Dear Shareholders,

2022 was an exceptionally good year for WACKER and the most successful in our company’s long history, setting new records for sales and earnings. This strong performance was driven by various factors, two of which were especially important given the unpredictable challenges we faced during this period.

We reacted quickly and resolutely to the emerging energy crisis, which was one of the keys to ensuring our business success. WACKER quickly recognized what was required to effectively manage the bottleneck in the energy supplies that are of existential importance to our company. This worked extremely well and was the result of a group effort at all levels, both inside and outside the company. The entire process chain – from procurement and logistics through to production and the customer side – worked hand in hand without any friction.

This tremendous team effort deserves the utmost recognition and respect. The Supervisory Board of Wacker Chemie AG wishes to thank all the company’s employees for their exceptional achievement and extraordinary commitment.

The second key factor in our success was the high quality and unique properties of many of our products across all business divisions – along with our strategy of working together with customers to develop solutions geared to their specific needs. This value added that WACKER provides its customers once again proved its worth in a volatile economic environment and enabled us to achieve better prices for our products. The company has built up these lasting business relations over many decades, which is precisely what makes WACKER a preferred partner of many of its customers.

Even though the economic environment will not be easier in 2023, WACKER has the creativity and the capabilities to constantly come up with the new ideas and solutions that will ensure the company’s future. Systematic research and innovation were the genesis of WACKER’s history as a company. And they remain an indispensable driver of its success to this day – across all four business divisions.

WACKER BIOSOLUTIONS is a prime example of how WACKER continues to succeed in developing sophisticated, innovative products and transforming them into growth drivers. The division is creating promising prospects for the company in the technologies and markets of tomorrow. This protects the company’s vitality and at the same time ensures its continued success. This long-term strategic approach and the company’s sound financial underpinnings create the basis for capital spending on research and new production capacities – both of which are needed to fully tap the wide array of potential opportunities that present themselves.

WACKER’s history has shown that the company has the strength to transform itself – time and again. It is this flexibility and adaptability that characterize the company to this very day.

Continuous Dialogue with the Executive Board

At WACKER, sound corporate governance and control are built on a relationship of trust between the Executive Board and Supervisory Board as they work closely together in the company’s interest. In 2022, the Supervisory Board performed – with great diligence – the duties incumbent upon it under law, the Articles of Association and its own Rules of Procedure. The Supervisory Board was involved at an early stage in every decision of fundamental significance for the company.

In both written and oral reports, the Executive Board regularly provided us with timely and comprehensive information on corporate planning, strategic development, business operations, and on the current state of Wacker Chemie AG and the Group, including the risk situation, risk management, and compliance and sustainability issues. Beyond scheduled Supervisory Board meetings, the Chair of the Supervisory Board remained in close contact with the Executive Board, especially with the CEO, conferring on issues of strategy, business development, risk exposure, risk management and compliance, and was kept informed of current trends, the business situation, and key business transactions. Any deviations from business plans and targets were explained to the Supervisory Board in detail.

Wherever required by statutory provisions or the Articles of Association, the Supervisory Board voted on the reports and proposals of the Executive Board after detailed examination and discussion. The Supervisory Board met on a regular basis, sometimes without the Executive Board being in attendance.

In the reporting year, we paid particularly close attention to investment spending, the current earnings situation, including the risk position and risk management, as well as the company’s liquidity and financial position. Our other points of focus in the reporting year were the company’s sustainability strategy and its new Group goals for 2030.

The Supervisory Board held four ordinary meetings in 2022, two in the first half of the year and two in the second. In addition, directly after the Annual Shareholders’ Meeting 2022, in which Prof. Anna Weber was elected as a new member of the Supervisory Board, an extraordinary Supervisory Board meeting was convened, in which she was elected as Chair of the Audit Committee and at which the Declaration of Conformity with the German Corporate Governance Code was updated. Above and beyond that, one resolution was adopted by written circular. One out of the total of five meetings was held via videoconference, while members attended the remaining four in person. Between meetings, the Executive Board informed us in detail by means of written reports about all projects and plans of particular importance to the Group. At its full meetings and in its committees, the Supervisory Board discussed in detail business transactions of importance to the company and referred to the reports submitted by the Executive Board. The full meetings were prepared by shareholder and employee representatives in their own separate sessions.

The Supervisory Board’s Main Areas of Deliberation

The development of sales, earnings and employment at the Group and its individual segments were the subject of regular consultations in the full meetings of the Supervisory Board. At each meeting, the Supervisory Board evaluated the Executive Board’s performance – on the basis of the reports submitted by the Executive Board – and discussed strategic development opportunities and other key topics with the Executive Board. There was no need for additional monitoring measures, such as the inspection of corporate documents or the appointment of experts.

The major areas of deliberation for the Supervisory Board were:

• Global market challenges, particularly the high raw-material and energy costs
• The effects of the war in Ukraine and its consequences for gas supplies in Germany
• Geopolitical developments and the resulting opportunities and risks for our business
• Disruptions in global trade and supply chains and their effects on world markets in general, and on WACKER in particular
• The effects of the ongoing coronavirus pandemic and the countermeasures needed
• Various M&A and capex projects
• Goals for 2030 and the new Group goals
• Financing activities
• Adjustments to the compensation system for Executive Board members
• Personnel matters due to changes in the membership of the Executive Board

The Supervisory Board discussed the WACKER Group’s plans for 2023 at its meeting of December 7, 2022. On that occasion, the Supervisory Board also dealt with medium-term corporate plans for 2023-2027. In addition, it discussed and approved the capital-expenditure budget for 2023.

Work in the Committees

The Supervisory Board is assisted in its work by the committees it has constituted. WACKER’s Supervisory Board has created three committees – an Audit Committee, an Executive Committee, and a Mediation Committee (the latter in accordance with Section 27 (3) of the German Co-Determination Act (MitbestG)). The tasks and the members of these committees are detailed in the Declaration on Corporate Management.

The Audit Committee met five times in person last year. In the presence of the auditors, it discussed the audit of the annual financial statements of Wacker Chemie AG and the Group for 2021 and the consolidated interim financial statements for the first half-year. It also examined the Group’s quarterly financial figures as well as issues relating to risk management, the accounting process, the internal control systems, compliance and auditing. It monitored the audit, especially regarding quality, as well as the independence of the auditors and the additional services they performed. Moreover, the Audit Committee submitted a recommendation to the Supervisory Board for the latter’s proposal to the Annual Shareholders’ Meeting for appointing an auditor for 2022. It then awarded the auditing contract for 2022 and determined the focus of auditing. In light of the statutory obligation to appoint new external auditors at the end of 2023, a further focal point of the committee’s work in the reporting year was to prepare and put in place a transparent, non-discriminatory tender and selection procedure for the 2024 audit in accordance with Art. 16 (3) of Regulation (EU) No. 537/2014 of the European Parliament and of the Council of 16 April 2014. Based on the results of this procedure, the Audit Committee made a recommendation to the Supervisory Board concerning the proposal to be made by the latter to the Annual Shareholders’ Meeting to nominate the auditors for fiscal 2024.

The Executive Committee met a total of three times in 2022, twice in person and once via videoconference. The committee members discussed the compensation system for Executive Board members and personnel matters, in particular Executive Board succession planning and the committee’s recommendations to the Supervisory Board to renew Dr. Christian Hartel’s contract and to determine the Executive Board’s total compensation for 2021 as well as set the performance goals for variable compensation in 2022. The Chair of the Supervisory Board also discussed matters of particular importance with the Executive Committee members between the regular meetings.

The Mediation Committee did not need to be convened in the reporting year.

The Supervisory Board was regularly informed about the committees’ work.

Initial and Advanced Training

The members of the Supervisory Board are called upon to take part in training courses at regular intervals and are responsible for meeting this obligation themselves. The company supports the members in their educational endeavors, in particular by granting them generous expense allowances, which can and should be used for further training, among other things. When they take office, new Supervisory Board members receive an information package about their rights and obligations; it also includes information sheets on insider-trading bans and on personal transactions by managers. Where necessary, they are also informed about significant changes in legislation and court rulings affecting their work, or are able to take part in internal information events.

Personalized Disclosure of Attendance at Meetings

Last year, there was only one absence from a meeting, and the Supervisory Board member involved was excused. All committee members attended their respective committee meetings in 2022. Members’ attendance at meetings of the Supervisory Board and at their respective committee meetings is disclosed in personalized form in the following table:

Corporate Governance

Last year, the Supervisory Board again looked closely at corporate governance standards. In May 2022, we updated the Declaration of Conformity, because with the election of Prof. Anna Weber as Chair of the Audit Committee we now comply with the recommendation concerning the independence of the Audit Committee chair. We performed a routine review of WACKER’s implementation of the German Corporate Governance Code at our meeting of December 7, 2022, and adopted the annual Declaration of Conformity that must be submitted jointly by the Executive and Supervisory Boards in accordance with Section 161 of the German Stock Corporation Act (AktG). The Declaration is available on the company’s website and is also included in the Declaration on Corporate Management.

Further information on corporate governance at WACKER can likewise be found in the Declaration on Corporate Management.

At its meeting in December 2022, the Supervisory Board conducted a self-assessment and found that it works efficiently – for example, due to the regular preliminary discussions regarding the Supervisory Board meetings, the comprehensive reports provided by the Executive Board and the documents received well in advance of the meetings. Further information on the Supervisory Board’s regular self-assessments can be found in the Declaration on Corporate Management.

Audit of the Annual Financial Statements of Wacker Chemie AG and the WACKER Group

KPMG AG Wirtschaftsprüfungsgesellschaft, Munich, audited the annual financial statements of Wacker Chemie AG for 2022, the consolidated financial statements and the combined management report (as of Dec. 31, 2022), as prepared by the Executive Board. KPMG AG Wirtschaftsprüfungsgesellschaft, Munich, has audited Wacker Chemie AG and the WACKER Group since 2006. The persons responsible for signing the audit are Prof. Bernd Grottel (since 2022 in his capacity as German Public Auditor Responsible for the Engagement) and Ms. Angelika Huber-Straßer (since 2021).

The Supervisory Board’s Audit Committee had awarded the auditing contract in accordance with the resolution of the Annual Shareholders’ Meeting of May 20, 2022. The auditors conducted their audit in accordance with Section 317 of the German Commercial Code (HGB) and the EU Audit Regulation, and in compliance with German Generally Accepted Standards for Financial Statement Audits promulgated by the Institut der Wirtschaftsprüfer (IDW). They issued unqualified audit opinions.

The auditors also carried out a review with limited assurance of the separate non-financial report for Wacker Chemie AG and the Group. The outcome was that no issues were identified that would indicate that the report did not satisfy the statutory requirements in all material respects.

The financial-statement documents (including the auditors’ reports, the combined management report and the Executive Board’s proposal for the distribution of profits as well as the combined non-financial report for Wacker Chemie AG and the Group) were submitted to all the Supervisory Board members in good time.

At its meeting of February 21, 2023, the Audit Committee examined and discussed in detail the financial statements, the combined management report, the combined non-financial report for Wacker Chemie AG and the Group (as per Sections 289b and 315b of the German Commercial Code – HGB) as well as the auditors’ reports. At its meeting of March 2, 2023, the full Supervisory Board closely examined and discussed the relevant annual accounting documents – including the combined non-financial report for Wacker Chemie AG and the Group – with knowledge and in consideration of both the report of the Audit Committee and the auditors’ reports. The auditors, Ms. Angelika Huber-Straßer and Prof. Bernd Grottel, took part in the deliberations at both meetings. They reported on the main results of the audits – in particular, the key audit matters described in the auditors’ reports and the results of non-financial reporting – and were available to answer questions and provide supplementary information.

After concluding our own examination, we have no objections to raise to the annual financial statements of Wacker Chemie AG, the consolidated financial statements, the combined management report, the combined non-financial report for Wacker Chemie AG and the Group, or the auditors’ reports.

We therefore approve the annual financial statements of Wacker Chemie AG and the consolidated financial statements as of December 31, 2022, that were prepared by the Executive Board. The annual financial statements of Wacker Chemie AG are hereby adopted. We concur with the Executive Board’s proposal for the distribution of retained profit.

The compensation report prepared in accordance with Section 162 of the German Stock Corporation Act was submitted to a formal review.

Changes in the Composition of the Supervisory and Executive Boards

With effect from May 20, 2022, Prof. Ernst-Ludwig Winnacker stepped down from Wacker Chemie AG’s Supervisory Board. Prof. Anna Weber was appointed as his successor at the Annual Shareholders’ Meeting on May 20, 2022. Employee representatives Peter Áldozó and Eduard-Harald Klein left the Supervisory Board effective December 31, 2022. Andreas Schnagl and Reinhard Spateneder were elected as replacement members effective January 1, 2023.

There were no changes in the composition of the Executive Board in 2022.

The Supervisory Board thanks the Executive Board and the company’s employees and employee representatives for their dedication in helping make 2022 one of the most successful years in the company’s history.

Munich, March 2, 2023
The Supervisory Board

Dr. Peter-Alexander Wacker
Chair of the Supervisory Board of Wacker Chemie AG