

CONSOLIDATED

Non-financial Statement

which we can share insights and knowledge across industries on reporting, climate and supply chain issues and on sustainable nance. Our 2030 Climate Strategy has been ocially validated by the Science Based Targets initiative (SBTi). We have committed to developing a net-zero emissions target and are part of the Business Ambition for 1.5°C campaign. We participate in recognised ratings and audits in order to ensure transparency towards customers, investors and analysts. In 2023, Carbon Disclosure Project (CDP) has given us an A- rating in the category Climate Change (Water Security: B), and our EcoVadis Scorecard was awarded a gold medal.

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2 | 93 CO2 emissions at our customers (GRI 302-5, 305-3, 305-5)

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1. Impact and materiality

As a technology supplier, the Krones Group enables climate change mitigation. Our machines and lines require a certain amount of electrical power and heat, primarily for the production, lling and packaging of beverages and liquid foods and the recycling of plastics. Most of the greenhouse gas emissions for which we are directly or indirectly responsible are not generated at our own production sites but rather at our customers' – as a result of their use of Krones machines and lines. Because of this large impact on our customers' direct and indirect greenhouse gas emissions, our internal and external stakeholders have rated this topic as highly material – in terms of both their impact on our business and our impact on the world around us (nancial materiality and impact materiality).

2. Risks and opportunities

The Krones Group views climate aspects relating to our Scope 3 downstream greenhouse gas emissions not primarily as a risk but rather as an opportunity. Under our corporate vision, "Solutions beyond tomorrow", we seek to address three global challenges – climate change, plastic pollution and food insecurity – and contribute to solving them. Our enviro products and sustainability consulting are aimed at helping to fight climate change. By growing these business activities, we can have a positive impact on our customers' climate protection eorts – and generate revenue at the same time.

3. Governance and resources

The Krones Group's 2030 Climate Strategy has been ocially adopted by the company's Executive Board. A group of experts from the dierent portfolio divisions of Krones AG meets regularly to coordinate measures to reduce product-related Scope 3 greenhouse gas emissions. They act as decentralised

points of contact and support for the enviro sustainability programme for energy ecient and environment-friendly machines and lines and translate the centrally coordinated sustainability requirements into the individual departments. Beyond Krones AG, the Product Sustainability team is in regular dialogue with the product specialists of our subsidiaries in order to promote climate and environment-related improvements to our products. Reporting of Scope 3 emissions from our products is done centrally through the Sustainability Team, with quarterly communications with the Executive Board on the topic of Scope 3 downstream emissions.

4. Strategy and targets

As part of our 2030 Climate Strategy, we set and published the following target for upstream and downstream Scope 3 greenhouse gas emissions in 2020:

Reduce our absolute Scope 3 greenhouse gas emissions by 25% by 2030, from a 2019 baseline.

The Science Based Targets initiative (SBTi) has validated the near-term climate goals we have submitted following its ocial review process and ocially con rmed that it is consistent with the United Nations goal of limiting global warming to 1.5 degrees Celsius. Where the SBTi assessment is based on the established reference scenarios of the Intergovernmental Panel on Climate Change (IPCC), our Scope 3 reduction targets are likewise based on that scenario. The Krones Group is part of the Business Ambition for 1.5°C campaign and reports annually to the CDP (Score: A-).

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5. Policies and actions

Sustainability programme for products – enviro (GRI 302-5, 305-5)

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Non-financial Statement

For many years now, our enviro sustainability programme for machines and lines has been a key component of our product sustainability. It was developed in collaboration with TÜV SÜD and focuses on the energy and media consumption as well as the eco-friendliness of Krones machines, lines and solutions. The associated processes are established within the enviro management system. Underlying it all is the enviro manual, which denes the principles of the management system, presents the assessment criteria and thus acts as a company-wide guide for climate-friendly product design and optimisation.

Before a Krones machine can carry the enviro label, its energy and media eciency and environment-friendly operation must be proven in a prescribed, well-documented testing procedure. To ensure the procedure's objectivity, a mandatory benchmark has been dened for each enviro-relevant aspect of a product, such as compressed air consumption or eco-friendliness. The benchmark criteria are to ensure that the enviro products conform at least to the Energy and Media Eciency Environmental Sustainability (EME) standard dened by TÜV SÜD. The enviro management system and the associated testing procedure are regularly certied by TÜV SÜD, an independent verication organisation.

Climate-friendly product development (GRI 302-5)

Sustainable, climate-friendly products start in the design and development stages. Strategic portfolio planning and the continued development of new and existing Krones products and solutions is handled by Research and Development and the respective product areas. Environmental compatibility, with a special focus on greenhouse gas emissions, is one of the key value drivers under which development projects are initiated and prioritised. The enviro sustainability programme plays an active role in the product development process, purposefully integrating ecological design aspects from the EcoDesign framework. To ensure that new developments are guided by the principles of environmental sustainability, ongoing development projects are evaluated on the basis of a checklist and managed by way of milestones that incorporate enviro requirements into the decision-making process.

Investing in low-carbon technologies (GRI 302-5)

Within our product development processes, we invest considerable sums and human resources in low-emission technologies. One example of a positive contribution to mitigating climate change and promoting a circular economy is the Phoenix BMC biomass conversion system developed by our subsidiary Steinecker because it recovers brewery residuals, which can ultimately be used to generate power. Meanwhile, Contiloop AI is an example of a digital solution: the intelligent control system monitors the processes on the stretch blow moulder and adjusts parameters as needed, fully automatically and without interrupting production. When it is fully implemented, the system will be capable of preventing incorrect settings in the machine's operation, thus reducing material rejects and saving energy.

Under Article 8 of the EU Taxonomy Regulation, our enviro product portfolio makes a veriable substantial contribution to climate change mitigation and is therefore reported as taxonomy-aligned. We run R&D projects as part of the ongoing development of the enviro portfolio. Each such project is assessed, in a standardised procedure, to determine whether it contributes to energy e ciency and thus to our enviro product portfolio. Because the enviro products themselves are taxonomy aligned, the R&D projects can also be reported as taxonomy aligned.

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Lifecycle assessments

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Besides calculating the environmental performance of packaging by way of recognised tools, Krones also conducts lifecycle assessments (LCAs) on its machines. For this, we work with a third-party service provider (University of Parma) that develops the methodology for calculating the lifecycle assessments for us. The current focus is on the greenhouse gas emissions – the carbon footprint – of Krones machines. No other impact categories are assessed at this time. Savings in greenhouse gas emissions over the entire lifecycle are calculated on the basis of ISO 14067:2018 (Product Carbon Footprint). In 2023, two machine types serving as examples were used to calculate the LCAs. The results of the lifecycle assessments show that, because of their high energy and media e ciency, the machines in the enviro product portfolio demonstrate substantial greenhouse gas emissions savings during the machines' use phase compared to the standard portfolio or to predecessor models.

Non-financial Statement

Sustainability consulting (GRI 302-5)

Sustainability consulting is an essential part of our eorts to reduce greenhouse gas emissions at our customers' plants. Whether it's for an existing factory or for planning a new one, the consulting team helps our customers reach their sustainability targets for Scope 1 and Scope 2 – which in turn lowers our own Scope 3 downstream greenhouse gas emissions. Our range of consulting services covers the development of emissions reduction strategies, process optimisations for improved energy and media use, utilities audits, production schedule optimisation, material analyses and classication for packaging, integration of an energy management system and consulting on funding options.

Cooperation and collaboration with customers

When it comes to climate change mitigation, we interact with our customers through a variety of channels: We report on our carbon footprint directly to our downstream business partners each year through various individual surveys, standardised tools and established rating and ranking systems (such as CDP and EcoVadis). In conversations with customers, we also discuss possibilities for collaboration on climate change mitigation and environmental protection.

Internal training and awareness campaigns

Our global Sales team is a major factor for bringing sustainable products and services to our customers. For that reason, team members receive training on the latest sustainable approaches – especially in the run-up to major trade fairs and events. Additionally, we use expert training courses to ensure that our own specialists from our Product Sustainability and Factory Planning teams have the most up-to-date information about energy and emissions.

"Product end-of-life" manual

The principal objective of Krones Lifecycle Service is to extend the service life of our machines and lines at our customers' plants as far as possible – for instance through retrots, maintenance and other services. Despite our best eorts, though, every product's useful life will ultimately come to an end at some point. Since the end-of-life processing of our products also makes up part of our performance when it comes to downstream greenhouse gas emissions, we oer our customers suitable solutions for that, too.

We have compiled information about the dierent paths that our machines and lines can take at the end of service in a product end-of-life manual: from resale to disassembly and recycling right through to proper disposal. Krones Lifecycle Service and ecomac, our subsidiary specialising in used machinery, oer various end-of-life options. The aim of the manual is to enable proper decommissioning, deinstallation and disposal of the machine in order to conserve resources, prevent waste and ultimately reduce emissions.

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(GRI 305-3, GRI 305-5)

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Public policy

The Krones Group does not directly inuence political processes but does act as a supporter and as a source of feedback and input for the political work of the German Engineering Federation (VDMA). As part of our involvement in the Sustainability and Energy working group, we take a stance on dra¾ legislation and political debates. We are also a member of econsense, where we are involved in the "climate and energy" cluster.

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CONSOLIDATED

Non-financial Statement

Public Carbon Transition Plan

https://www. krones.com/media/downloads/ Krones_Carbon-TransitionPlan_ en.pdf

A climate transition plan was published in the nancial year 2023 which shows how Krones will adapt on the path towards a low-carbon circular economy. The basis will be our internal action plans and the existing conrmation of our cli-

mate strategy's 1.5-degree compatibility through SBTi.

Stakeholder communications

The main medium through which we communicate our climate strategy and emissions performance is the Non-nancial Statement, which is published annually as part of the Krones Group Annual Report and is publicly available on our corporate website. In addition, we communicate our main climate-related metrics on our corporate website under the heading "Sustainability". We use internal communication channels to regularly inform our workforce about the progress of measures and metrics. We use social media, the Krones magazine and press releases to keep our external stakeholders apprised of our climate strategy.

6. Key performance indicators

All greenhouse gas emissions gures published in this statement have been measured in accordance with the provisions of the Greenhouse Gas Protocol.

https://ghgprotocol.org/ corporate-value-chainscope-3-standard

Krones Group – Greenhouse gas emissions, Scope 3, from the use phase of our machines and lines (metric tonnes CO₂e) (Scope 3 category 11 per GHG Protocol)

The greenhouse gas emissions reported here are based on new machinery sales at Krones AG and Steinecker GmbH. For the Krones Group, that is a coverage of over 92%. To calculate the emissions from our machines and lines, we assumed an average useful life of 15 years. Greenhouse gas emissions from the use phase, based on the entire expected service life of the products (15 years)

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